Italy-Slovenia power interconnectors to begin operating by 2016

Two new privately-owned power interconnectors between Italy and Slovenia are expected to be commissioned by 2016, seeing the 730MW currently available increase by 41%, according to a source close to the matter.

The 300MW increase will bring total capacity between Italy and Slovenia to more than 1GW.

The connections have also been granted exemptions from EU regulation which requires new interconnection projects allow third-party access. The exemption was requested by project developer Adria Link, a subsidiary of Italian utilities Enel, Gruppo Hera’s Acegas-Aps and Trafigura’s TEI Energy in partnership with Slovenian utilities HSE and E3. According to Adria Link’s request, the exemption would safeguard investments on the construction of the Redipuglia-Vrtojba and Dekani-Zaule interconnectors, whose combined cost stands at approximately €45m.

The EU’s third-party access rules aim to promote free competition in access to interconnector capacity and regulate the amount and destination of profits generated by the management of capacity on cables. Exemptions can be given to new projects where development would otherwise be limited.

The exemption was awarded by Italian and Slovenien regulators AEEGSI and AGEN-RS in December 2013, but was only published by AEEGSI in October. The EU Commission still needs to approve the exemptions but this is expected before the end of 2014.

The awarded exemptions will allow Adria Link to withhold profits generated by cross-border transmission capacity auctions between Italy and Slovenia in proportion to the amount of capacity added by the new cables. The exemptions will last 10 years for the Dekani-Zaule line and 16 years for Redipuglia-Vrtojba.

Though entirely privately-funded, both lines will be operated by Italian system operator Terna and Slovenian equivalent Eles.

The day-ahead markets of the two countries have been coupled since January 2011 and are expected to migrate to the centre south Europe (CSE) region market coupling mechanism by the end of the year ( see EDEM 17 July 2014 ). Market coupling is where transmission capacity is allocated through implicit auctions linked to cross-border energy transactions on the exchange rather than through separate, or explicit, capacity auctions.

“We believe [the exemption] is a very good result in terms of coordination between institutions, as well as out-and-out innovation for the opportunity to contribute to greater market integration,” Adria Link CEO Fabrizio Scaramuzza said.

“It’s the first time Italian and Slovenian institutions have struck an agreement on the development of cross-border merchant lines connecting the two countries.” Riccardo Patrian