European Union and the neighbouring countries Riccardo Vailati 1 , T. Hartmann 2 , C. Artaiz Wert 3 , Bruno Cova 4 H. El Andaloussi 5 , S. Karkkainen 6 , Y. Kubrushko 7 , M. Maly 8 , S. Molodtsov 9 , L. Radulov 10 D. Tonge 11 , F. Van Oostvoorn 12 CIGRE session 2008 – Regular session of SC C1 Parigi, 27 agosto 2008 1 CESI RICERCA 2 IAEW RWTH AACHEN (GERMANY) 3 RED ELECTRICA DE ESPAÑA (SPAIN) 4 CESI SPA 5 OBSERVATOIRE MEDITERRANEEN DE L’ENERGIE (FRANCE) 6 VTT (FINLAND) 7 IMEPOWER (UKRAINE) 8 ENVIROS (CZECH REPUBLIC) 9 CENTRE FOR ENERGY POLICY (RUSSIAN FEDERATION) 10 BLACK SEA REGIONAL ENERGY CENTRE (BULGARIA) 11 IBS RESEARCH & CONSULTANCY (TURKEY) 12 ENERGY RESEARCH CENTRE OF THE NETHERLANDS (THE NETHERLANDS) The expansion of interconnection capacity is one of the main objectives of the EU (European Union) and of its neighbouring countries, towards the effective development of the electricity market. This is confirmed by the Priority Interconnection Plan of the European Commission, by development plans of each country and by the requests of interconnection to the power system of UCTE coming from Turkey, Ukraine, Russian Federation, and Northern African countries. The objective to increase intra-EU cross border capacity is as much important as the target of interconnecting and expanding the ‘EU power system’ eastwards and southwards beyond EU borders. Bearing in mind this target, the European Commission launched in 2005 the ENCOURAGED study in order to investigate the possible future electrical interconnections between EU and the neighbouring countries over a long term horizon (year 2030) and to give scientific support to the EU energy policy. In this paper, we present the methodology adopted for evaluating electricity exchanges and optimising transfer capacities and the main findings of the study. According to ENCOURAGED results, the total electricity exchanges at the ‘main EU borders’ (South border with North Africa, South-East border with Turkey, and East border with IPS/UPS system) are expected to represent a relatively small percentage of electricity demand in the EU and neighbouring regions. Indeed, exchanges in 2030 are estimated to range from 110 TWh up to 180 TWh, which correspond to 2-4% of total electricity demand in EU-27. This would however represent a significant contribution to diversify EU energy imports and a massive increase with respect to current transfers (27 TWh in 2006). The optimal size of future interconnection corridors is expected about 5000 MW at the EU – Northern Africa corridor, about 5000 MW for EU – Turkey interconnection, and at least 5100 MW at the border with Russian Federation. The investments needed to achieve the aforementioned transfer capacities EU – Northern Africa and EU – Turkey are at least € 2.5 billion. In addition to this figure, investments will be needed for upgrading of existing substations and lines EU-IPS/UPS and for eliminating intra-EU bottlenecks, enabling to fully capture the benefits deriving by new interconnections with the neighbouring countries.