Electricity in the EU — Inter-Transmission System Operator Compensation (ITC)

KEY POINTS

TSOs receive compensation for hosting cross-border flows of electricity on their networks, including for corresponding losses through an Inter-Transmission Compensation (ITC) fund established and administered by the European Network of Transmission System Operators for Electricity (ENTSOE), which was set up under Article 5 of Regulation (EC) No 714/2009. The ITC framework is overseen by the Agency for the Co-operation of Energy Regulators (ACER), set up by Regulation (EC) No 713/2009.

Contribution to the fund

TSOs contribute proportionately to the ITC fund based on electricity flows onto and from their national transmission system.

Participation

Regulatory authorities ensure that TSOs participate in the ITC mechanism and that no additional charges for hosting cross-border flows of electricity are included in charges applied by transmission system operators for access to networks.

TSOs from non-EU countries who apply EU law in the field of electricity or have entered into multi-party agreements are entitled to participate in the ITC mechanism.

Use fee

Each participant in the ITC mechanism charges a transmission system ‘use fee’ on electricity imports and exports of electricity between the national transmission system and the transmission system of a non-EU country, unless it is has agreed to apply EU law in the field of electricity, or where there is no multi-party agreement.

The ‘use fee’ for each year is set by ENTSO-E at the estimated contribution per megawatt hour TSOs from a participating country would make to the ITC Fund based on projected cross-border electricity flows for the relevant year.

Charges

The annual average transmission charges paid by producers is calculated as:

• the annual total transmission tariff charges paid by producers divided by the total measured energy injected annually by producers to the transmission system of an EU country.

These charges exclude:

• infrastructure charges;
• charges paid by producers related to ancillary services;
• specific system loss charges paid by producers.

The allowable annual average transmission charges paid by producers is as follows:

• Denmark, Sweden and Finland: 0 to 1.2 €/MWh;
• Ireland, Great Britain and Northern Ireland: 0 to 2.5 €/MWh;
• Romania: 0 to 2.0 €/MWh;
• other participating countries: 0 to 0.5 €/MWh.

ENTSO-E monitors how appropriate these allowable charge ranges are, taking account of their impact on transmission capacity financing for EU countries.