Electricity Transmission and Eu Rules for Energy Sector

This paper fi rst discusses features of the Third Energy Package” of EU legislation regarding electricity transmission system operators (TSOs), which has been in place since 2009. The Package envisages three different types of TSO organization: full ownership unbundling (OU), independent system operator (ISO), and independent transmission operator (ITO). The question of economic effi ciency of the three possible settings occupies much of researchers’ attention. Here we argue that the results of basic economic analytical models depend critically on whether the regulatory function is deemed effi ciently executed, or not. Next, challenges posed in front of TSOs by rapid decarbonization of power systems are briefl y discussed, too. The main conclusion is that the answer to a question which of the three types of TSO organization from EU regulations is economically most effi cient depends on quality of regulator’s performance, which itself cannot be deemed (as often is in the literature) perfectly effi cient.