Renewable Energy and Transmission Networks - Green Energy and Efficiency: An Economic Perspective - page 370

of the projects that are part of the plan. Note that the need to centrally manage the
expansion of the grid is not only motivated by the existence of high RES pene-
tration levels. Centrally planning the expansion of the grid and operating the
regional system and market afterward would result in a signi

cant increase in

economic ef ciency, even in regions where the contribution of RES generation to

electricity supply is marginal. However, in those systems where a large fraction, or
even the majority, of total generation is based on RES, centrally computing the
expansion of the grid is critical to securing the electricity supply, i.e. to achieving a
safe and reliable operation of the system.
Not all regional electricity markets expected to host a signi cant amount of RES

generation shortly have managed to comply with this requirement. Thus, whereas
the expansion of the grid used by regional transactions in Central America is
planned by the regional System Operator, EOR, and the undertaking of each of the
projects comprising the plan, as well as those proposed by private promoters, is to
be approved or rejected by the regional regulator, CRIE, the Internal Electricity
Market (IEM) of the European Union and the set of regional markets developing in
the US have not got, up to now, to the same level of integration of the planning of
the expansion of their grids. Within the IEM, however, several steps have been
already undertaken towards a more coordinated approach, which may lead in a
close future to a centralized regional transmission network planning. Currently, the
European association of electricity TSOs, ENTSO-e, together with the Agency for
the Cooperation of Energy Regulators, ACER, must periodically produce a pan-
European network expansion plan. However, this expansion plan is only indicative.
Therefore, national authorities within each country may decide not to implement
part of the network reinforcements included in the centralized plan, see [ 9 ]. In the
US, two levels of regional network expansion planning coordination should be
distinguished. Regions comprising several systems have been de

ned, within which
a common regional expansion planning of the transmission network is carried out.
Even more, within some of those regions a Regional Transmission Operator (RTO)
is in charge of the coordination of both the market and the system operation. On the
contrary, coordination among these regions (interregional coordination) is still very
loose. The Federal Energy Regulatory Commission (FERC) Order 1000, see [ 10 ],
mandates each region (Independent System Operators or Regional Transmission
Operators) to develop its own transmission expansion plan and to coordinate
bilaterally with its neighbors. FERC Order 1000 also asks system planning
authorities to look for interregional network reinforcements that may be more cost
ef cient than those computed separately within each region. However, this does not

guarantee that systematic coordination will take place among network expansion
proposals in neighboring regions.
The need to build large amounts of transmission capacity in order to allow large

cant
amount of funds. This should condition the nature of entities in charge of building
the transmission system and the regulation governing the development and oper-
ation of the transmission network. Owners of the grid, i.e. those raising the required
funds and constructing new transmission assets, should have large

ows to take place over long distances involves being able to raise a signi

nancing