ENTSO-E has produced a new report which concludes that a new kind of regional policy structure will be needed if Europe is to achieve its 2030 renewables targets.

ENTSO-E, the European organisation of TSOs, has produced a new report* which concludes that a new kind of regional policy structure will be needed if the continent is to achieve its 2030 renewables targets.
In the light of the continent’s energy transition, European countries need increasingly to rely on and co-ordinate with each other to guarantee security of supply and well-functioning markets, says ENTSO-E. It favours the creation of what it calls ‘policy regions’ to advance further on regional co-ordination of energy policies. Transmission system operators will on their side fulfil their commitment towards more co-operation in their areas of expertise.
European customers would benefit immensely if the energy mix, renewables support schemes, capacity mechanisms, planning of interconnectors, supply adequacy and risk preparedness would be discussed and co-ordinated regionally. Policy regions could bring this about without taking away the final decision-making role from individual member states. For maximum efficiency, policy regions should gather representatives from ministries, regulators, transmission system operators, stakeholders as well as the EU institutions. Limited policy regions in Europe have already delivered successfully, says ENTSO-E. Now it is time to expand, covering more parts of Europe and widen the scope.
"Policy regions are needed bringing political, regulatory and technical/ commercial competences together based on common values and common concerns. A history of cooperation and trust helps to speed up the integration process", suggest Bente Hagem, chairman of the board of ENTSO-E. "Voluntary co-operation and manageable size should be guiding principles".  
Policy regions, such as, for example the Pentalateral Energy Forum or the Nordics, should not be confused with ‘functional areas’. These functional areas, like capacity calculation regions, bidding zones and so on, are created to optimise a particular function in power system operation, market integration or infrastructure planning.
Often created on a voluntary basis by the TSOs, the existence of functional areas is now formalised in the EU legislation through the network codes process. In the coming days, RSPs (for example Coreso or TSC) will be recognised in the to-be-voted System Operation Guideline. ENTSO-E and its members committed in 2015 to roll out RSPs throughout Europe by 2017. The five main services are capacity calculation, outage planning, short term adequacy forecast, coordination of operational security measures and the implementation of of a Common Grid Model software.
TSOs rely on a daily basis on RSPs in their decision-making. Their added-value will grow in a more interconnected system faced with more variation in power flows. ENTSO-E and its members are planning to develop RSPs’ services over time. This development needs to remain flexible because the power system and market in Europe is changing fast and will continue facing very varied conditions.
"TSOs want to move  forward on regional co-ordination", says Peder Andreasen, president of ENTSO-E. "The  multilateral agreement signed in 2015 is a strong commitment towards even more regional co-operation among TSOs. However, we are reaching legal and regulatory limits". "To move further and  increase speed, policy regions are needed".
Functional areas and political regions can overlap, but do not need to. "On the contrary, efficiency and security call for several functional areas to serve multiple policy regions ", says Bente Hagem.
"In any case, we are in favour of a bottom-up, dynamic approach as opposed to drawing new artificial borders in Europe", commented Konstantin Staschus, ENTSO-E secretary-general.
*ENTSO-E policy paper ‘Regional Co-ordination and Governance in the Electricity Sector’ is available for download on the organisation’s website.