In this latest OIES podcast from the Electricity Programme, Dimitra Apostolopoulou talks to Doctoral Fellow Anas Damoun about his latest paper co-authored with Rahmat Poudineh titled “Economics of Electricity Grid Interconnections: A Heterogeneous Markets’ Design Context”. In this podcast, we discuss the critical role of interconnections in the energy transition as well as analyse the numerous benefits, e.g., technical, commercial and economic, they entail. We differentiate between homogeneous and heterogeneous interconnections since they connect countries with different market structures. We provide insights into the magnitude of interconnection benefits that depend on their efficient utilisation, which is harder to achieve in the heterogeneous case. Next, Anas discusses ways of improving the utilisation of heterogeneous interconnections with the use, among others, of long-term cross-border contracts and distancing cross-border scheduling from real-time dispatch. Last, we discuss the overall challenges that interconnections face and ways to overcome them.