FEATURE: Regulators recommend improvements to the TEN-E Regulation and infrastructure governance
Europe’s energy regulators (CEER and ACER) have published a set of 24 recommendations on how to improve the TEN-E Regulation and energy infrastructure governance.
Delivering on the objectives of the Energy Union and of the “Green Deal” will require major investments in networks. Europe’s strategy for trans-European energy infrastructure is set out in the form of guidelines in the “TEN-E Regulation” (Regulation (EU) No 347/2013). The European Commission is currently evaluating how effective the TEN-E Regulation has been, in particular with regard to EU energy and climate targets for 2030, Europe’s long-term decarbonisation commitment and the principle of prioritising energy efficiency in all planning, policy and investment decisions. Interested parties have until the 13 July to submit their responses to the Commission’s public consultation on revising the TEN-E guidelines.
Regulators’ key messages
A key message in the ACER-CEER position paper on revision of the Trans-European Energy Networks Regulation (TEN-E) and Infrastructure Governance is that improving the TEN-E Regulation may not suffice to support the realisation of all the different types of assets needed to achieve the decarbonisation targets.
The TEN-E Regulation was conceived around the specific needs of network infrastructures and it may not be the best tool to support all the different types of assets needed to achieve the decarbonisation targets. The limited number of smart grids, storage units and LNG facilities having obtained the PCI status during the last years proves that this Regulation performs better for the type of assets that it had been designed for.
What specific changes do ACER and CEER recommend to improve the TEN-E Regulation?
Regulators propose a suite of improvements to the TEN-E Regulation across 3 areas: infrastructure governance; the scope of the European Projects of Common Interest (PCIs); and the TEN-E processes.
Area 1 – Improving infrastructure development governance
• Scenarios for network development planning should be developed jointly for electricity and gas, in a neutral way;
• Most of the problems that arose during the past implementation of the TEN-E Regulation could be ascribed to the regulatory role inappropriately attributed to the ENTSOs, despite their conflict of interest;
• ACER should be conferred with the powers to approve the ENTSOs’ proposal on the cost benefit analysis (CBA) methodology, and to request amendments by the ENTSOs, or directly amend it after consulting the ENTSOs;
• ACER should be conferred with the powers to issue binding guidelines on the major infrastructure-related deliverables: the Scenario Development Report, the CBA Methodology and the Ten-Year Network Development Plan (TYNDP);
• ACER should be empowered to issue binding amendment requests on the draft TYNDP;
• National Regulatory Authorities (NRAs) should be empowered to approve and to amend the national network development plans.
Area 2 – Principles for PCI scope
• The energy infrastructure categories should be simplified;
• All TEN-E (regional) groups should be brought to a European dimension, serving resource efficiency and transparency and improving the process results;
• The TEN-E Regulation is an instrument to deal with trans-European energy networks. As such, the PCI process is not the most appropriate tool to address small-scale projects;
• The current criteria to identify the significant cross-border impact of a project should be improved.
Area 3 – Improving the TEN-E processes
• Sustainability criteria have to get the priority focus in the selection of projects of common interest (PCI), in particular for gas projects;
• For the TEN-E Regulation, besides the project promoters, the role of other involved parties like NRAs and other organisations which act in the interest of society should be emphasized;
• NRAs should be entitled to reject an investment request if the project fails to provide positive net benefits at EU level;
• PCIs in an advanced project status should be distinguished from less advanced PCIs, and TEN-E mechanisms should be differentiated according to the advancement status;
• ACER’s powers to obtain information on all TYNDP aspects should be extended to include non-TSO project promoters;
• The currently yearly frequency of the ACER PCI monitoring report should change to once per PCI list;
• Fundamental project information (i.e. commissioning date, capacity increase, project status and project cost) shall be made publicly available;
• The unit investment cost activity should be regularly repeated (e.g. every 4 years);
• The TEN-E Annex(es) on the CBA methodologies should be concise, providing only the main principles of the CBA;
• Risk-related incentives should be dismissed;
• ACER and CEER see Article 14(2)(a) as the key criterion for the Connecting Europe Facility (CEF) grants for works and recommend considering a wider spectrum of benefits;
• The sustainability dimension should be explicitly added in the list of positive externalities considered for CEF grants for works;
• The “lack of commercial viability” criterion should be dismissed. In some cases, a scattered distribution of benefits across countries could justify the request for CEF support;
• The sequential step between CBCA and CEF grants for works should be revised, allowing conditional CBCA decisions and a second (final) decision to be taken after a grant decision is made.