COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on guidelines for trans-European energy infrastructure and repealing Regulation (EU) No 347/2013

EN EN
EUROPEAN
COMMISSION
Brussels, 15.12.2020
SWD(2020) 346 final
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT
Accompanying the document
Proposal for a Regulation of the European Parliament and of the Council on guidelines
for trans-European energy infrastructure and repealing Regulation (EU) No 347/2013
{COM(2020) 824 final} - {SEC(2020) 431 final} - {SWD(2020) 347 final}
Europaudvalget 2020
KOM (2020) 0824
Offentligt
1
Table of Contents
1 INTRODUCTION: POLITICAL AND LEGAL CONTEXT............................................................... 3
1.1 Legal framework ...............................................................................................3
1.2 Benefits of the TEN-E Regulation ....................................................................5
1.3 Political context.................................................................................................6
2 PROBLEM DEFINITION .................................................................................................................... 7
2.1 Problem 1: Type and scale of cross-border infrastructure
developments are not fully aligned with EU energy policy objectives
in particular as regards the European Green Deal and the climate
neutrality objective ............................................................................................9
2.2 Problem 2: Delays in project implementation.................................................15
2.3 How will the problem evolve? ........................................................................19
2.4 Scope of the initiative......................................................................................20
3 WHY SHOULD THE EU ACT? ........................................................................................................ 20
3.1 Legal basis .....................................................................................................20
3.2 Subsidiarity: Necessity of EU action...............................................................21
3.3 Subsidiarity: Added value of EU action..........................................................21
4 OBJECTIVES: WHAT IS TO BE ACHIEVED? ............................................................................... 21
4.1 General objectives ...........................................................................................21
4.2 Specific objectives...........................................................................................22
5 WHAT ARE THE AVAILABLE POLICY OPTIONS? .................................................................... 23
5.1 What is the baseline from which options are assessed? ..................................25
5.2 Description of the policy options ....................................................................26
5.3 Options discarded at an early stage .................................................................35
6 WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? ........................................................... 36
6.1 Scope .....................................................................................................37
6.2 Governance / Infrastructure planning..............................................................51
6.3 Permitting and public participation .................................................................55
6.4 Regulatory treatment .......................................................................................58
7 HOW DO THE OPTIONS COMPARE?............................................................................................ 60
8 PREFERRED OPTION ...................................................................................................................... 66
8.1 Package of preferred policy options ................................................................66
8.2 REFIT (simplification and improved efficiency)............................................68
9 HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?.................................. 69
9.1 Indicators .....................................................................................................70
9.2 Operational objectives.....................................................................................70
10 GLOSSARY ........................................................................................................................ 71
ANNEX 1: PROCEDURAL INFORMATION............................................................................................ 72
2
ANNEX 2: STAKEHOLDER CONSULTATION....................................................................................... 77
ANNEX 3: WHO IS AFFECTED AND HOW? .......................................................................................... 87
ANNEX 4: ANALYTICAL METHODS ..................................................................................................... 97
ANNEX 5: EVALUATION REPORT......................................................................................................... 99
ANNEX 6: PCIS AND CEF FINANCIAL ASSISTANCE ....................................................................... 128
ANNEX 7: ADDITIONAL DISCARDED OPTIONS............................................................................... 133
ANNEX 8: INTRODUCTION OF A MANDATORY SUSTAINABILITY CRITERION....................... 135
ANNEX 9: ASSESSMENT OF ADDITIONAL POLICY OPTIONS....................................................... 136
ANNEX 10: REFIT (SIMPLIFICATION AND IMPROVED EFFICIENCY).......................................... 144
3
1 INTRODUCTION: POLITICAL AND LEGAL CONTEXT
1.1 Legal framework
The Regulation on trans-European energy networks (TEN-E), adopted in 2013, lays
down rules for the timely development and interoperability of trans-European energy
networks in order to achieve the energy policy objectives of the Treaty on the
Functioning of the European Union (TFEU)1
to ensure the functioning of the internal
energy market and security of supply in the Union, to promote energy efficiency and
energy saving and the development of new and renewable forms of energy, and to
promote the interconnection of energy networks.
The TEN-E is a policy that is focused on linking the energy infrastructure – electricity,
natural and biogas, oil, CO2 – of EU countries. The TEN-E Regulation puts in place a
framework for Member States and relevant stakeholders to work together in a regional
setting to develop better connected energy networks with the aim to connect regions
currently isolated from European energy markets, strengthen existing cross-border
interconnections, and help integrate renewable energy.
As such, the TEN-E is a central instrument in the development of an internal energy
market and necessary to achieve the European Green Deal objectives. To achieve climate
neutrality by 2050 and higher levels of greenhouse gas emission reductions by 2030,
Europe will need a more integrated energy system, relying on higher levels of
electrification based on renewable sources and the decarbonisation of the gas sector2
. The
TEN-E can ensure that the EU energy infrastructure development supports the required
energy transition.
The key tools of the current TEN-E guidelines to identify and speed up the
implementation of the key infrastructure projects are to address the following problems:
a) market and regulatory failures for cross-border energy infrastructure investments also
due to asymmetric benefits and costs among Member States, b) too strong focus on
national priorities in infrastructure investments decision and the need to align cross-
border infrastructure projects with European infrastructure priorities to achieve synergies,
and c) insufficient market based financing to address the investments needs in cross-
border energy infrastructure.
Under the TEN-E Regulation, the Commission shall ensure that a Union list of PCIs is
established every two years. The TEN-E Regulation sets general and specific criteria for
the selection of PCIs. PCIs span Member State borders or, while remaining within the
territory of a single Member State, address an important bottleneck with significant
impact on cross-border trade. Specific selection criteria are defined for each
infrastructure category considering specific policy objectives (see Annex 5). While the
current framework includes the mid- and long-term decarbonisation objectives, it is not
systematically applied to all candidate PCI projects and hence limits the possibility to
1
Articles 170-172 TFEU
2
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
4
identify projects that support the energy transition to reach the European Green Deal
objectives.
For electricity and gas projects, in order to be eligible for inclusion in the PCI list,
projects must be part of the latest available 10-year network development plan (TYNDP).
Every two years the European Network of Transmission System Operators (ENTSOs for
Electricity and for Gas) establishes first the system needs under different future and
disruption scenarios. Then, a cost-benefit analysis (CBA) is performed for every
submitted project, assessing their contribution to the system needs. For smart grids, CO2
networks and oil projects specific assessment methods are used.
Project promoters submit their projects for selection as PCIs. The Regional Groups,
chaired by the Commission and including representatives from the Member States,
transmission system operators and their European networks, project promoters, national
regulatory authorities, as well as the Agency for the Cooperation of Energy Regulators
(ACER), assess the projects' contribution to implementing the priorities, the fulfilment of
the relevant criteria and their maturity. Stakeholders are invited to take part in these
meetings and bring their insight on the infrastructure bottlenecks and on the candidate
PCIs into the assessment process. The decision-making power in the Regional Groups is
restricted to a body comprising Member States and the Commission.
Based on this assessment, the Regional Groups propose regional lists of PCIs. Based on
the agreed regional lists, the Commission adopts the Union list of PCIs in the form of a
delegated regulation. When doing so, the Commission ensures compliance with the
relevant criteria, cross-regional consistency, and aims for a manageable total number of
PCIs. A Member State to whose territory a proposed project relates may not approve its
inclusion in the PCI list.
So far, four Union lists of PCIs have been established. The 4th
PCI list was adopted in
2019 and entered into force in March 2020. Since the first PCI list the total number of
PCIs per list has been significantly reduced and the distribution across the different
sectors has changed significantly with electricity PCIs representing two thirds of the total
number of projects in the latest PCI lists. Oil, CO2 and smart electricity grids have
represented a minor share (see Figure 1).
Figure 1: Number of PCIs per infrastructure category per PCI list
There is no automatism between the PCI status and CEF funding. Most PCIs are
expected to be commercially viable and financed through regulated network tariffs, CEF
funding for works is considered as ‘last resort option’ for the financing of PCIs. CEF is
131
108
102
100
109
77
53
32
6
7
6
6
4
5
2
3
4
6
0% 25% 50% 75% 100%
1st PCI list (2013) (n=248)
2nd PCI list (2015) (n=195)
3rd PCI list (2017) (n=169)
4th PCI list (2019) (n=149)
Electricity Gas Oil CO2 Smart grids
5
designed to address the gap between the socioeconomic value at regional/European level
(such as security of supply, innovation and solidarity) and the commercial viability of
projects. CEF promotes cooperation between countries to develop and implement energy
interconnection PCIs that otherwise would not happen. This is especially the case for
cross-border projects located in countries with smaller population sizes or in a more
remote location, where energy tariffs would need to be increased substantially to cover
the investment needs.
The key elements of the TEN-E Regulation are summarised in Figure 2 and Annex 5.
Figure 2: Key elements of the TEN-E Regulation
1.2 Benefits of the TEN-E Regulation
The TEN-E Regulation3
has established a new approach to cross-border energy
infrastructure planning. It brings together stakeholders in regional groups to identify and
help implement projects of common interest (PCIs) that contribute to the development of
energy infrastructure priority corridors and thematic areas.
In addition to an effective and cost-efficient approach to infrastructure planning, the
regulation has improved the permitting procedures. It requires Member States to ensure a
streamlined permit granting process for PCIs within a timeframe of 3½ year for a
permitting decision. They are to receive the highest national priority status and be
included in national network development plans. The regulation also provides for
regulatory assistance, rules and guidance for the cross-border allocation of costs and risk-
related incentives, and provides access to financing opportunities from the Connecting
Europe Facility (CEF).
The evaluation of the current TEN-E Regulation shows that it has effectively contributed
to connecting Member States networks and removing bottlenecks. Market integration
between Member States and competitiveness have improved, as reflected in the progress
towards the interconnection targets and the convergence of energy prices across the EU
3
OJ L 115, 25.4.2013, p. 39-75
6
(see Annex 5 for more details). The implementation of electricity PCIs will help most
Member States reach the 10% interconnection target for 2020. As a result, the EU energy
market is more integrated and competitive than it was in 2013. The projects also enable
the integration of renewable electricity and power exchange across borders reducing the
need to curtailment.
Security of supply, as one main driver behind the current TEN-E Regulation, has been
significantly improved through PCIs. By the early 2020s, when the gas PCIs currently
under implementation will be in operation, Europe should achieve a well-interconnected
and shock-resilient gas grid and all Member States will have access to at least three gas
sources or the global liquefied natural gas (LNG) market, a key element to improve the
Union’s energy security through the diversification of gas sources.
Since its adoption in 2013, TEN-E enabled the implementation of over 40 key energy
infrastructure projects and further 75 projects are expected to be implemented by 2022.
The financing support provided by CEF of EUR 4.7 billion in total enabled the
implementation of 95 PCIs. Since 2014, CEF has provided financing to 149 actions of
which 114 (EUR 519 million) for studies and 35 (EUR 4.2 billion) for works. Of the total
budget of EUR 4.7 billion, EUR 1.5 billion were allocated to gas projects and EUR 2.8
billion to electricity projects. So far, around one fifth of all PCIs have received CEF
financial assistance for studies and/or works4
.
1.3 Political context
Achieving climate neutrality by 2050, starting with a 55% reduction in GHG emissions
by 2030, is the key climate objective of the European Green Deal presented by the von
der Leyen Commission in December 20195
. With the current climate and energy policy
framework, the EU is not on track to achieve carbon neutrality by mid-century. The
impact assessment carried out for the climate target plan estimates that full achievement
of the currently legislated 2030 energy targets would lead to a reduction of 60% below
1990 by 20506
. Adopted before the climate neutrality objective, current climate and
energy legislation is thus not sufficiently ambitious to deliver a 2030 climate target of at
least 55% GHG emission reductions, as proposed by the Commission7
.
Energy production and consumption represent 75% of total EU GHG emissions. To
achieve the 55% target and to become climate neutral by 2050 Europe needs to lower its
energy consumption and transition to cleaner energy. Energy infrastructure is a key
enabler for the energy transition as reflected in the Commission’s communication on the
European Green Deal and A Clean Planet for all8
. Infrastructure is a long-lived asset and
will therefore need to be consistent with the climate neutrality objective so as to enable
rapid and cost-effective decarbonisation of the energy system and more broadly the
economy. This will require stepping up electrification of the economy; the average
4
See Annex 6 for more information.
5
The European Green Deal, COM(2019) 640 final
6
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
7
Stepping up Europe’s 2030 climate ambition, Investing in a climate-neutral future for the benefit of our
people, COM(2020) 562 final
8
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52018DC0773
7
annual investments needed for the period 2021-2030 amount to EUR 50.5 billion for the
power grid including both the transmission and distribution networks – more than twice
the investments in the period 2011-20209
.
Furthermore, to achieve the levels of renewable energy for a 55% reduction of GHG
emissions by 2030, Europe needs to significantly scale up renewable electricity
generation. This requires investment in offshore renewable energy, which can bring the
scale that is needed. The Commission is planning to adopt an EU strategy for offshore
renewable energy in November. In order to achieve the required massive scale up of
offshore renewable energy in the whole EU up to 2050, the strategy will also address the
issue of coordinating long-term planning and development of offshore and onshore
electricity grids, which are assessed as part of this impact assessment. Other on-going
policy initiatives of direct relevance include the revision of the TEN-T Regulation10
and
the EU taxonomy for sustainable investments11
, as well as the review of the Renewable
Energy Directive envisaged for 2021.
At the same time, the Commission’s communication on energy system integration12
underlines the need for integrated energy infrastructure planning across energy carriers,
infrastructures, and consumption sectors. Such system integration addresses in particular
the decarbonisation needs of the hard to abate sectors, such as industry or transport,
where electrification can be technically or economically challenging. Such investments
include emerging technologies such as hydrogen, power-to-gas which are progressing
towards commercial large-scale deployment.
Already in March 2019, as part of the political agreement between the European
Parliament and the Council on the Connecting Europe Facility for the period 2021-2027,
the co-legislators agreed that the Commission should evaluate the effectiveness and
policy coherence of the TEN-E Regulation and submit an evaluation to the European
Parliament and to the Council by 31 December 2020. The Commission is requested, if
appropriate, to accompany the evaluation by a legislative proposal for the revision of the
guidelines.13
Stakeholders as well have called for this revision to align the TEN-E policy
framework with the new policy context.
2 PROBLEM DEFINITION
An evaluation of the current TEN-E Regulation was carried out back-to-back with this
impact assessment to identify potential shortcomings. The main results can be
summarised as follows (for more details see Annex 5):
 The TEN-E Regulation has effectively improved integration of Member States’
networks, stimulated energy trade and hence contributed to EU competitiveness,
9
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
10
https://ec.europa.eu/transport/themes/infrastructure/ten-t/review_en
11
https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance/eu-taxonomy-
sustainable-activities_en
12
COM(2020) 299 final
13
https://www.consilium.europa.eu/media/38507/st07207-re01-en19.pdf,
http://www.europarl.europa.eu/doceo/document/TA-8-2019-0420_EN.pdf
8
as shown in the evidence on interconnection targets and energy prices and their
convergence across the EU.
 PCIs in electricity and in particular in gas have strongly contributed to security of
supply as a main contextual driver to the design of the TEN-E Regulation. For
gas, the infrastructure is now well connected and supply resilience has improved
substantially since 2013.
 Regional cooperation in Regional Groups and through cross-border cost
allocation is an important enabler for project implementation. However, in many
cases the cross-border cost allocation did not result in reducing the financing gap
of the project, as intended.
 While permitting procedures have been shortened, long permitting procedures
persist in some cases. While the underlying reasons are mainly related to national
implementation and outside the scope of the TEN-E Regulation, there are
elements that can be improved.
 CEF financial assistance was an important factor, grants for studies helped
projects to reduce risks in the early stages of development while grants for works
supported projects addressing key bottlenecks that market finance could not
sufficiently address.
 While the objectives of the current Regulation remain largely valid, their focus on
2020/30 targets must be upgraded to reflect the new political context and the 2050
climate neutrality objective under the European Green Deal.
 Besides the new political context and objectives, technological development has
been rapid in the past decade. This progress should be taken into account in the
infrastructure categories covered by the Regulation, the PCI selection criteria as
well as the priority corridors and thematic areas.
 The TYNDP process as basis for the identification of PCIs has proven effective.
However, while the ENTSOs and TSOs have an important role to play in the
process, there is a need for more scrutiny, in particular as regards defining the
scenarios for the future, setting long-term infrastructure needs and bottlenecks
and assessing individual projects, to enhance trust in the process.
It is worth noting that the evaluation did not look specifically at the issue of offshore
grids as this was not a specific objective of the current TEN-E Regulation. As mentioned
above, enhancing renewable energy and specifically offshore is a necessary part of the
energy transition to achieve climate neutrality by 2050 in a cost-effective manner. The
problems defined in this section and the policy options defined in Section 5 build on the
results of the evaluation and on the numerous comments received from stakeholders (see
Annex 2).14
14
In 2017, a mid-term evaluation of the TEN-E Regulation was completed. In 2019, an evaluation of the
TEN-E Regulation was formally launched with the publication of an evaluation roadmap, which was
complemented in May 2020 with the publication of an inception impact assessment.
9
2.1 Problem 1: Type and scale of cross-border infrastructure developments are
not fully aligned with EU energy policy objectives in particular as regards the
European Green Deal and the climate neutrality objective
The increased 2030 climate target and the 2050 climate-neutrality objective of the
European Green Deal and the Communication “A Clean Planet for All” require a
profound transition of the European energy system, both on the supply and the demand
side. Energy will be produced and consumed in a different manner and in different places
than today. The role of electricity will increase radically, but there will also be an
increasing role for renewable and low carbon gases.
The Commission’s analysis shows that by 2050 more than 80% of electricity will stem
from renewable energy sources, to an increasing extent located offshore15
. EU renewable
electricity production should as a minimum double from today’s 32% share of renewable
electricity in the energy mix to around 65% share in 203016
. To achieve the European
Green Deal objective of climate neutrality 2050 and 55% GHG emission reduction by
2030, the EU needs to significantly scale up the generation of renewable energy. For the
upscaled deployment of renewable generation to have real economic, climate and societal
value, the relevant grid infrastructure should be in place. Electricity grids are essential to
transport renewable energy over medium to long distances, from production sites to the
sites of consumption, and for integrating the European energy markets. An annual
average investment of EUR 50.5 billion are needed in the electricity transmission and
distribution grids, to achieve the 2030 targets alone. This compares to an annual average
investment of EUR 24 billion in the period 2011-2020. This means that the grid
investment should double from the previous decade.
The Commission’s impact assessment for the 2030 targets shows that the offshore wind
capacity in Europe should increase to about 280 GW by 2050 in order to meet the 2030
energy and climate objectives.17
This represents an increase of about 25 times compared
to the current situation. As much as two thirds of the costs of the foreseen upscale in
offshore renewable energy is related to infrastructure, a large part of which will be of
cross-border nature. Over the last 30 years, about 12 GW offshore wind has been
deployed in Europe, mainly as national projects. Continuing with the current deployment
pace, offshore wind and related infrastructure would reach about 25 GW in 2050, or 1/10
of the required 280 GW to achieve climate neutrality.
At the same time, all existing scenarios modelling pathways for the achievement of the
climate neutrality objective by 2050 require a substantial role for renewable and low-
carbon gases in the energy mix, since a 100% electrified energy system is not considered
feasible.18
Therefore, by 2050 the use of unabated natural gas is to be reduced by 66 -
15
A Clean Planet for all. A European long-term strategic vision for a prosperous, modern, competitive and
climate neutral economy, COM(2018) 773 final
16
Stepping up Europe’s 2030 climate ambition, Investing in a climate-neutral future for the benefit of our
people, COM(2020) 562 final
17
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
18
These scenarios include those in the EU Long-Term Strategy (2018), the TYNDP 2020 scenarios
developed by ENTSOG and ENTSO-E (2020), Eurelectric's "Decarbonisation pathways" (2018) or those
10
71%, with a steep increase of renewable and low-carbon gases, with hydrogen
accounting for approximately 46% - 49% of all renewable and low-carbon gases in 2050.
However, there is currently very limited dedicated or retrofitted infrastructure in place to
transport and trade hydrogen across borders from one Member State to another. By 2030,
total investments needs in hydrogen electrolysers are estimated between EUR 24-42
billion. About EUR 65 billion is needed for hydrogen transport, distribution and
storage47
.
These forecasts, and in particular the impact assessment accompanying the 2030 climate
target plan, show that the energy mix of the future will be very different from the one
today. The current energy infrastructure investments are clearly insufficient to transform
and build the energy infrastructure of the future. This also means infrastructure needs to
be in place to support this European energy transition, including rapid electrification,
scaling up of renewable electricity generation, the increased use of renewable and low-
carbon gases, energy system integration and a higher uptake of innovative solutions.
Given the role of clean hydrogen in the decarbonisation and as energy carrier and storage
for an integrated energy system, the lack of dedicated energy infrastructure for hydrogen
would negatively affect the pathway to climate neutrality, especially for the
decarbonisation of the industry sectors that have limited decarbonisation options
available.19
Trans-European cross-border energy infrastructures have to make a more important
contribution to build and establish the cross-border infrastructure necessary for achieving
climate neutrality. A recent JRC study assessing the impacts of replacing coal with non-
CO2-emitting resources, mainly onshore wind power, by 2030 concludes that, in a power
system largely based on renewables electricity, interconnectors are “a definitive enabler,
not only of market integration, but also of a path towards a renewables-based power
system”20
. Investments to upgrade the electricity interconnections between European
regions, within the EU but also with neighbouring countries, by 53 GW would have the
potential to reduce the carbon footprint of the European power system by more than a
quarter in 2030. A more interconnected power system would require the deployment of
significantly less renewable generation capacity as well as significantly less thermal
backup capacity. These findings confirm earlier studies pointing to the need and benefits
of a more interconnected energy systems to enable a decarbonised power system21
.
Concerning the future gas infrastructure needs, the Commission’s hydrogen strategy
developed for DG ENER in the framework of the study "Impact of the use of the biomethane and hydrogen
potential on trans-European infrastructure" (2019).
19
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
20
Kanellopoulos K., Kavvadias K., De Felice M., Wind and other CO2-free assets replacing coal in 2030,
EUR 30343 EN, Publications Office of the European Union, Luxembourg, 2020, ISBN 978-92-76-21440-
3, doi:10.2760/007407, JRC121605, p. 2
21
Kanellopoulos K., Scenario analysis of accelerated coal phase-out by 2030A study on the European
power system based on the EUCO27 scenario using the METIS model, EUR 29203 EN,PublicationsOffice
of the European Union, Luxembourg, 2018, ISBN 978-92-79-81888-2,doi:10.2760/751272, JRC111438;
Faunhofer ISI (2014): Optimized pathways towards ambitious climate protection in the European
electricity system (EU Long-term scenarios 2050 II), Final Report.
11
concluded that for the required deployment of hydrogen a large-scale infrastructure
network is one important element that only the EU and the single market can offer.22
A study on infrastructure needs, commissioned by the Commission, concluded that total
investment needs in the trans-European transmission energy infrastructure are around
EUR 200 billion, in the period between 2021 and 2030.23
The upgrade of the electricity
interconnections between European regions by 53 GW, as set out above, would require
total investments of between EUR 35 and 70 billion by 2030.24
The upscale of offshore
renewable energy in Europe by 2050 has an estimated cost of EUR 800 billion of which
EUR 530 billion EUR is related to grid infrastructure. To reduce the costs as much as
possible, a strong focus on rational grid development is key.
The evaluation showed that the current TEN-E Regulation has made an important
contribution in advancing cross-border energy infrastructure and in meeting energy
policy objectives, and in particular security of supply. While the share of electricity PCIs
has constantly increased since the first PCI list (see Figure 1), the share of the different
sectors does not fully reflect future needs. Although transmission networks for offshore
renewables are eligible under the current TEN-E Regulation and despite a priority
corridor for offshore grid in the Northern Seas, very few offshore grid PCIs have been
selected so far. The number of PCIs on smart electricity grids has never exceeded six.
Gas PCIs have focussed on natural gas projects with no role for renewable and low
carbon gases, including hydrogen.
Problem driver 1.1: TEN-E infrastructure categories do not sufficiently reflect the
Green Deal and technological progress
The infrastructure categories eligible for PCI status under the current TEN-E Regulation
do neither reflect the European Green Deal objectives and the related infrastructure needs
nor technological progress made since 2013. This prevents the uptake of PCIs that are
necessary to achieve the climate neutrality objective under the European Green Deal. In
the gas sector, hydrogen networks are currently not eligible for PCI status, for which
nearly all stakeholders considered EU-wide coordinated planning relevant for a cost-
efficient transition to renewable and low-carbon gases.25
In addition to the technological
advancement in renewable and low-carbon gases, digitalisation, automation, and other
innovations, including the electrification of the transport sector, have made important
progress. Smart grid solutions, including demand response, have developed considerably
over the past years because of the acceleration of the digital transformation of the energy
sector and will play a crucial role in enabling renewable energy integration26
. The need to
update infrastructure categories to adapt to future challenges was widely shared among
22
A hydrogen strategy for a climate-neutral Europe, COM(2020) 301 final
23
Ecofys (2017): INVESTMENT NEEDS IN TRANS-EUROPEAN ENERGYINFRASTRUCTURE UP
TO 2030 AND BEYOND, Final report, http://publications.europa.eu/resource/cellar/431bc842-437c-11e8-
a9f4-01aa75ed71a1.0001.01/DOC_1
24
Kanellopoulos K., Kavvadias K., De Felice M., Wind and other CO2-free assets replacing coal in 2030,
EUR 30343 EN, Publications Office of the European Union, Luxembourg, 2020, ISBN 978-92-76-21440-
3, doi:10.2760/007407, JRC121605
25
Most stakeholders who responded to the targeted survey consider that hydrogen is relevant for the TEN-
E framework and required at large scale.
26
International Energy Agency (2017): Digitalisation and Energy, OECD.
12
the stakeholders27
, who consider that the current set-up is not aligned with today’s
decarbonisation ambitions nor reflect emerging technologies.
This links directly to the eligibility for CEF financial assistance for which PCI status
under TEN-E is a precondition.28
New infrastructure categories that can make an
important contribution to achieve the climate neutrality objective, e.g. hydrogen are less
mature and hence need access to financing e.g. for studies to help make the projects
“bankable”.
The above-referenced JRC study on the implications of a renewables based energy
system also shows that cross-border interconnectors with third countries play an
increasing role to achieve a decarbonised energy system cost-effectively. The
Commission Expert Group on electricity interconnection targets also highlighted the role
of interconnectors with neighbouring countries for the better integration of renewable
energy sources and security of supply.29
Under the current TEN-E Regulation projects
with third countries are only eligible if they show a physical cross-border impact for at
least two Member States which is difficult to demonstrate.30
At the same time, the TFEU
provides for the possibility that the Union may decide to cooperate with third countries to
promote projects of mutual interest (PMI)31
and to ensure the interoperability of networks
in the EU’s neighbourhood. Such cooperation can help reduce GHG emission in the EU
and in third countries, thus contributing to achieving the Green Deal objectives.
However, PMIs do currently not benefit from the provisions of the TEN-E framework.
Problem driver 1.2: Lack of a mandatory sustainability criterion in the PCI selection
process
The current TEN-E Regulation defines a set of selection criteria for projects that are
eligible for PCI status. The specific criteria include sustainability, security of supply,
market integration and competition. Electricity and gas PCI candidate projects need to
contribute significantly to at least one of these specific criteria. As a result, projects that
enable, for example, the increase in gas supply/demand may become PCIs even if they do
not demonstrate benefits in terms of sustainability but address security of supply risks.
Some stakeholders consider that this poses a risk that infrastructure developments and
specifically PCIs may not be on track to achieve EU energy and climate policy
27
Replies to the targeted survey showed that there is higher disagreement than agreement in the fitness of
the current priority corridors and thematic areas to the future challenges. For priority corridors, 36
respondents (of 112) disagree and 32 agree they are fit for purpose for future challenges to the energy
infrastructure. As for thematic areas, 46 disagree, while only 15 respondents agree on the prior statement.
28
Except for cross-border projects in the field of renewable energy for which a new window is foreseen
under the new CEF Regulation for the MFF2021-2027.
29
“Electricity interconnections with neighbouring countries”, Second report of the Commission Expert
Group, https://op.europa.eu/en/publication-detail/-/publication/785f224b-93cd-11e9-9369-01aa75ed71a1
on electricity interconnection targets
30
On the previous and current 4th
PCI lists, there have been several projects with third countries that
fulfilled current conditions, i.e. demonstrating socio-economic benefits for at least two Member States For
example, electricity interconnections between Italy and Montenegro, between Italy and Tunisia (ELMED),
and from Israel to Greece via Cyprus (Euroasia), the gas interconnection between Bulgaria and Serbia, the
Southern Gas Corridor or an oil interconnector between Ukraine and Poland.
31
Art. 171(3) TFEU: “The Union may decide to cooperate with third countries to promote projects
of mutual interest and to ensure the interoperability of networks.”
13
objectives.32
Building on the conclusions of the Technical Expert Group on an EU
taxonomy for sustainable investments33
this is not an issue for all infrastructure
categories considered under the TEN-E framework. A sustainability assessment is not
necessary for investments in electricity transmission and distribution networks in the
interconnected European grid as well as electricity storage, which are considered as such
as substantially contributing to climate change adaptation and mitigation objectives
because of the need for electrification to achieve the climate objectives.34
The expert
group concluded that the sustainability in terms of greenhouse gas emissions of new
pipelines for new, low-carbon gases including hydrogen should be assessed. In the
absence of a mandatory sustainability criterion for such projects, TEN-E would be
incoherent with the taxonomy.
Problem driver 1.3: Sectoral bottom-up approach to infrastructure planning
The evaluation of the current framework concluded that the approach to cross-border
infrastructure planning is in principle working well and that the central role of the
ENTSOs (and TSOs) is justified by their specialised knowledge and expertise in network
planning. However, it pointed to shortcomings of a sectoral approach to planning and to
the lack of an independent validation of the assessment methodology and underlying
assumptions used since TSOs are at the same time the promoters of most of the
infrastructure projects submitted to the EU-wide TYNPD (and hence eligible for PCI
status). This gives the ENTSOs an incentive to emphasise security of supply risks above
e.g. investments in improving the efficiency of the system and hence to higher needs for
infrastructure construction. Other actors such as the Commission and ACER have a
limited role under current TEN-E Regulation, which cannot prevent that the ENTSOs
assume e.g too significant gas/electricity demand for the future, import of fuel and
unreasonable technology development. This in turn may lead to the identification of
infrastructure gaps that are not realistic and overestimates the potential benefits of the
proposed projects. This problem is reinforced by a sectoral planning approach.
Today’s energy system is built on parallel vertical energy value chains, which rigidly link
specific energy resources with specific end-use sectors. This is mirrored in a sectoral
approach to infrastructure planning where electricity and gas networks are planned and
managed mostly independently from each other. Whilst this approach has worked in the
past, the Commission communication on energy system integration35
recalls that this
model of separate silos cannot deliver a climate neutral economy by 2050. It is
technically and economically inefficient, and leads to substantial losses in the form of
32
In the public consultation several environmental NGOs, NRAs and industry stakeholders indicated that
the current selection process has resulted in projects being selected that do not have a positive effect on the
CO2 emissions, do not sufficiently support network innovation and include traditional, fossil fuel
infrastructure which will ultimately hamper the achievement of climate neutrality. TSOs did not indicate
strong opinions on the sustainability criterion.
33
EU Technical Expert Group on Sustainable Finance: Taxonomy, Technical Report
https://ec.europa.eu/info/sites/info/files/business_economy_euro/banking_and_finance/documents/200309-
sustainable-finance-teg-final-report-taxonomy-annexes_en.pdf
34
In addition to substantially contributing to one of the environmental objectives of the Taxonomy
Regulation, it must also be demonstrated that an activity does not significantly harm any of those
objectives.
35
COM(2020) 299 final
14
waste heat and low energy efficiency36
. The insufficient integration of the energy system
hinders the decarbonisation of electricity as well as major energy consuming sectors,
notably transport and industry.
The selection of infrastructure projects of common interest in the electricity and gas
sectors is based on 10-Year Network Development Plans (TYNDPs). These plans are
developed at national level and since 2013 integrated to the EU level for gas and
electricity. The EU-wide TYNDPs are elaborated by the European Network of
Transmission System Operators for Electricity (ENTSO-E)37
and for Gas (ENTSOG)38
which consist of the National Transmission System Operators (see Annex 5 for a more
information). The two TYNDPs remain two separate sectorial processes. This represents
a significant impediment in the identification of optimal infrastructure solution in cases
where e.g. a need identified in the electricity sector could be tackled by a solution in the
gas sector. Although the scenarios reflect the 2050 climate-neutrality objectives, the
trajectories chosen are debatable and tend to favour in particular high levels of gas
demand39
.
A significant number of stakeholders across different stakeholder groups agree that the
current sectoral approach to infrastructure planning does not match the needs for system
integration and question the adequacy of roles and the coordination with the distribution
operators and synergies with other sectors. Stakeholders indicated the wish to weaken the
role of the ENTSOs (39%) and to strengthen the role of DSOs (53%) and other
stakeholders, such as NGOs (39% - 67% of whom represented industry or civil society).
Stakeholders state that the process is geared towards the construction of additional
infrastructure40
and may be at odds with the energy efficiency first principle and not
necessarily lead to those PCIs being selected and implemented that are most efficient
from a technical, economic and social perspective.41
The risk of stranded assets exists.
While the current bottom-up infrastructure planning via the TYNDP provides a solid
basis for the identification of necessary infrastructure projects onshore, this is not the
case for offshore grids. The onshore electricity grid developed over a long period and
with an incremental and integrated approach when utilities were the owners of the
generation units and networks. The starting point for the development of offshore
networks is fundamentally different. An incremental approach, as used for onshore
networks, is not sufficient to identify offshore infrastructure needs at the necessary scale
as set out above. The bottom-up approach is too fragmented and nationally focused,
36
In Trinomics et al. (2018), it was stressed that the current setup for selecting PCI projects is partially
adequate given the deficiency in accounting for energy efficiency in the evaluation process, although
energy efficiency gains are accounted for in the demand levels of the scenarios to be modelled according to
the TYNDP 2020 Scenario report.
37
https://tyndp.entsoe.eu/about-the-tyndp/
38
https://www.entsog.eu/tyndp#
39
ENTSO-E/ENTSOG (2020): TYNDP 2020 Scenario Report,
https://eepublicdownloads.azureedge.net/tyndp-
documents/TYNDP_2020_Joint_Scenario_Report_ENTSOG_ENTSOE_200629_Final.pdf
40
In the public consultation, a number of stakeholders indicated that ENTSOs role in planning and owning
assets ultimately creates a potential conflict of interest that favours TSOs over non-TSOs promoters with a
limited role of other technologies or actors.
41
It is important to note that security of supply requires redundant infrastructure and needs to be taken into
account in the context of the energy efficiency first principle.
15
which leads to a less rational offshore wind development, resulting in higher costs and
irrational use of maritime space. Lack of grids and grid connections are perceived as a
key barrier to large-scale offshore wind by the industry. Continuing the current practice
would not bring along many new offshore wind parks at the required speed42
.
Like for onshore infrastructures, there is also a risk of stranded assets offshore. A
coordinated approach allows for developing an optimised offshore grid both with a view
to interconnection and to evacuate offshore wind. A recent study43
has demonstrated that
the current practice of nationally developing offshore wind with radial connections to
shore, and in parallel develop cross-border interconnectors often is not the optimal way,
although this may vary between regions. Hybrid assets in the North Sea region, i.e.
interconnectors with offshore production connected to them would reduce costs
significantly and make better use of the maritime space, compared to developing
interconnections and evacuation of offshore wind separately.
An inadequate framework for offshore infrastructure planning explains the slow progress
in the identification of cross-border offshore infrastructure projects, whereas current
permitting procedures for offshore projects explain delays in project implementation (see
problem driver 2.1).
2.2 Problem 2: Delays in project implementation
Delays in the implementation of the projects of common interest, identified as necessary
to achieve the EU climate and energy policy objectives, would jeopardise the accelerated
change in the energy system as set out above. The implementation of PCIs still takes too
long as projects have to overcome several challenges during the implementation process
as is further outlined below. In 2020, 27% of electricity PCIs were delayed by on average
17 months against their initially planned commissioning date and the share of delayed
electricity PCIs has been fairly stable (23%-31%) between 2016-2019. This would
appear particularly problematic given the increasing role of electricity and resulting
infrastructure needs to achieve the 2030 and 2050 GHG reduction targets. As for gas
PCIs, in 2020, 38% of all PCIs encountered delays of on average 33 months.44
Problem driver 2.1: Long permitting procedures
About 40% of PCIs are still expected to take more than the legal requirement to complete
the permit granting procedure.45
According to ACER, the average permitting durations
are 4 years for electricity PCIs and 3.1 years for gas PCIs with some PCIs requiring
42
E.g. Navigant/SWECO (2020): Study on the offshore grid potential in the Mediterranean region,
ENER/B1/2019-508, Final draft report; ENTSO-E (2020): Position on Offshore Development,
https://www.entsoe.eu/2020/05/29/entso-e-position-on-offshore-development/
43
E.g. Roland Berger (2019; “How to reduce costs and space of offshore development : North Seas
offshore energy clusters study, https://ec.europa.eu/energy/studies/hybrid-projects-how-reduce-costs-and-
space-offshore-developments_en?redir=1
44
ACER (2020): Consolidated Report on the progress of electricity and gas Projects of Common Interest,
https://www.acer.europa.eu/Official_documents/Acts_of_the_Agency/Publication/Consolidated%20Report
%20on%20the%20progress%20of%20electricity%20and%20gas%20Projects%20of%20Common%20Inter
est%20%282020%29.pdf
45
Ibidem.
16
substantially longer than the foreseen maximum of 3.5 years.46
However, out of the 18
PCIs that already passed the 5-year mark, 13 had started the permitting process before the
entry into force of the TEN-E regulation and therefore did not benefit from the permitting
provisions therein due to the transitional provisions and are still in permitting under the
applicable national rules.
According to ACER’s report, three electricity PCIs were delayed at a permitting stage
due to public opposition, while three more are facing lawsuits and court procedures that
have resulted in delays as well47
. Public opposition continues to be one of the key factors
for lengthy implementation procedures of PCIs driven by reasons such as insufficient or
late use of participatory processes.48
Lack of public awareness on the specific needs for
new infrastructure hampers the acceptance of PCIs and may result in a significant
number of objections during consultations, thereby leading to significant additional
efforts and delays in the permitting process. Ultimately, public opposition might lead to
court claims by organised local communities, landowners and citizens living in the
vicinity of potential installations and routing of PCIs. Since the administrative appeals
and judicial remedies before court or tribunal do not fall under the foreseen permitting
timeline of 3.5 years49
, this causes further delays. For instance, if there is an appeal
regarding any of the issued permits, the permitting process is not complete until the
appeal is complete and the permits issued are final. The TEN-E Regulation does not
currently provide for any means of accelerating project implementation from the
perspective of court proceedings. In this respect, a series of stakeholders mentioned that a
streamlining of appeals regarding PCIs would also be considered so that the accelerated
permitting process becomes truly effective.
Strong regional cooperation is key to implement more cross-border hybrid and joint
offshore projects. The permitting experience50
, so far, of offshore cables shows that they
often encounter additional delays by comparison to onshore projects due to the need for
additional studies, maritime spatial planning and crossing international waters of several
countries. Cross-border hybrid and joint offshore projects bring even more challenges as
the implementation of the infrastructure needs to be coordinated with the deployment of
generation projects. As such, stakeholders called for streamlined permitting procedures
for cross-border offshore projects. Delays in permitting leads to delay in infrastructure
such as renewable electricity generation and grids that are needed for the energy
transition towards climate neutrality in 2050.
Problem driver 2.2: Sub-optimal implementation and insufficient use of cost sharing
tools and regulatory incentives
46
Ibidem.
47
Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure, Draft final report
48
Scope et al. (2020) Innovative actions and strategies to boost public awareness, trust and acceptance of
trans-European energy infrastructure projects. Draft Revised Interim Report. DG ENER.
49
Article 10 (6)
50
Input from National Grid regarding the development of the Viking Cable during the PCI Days,
December 2019 edition, the recording is accessible here:
https://www.youtube.com/watch?v=uk84QPpEUyY, and input in the stakeholder consultation regarding
the development of projects such as the Baltic Pipe.
17
The TEN-E Regulation introduced a regulatory framework aiming at facilitating the
implementation of PCIs, by creating financial and regulatory certainty: the split of costs
across borders (cross border costs allocation, CBCA), inclusion of the investment costs
into tariffs and additional investment incentives for riskier projects. In practice, these
provisions remained underutilised depriving PCIs of the benefits they could have
obtained thus delaying or failing to remove barriers to their implementation.
The current CBCA provisions have rarely been used as intended to reduce or eliminate
the financing gap but have been applied only for projects requesting CEF funding for
works51
, as the CBCA is one of the required documents to be submitted. This is
supported by ACER’s finding of 70% of all CBCA decisions made up to March 2018
concerning projects with only a single Member State involved52
. By March 2020, this
share decreased to just under 50%.53
Allocation of costs to non-hosting countries, with
the benefits that entails in terms of enabling and accelerating implementation, has only so
far occurred for gas PCIs.54
Moreover, the manner in which national regulators approach CBCA decisions is very
diverse and very often diverts from the principles above as regards the financing of
infrastructure. NRAs often only allocate partially the investment costs into tariffs (or not
at all) mentioning that the rest of the financing should come from a CEF grant or even
issue CBCA decisions conditional upon obtaining CEF grants. This creates regulatory
instability for the projects, which cannot obtain financing on the market and are rendered
completely dependent on Union financial assistance leading, thus, to hampering their
realisation. In addition, viewing the CBCA procedure solely as a precondition to CEF
applications55
deprives the provision of its main purpose, which is creating a framework
for the procedure of splitting the costs of PCIs across borders for the purposes of
enabling and accelerating their implementation.
An additional issue arises with the application of the ACER CBCA Guidelines from
2015, which are not legally binding. Some NRAs and project promoters apply them and
others do not, some choose to apply the most convenient elements. The correct
implementation of the CBCA procedure becomes even more relevant in the context of
infrastructure to support the development of offshore renewables. The reason is that the
constructing countries will not necessarily coincide with the beneficiary countries due to
the location of the offshore renewable energy potential in a certain sea basin, maritime
spatial planning and environmental restrictions. Without the application of clear CBCA
guidelines, the benefits from such projects could be widely split amongst Member States,
not reflecting the benefits, and thus make the realisation of the projects difficult.
51
Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure, Draft final report.
52
ACER (2018), Third Edition of the Agency’s Summary Report on Cross-Border Cost Allocation
Decisions – Status update as of March 2018.
53
Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure, Draft final report.
54
Ibidem.
55
For all cases where CBCA decisions were made, the project promoters consecutively applied for CEF
grants. The objective of accessing CEF funding was indicated by stakeholders as more important than the
allocation of costs between Member States.
18
The use of regulatory investment incentives introduced by the TEN-E for projects that
incur higher risks has been low and, even though they were crucial for some of the
projects, their overall contribution to the advancement of PCIs remains limited, with only
eleven PCIs applying.56
According to ACER only in four cases overall (one electricity,
three gas), risk-based incentives have been granted.57
Stakeholder input has shown that
while some TSOs see an added value in these incentives in adjusting the financial risk,
regulators refer to the low number of applications to illustrate the lacking need for
additional risk-based incentives.
Offshore wind related infrastructure projects will most likely have a higher risk profile
than traditional interconnectors58
also substantiated by offshore energy industry
stakeholders and project promoters, and could benefit from a facilitating regulatory
regime that starts from an acknowledgement of their inherent higher risk, to be
recognised in their regulatory regime. As such, stakeholders called for a clear legal
framework for cross-border hybrid projects notably as regards the assessment of benefits
and the cross-border allocation of costs. Moreover, the current provisions for investment
incentives do not cater for more innovative grid solutions, for instance if they are more
OPEX intensive relative to the CAPEX intensive traditional grids.
In sum, the identified problem drivers are largely independent from each other, although
reinforcing sustainability during PCI selection can contribute to limit the number of
projects that are not fully in line with Green Deal objectives. The problem drivers behind
problem 1 are largely driven by a new political context and technological progress. The
problem drivers behind problem 2 are mainly related to implementation and the current
TEN-E legal framework and to a lesser extent to technological progress (offshore wind).
Figure 3 summarises the problems and the underlying drivers.
56
Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure.
57
ACER (2019). Consolidated Report on the Progress of Electricity and Gas Projects of Common Interest.
ACER (2018). Summary report on project-specific risk-based incentives.
58 As resulting from the Study on How to reduce costs and space of offshore development: North Seas
offshore energy clusters study, European Commission, Roland Berger GmbH, available at:
https://op.europa.eu/en/publication-detail/-/publication/59165f6d-802e-11e9-9f05-01aa75ed71a1/language-
en?WT.mc_id=Searchresult&WT.ria_c=37085&WT.ria_f=3608&WT.ria_ev=search and the Study on
Baltic offshore wind energy cooperation under BEMIP, COWI , Directorate-General for Energy (European
Commission) , Ea Energy Analyses , THEMA Consulting group, available at:
https://op.europa.eu/en/publication-detail/-/publication/9590cdee-cd30-11e9-992f-01aa75ed71a1/language-
en/format-PDF/source-search
19
Figure 3: Problems and problem drivers
The initiative is justified by market and regulatory failures also driven by a new policy
context, new technological developments, and achievements since the adoption of the
current TEN-E Regulation in 2013.
2.3 How will the problem evolve?
The problems and the underlying problem drivers are likely to become even more
important in the short and mid-term. Adopted or planned policy initiatives such as the
2030 Climate Target Plan, the revision of the ETS Directive, the Effort Sharing
Regulation, the Energy Efficiency Directive, the Renewable Energy Directive, the
Energy Taxation Directive and the planned initiative for the decarbonisation of gas are
expected to significantly increase the ambition on the mid- and long-term
decarbonisation and renewable energy targets, in line with the 2030 55% GHG reduction
objective. This will lead to an accelerated pathway to the decarbonisation of the energy
system, significantly higher penetration of renewables in power and heating at the
expense of fossil fuels, reduction of demand for energy, and hence to a significant
increase in the need for an enabling energy infrastructure in place by 2030 and beyond.
Without changes in TEN-E Regulation, investments necessary for this transition will
happen in a sub-optimal, uncoordinated manner at a higher cost. The gap in cross-border
infrastructure investments in line with the decarbonisation objectives is expected to
increase, in particular as regards investment related to renewable generation, although
there should be a lower demand for gas projects due to the progress in the completion of
new gas infrastructure projects and changes in the market framework such as the
taxonomy. Investments in technologies that allow moving towards decarbonisation more
quickly would not be fully prioritised. Investments in cross-border hydrogen pipelines
would not come forward fast enough, offshore wind developments would be incremental,
smart grids needed for better functioning of the European network could not be fully
exploited. Also, the identification of the future infrastructure needs and their planning
would continue to be in silos, without contributing to the integration of the energy
system.
Moreover, the Covid19 sanitary crisis reinforces some of the identified problems such as
delays in project implementation and access to financing for cross-border infrastructure
projects. However, investments in energy infrastructure, in particular in the context of the
roll out of renewable energy generation, is a key component of the recovery and
resilience fund (RRF). Investments in smart and sustainable energy infrastructure has
20
been identified as a key enabling factor to achieve the European Green Deal objectives
and a green recovery in line with political objectives. However, also depending on
Member States’ objectives, cross-border interconnections are not expected to be financed
to a large extent under the RRF.
The taxonomy regulation59
establishes criteria for determining whether an economic
activity qualifies as environmentally sustainable for the purposes of establishing the
degree to which an investment is environmentally sustainable. The Commission is
currently preparing two Delegated Acts to establish an actual list of environmentally
sustainable economic activities by defining technical screening criteria for climate
change mitigation and adaptation, which will be adopted by end 2020. These screening
criteria are aimed to classify projects as guidance for private investors. Without a review
of TEN-E there would be a risk of increasing incoherence with the guidance to private
investment as established in the taxonomy regulation.
2.4 Scope of the initiative
Based on the evaluation results, the stakeholder feedback, and the problem analysis, key
principles of the current TEN-E Regulation would remain unchanged and are not further
analysed in the impact assessment: the TYNDP as such as tool to European infrastructure
planning as basis for the PCI selection process (except for smart grids and CO2 transport
networks), and regional cooperation based on priority corridors and thematic areas.
Whilst the regional groups and the priority corridors and areas will remain as the key
working method to identify and monitor the implementation of PCIs, they would be
adjusted to the new scope of the TEN-E Regulation in terms of eligible infrastructure
categories. The focus of the initiative is on four impact areas of the current TEN-E
framework (see Figure 2): a) scope (infrastructure categories), b)
governance/infrastructure planning (planning for offshore grids, and cross-sectoral
infrastructure planning/PCI selection criteria), c) permitting, and d) regulatory treatment.
3 WHY SHOULD THE EU ACT?
3.1 Legal basis
Article 170 of the Treaty on the Functioning of the European Union foresees that the
Union shall contribute to the establishment and development of trans-European networks,
inclosing in the area of energy infrastructure. The Union will need to promote
interconnection of national networks. The TEN-E Regulation is based on Article 172 of
the Treaty on the Functioning of the European Union which provides for the legal base to
adopt guidelines covering the objectives, priorities and broad lines of measures envisaged
in the sphere of trans-European networks as set out in Article 171. The guidelines are to
identify projects of common interest that are necessary for making the TEN-E fit for
purpose. The guidelines also set the conditions under which the EU may financially
support the PCIs.
59
Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment, and
amending Regulation (EU) 2019/2088, OJ L 198, 22.6.2020, p. 13
21
3.2 Subsidiarity: Necessity of EU action
Energy transmission infrastructure (including an interconnected offshore grid and smart
grid infrastructure) has a European added value due to its cross-border impacts and is
essential to achieve a climate neutral energy system. The TEN-E Regulation has provided
value and has contributed to achieving results regarding the EU energy market
integration, competition and security of supply. A framework for regional cooperation
across Member States is necessary to develop cross-border energy infrastructure.
Individual Member State regulations and actions are insufficient to deliver these
infrastructure projects as a whole.
3.3 Subsidiarity: Added value of EU action
Internal energy market is based on cross-border interconnectors, development of which
requires cooperation of two or more Member States, all with their own regulatory
framework. The TEN-E Regulation has provided additional value compared to what
could have been achieved at national or regional level alone. There is widespread
agreement among stakeholders on the EU added value of the Regulation, achieved
through regional cooperation, access to financing, improved information and
transparency, and improved planning and permitting processes. The majority believe that
TEN-E achieved more than could have been achieved at national/regional level (92 %,
79% respectively agree) and that the issues addressed by the TEN-E Regulation continue
to require action at EU level (91% agree, 0 disagree) (see Annex 2). Many Member
States have benefitted from an increase in security of supply, more competitive markets
and more interconnected energy networks. Given the recognition of TEN-E as effective
and cost-efficient instrument in the evaluation, the current instrument should be further
improved to address the above-identified problems instead of developing a new
instrument.
4 OBJECTIVES: WHAT IS TO BE ACHIEVED?
In line with the results of the evaluation, the general objective of the initiative builds very
closely on the general objective of the current TEN-E Regulation but develops it further.
By referring explicitly to both energy and climate objectives as well as the 2030/50
targets, the revised general objective reflects the new political context and the
achievements of the current TEN-E Regulation, e.g. in terms of gas security of supply.
The overall objective is to align the TEN-E Regulation with the European Green Deal
objectives, and the policy initiatives proposed within its framework and thereby to
support the timely transition towards climate neutrality by 2050, starting with a 55%
reduction in GHG emissions by 2030 in a cost-efficient manner.
4.1 General objectives
The general objective of the revision is to facilitate the timely development of adequate
energy infrastructure across the EU and in its neighbourhood to enable delivering on the
EU’s energy and climate objectives in line with the European Green Deal, in particular
on the 2030/50 targets including the climate-neutrality objective, as well as market
integration, competitiveness, and security of supply at least cost to consumers and
businesses. Stakeholders in the targeted survey identified greenhouse gas emission
reductions / climate neutrality as the most important challenge in the field of energy
22
infrastructure today followed by the integration of renewable energy sources and energy
system integration, both closely linked to greenhouse gas emission reduction.
4.2 Specific objectives
The specific objectives to be pursued by the policy options are to correct the problems
and underpinning drivers identified in Section 2, namely to:
 Enable the identification of the cross-border projects and investments across the
EU and with its neighbouring countries that are necessary for the energy
transition and climate targets
 Improve infrastructure planning for energy system integration and offshore grids
 Shorten permitting procedures for PCIs to avoid delays in projects that facilitate
the energy transition
 Ensure the appropriate use of cost sharing tools and regulatory incentives
Figure 4 illustrates how the problems and their underlying drivers relate to the general
and specific objectives of the initiative. The last column indicates how the policy options
that will be developed in more detail in the next section relate to the problem drivers and
objectives.
Figure 4: Intervention logic diagram
Problem/Driver Objective Policy option
Problem 1
Type and scale of cross-border
infrastructure developments are
not fully aligned with EU energy
policy objectives in particular as
regards European Green Deal and
the climate neutrality objective
General objective (Part 1)
Facilitate the development of
adequate energy infrastructures
across the EU and in its
neighbourhood to enable
delivering on the EU’s energy
and climate objectives, in
particular on the 2030/50 targets,
as well as market integration
competitiveness, and security of
supply
Driver 1.1
TEN-E infrastructure categories
do not sufficiently reflect the
Green Deal and technological
progress
Specific objective 1
Enable the identification of the
cross-border projects and
investments across the EU and
with its neighbouring countries
that are necessary for the energy
transition and climate targets
Option A.1: Smart
electricity grids and
electricity storage
Option A.2: Gas
infrastructure, hydrogen
networks and power-to-
gas
Option A.3: Projects of
mutual interest (PMIs)
Driver 1.2
Lack of a mandatory
sustainability criterion in the PCI
selection process
Option B.2: Cross-
sectoral infrastructure
planning
Driver 1.3
Sectoral bottom-up approach to
Specific objective 2
Improve infrastructure planning
Option B.1: Offshore
grids for renewable
23
infrastructure planning for energy system integration and
offshore grids
energy
Option B.2: Cross-
sectoral infrastructure
planning
Problem 2
Delays in project implementation
General objective (Part 2)
Facilitate the timely development
of adequate cross-border energy
infrastructures across the EU at
least cost for consumers and
businesses
Driver 2.1
Long permitting procedures
Specific objective 3
Shorten permitting procedures
for PCIs to avoid delays in
projects that facilitate the energy
transition
Option C.1: Permitting
Driver 2.2
Sub-optimal implementation and
insufficient use of the cost
sharing tools and regulatory
incentives
Specific objective 4
Ensure the appropriate use of
cost sharing tools and regulatory
incentives
Option D.1: Regulatory
treatment
In addition to the above objectives, the initiative seeks to simplify and improve the
efficiency of the TEN-E Regulation as further specified in section 8.2.
5 WHAT ARE THE AVAILABLE POLICY OPTIONS?
Building on the inception impact assessment and the evaluation as well as the issues
identified in Section 2 and the objectives set out in Section 4, policy options to address
the problems and its underlying drivers, will be presented and discussed for four impact
areas of the current TEN-E framework: scope, governance/infrastructure planning,
permitting and public participation, and regulation. A preliminary analysis will allow
discarding those (sub-)options with the least positive impact. Table 1 provides an
overview of the policy options subject to assessment.
24
Table 1: Overview of assessed policy options
Policy option Description
A) SCOPE
Option A.1. Smart electricity grids and electricity storage
Option A.1.0 Business as usual
Option A.1.1 Broadened scope to reflect technological developments
Sub-option: Inclusion of non-mechanical storage
Option A.2 Gas infrastructure, hydrogen networks and power-to-gas
Option A.2.0 Business as usual
Option A.2.1 Exclude all natural gas infrastructure but include hydrogen and P2G
Option A.2.2 Exclude natural gas infrastructure but include hydrogen, P2G and smart gas
grids for low-carbon and renewable gases
Sub-option: Natural gas infrastructure for renewable and low-carbon gases
Sub-option: Exceptions for natural gas PCIs (advanced implementation)
Option A.3 Projects of mutual interest (PMIs)
Option A.3.0 Business as usual
Option A.3.1 Inclusion of projects of mutual interest (PMIs)
B) GOVERNANCE / INFRASTRUCTURE PLANNING
Option B.1 Offshore grids for renewable energy
Option B.1.0 Business as usual
Option B.1.1 Integrated offshore development plans
Option B.1.2 Regional Independent System Operator / Joint Undertaking
Option B.2 Cross-sectoral infrastructure planning
Option B.2.0 Business as usual
Option B.2.1 Strengthened governance and sustainability
Option B.2.2 New governance set-up and expansion of scope and role of the TYNDP
C) PERMITTING
Option C.1 Permitting
Option C.1.0 Business as usual
Option C.1.1 Use of urgent court procedures
Option C.1.2 One-stop shop per sea basin for offshore renewable infrastructure projects
D) REGULATORY TREATMENT
Option D.1 Regulatory treatment
Option D.1.0 Business as usual
Option D.1.1 Inclusion of full investment costs
The options set out in this section are those with a significant potential to address the
problems identified above. Additional options are set out in Annex 9. These options
propose changes or improvements of mainly technical nature and are considered non-
essential in view of their potential to address the problem drivers. They do not entail
political choices concerning the future TEN-E Regulation.
During the evaluation study and the stakeholder consultations, several issues were
subject to a large consensus between stakeholders. They are not re-discussed in detail in
this report, as their positive impacts and contribution to the objectives of the initiative are
considered well accepted. These issues are the following:
a) Removal of oil pipelines as infrastructure category and thematic area:
New cross-border oil pipelines are not in line with the long-term decarbonisation
objectives. The Green Deal, and the relevant interim emission reduction
objectives, put the transport sector on a more dynamic decarbonisation pathway
25
then earlier targets60
. This is expected to drastically reduce oil demand and phase-
out all unabated oil consumption. This trend and the already existing crude oil
supply infrastructure coupled with the security of supply measures (e.g.
emergency oil stocks) does not necessitate the inclusion of oil supply
infrastructure in the revised TEN-E.
b) Removal of electricity highways as infrastructure category and thematic
area:
Electricity highways are fully covered under the priority electricity corridors.
Hence, the removal of electricity highways would not affect the outcome of the
PCI selection procedure but simplify the process and remove unnecessary
administrative burden.
5.1 What is the baseline from which options are assessed?
In the baseline, the current TEN-E Regulation is assumed to continue. The provisions as
described above would continue to apply and constitute the basis of the bi-annual
selection of PCIs and their implementation. The Regulation is likely continue to deliver
results/outcomes and impacts as shown in the evaluation (see Annex 5) and the expected
benefits from future PCIs.61
While the infrastructure planning and the PCI selection
process would not change in substance, a methodology to assess the sustainability
criterion for gas projects has been developed and may affect the number of gas projects
on future PCI lists under the current TEN-E Regulation. Investments in system
integration projects, such as hydrogen or biogas, would happen at local level but the
necessary scaling up for an European market to emerge would be hampered because of
lack of cross-border cooperation and planning framework. As for permitting, the existing
Regional Groups could be used to support better enforcement of the existing provisions,
which may improve and ultimately shorten project implementation. These changes are
incremental and would not significantly affect the outputs, results/outcomes and impacts
as identified in the evaluation. At the same, the significant progress in establishing a
resilient gas infrastructure is likely to decrease the number of natural gas candidate PCIs,
whereas an increase of electricity candidate PCIs can be expected – within the limits of
the current scope of the Regulation. In addition, external factors will affect the PCI
process. Adopted or planned policy initiatives such as the 2030 Climate Target Plan, the
revision of the Energy Efficiency Directive, the Renewable Energy Directive, and the gas
package may enter into force and increase the demand for energy infrastructure. The
taxonomy regulation is expected to influence private investments towards more
sustainable infrastructure categories. The Covid-19 sanitary crisis is likely to affect the
level of investments and may delay project implementation (see also section 2.3).
60
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
61
See modelling results in Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013
on guidelines for trans-European energy infrastructure, Draft final report
26
5.2 Description of the policy options
5.2.1 Scope
5.2.1.1 Smart electricity grids and electricity storage
Option A.1.0: Business as usual
The TEN-E Regulation defines each infrastructure category and a set of general and
specific selection criteria for PCI projects. The criteria for a smart electricity grid is
exhaustive and very detailed from a technical point of view and are thus difficult to be
met at the same time. Only a few smart grid projects have been eligible as PCIs to date,
nine in total since the adoption of the first PCI List. Concerning electricity storage the
current definition is limited to mechanical storage with 13 storage projects on the current
PCI list.
On the cross border criterion for the smart electricity grids, a project needs to
demonstrate in detail the involvement of the project promoters (a TSO or a DSO from
two or more Member States, or from at least one Member State and an EEA country).
Since the concept of “involvement" is not clearly defined in the current Regulation, the
current practice has provided further interpretation regarding the necessary support from
a TSO level (not being a direct project promoter but supporting it in any case) . Under the
current cross border criterion, only large hydro and compressed air storage facilities are
eligible for PCI status for electricity storage, prohibiting utilisation of other advanced
electricity storage technologies such as batteries.
Option A.1.1: Broadened scope to reflect technological developments
The definition and the description of smart electricity grids thematic area would be
updated by including elements regarding innovation and digital aspects that could be
considered among the equipment or installations for smart grids. The criteria would be
adjusted accordingly to reflect the broadened scope. Whereas the requirement for the
involvement of project promotors from two or more Member States remains, it would be
clarified that not all involved DSOs and TSOs do not need to be project promoters, but it
is important that the relevant TSOs and DSOs are duly informed about and supportive of
the project. In addition, smart grid projects at TSO level, not involving DSOs, would also
be allowed. The update would also include a specific reference to smart grids enabling
charging infrastructure for electric vehicles at the medium to high-voltage level.
Sub-option: Inclusion of non-mechanical storage technologies
The definition of electricity storage would be updated by including elements related to
new technologies utilised for electricity storage. Key changes would be to define new
criteria to prove significant cross border impact for new non-mechanical storage
technologies (for ex. electrochemical storage in batteries or chemical storage in
hydrogen). For non-mechanical storage technologies new values for minimum installed
power in MW and energy capacity in MWh would be proposed. Those values would be
smaller compared to the current values and be based on the latest Commission storage
27
study62
and would need to be sufficiently high to ensure significant cross-border benefits.
The current criteria would remain for mechanical storage facilities.
This would allow the TEN-E frameworks integrate technological progress necessary to
support a cost-efficient energy transition.
Stakeholder views: Many stakeholders underline the significance of electricity
distribution infrastructure in an interconnected European energy market that increasingly
relies on distributed generation and active participation of end consumers63
. In this
context, many stakeholders pointed out a necessary update of smart electricity grids
thematic area by including new smart technologies, solutions and concepts. Stakeholders
suggested that the current eligibility criteria for storage technologies do not provide
sufficient flexibility for the support of different and emerging storage technologies.
5.2.1.2 Gas infrastructure, hydrogen networks and power-to-gas
Option A.2.0: Business as usual
This policy option would keep the status quo regarding the scope of the Regulation with
regard to gas infrastructure. Natural gas projects would remain eligible for PCI status and
CEF funding, if they contribute to the TEN-E objectives. Hydrogen, power-to-gas
facilities and smart gas grids are not in the scope of the regulation and therefore not
eligible for PCI status, nor CEF funding, except in case they fall under the new cross-
border renewable window of CEF II coming into force under the 2021-2027 MFF.
Retrofitting to allow for hydrogen blends and projects aiming specifically to integrate
renewable gases (biogas/biomethane) would remain eligible in principle (as long as they
affect the transmission infrastructure) but in practice unlikely to meet all the current
selection criteria, since such projects typically do not aim at increasing cross-border
transport capacity.
Option A.2.1: Exclude all natural gas infrastructure, but include hydrogen and P2G
Under this policy option, the scope of the TEN-E Regulation would cover only the
following projects:
 Dedicated new and repurposed hydrogen networks with cross border relevance
(including hydrogen transmission pipelines and related equipment such as
compressors; storage facilities; facilities for liquefied hydrogen).
 Power-to-gas facilities and related infrastructure with cross-border relevance (i.e.
aiming to supply at least two Member States and consideration of setting a
capacity threshold
62
Artelys/Trinomics/Enerdata (2020): Study on energy storage – Contribution to the security of the
electricity supply in Europe, https://op.europa.eu/en/publication-detail/-/publication/a6eba083-932e-11ea-
aac4-01aa75ed71a1
63
Stakeholder views are briefly summarised for each sub-section, for further details on the different
stakeholder positions see Annex 2.
28
Only the above projects would be eligible for PCI status (apart from electricity and CO2
transportation projects). All infrastructure projects related to the methane gas grid would
be excluded from the scope.
Policy option A.2.2: Exclude natural gas infrastructure but include hydrogen, P2G
and smart gas grids for low-carbon and renewable gases
In addition to the inclusion of new and repurposed hydrogen networks and P2G (as
described in the previous option), a new PCI category would be created for smart gas
grids. This would support investments at distribution and/or transmission level to
integrate locally produced renewable and low carbon gases (typically biogas and
biomethane but also hydrogen) in the network and help manage a resulting more complex
system, building on innovative technologies. The candidate projects would consist of a
range of investments directed at "smartening" and decarbonising a given gas network.
Some of the investments would affect the TSO level, such as for instance compressor
stations to enable DSO-to-TSO reverse flow. The following requirements could help
ensure project scale and cross-border impact:
 To require the involvement of DSOs and TSOs from at least two Member States
(mirroring the cross-border criterion for smart electricity grids).
 To require involvement of one or several DSOs as well as one or several TSOs.
 To establish a threshold, for instance based on the number of consumers and/or
energy consumption volume, similar as for smart electricity grids.
Sub-option: Natural gas transport infrastructure for renewable and low-carbon gases
Under this option, natural gas projects would no longer be eligible for PCI status,
regardless of their contribution to the TEN-E objectives.
However, an exception could be made for gas infrastructure projects that specifically aim
at integrating renewable and low-carbon gases (i.e. biogas, biomethane, synthetic
methane produced from hydrogen, or pure hydrogen) into the existing natural gas
(methane) transmission network. This exception could comprise one or both of the
following project types:
1. Newly built gas transmission infrastructure projects of cross-border relevance
aiming to integrate biomethane and synthetic methane into the European gas
network;
2. Retrofits of existing natural gas transmission assets for hydrogen
admixtures/blends.
While certain investments on the transmission level could also form part of a smart gas
grid project, the infrastructure categories under this exception would affect exclusively
the transmission level and would not necessarily involve any “smart” elements.
Sub-option: Exceptions for natural gas PCIs at an advanced implementation stage
29
A further exception could be made (under either of the two policy options) for existing
natural gas PCI projects at an advanced stage of implementation to cater for legitimate
expectations by the affected promoters. This would mean the following: existing gas
PCIs which are already under construction, or will start construction before [the end of
2022]64
, or for which a CEF grant agreement for works has been concluded before [the
end of 2022], would remain eligible for PCI status under current rules to allow the
finalisation of these projects under a preferential treatment. There could be an additional
limitation which would make the affected projects eligible under the current rules only
for the first list to be adopted under the revised TEN-E.
The choices on the updated gas infrastructure priorities and eligible infrastructure
categories will be reflected in the structure and objectives of the affected regional groups
and thematic priority areas defined in the TEN-E Regulation.
Table 2: Overview of policy options for gas infrastructure
Gas policy options
and infrastructure
categories
A.2.0:
Business-as-
usual
A.2.1:
Hydrogen and
P2G
A.2.2: Green
gas
infrastructure
Hydrogen networks X ✔ ✔
Power-to-gas X ✔ ✔
Smart gas grids X X ✔
Natural gas
infrastructure
✔ X X
Exception for advanced
natural gas PCIs
NA ✔ ✔
Exception for natural
gas TSO infrastructure
to integrate biomethane
and synthetic methane
(✔) X ✔
Exception for natural
gas TSO retrofits for
hydrogen admixtures
(✔) X ✔
Legend: ✔ : infrastructure category possibly included in the scope; (✔): included in principle but unlikely
to meet (all) PCI eligibility criteria; X: excluded from the scope; NA: not applicable
The eligibility for CEF financial assistance would be adjusted to the infrastructure
categories of the revised TEN-E Regulation, i.e. expand eligibility to all or some of those
categories that were added, while those removed would by default be excluded from CEF
64
Exact date tbd – but should be sufficiently early before the establishment of the first list under the
revised TEN-E Regulation. Counting with a legislative proposal in December 2020 and entry into force of
the revised regulation in June 2022 (ambitious timeline of 1.5 years for co-decision), and counting with the
6th
list being adopted by end-2023 – requiring sufficient maturity by the end of 2022 seems like a
meaningful working assumption for a cut-off date.
30
financial assistance. For CEF financial assistance for works the same principles as under
the current framework (commercial non-viability and externalities) would apply.
However, as electrolysers would be already eligible for CEF financial assistance as cross-
border projects in the field of renewable energy under CEF II (so-called cross-border
RES window), under this option electrolysers would not be eligible for CEF financial
assistance under the future TEN-E Regulation.
Stakeholder views: While several stakeholder groups, mainly representing TSOs and
industry associations, considered the inclusion of hydrogen infrastructures, smart gas
distribution grids as well as power-to-gas important, there was mixed support notably
from NGOs. Environmental NGOs in particular, but also some stakeholders representing
the electricity sector, were against the inclusion of natural gas infrastructure in the future
scope of TEN-E and voiced concerns about the sustainability of the new types of gases.
5.2.1.3 Projects of mutual interest (PMIs)
Option A.5.0: Business as usual
Only projects, which are able to demonstrate socio-economic benefits for at least two EU
Member States are eligible for PCI status. Significant cross-border impact needs to be
demonstrated by meeting a certain capacity threshold.
Option A.5.1: Inclusion of PMIs under the TEN-E Regulation
The status of projects, which are able to demonstrate significant net socio-economic
benefits for at least two EU Member State and at least one third country could be
recognised by the revised TEN-E Regulation by introducing specific criteria for such
projects. For such projects to obtain a priority status, the conditions of regulatory
approximation with the EU would need to be fulfilled, and the projects would need to
contribute to the EU overall energy and climate objectives in terms of security of supply,
decarbonisation. In addition, the third country, when supporting the priority status of the
given project, would also commit to full support of the project in view of complying with
a similar timeline for accelerated implementation and other policy support measures, as
stipulated in the TEN-E Regulation.
The presented options would not effect the very few projects with third countries which
already qualify under the existing PCI eligibility criteria.
This would allow identifying cross-border infrastructure between the EU and
neighbourhood countries that is mutually beneficial and necessary for the energy
transition and the achievement of the climate targets.
Stakeholder views: There was mixed support among stakeholders to extend the scope of
the Regulation to Energy Community countries and other third countries. Support was
mainly expressed by TSOs of Member States with borders to non-EU countries as well as
non-EU stakeholders. Some stakeholders called for a specific regime for this kind of
projects to ensure that similar regulatory standards are complied with.
31
5.2.2 Governance / Infrastructure planning
5.2.2.1 Offshore grids for renewable energy
The offshore grids for renewable energy is a transmission infrastructure, with dual
functionality: interconnection and transport of offshore renewable energy from the
offshore generation sites to two or more Member States (thereafter hybrid grids). The
offshore grid can also include the Member States internal high voltage transmission
infrastructures (new or reinforcements) that demonstrate significant necessity for the
transport of offshore renewable energy to the consumption sites, as well as any offshore
adjacent equipment or installation essential to operate safely, securely and efficiently,
including protection, monitoring and control systems and necessary substations.
Option B.1.0: Business as usual
This option would continue the incremental development of offshore grids observed so
far. As regards planning, ENTSO-E would identify and analyse within the Regional
Investment Plans (which are part of the ten-Year Network Development Plans package)
the necessary regional offshore grid infrastructure. The identification of the infrastructure
needs, project proposals and assessment done in line with the latest available
Commission scenarios and Member States commitments on offshore renewable energy.
This enhanced TYNDP would be the basis for the PCI selection process.
Option B.1.1 Integrated offshore development plans
This option would strengthen the cooperation in offshore infrastructure planning and
implementation. It would require Member States within each sea basin to jointly commit
to the amount of the offshore renewable deployment for each sea basin65
. In addition, it
would mandate ENTSO-E, with the involvement of the relevant TSOs and in line with
the political commitments, to develop offshore plans for time horizons 2030, 2040 and
2050 respectively for all the sea basins. The integrated offshore network development
plan is to be coherent with the TYNDP and developed under the Commission’s steering
and binding opinion. If, based on ENTSO-E’s report, a group cannot agree on an
integrated offshore network development plan, or ENTSO-E does not develop such plans
on time, the Commission may take over, possibly with input from a third party in view of
having an integrated offshore network development plan established per sea basin.
Finally, this option would include a requirement for the Commission to develop a
specific cost-benefit and cost-sharing method for offshore infrastructure that will enable
Member States to properly assess the direction they want to take and carry out a
preliminary cost sharing procedure.
Option B.1.2 Regional Independent System Operator / Joint Undertaking
This option gives the task of offshore grid planning, including the identification of
infrastructure gaps, proposal and implementation and offshore grids, investment per sea
65
In line with the NECPs, considering also the new ambition of the proposed Climate Target Plan, other
national and regional investment plans, renewable potentials, maritime spatial plans and environmental
aspects
32
basin and cross border cost allocation process for offshore infrastructures to a new entity,
either a regional Independent System Operator or a Joint Undertaking e.g. per sea basin.
A single entity could optimise the grid planning and investment per sea basin more
efficiently, than a group of TSOs. The entity would have to take over key responsibilities
from the national TSOs.
Options B.1.1 and B.1.2 would allow going beyond the bottom-up approach to
infrastructure planning for offshore infrastructure.
Stakeholders view: Stakeholders did not express specific views on the future offshore
infrastructure planning regime. However, there was the general view that hybrid assets
and meshed offshore wind hubs will be essential for the development of offshore
renewable energy in Europe.
5.2.2.2 Cross-sectoral infrastructure planning
Option B.2.0: Business as usual
The current conditions continue to apply without changes. The Electricity and Gas
Regulations mandate the ENTSOs to develop every two years their respective 10-year
Network Development Plans (TYNDP) and give ACER the power to deliver a non-
binding opinion on these plans. The Commission has no direct role in the development of
these plans. The sole oversight of the Commission is on the ENTSOs’ gas/electricity
Cost-Benefit Analysis (CBA) methodologies, which must receive approval from the
Commission before their use in the TYNDPs and the PCI selection process.
Sustainability is an integral part of the CBA methodologies for PCI selection. Under the
TEN-E framework, sustainability is as optional criterion alongside security of supply,
competition or market integration. Although in practice the Cost-Benefit Analysis
methodology provides leeway to prioritise some criteria over others, prioritisation is not
enshrined in the current TEN-E text. Thus, keeping the current frame would allow a
project with negative impact on the sustainability criterion but good results on other
criteria be selected as PCI.
Option B.2.1: Strengthened governance and sustainability
This option entails maintaining the current governance of the TYNDPs and the role of
the ENTSOs with significant improvements in the Commission and ACER oversight on
the TYNDP. This includes in particular three elements. First, a strengthened oversight
role for the Commission, through means of binding opinions, on the ENTSOs’ scenarios
and system needs identification, which are key steps in the process to deliver the
TYNDPs and define what infrastructures are needed. This would allow the Commission
to safeguard the alignment of the ENTSOs’ scenarios to climate and energy targets and
Commission scenarios, along with the improved identification of the infrastructure needs.
Second, a reinforced role for ACER in the development of scenarios and in the Cost-
Benefit Analysis methodology by mandating the Agency to develop framework
guidelines for the ENTSOs’ scenarios and approve incremental improvements of the Cost
Benefit methodology. Third, a deeper interlinkage between the sectoral TYNDPs to
reinforce their contribution to the energy system integration process and increased
participation of the DSOs in the planning process.
33
This option would also require the inclusion of a mandatory sustainability criterion for all
gas infrastructure categories with at least one other criterion (market integration, security
of supply, competition) at the stage of project selection. This would be applicable to any
gas infrastructure category included in the future TEN-E Regulation in line with the
principles of the taxonomy. The relevance of each criterion in the ranking of the gas
projects would be defined in the assessment methodology for the ranking of the candidate
projects. This methodology is discussed and validated by the regional groups as under the
current TEN-E Regulation66
.
Option B.2.2: New governance set-up and expansion of the scope and the role of the
TYNDP
This option would establish a new governance set-up for the TYNDPs and expand the
scope of the TYNDP in order to integrate energy system-wide cost-efficiency. Through a
governance reform, a neutral actor (such as the Commission or ACER) would take a
leading role in the TYNDPs development. Within this frame, the Commission or ACER
would not be responsible of delivering any opinion or approval of the ENTSOs work as
in option B2.1. Instead, the neutral actor will be responsible of the entire planning
process, meaning developing scenarios and the associated data, run market and network
studies to identify infrastructure gaps within electricity and gas sectors, assess the
benefits of possible and draft and publish the planning reports. The role of ENTSOs and
TSOs would be limited to providing information given their unique expertise in
networks. This option would also require the inclusion of a mandatory sustainability
criterion for all gas infrastructure categories as per option B.2.1.
Options B.2.1 and B.2.2 would allow overcoming the sectoral approach to infrastructure
planning and ensuring that sustainability will be considered during the PCI selection
process.
Stakeholders view: ACER and a majority of other stakeholders, while recognising the
merits of having the ENTSOs’ expertise in the process, asked for a stronger oversight
from the Commission and ACER on scenarios, cost-benefit analysis and identification of
system needs. There is a large consensus among stakeholders that the importance of
sustainability in the PCI selection process of the (decarbonised) gas projects needs to be
reinforced. Some categories of stakeholders also underline the importance of maintaining
strong weighting for other criteria, in particular security of supply, in a multi-criteria
selection approach.
5.2.3 Permitting and public participation67
Option C.1.0 Business as usual
The permitting provisions in the TEN-E Regulation, which are very innovative and have
already proven their effectiveness with the permitting duration of PCIs decreasing
significantly, would remain unchanged.
66
See Annex 8 for more information.
67
For improving the readability of the report, we maintained in the man text only political options, with
additional options of a technical nature being include and assessed in Annex 8.
34
Option C.1.1: Use of urgent court procedures
Administrative appeal procedures and judicial remedies before a court or tribunal do not
fall within the time limit prescribed for the permitting process of 3.5. years meaning that
their duration, if they happen, adds on to the project implementation delay. To accelerate
the completion of the permitting process, Member States, which already have urgent
court procedures under national legislation in other domains, would have to ensure that
these accelerated litigation procedures are applicable to PCIs under national legislations.
Option C1.2: One-stop shop per sea basin for offshore renewable infrastructure
projects
The one-stop shop would issue the comprehensive decisions for the infrastructure
elements for offshore projects by coordinating all the national and regional permits to be
obtained within the 3.5 years time-limit and ensure that offshore projects do not
encounter delays beyond this period. It would enable coordination between the
permitting process for the infrastructure and the one for the generation assets and it
would act as a single point of contact for project promoters and a repository of existing
sea basin studies and plans, which would facilitate the permitting of individual projects.
The one stop shop would be comprised of staff from all the already existing national
permitting one-stop shops. This option is complementary to the ones mentioned above.
Options C1.1 and C1.2 would allow shortening permitting procedures.
Stakeholder views: While a series of stakeholders pointed to the difficulties with
complex and lengthy permitting process for offshore projects crossing several
jurisdictions and called for a simplified permitting process, no stakeholder expressed any
specific opinion on a possible new one-stop-shop for offshore wind projects.
Stakeholders involved in the permitting procedures indicated that several notions in the
permitting chapter could be clarified (see additional options in Annex 9). Stakeholders
also raised the delay with the court and appeal procedures regarding PCIs and called for
streamlines court procedures for PCIs.
5.2.4 Regulatory treatment68
Option D.1.0: Business as usual
The current CBCA provisions, which provide the principles and tools to ensure that costs
are allocated cross-border in an orderly manner enabling the development of such
projects, would be maintained. However, in practice this means that the CBCA procedure
would be used only as a pre-requisite for requesting CEF grants for work and the
provisions would not reach their potential in enabling projects implementation.
Option D.1.1: Inclusion of full investment costs
68
For improving the readability of the report, the main text includes only political options, with additional
options of a technical nature being included and assessed in Annex 9.
35
This option aims at ensuring consistency between the CBCA decisions and safeguarding
the primary goal of the CBCA. This would entail a two-stage approach in which: (i) The
NRAs would allocate all investment costs across borders and include them in full in the
national tariffs and, afterwards, if necessary, (ii) assess whether any affordability issues
arise as regards the increase in tariffs due to the inclusion of such costs. The NRAs would
always assess how much a certain project would cost if it were paid for completely by
tariffs and this should be the basis for the affordability test and, ultimately, for
calculating any public financing.
This would allow for a better implementation and use of the cost sharing tools.
5.3 Options discarded at an early stage
 Expand CO2 infrastructure category to include CO2 transport by ship and
infrastructure necessary for the permanent geological storage of CO2
Mainly stakeholders representing the CO2 industry argued for the inclusion of CO2
transport by ship and infrastructure necessary for the permanent geological storage of
CO2in the TEN-E Regulation. The transport infrastructure category would be enlarged
from only pipeline infrastructure to also include shipping infrastructure, both the
facilities necessary to enable shipping as the actual ships themselves, and infrastructure
related to CO2 storage.
However, it is not clear how the inclusion of transport with mobile assets such as ships in
the TEN-E Regulation would help the implementation of such projects. There are no
regulatory or administrative barriers in relation to cross-border networks that could be
addressed by the provisions in the TEN-E Regulation. The key barrier to the deployment
of CO2 infrastructure, including for the geological storage of CO2 and shipping, is access
to financing.69
The only benefit sought by such projects being eligible for PCI status
would be that they may get access to CEF financial assistance. However, the key
objectives of the TEN-E is to support the timely implementation of infrastructure projects
of cross-border nature where CEF financial assistance is only one element as a last resort
financing option. Moreover, such expansion would not relate to transmission networks
and interconnections in accordance with the legal base. Other EU and national financing
instruments are available to support CO2 infrastructure for geological storage and
shipping such as the Innovation Fund.
 Projects to reduce methane leakage
Methane leakage projects would be unlikely to demonstrate cross-border impact.
Methane leakage projects consist of retrofits and repairs of different elements of a gas
network. They often do not involve capital investments but rather network management
and repair methods (more related to operational expenses). The investments involved are
often targeted at the distribution level, which is responsible for around 60% of methane
emissions from gas operations in Europe. Such investments are therefore per definition
69
Ecofys (2018): Market testing for low-carbon innovation support to energy intensive industry and to
power generation, https://op.europa.eu/en/publication-detail/-/publication/906bea83-b6fe-11e8-99ee-
01aa75ed71a1
36
related to one country’s network and aim at improving the efficiency of the network
operation and emission savings but do not aim at increasing cross-border capacity,
neither do they have indirect effects on cross-border trade or capacities. Therefore,
projects specifically aiming at methane leakage reductions do not really fit the
intervention logic of the TEN-E Regulation nor under the concept of projects of common
interest of a trans-European importance. Based on IEA data, the gas industry itself has
cost-effective options to make its contribution to methane emission reductions by
deploying best available technologies for the various gas chain elements and processes;
and by adopting best practices and implementing leak detection and repair programmes.
 Removing cross-border requirements for smart electricity projects (inclusion
of pure DSO level projects at local level)
Different stakeholders have called for the eligibility of all smart electricity grid projects,
also those with no involvement of TSOs, for PCI status. With 2 400 DSOs in Europe, the
potential number of eligible projects would be very high. At the same time, without the
involvement of a TSO, it would be difficult, if not impossible, to demonstrate a
significant cross-border impact for such projects. It would not be in line with the legal
base, which requires a clear link to the transmission level. The required resources for the
selection process would be disproportionate in view of the projects that could actually
qualify. The inclusion of projects at a DSO level and hence without a (significant) cross-
border impact would neither imply more investments at the distribution level nor an
easier implementation process for such projects. To the contrary, it may rather create
wrong expectations and add unnecessary burden on all parties involved in the PCI
selection process.
 Heat networks as new infrastructure category
Some stakeholders such as heat network operators argued for the inclusion of smart heat
networks in the TEN-E Regulation as this could bring benefits in terms of system
integration. However, heat networks are local in nature with no or very limited cross-
border impact. There are no heat transmission networks as it is not efficient to transport
heat over long distances. European infrastructure planning for the purpose of
interconnections and interoperability is therefore not needed for heat networks.
Additional discarded options of more technical nature, also based on the evaluation
results and stakeholder views, are included in Annex 7 and relate to the following topics:
breaking the link between the CBCA and CEF financing, conditional CBCA decisions,
and the easing of environmental and location approvals for PCIs.
6 WHAT ARE THE IMPACTS OF THE POLICY OPTIONS?
The assessment of the impacts of each policy option relies to a large extent on a
qualitative approach looking at the main environmental, economic, and social impacts as
well as administrative burden, if applicable. It was not possible to quantify the impacts
for all options because the specifics of future PCIs would need to be available for that
purpose which is particularly challenging for new or emerging infrastructure categories.
Moreover, many of the proposed changes are mainly improvements to the current
framework, which has been deemed to work relatively well and broadly meet its aims.
Relevant sectoral studies or literature are used to provide a quantitative indication of
certain impacts even if their scope is not limited to PCIs. While PCIs as cross-border
37
infrastructure project cover a comparatively small number of energy infrastructure
projects and needs in Europe, they constitute key infrastructure projects that enable and
trigger additional investments with impacts beyond the direct benefits of the projects of
common interest.
The TEN-E Regulation does not impose obligations on economic operators, but it does
set requirements on promoters of PCIs, mainly TSOs and DSOs, which decide to apply
for PCI status and subsequently become subject to certain obligations, mainly in the form
of monitoring and reporting obligations. In addition, the TEN-E Regulation sets
obligations on competent national authorities and regulators concerning permitting,
regulatory incentives, and public participation as well as on network operators
concerning long-term network planning. Consumers are mainly affected through network
tariffs to finance investments in the regulatory asset base (RAB).
6.1 Scope
6.1.1 Smart electricity grids end electricity storage
Option A.1.0: Business as usual
To keep the current eligibility criteria would imply that the smart electricity grids
thematic area remains restricted and only accessible for a limited number of
infrastructure projects. In the case of electricity storage, it would remain limited to large
mechanical/hydro storage projects. In the case of smart electricity grids, digitalisation
and innovation in the grids creates would not sufficiently reflect recent technologies and
hence potential positive environmental, economic and social impacts would not be
enough exploited (see below). Regulatory frameworks and regulatory practice in the
Member States in many cases do not sufficiently support innovative grid investments by
the TSOs or even constitute a barrier to such investments.70
Option A.1.1: Broadened scope to reflect technological developments
Environmental impacts
The broadened scope for electricity smart grids would support the changing infrastructure
and system security needs with a higher uptake of innovation and digitalisation in the
grids. Over 90% of distributed renewable energy generation will most likely continue to
be connected at distribution grid level71
. Consumers, mostly connected to the distribution
grid, are allowed to provide demand-side flexibility, with 120 GW-150 GW of flexible
load available by 2045. The ongoing rollout of smart metering will boost this
development. Further synergies with the TEN-T Regulation would help to enhance the
future charging infrastructure for electric vehicles and would benefit users of electric
vehicles by supporting smart grid projects enabling charging infrastructure for electric
vehicles. It is expected that the vehicle stock share of electric cars will increase to up to
70
Ecorys 2019, Do currrent regulatory frameworks in the EU support innovation and security of supply in
electricity and gas grids.
71
Eurelectric (2019): The Value of the Grid, https://cdn.eurelectric.org/media/3921/value-of-the-grid-final-2019-030-
0406-01-e-h-D1C80F0B.pdf
38
11% by 203072
from currently below 1%. Electric vehicles with “smart charging” could
provide capacity for flexibility and demand response. These use cases alone or as
elements of virtual power plant platforms could become an important interface between
energy and mobility, since digital infrastructure is a key enabler for the energy transition
in these two sectors with a significant greenhouse gas reduction potential. While TEN-E
would only cover smart grid projects with a cross-border impact, these projects could
make a significant impact to ensure interoperability across Member States.
Sub-option: Inclusion of non-mechanical storage technologies
The estimated daily flexibility required to be provided by electricity storage in 2030 is 97
GW for EU-2773
. Electricity storage provides flexibility to the power system operation
and decreases the need for new power lines within the power system74
. In certain cases
energy storage systems can be deployed faster than transmission lines and have a smaller
footprint than transmission projects eliminating environmental impacts from construction
of those projects75
. The increased demand of different storage technologies, especially
electrochemical (batteries) would support development and usage of new, more advanced
storage systems, decreasing the overall impact on the environment.
The inclusion of electric storage in the form of batteries would result in potential
emissions associated with the production of batteries. However, the emission factors
calculated vary significantly depending on the type of battery in terms of materials and
energy density and the source of energy used for its production. However, it is
anticipated that the potential environmental impacts could decrease very significantly. In
its 2019 Strategic Action Plan on Batteries76
, the Commission points to the importance of
improved recycling processes, and an extension of the battery lifetime. Re-use of
batteries in stationary applications can reduce environmental impacts over the life- cycle.
Economic impacts
A broadened scope of smart grids would increase the network operational efficiency
through the implementation of flexibility features of existing HVDC (High Voltage
Direct Connection) cables and the enhancement of the exploitation of demand-response
management services based on the increased cross-border data and capacity exchange,
together with the provision of ancillary services between the related TSOs and/or DSOs.
In addition, cross-border smart electricity grids facilitate the growing penetration of
renewable energy sources in the grid and enable a better integration of the behaviours
and actions of all users connected to the network across borders.
In the light of changing infrastructure and system security needs, this policy option
would contribute to stimulate the use and implementation of new innovative technologies
72
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
73
Artelys/Trinomics/Enerdata (2020): Study on energy storage – Contribution to the security of the
electricity supply in Europe, https://op.europa.eu/en/publication-detail/-/publication/a6eba083-932e-11ea-
aac4-01aa75ed71a1
74
IEA Energy Storage Study 2020, https://www.iea.org/reports/energy-storage
75
FLUENCE 2019 White Paper, Redrawing the Network Map: Energy Storage as Virtual Transmission
76
COM(2019) 176 final
39
and activities in the domain of digital technologies, which will enhance the already
existing positive impact of cross-border smart electricity grids. Development of new
standards and technology for the interoperability of smart grid systems with increased
reliability and cybersecurity protection would be further supported across borders.
Comprehensive control and monitoring of the grid would reduce the need for curtailment
of renewables and enable competitive and innovative energy services for consumers.
According to the IEA, investments in enhanced digitalisation would reduce curtailment
in Europe by 67 TWh by 204077
. Electricity storage could simultaneously reduce the
volatility of the electricity prices, reduce the cost of the electricity system increasing
energy efficiency and facilitate a higher share of variable renewable energy sources in the
energy system78
. Due to lack of data, it is not possible to quantify the potential cross-
border impact for non-mechanical storage projects. However, at this stage it would be
difficult for non-mechanical storage technologies (for ex. electrochemical storage in
batteries or chemical storage in hydrogen) to meet cross-border criteria to prove a
significant cross-border impact. The opportunities provided by energy storage are
increasingly supported by the momentum in research and innovation making the
European economy more competitive.
This option would allow more market players to get involved in smart electricity
projects. The updated eligibility criteria would enable TSO/TSO cooperation in the area
of smart grids, where DSO/DSO combinations would still be possible with the respective
TSO support. To open the possibility to purely TSO level projects would enhance the
number of cross-border smart electricity grids to be developed under the TEN-E
framework, which are unlikely to happen otherwise.
Social impacts
The digitalisation of the grid and metering would facilitate customer participation in all
stages of the development and expansion of the energy system by digital tools such
as participative geographical systems and new energy market arrangements79
. This would
allow consumers to directly benefit from a more competitive energy market and monetise
the flexibility in their consumption patterns.
6.1.2 Gas infrastructure, hydrogen networks and power-to-gas
Policy options A.2 combine different infrastructure categories. The overall impact of
these options depends on the impacts stemming from the individual infrastructure
categories included under each option.
Option A.2.0: Business as usual
77
with demand-response accounting for 22 TWh and storage accounting for 45 TWh - IEA 2016
78
EC report “Role of electricity in energy storage”, February 2017,
https://ec.europa.eu/energy/sites/ener/files/documents/swd2017_61_document_travail_service_part1_v6.pd
f
79
E.g. ETIP SNET (2018): DIGITALIZATION OF THE ENERGY SYSTEM AND CUSTOMER
PARTICIPATION: Description and recommendations of Technologies, Use Cases and Cybersecurity,
https://www.etip-snet.eu/wp-content/uploads/2018/11/ETIP-SNET-Position-Paper-on-Digitalisation-short-
for-web.pdf
40
Hydrogen networks, power-to-gas projects, smart gas grids would remain out of scope.
Green gas-related transmission infrastructure projects are in the scope but unlikely to
meet the cross-border criterion. This option would mean that, as regards gas, the TEN-E
would keep its focus on natural gas transmission infrastructure and fail to accommodate
renewable and low carbon gas projects. Although the number of natural gas PCIs is
expected to decrease in the coming years (see section 5.1), the continued focus on natural
gas and failing to stimulate the decarbonisation of the gas sector would significantly
weaken TEN-E’s potential contribution to greenhouse gas emission reduction.
Environmental impacts
Continued PCI status for new natural gas infrastructure is not compatible with the long-
term decarbonisation objectives. A reduction of natural gas demand is expected in all
decarbonisation pathways developed by the Commission: even in business-as-usual,
demand for natural gas shrinks by 13% between 2015 and 2030 and, by 2050, natural gas
is expected to be largely replaced by alternative renewable and low-carbon gaseous fuels
in all decarbonisation scenarios80
. Infrastructure projects create assets with a long
lifetime (e.g. a gas pipeline can be used for 50 years or more) and would contribute to a
lock in to the use of fossil fuels which is inconsistent with the long-term climate
neutrality objective.
Economic impacts
Keeping natural gas PCIs in the scope of the regulation creates risks of financing
stranded assets because there is no need for policy support for additional cross-border
natural gas infrastructure. The TEN-E framework has been successful in delivering a
secure and well-interconnected gas grid in Europe (see section Annex 5), which is largely
sufficient to guarantee security of gas supply for consumers and to enable closer market
integration. The evaluation report81
confirms that the existing gas infrastructure allows
access for a wide range of supplies and it is resilient in a number of disruption cases. This
understanding is also supported REKK’s previous modelling82
along with the ENTSOG
TYNDP results83
. REKK concluded that there are no isolated markets in the EU and the
market players can make good use of the substantial LNG terminal and storage capacities
when market circumstances are favourable, as in 2019-2020. Today Europe enjoys a
resilient gas network, where gas prices are in majority correlated and infrastructure
capacities are auctioned and used to provide the necessary flexibility to the market84
. In a
80
IN-DEPTH ANALYSIS IN SUPPORT OF THE COMMISSION COMMUNICATION COM(2018) 773
A Clean Planet for all, A European long-term strategic vision for a prosperous, modern, competitive and
climate neutral economy,
https://ec.europa.eu/clima/sites/clima/files/docs/pages/com_2018_733_analysis_in_support_en_0.pdf
81
REKK study concluded that Europe overall benefited significantly from the implementation of the
already commissioned PCIs which are estimated to bring more than 132 m€ of socio-economic benefit per
year, leading to an increase in trading of 42.5 TWh/year and an increase in LNG flow of around 18.3
TWh/year.
82
European Commission (2018) Quo vadis EU gas market regulatory framework –Study on a Gas Market
Design for Europe, https://ec.europa.eu/energy/sites/ener/files/documents/quo_vadis_report_16feb18.pdf
83
ENTSO-G (2017), Ten Year Network Development Plan 2017,
84
See ACER monitoring reports, eg. ACER/CEER: Annual Report on the Results of Monitoring the
Internal Natural Gas Markets in 2018
41
similar vein, ACER’s latest monitoring report on the incremental capacity procedure
concludes that no market demand seems to exist for additional cross-border gas transport
capacity. From 55 non-binding demand assessment phase projects, only five proceeded to
the binding stage and none received sufficient market coverage to be realised.85
The remaining and already well-identified natural gas infrastructure needs are primarily
in the Eastern Baltic Sea region, the Central and South-Eastern part of Europe, and those
needs can be addressed by the most advanced gas PCIs in the 4th
PCI list. The evaluation
study shows that the implementation of the most advanced projects would further reduce
price differentials across EU countries. However, the relatively small incremental
benefits are also an indication that building even further natural gas projects do not seem
justified from a security of supply, market integration or solidarity point of view.86
Nor
would it align well with the more ambitious climate objectives of the European Green
Deal.
Following the implementation of the existing gas PCIs, there is no need for support for
additional cross-border natural gas infrastructure or LNG terminals. If there is market
demand for new capacity, it can be met through the appropriate internal energy market
rules (incremental procedure under the Network Code for Capacity Allocation and
Congestion Management) but the priority status coming with a PCI label is no longer
justified.
Social impacts
Support for stranded assets would inevitably translate into higher tariffs for consumers,
thereby rendering the energy transition slower and less affordable.
Option A.2.1: Exclude all natural gas infrastructure but include hydrogen and P2G
Economic impacts
A condition for a widespread use of hydrogen as an energy carrier in the European Union
is the availability of dedicated cross-border hydrogen infrastructure. Today, the existing
hydrogen networks are not regulated assets; they are typically privately owned pipelines
connecting specific production and consumption sites. This is expected to change in the
future, as hydrogen use expands and its transportation is expected to happen over longer
85
ACER: Monitoring update on incremental capacity projects and virtual interconnection points, July
2020, available at:
https://www.acer.europa.eu/Official_documents/Acts_of_the_Agency/Publication/ACER%20Monitoring%
20update%20on%20incremental%20capacity%20projects%20and%20virtual%20interconnection%20point
s.2020.pdf
86
REKK modelling concluded that by implementing all the advanced gas projects (i.e. those that have
already made a final investment decision) from the 4th
PCI list, Europe would have a decrease in price
dispersion of about EUR0.69/MWh (reaching EUR0.83/MWh if all PCIs on the 4th
PCI list were to be
build). Although minor, this decrease in average wholesale price illustrates that on some markets these
projects may bring incremental benefits. Regarding trade, all PCIs of the 4th
PCI list would decrease the
total flow levels on the network by 1%, showing therefore that the European network infrastructure is
adequate to serve the demand and PCIs from the fourth list will mostly help only with the better utilisation
of the grid by providing shorter routes and route diversification. These messages are also supported by an
internal JRC study run in parallel on the same topic.
42
distances. Hydrogen networks – which may initially be restricted to isolated local
distribution grids and later national hydrogen networks – will, starting around 2030,
increasingly be connected to create an internal market for hydrogen and offer benefits in
terms of competition and security of supply.87
This may have a profound impact on the
pattern of gas flows in Europe: countries with renewable power generation potential,
where green hydrogen can be produced, may become hydrogen exporters, while
consumption centres would be importers.
There is today no systematic network planning for hydrogen infrastructure at EU or
national level. The TEN-E framework could facilitate the European level planning for
hydrogen infrastructure. Depending on future developments, the planning and assessment
of hydrogen network could either be based on the TYNDP or the TEN-E could require
that hydrogen projects to apply for PCI status in the context of a hydrogen network
development plan, developed by the affected countries and/or project promoters88
which
would reduce costs. Coordinated planning would allow for a more efficient utilisation of
resources and locations, save costs, and speed up implementation. Without coordinated
network planning, the resulting infrastructure risks being fragmented along national lines
and hindering the emergence of an EU internal market for hydrogen. The location of P2G
facilities with a cross-border relevance will be crucial for the planning of hydrogen grids.
P2G facilities are also essential enablers for energy system integration, as they will create
links between gas and electricity systems, facilitating the decarbonisation of hard-to-
decarbonize sectors, such as heavy goods transport or industry.89
Future hydrogen networks are expected to consist to a great extent of infrastructure
converted to hydrogen from existing natural gas assets, however new production and
consumption centres for hydrogen may also require the construction of new assets
specifically for hydrogen.90
It is therefore important to include both of those categories
into the TEN-E. The conversion of existing natural gas assets into dedicated hydrogen
pipelines is up to 90% cheaper than new build91
, thus this can ensure a more cost-
87
For instance, up to 70% of additional demand for green hydrogen projected by German TSOs for 2025
and 2030 is expected to be covere by imports of decarbonised hydrogen from the Netherlands (FNB Gas:
Gas Network Development Plan 2020-2030, p. 142). European gas TSOs expect that a European hydrogen
backbone would start to emerge from around 2030 and the initial regional clusters would progressively
expand into a truly European hydrogen transport network (see European Hydrogen Backbone, report by 11
European gas TSOs, July 2020, available at: https://gasforclimate2050.eu/sdm_downloads/european-
hydrogen-backbone/).
88
This would be on analogy of CO2 networks which are also not included in a TYNDP. Depending on the
infrastructure category, PCI status is not limited to projects that are included in a TYDNP.
89
See A hydrogen strategy for a climate-neutral Europe, COM(2020) 301 final; and Powering a climate-
neutral economy: An EU Strategy for Energy System Integration, COM(2020) 299 final
90
In existing plans to create a hydrogen backbone in the Netherlands and in Germany, up to 90% of the
future hydrogen network is planned to be based on the conversion of no longer needed natural gas assets,
the rest would be new infrastructure (see http://www.get-h2.de/en/initiativeandvision/ and
https://www.gasunie.nl/en/expertise/hydrogen/hydrogen-projects). The 23 000 km European hydrogen
backbone envisaged by 11 European gas TSOs for 2040 would consist 75% of converted natural gas
infrastructure, connected by 25% new hydrogen assets
(https://gasforclimate2050.eu/sdm_downloads/european-hydrogen-backbone).
91
European TSOs estimate that while new hydrogen pipelines could cost 10-50% more than similar natural
gas pipelines, repurposed hydrogen pipelines would cost only 10-35% of new hydrogen pipelines
(European Hydrogen Backbone, report by 11 European gas TSOs, July 2020, available at:
https://gasforclimate2050.eu/sdm_downloads/european-hydrogen-backbone/). German TSOs estimate that
43
effective pathway to the deployment of hydrogen infrastructure and avoid stranded assets
in the existing gas network. The rollout of hydrogen infrastructure will require
coordinated planning, taking into account the location of supply and demand (see section
6.2.2).
The International Energy Agency (IEA) estimates that the transmission of hydrogen as
gas by pipeline is the cheapest option.92
Transporting renewable energy in the form of
green hydrogen via pipeline offers a cost-effective solution to integrate renewable energy
into the energy grids. It can also help overcome network bottlenecks in electricity that
limit the ability of the energy system to integrate renewable power production.
While today only a few member states have 100% operating hydrogen networks, ongoing
developments in this area are likely to affect the whole EU. According to ACER, 11
Member States have or are working on a hydrogen strategy and 4 member states
(Germany, France, Netherlands and Poland) are planning to roll out 100% hydrogen
networks.93
Half of the national energy and climate plans (NECPs) mention concrete
hydrogen related objectives and national hydrogen strategies, roadmaps, or plans been or
are being developed.94
The industry’s vision for a European hydrogen backbone was
presented by gas TSOs from 10 European countries: Germany, France, Italy, Spain, the
Netherlands, Belgium, Czech Republic, Denmark, Sweden and Switzerland.95
Investment in hydrogen infrastructure would have a significant economic impact. The
European hydrogen backbone vision presented by the industry estimates that creating a
23 000 km dedicated hydrogen network by 2040 would require a total investment of €27-
64 billion based on using 75% of converted natural gas pipelines connected by 25% new
pipeline stretches.96
The Commission has put forward the strategic objective to install at least 40 GW of
renewable hydrogen electrolysers in Europe by 2030.97
The hydrogen industry has
estimated the impact of building such electrolyser capacity (complemented by a further
40 GW electrolyser capacity in neighbouring countries with the aim of exporting green
hydrogen into Europe).98
This electrolyser capacity can produce 173 TWh of hydrogen,
which represents around half of today’s hydrogen demand in Europe. This would require
total investments investment of €25-€30 billion, of which over 85% would be realised in
investment costs for conversion projects is up to 90% cheaper than for new build (FNB Gas: Gas Network
Development Plan 2020-2030, p. 148).
92
International Energy Agency: The Future of Hydrogen, June 2019, esp. pp, 67-84. For cost estimates of
different hydrogen transport options, see also Asset project (funded by the European Commission): Jan
Cihlar et al.: Hydrogen generation in Europe: Overview of costs and figures, June 2020, pp. 12-14. ; see
also Navigant (2019): Gas for Climate The optimal role for gas in a net-zero emissions energy system,
March 2019, table on p. 98
93
ACER: NRA Survey on Hydrogen, Biomethane, and Related Network Adaptations, Evaluation of
Responses Report, July 2020
94
see Trinomics: Study on Opportunities arising from the inclusion of Hydrogen Energy Technologies in
the National Energy & Climate Plans, final report, June 2020, chapter 2
95
https://gasforclimate2050.eu/sdm_downloads/european-hydrogen-backbone
96
https://gasforclimate2050.eu/sdm_downloads/european-hydrogen-backbone
97
A hydrogen strategy for a climate-neutral Europe, COM(2020) 301 final
98
Green Hydrogen for a European Green Deal – A 2x40 GW initiative, Hydrogen Europe, 2020
44
the 2025-2030 timeframe99
and would create between 140,000 and 170,000 jobs for
manufacturing and maintenance of 2x40 GW electrolyser capacity up to 2030.
A recent study for the Fuel cells and Hydrogen Joint Undertaking (FCHJU)100
has
estimated the overall accumulated investment in hydrogen technologies in the EU-28 at
70-240 billion EUR up to 2030. Renewable energy supply accounts for 50%-60% of total
investments, end user applications account for 20%-30% and electrolysis units account
for almost 10%. The investments related to infrastructure, including power and gas grids,
refuelling stations and hydrogen storage are 5%-10% of total investments. Depending on
the scenario, 7.5 billion or 29 billion EUR of value added can be generated annually in
the whole EU-28, by investment in and operation of hydrogen technologies. Most of the
value added is expected to be created by building and operating the renewable electricity
plants that provide energy to electrolysers. A significant share of value added would also
be created by the development of hydrogen transport infrastructure.
Environmental impacts
As mentioned above, the inclusion of hydrogen networks and P2G facilities with cross-
border relevance into the TEN-E would ensure a new coordinated and efficient planning
to these types of infrastructure. Such a coordinated process can reduce the overall need
for infrastructure projects Allowing PCI status conversion projects (existing natural gas
assets to be turned into hydrogen assets) will further limit the environmental impact, as it
will avoid the need to build new infrastructure and make better use of the existing one.
In general terms, the facilitation of hydrogen and P2G projects would bring
environmental benefits because the impact of renewable and low-carbon hydrogen
technology is expected to be positive in terms of greenhouse gas emissions: the
substitution of fossil fuels by renewable or low-carbon hydrogen would translate into
GHG emission reductions in the range of 20-65 MtCO2/a, corresponding to 1.4%-4.5%
of the reduction gap at EU-28 level.101
P2G based on electrolysis is an important enabler for smart sector integration and the
decarbonisation of the gas and hydrogen grids. The source of the hydrogen produced is
crucial in terms of the GHG impact. If grid electricity is used, then the climate impact
would reflect the CO2 intensity of the electricity mix. However, if electricity comes from
a renewable source, then the hydrogen produced is carbon-neutral.102
This green
hydrogen can be used in gaseous form (and injected in dedicated hydrogen networks or
admixed to methane in natural gas networks) or it can be turned into synthetic methane or
99
These are electrolyser investment cost only, the figures do not include the investments in solar and wind
farms, transport and storage infrastructure, nor end-use applications.
100
Data from Trinomics: Study on Opportunities arising from the inclusion of Hydrogen Energy
Technologies in the National Energy & Climate Plans, Final report, June 2020
101
Artelys-Trinomics (2020): Measuring the contribution of gas infrastructure projects to sustainability as
defined in the TEN-E Regulation, Draft final report
102
Artelys-Trinomics (2020) has calculated that, when substituting natural gas with hydrogen, 56 tCO2
equivalent per TJ savings are achieved in case hydrogen from renewable sources is used and savings of 48
tCO2 equivalent per TJ are achieved in case the hydrogen is produced from natural gas with carbon capture
and storage; by contrast, the climate impact is negative when EU grid electricity used (72 tCO2 equivalent
per TJ increase), see table 5 in Annex 8.
45
synthetic liquid fuels, e.g. kerosene or diesel. Therefore, green hydrogen can play a
crucial role in decarbonising end use sectors, such as industry, transport or heating. It can
also offer flexibility options for the power grid and seasonal storage options for
renewable energy.
The strategic goal is to support renewable hydrogen; however, other forms of low-carbon
hydrogen will also be needed in the short-to-medium term to rapidly reduce emissions
from existing hydrogen production and support the parallel and future uptake of
renewable hydrogen.103
P2G facilities should contribute to the strategic goal in order to
maximize the positive GHG reduction impact, a similar approach would not be
appropriate for hydrogen networks, as for reasons of economic efficiency non-
discriminatory third party access to such infrastructure could be considered.
Social impact
The inclusion of hydrogen in the TEN-E framework and eligibility for CEF financial
assistance would have no impact on consumer prices104
. Support through TEN-E to these
emerging technologies could facilitate upscaling and bringing down costs and hence
improve affordability of the energy transitions. Hydrogen-related investments and
operations are estimated to generate in 2020-2030 employment of 29 100–103 100 direct
jobs (in production and operations & maintenance) and contribute to further 74 100–241
150 indirect jobs.105
Option A.2.2: Exclude natural gas infrastructure but include hydrogen, P2G and
smart gas grids for low-carbon and renewable gases
The impact of the inclusion of hydrogen and P2G is described above. The additional
impacts stem from the inclusion of smart gas grids. Specific impacts of the sub-option on
the exception for natural gas transmission projects that enable renewable and low carbon
gases (i.e. new cross-border transmission infrastructure for biomethane and/or retrofits
for hydrogen blends) are discussed separately.
Economic impacts
Indigenous renewable gas sources are expected to play an important role in the way
towards climate neutrality. The most significant current production of renewable gases in
the EU are biogas and biomethane106
with some 17 bcm annually. The Commission
estimates that biogas consumption would have to increase between 14-48% in the period
2015-2030 and between 37-378% in the period 2015-2050 to reach carbon neutrality.107
103
See A hydrogen strategy for a climate-neutral Europe, COM(2020) 301 final
104
Solidarity and the effect of CEF financial assistance in terms of affordability of PCIs is one element
when assessing applications for CEF financial assistance.
105
Artelys-Trinomics (2020): Measuring the contribution of gas infrastructure projects to sustainability as
defined in the TEN-E Regulation, Draft final report
106
Biogas is about 60% methane, 40% CO2 + some impurities. To enable its injection into the transmission
grid, biogas must be treated to meet standardized gas quality requirements. The upgrading of biogas to
biomethane requires the removal of CO2 and impurities. If used and, more importantly, stored, the CO2
obtained in production of biomethane from biogas is sometimes argued to create ‘negative’ emissions.
107
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
46
After upgrading biogas to biomethane, this gas can be transported, distributed and stored
in the existing methane gas grid. Hydrogen can also be blended into the methane grid up
to certain limits or subject to adaptations.
The vast majority of today’s 500 biomethane plants in the EU are connected to the
distribution grid, without the possibility to inject gas into the transmission level, meaning
the gas has to be consumed close to its place of production. Some of the green hydrogen
is also expected to be injected at DSO level. Smart gas grid projects would aim to tap
into this potential by implementing infrastructure facilitating the integration of those
locally produced renewable and low-carbon gases into the DSO and TSO grids and
making use of modern ICT technologies to help manage a more complex grid. Smart gas
grid projects would also include related investments enabling reverse flow to the
transmission level, which could ensure that excess local green gas supply is injected into
the transmission grid and used elsewhere, enabling the full use of local green gas
potential.
The inclusion of smart gas grids would ensure the seamless integration of the
transmission and distribution grids that will be increasingly necessary108
because of the
rapidly changing natural gas infrastructure system.
At the same time, smart gas grid projects would not meet the current cross-border
criterion for gas transmission infrastructure because they would not aim at creating
additional transmission capacity. Instead, the cross-border relevance would come from
the requirements to include promoters from at least two Member States in project design
and implementation. While projects to enable biogas to be injected from the distribution
to the transmission grid are indeed local, they may enable trade with those gases, as the
gas transmission grid is already interconnected at EU level. Biomethane and synthetic
methane pose in principle no technical problems for their injection into natural gas grids
as long as they meet quality standards. At transmission level, investments in grid
expansion may be needed in case capacity at certain network sections or interconnection
points become insufficient due to a change in the gas flow patterns caused by an increase
in biogas production in certain EU regions.
Environmental impact
Gas infrastructure projects may contribute to sustainability by enabling the substitution
of fossil fuels with renewable and low-carbon gases in various applications. The exact
impact will depend on the amount of renewable and low carbon gases injected into the
grid and on the difference between the GHG intensity of the specific renewable and low
carbon gas and the substituted fuel. For the substitution of natural gas with biogas, the
GHG impact ranges from a 156 tCO2eq per TJ reduction to a 17 tCO2eq per TJ increase
in emissions109
.
108
Gas distribution projects are not currently in the scope of the TEN-E Regulation.
109
The assessment takes negative emissions into account. The net CO2 impact shows the difference
between the natural gas CO2 emissions factor and the emissions factor of a specific renewable or low-
carbon gas. For further details: Artelys-Trinomics (2020): Measuring the contribution of gas infrastructure
projects to sustainability as defined in the TEN-E Regulation, Draft final report
47
Specifically on projects that aim to increase the share of hydrogen that can be blended
into the natural gas grid: it must be noted that, even when electrolysers run on renewable
electricity to produce green hydrogen, the GHG reduction potential is limited by the fact
that hydrogen has a lower energy content than methane. Since the calorific value of
hydrogen is about 1/3 of the calorific value of natural gas, a 10 vol% H2 admixture is
equivalent to only 3.3% of the energy content. This translates into -11.6% CO2 effect for
an admixture of 30 vol% hydrogen, providing only relatively limited room for
decarbonisation in the medium- to long-term.110
Projects that specifically aim at enabling the integration of renewable and low-carbon
gases into the gas grid would have to prove significant net GHG savings to be eligible for
PCI status. This poses a number of difficulties because fossil and green gas molecules
share the same network infrastructure and therefore the GHG reductions would result
from a planned increase of renewable and low-carbon gases in a given network, which
are enabled, but not directly influenced, by such projects111
. The project promoter
(typically a TSO) has limited ability to influence the gas mix. Under the unbundling
rules, a TSO (or DSO) is responsible for network operation but it does not determine
what type of gas is injected into its grid because it has to grant equal access to all
network users. A network operator can invest in pipeline projects that enable more
injections of renewable and low-carbon gases (for instance a transmission pipeline
leading to an area with major biogas production potential where there are transmission
bottlenecks) but this pipeline will be able to carry biomethane and natural gas alike.
Therefore, investments in gas networks can only indirectly reduce GHG emissions by
enabling a greener gas mix, while the actual GHG impact will depend on actual gas
flows, which is to a large extent beyond the control of network operators. This creates a
risk of “greenwashing” as any new gas infrastructure ostensibly built for renewable gases
could in practice end up being used for natural gas because it will in the end form part of
a given gas network operator’s regulated asset base.
Infrastructure types linked more closely to the supply of green gases can contribute more
directly to the decarbonisation objectives. For instance, a connecting pipeline linking a
biomethane plant to the transmission grid can be expected to transport only biomethane.
A P2G facility producing green hydrogen with a view to injecting it into the gas network
(together with its connecting pipeline) can be expected to directly contribute to GHG
reductions. However, such connecting pipelines and facilities related to gas supply are
typically non-regulated assets, meaning they relate to competitive activities and have no
regulatory scrutiny of costs.
111
Methodologies such as the EIB's Project Carbon Footprint Methodology elaborates on the assessment
of GHG emissions and emission variations generated by a wide spectrum of projects, including energy
transmission and distribution assets. However, such methodologies would not fit the purpose of the present
IA in the case of power lines and gas transmission infrastructure, given that it is based on estimations of
CO2 emissions for the entire network and an emissions factors per unit of supply. In most cases, emissions
for the current level of supply would go up without the investment. The percentage share of the network
assets replaced/rehabilitated is estimated. Carbon footprints (absolute and baseline) are calculated using
this percentage share of the total emissions of the network (with and without the project) for the pre-project
levels of demand.
48
To a certain extent, additional requirements could offer some safeguards that the selected
gas PCIs do indeed contribute to significant GHG reductions and avoid the risk of
creating assets that would continue to be used predominantly for natural gas. This could
include a stronger sustainability assessment of candidate PCIs (see section 6.2.2) or a
requirement that the projects are presented in the context of credible policy and/or
network development plans to roll out renewable and low-carbon gases (see section
6.2.2). However, while this may work for smart gas grids, in other cases such as new
infrastructure for renewable gases or retrofits for hydrogen blends (see below sub-option,
such safeguards may not entirely address the risk of financing infrastructure that would
end up being used primarily for fossil energy in reality.
Social impacts
Access to PCI and CEF funding could limit the effect of related investments on tariffs.
Sub-option: Natural gas transport infrastructure for renewable and low-carbon gases
In addition to the above impacts, the following impacts are relevant for this sub-option. A
study for DG Energy112
has estimated a total technical biogas/biomethane production
potential of 1 150 TWh/yr for 2050113
. This compares to 193 TWh biogas production in
2016, almost a six-fold increase. The full deployment of the biomethane potential
identified in the study would have a profound impact on the pattern of gas flows in
Europe with flows originating from countries with high biomass potential to centres of
consumption. While gas transmission grid capacity in the short- to mid-term is unlikely
to present a bottleneck, there would be a need for investment in additional cross-border
capacity in the long run114
. In such a case, the TEN-E framework could add value by
prioritizing such possible projects of cross-border relevance (even though it has to be
added that in practice there have not been any projects thus far that would have aimed
specifically at enabling cross-border renewable gas flows). A methane-heavy 2050
scenario involves higher investment need in cross-border gas networks than a hydrogen-
heavy scenario115
. However, the system-wide costs are also higher, since the production
of carbon-free methane from hydrogen increases conversion losses and electricity
consumption for the same amount of energy. 116
It should be noted that the biomethane
112
Trinomics (2019): Impact of the use of the biomethane and hydrogen potential on trans-European
infrastructure, Study for DG ENER
113
This is equal to about 118 bcm, based on a calorific value of 35.17 MJ/m3, see https://unit-
converter.gasunie.nl/
114
See assessment and depiction of the possible effect of hydrogen on gas flows and capacity investments
in Trinomics (2019) pp. 102-111.
115
The study estimates that, by 2050, investment needs in cross-border gas infrastructure would be €5
billion per annum in a hydrogen heavy scenario and €1.2 billion p.a. in a methane heavy scenario, while
overall system costs are lower in the hydrogen scenario due to higher efficiency, i.e. smaller conversion
losses (see Annex 8 for more details).
116
Trinomics: Impact of the use of the biomethane and hydrogen potential on trans-European
infrastructure, Study for DG ENER, 2019
49
potential assumed by the study is higher than in the Commission’s impact assessment for
the climate target plan117
, so the effect depends on those assumptions.
By contrast to biomethane, the blending of hydrogen into the methane gas grid is much
more complex and requires careful consideration. Hydrogen can also be directly injected
into the natural gas (methane) grid – but only up to strict limits because hydrogen is a
different molecule than methane. Industry data show that nearly all network elements at
both distribution and transmission level can handle up to 10% hydrogen (with the
exception of compressor stations and some other equipment). Going beyond this limit
usually requires adaptations.118
Importantly, blending changes gas quality and prevents
the direct use of hydrogen in higher-value applications, such as industry and transport.
Therefore, the main bottleneck for blending is not necessarily the transport infrastructure
but the end-use applications. While blending may be a relatively low-cost119
solution in
specific circumstances and could lay the ground for scaling up hydrogen use, hydrogen
admixture levels beyond 20% would be impractical and have important implications for
end users. A number of EU countries do foresee a role for hydrogen blends during a
transition period and see a need for EU level coordination to avoid creating barriers for
cross-border gas flows120
. Such projects are unlikely to meet the existing cross-border
criterion, as they are not directed at creating additional cross-border transmission
capacity. The risk of “greenwashing”, as discussed above, is particularly relevant for this
sub-option, i.e. new infrastructure for renewable gases or retrofits for hydrogen blends,
which are intended to be used for renewable and low carbon gases but may in practice be
used (predominantly or exclusively) for natural gas.
Sub-option: Exceptions for natural gas PCIs at an advanced implementation stage
New natural gas PCIs – beyond the most advanced PCI projects on the 4th
PCI list – are
unlikely to be needed for security of supply or market integration.
If the revised TEN-E Regulation excludes natural gas infrastructure from the scope, all
existing PCI projects – including the most advanced ones – would lose eligibility for PCI
status. There might be expectations for special treatment for existing PCIs which are still
not completed but which will have started construction by the time the first PCI list under
the revised regulation enters into force or which will have already received CEF support
by that time (as described in the policy option). The implementation of those projects
should not be prevented or significantly delayed due to the loss of PCI status which
would not affect signed grant agreements for CEF financial assistance.
117
To note that the scenarios in the Commission’s impact assessment for the climate target plan count with
biogas volumes of 56-63 Mtoe by 2050, or around 650-730 TWh (with a conversion factor of around 11.6
TWh / Mtoe).
118
See Marcogaz: Overview of available test results and regulatory limits for hydrogen admission into
existing natural gas infrastructure and end use, October 2019
119
For instance, French gas operators count with limited costs up to 6-10% blending ratios (Technical and
economic conditions for injecting hydrogen into natural gas networks, Final report by French gas network
operators, June 2019, see esp. p. 22 for investment estimates). See Annex 8 for more detail.
120
See ACER: NRA Survey on Hydrogen, Biomethane, and Related Network Adaptations, Evaluation of
Responses Report, July 2020
50
Based on the planned commissioning dates of the existing gas PCI projects on the 4th
PCI
list, many are expected to be completed by the time when the first PCI list under the
revised Regulation would be established121
(provided there are no implementation
delays). However, according to ACER monitoring data, there may still be up to 21 gas
PCIs122
from the current list that are presently less mature and may wish to apply for PCI
status under the revised framework. Provided these projects are advanced by then
(according to the definition set out in the policy option), they could be captured by this
possible exception.
The projects that could benefit from the exception would already need to be well-
advanced. For such projects, the loss of PCI status is unlikely to prevent or delay timely
project implementation, as they will have either started construction or already secured
funding, including through a CEF grant agreement. Therefore, only the implementation
of less advanced gas projects (i.e. those that are only planned or still under permitting)
would be affected by the loss of PCI status due to the change in the Regulation’s scope.
However, these projects are unlikely to bring significant benefits according to the
evaluation report and other evidence presented in this impact assessment (see above).
6.1.3 Projects of mutual interest
Option A.5.0: Business as usual
Projects, which are not able to demonstrate socio-economic benefits for at least two EU
Member States, could be pursued relying on other policy instruments, in particular under
the accession and neighbourhood policy, but would not benefit from the provisions of the
TEN-E revision and would not have access to CEF financial assistance.
Option A.5.1: Inclusion of PMIs under the TEN-E Regulation
Socio-economic impacts
The inclusion of PMIs in the TEN-E framework would enable the identification of
additional projects that demonstrate significant net socio-economic benefits, e.g. in terms
of enhancing security of supply and/or contributing to higher share of renewables in the
EU and in the neighbouring countries. The requirement from an involved third country
that a priority status under the TEN-E is conditioned to project specific regulatory
approximation with the EU in terms of internal energy market policies can provide
socio-economic benefits by extending the pro-competitive impact of the EU’s internal
market rules to infrastructure connecting the internal market with third countries,
including avoidance of distortion of competition.
Environmental impacts
The inclusion of PMIs under the TEN-E framework would be conditional on the
infrastructure projects beyond the EU territory, often in EU’s immediate neighbourhood,
121
It is assumed that end 2023 is the earliest possible date for the adoption of the first PCI list under the
revised TEN-E Regulation.
122
ACER: Consolidated Report on the progress of electricity and gas Projects of Common Interest, July
2020
51
being aligned with the EU’s energy and climate objectives. In order for the project to
benefit from priority status under the TEN-E, there would be a requirement on the
involved third country for approximation with the EU also in terms of sustainability,
environmental and climate policies, which could contribute to the achievement of the
decarbonisation objectives beyond the EU’s border while limiting the risk of carbon
leakage.
Administrative burden
Building on the current governance model of the TEN-E and PCI process which already
foresees the participation of stakeholders from third countries (like project promoters,
energy regulatory agencies, ministries, and NGOs), there would be very limited
adjustments needed. The requirement of regulatory alignment concerning different EU
policies from third countries which have not adopted the EU acquis yet (i.e. those which
are not signatories of the Energy Community Treaty), would require the establishment of
procedures for monitoring and enforcing these particular provisions vis-à-vis the
concerned third countries. The administrative burden would depend on the number and
specificities of the projects and countries involved.
6.2 Governance / Infrastructure planning
6.2.1 Offshore grids for renewable energy
Option B.1.0: Business as usual
Environmental impacts
Despite the initiatives that will create more ambition on offshore renewable energy, the
continuation of the current framework would not change the incremental progress in
developing the necessary offshore grid infrastructure. While this would reduce the impact
on maritime space, the required greenhouse gas emissions to reach climate neutrality by
2050 could not be achieved.
Socio-economic impacts
There would be significant costs of delays and lack of leveraging the infrastructure
investments needed to meet the 2050 energy and climate objectives, which is a
prerequisite for a significant upscale of offshore wind energy in Europe. The European
industry would lose its technology leadership in an important future technology market
and not exploit the jobs and growth potential in this sector.
Option B.1.1: Integrated offshore development plans
Environmental impacts
An optimised offshore grid would result in two key environmental benefits: first, it
would enable the integration of a significant amount of renewable electricity from
offshore renewable energy sources into the European power grid and, secondly, the
consideration, from the initial stage, of the maritime spatial plans and environmental
aspects within the infrastructure planning will allow minimising the environmental
impact of the future offshore infrastructure.
52
The potential greenhouse gas emission reductions from the development of offshore
renewable energy, and related infrastructure, have not been quantified yet. However,
given the expected deployment the emissions reductions can be considered significant in
a mid-term perspective. These would depend on the actual deployment rate and the
greenhouse gas intensity of the electricity it replaces. This is influenced by various
factors including demand and supply patterns, price sensitivities, localisations, grid
congestions. It is expected that the coordinated and optimised grid planning at regional
level would reduce the need for landing points. This would have a direct positive
environmental impact.
Economic impacts
An efficient market framework and optimised offshore grid planning is likely to bring a
higher overall social welfare than the current trajectory. In 2019, a Commission study on
hybrid projects in the North Seas by Roland Berger shows possible cost savings of about
10 percent, which would be equivalent to between EUR 300 million and EUR 2500
million for five projects alone, depending of the size of the comparable conventional
projects123
.
According to ENTSO-E, holistic planning and coordination of development of on- and
offshore transmission systems is a requirement to ensure timely development and low
cost for the end consumer concerning offshore grids. Such an approach would limit the
expected increase in grid expansion costs for offshore network developments. It would
also help to shorten the time required for offshore grid development and hence to keep
pace with the shorter lead times for the deployment of offshore wind.124
The establishment of an enabling grid planning framework for offshore grids would open
up a significant market for the renewable energy industry, in particular in Europe, and
partially compensate for the slowdown in renewable development onshore in some
regions in Europe. This could have significant positive impacts on turnover and
employment by contributing to maintain Europe’s technological leadership in this area.
Social impacts
It is expected that the expansion of offshore renewable energy could have a positive
effect on employment across the EU. For instance, based on industry estimates, 77,000
people work in offshore wind in Europe today and this is expected to increase to more
than 200,000 if the commitments for offshore wind expansion such as in the NECPs are
met125
. According to the European Technology and Innovation Platform for Ocean
Energy (ETIP Ocean126
), with a clear development strategy and by creating the right
policy conditions, 400,000 jobs could be created in the EU by 2050 in the ocean energy
sector (e.g. wave, tidal, floating solar).
123
Roland Berger (2019): Hybrid projects: How to reduce the cost and space of offshore wind projects
124
WindEurope (2019): Industry position on how offshore grids should develop,
https://windeurope.org/wp-content/uploads/files/policy/position-papers/WindEurope-Industry-position-on-
how-offshore-grids-should-develop.pdf
125
EU27 + UK but excluding Norway, Source: WindEurope
126
https://www.etipocean.eu/
53
Large TSO investments in offshore grids can lead to a tariff increase, to the detriment of
consumers. That is why an appropriate cost-benefit cost allocation is key to stimulate
these investments in the most efficient way (see policy option D.1.1).
Administrative burden
The option would build on ENTSOs’ existing capabilities on network planning and the
resource implications are considered limited for ENTSOs and TSOs. It would require
participation in regional group meetings, data collection.
Option B.1.2: Regional Independent System Operator / Joint Undertaking
While the environmental, economic and social impact are expected to be similar as under
option B.1.2, there would be an initial administrative burden in setting up a new entity in
the form of Regional Independent System operator or a Joint Undertaking either per
regional priority corridors or sea basins. When established, this entity could reduce some
of the administrative burden related to planning for the Commission, TSOs and Member
States as the entity would take on the responsibility for developing the offshore gird. In
addition to the resources for the administrative tasks, the entity would need the necessary
network modelling capabilities with significant additional costs.
This option would have significant impacts on all actors involved in the offshore
planning. The Regional Independent System operator or Joint Undertaking bodies would
not only be responsible for the planning of the offshore infrastructure but it would also
decide on the costs to be allocated to each Member State. Member States, TSOs, and
NRAs would lose influence in this process. This is also likely to result in higher
transaction costs and the risk of non-synchronised planning due to split responsibilities
for the offshore and onshore infrastructure planning.
While the role of ENTSOs and TSOs would be significantly weakened for the offshore
planning, they would remain the main information providers. This may result in
decreased interest in cooperation between the TSOs on the planning level, and possibly
in decreased data accuracy and sharing. Given the institutional changes, setting up a
Regional Independent System operator or Joint Undertaking bodies would require a
rather long lead time also because there is no equivalent body in place that could be used
as best practice.
6.2.2 Cross-sectoral infrastructure planning
Option B.2.0: Business as usual
Environmental and economic impacts
While the scenarios and system needs assessments that underpin the TYNDP and the PCI
selection process, as carried out by the ENTSOs, are based on DG ENER scenarios and
reflect the 2050 climate-neutrality objectives and relevant policy initiatives, the
trajectories chosen may favour in particular high levels of gas demand and result in
estimations of flows for the different energy carriers that favour the construction of more
54
infrastructure than is actually required for achieving the 2050 carbon-neutrality
objective.127
Therefore, this option may lead to the selection of PCI projects that would
not be in line with long-term policy objectives. This would lead to negative
environmental and the socio-economic impact, the latter mainly linked to risk of stranded
assets. The possibility to repurpose gas pipelines for hydrogen transport and the potential
cost savings should only be applied to existing gas pipelines or those that are already
under construction / development. Developing new natural gas infrastructure projects
with the assumption that they may be repurposed in the future would need to take into
account the costs for developing the infrastructure in the first place and hence
significantly affect the potential cost advantages of repurposing and bear the significant
risk of green washing (see section 6.1.2).
Option B.2.1: Strengthened governance and sustainability
Environmental and economic impacts
An increased oversight by the Commission over the scenarios and system needs
identification, a strengthened role for ACER in the methodology to assess the costs and
benefits of the projects, as well as an increased role for the DSOs in the planning process
is expected to result in more realistic electricity and gas demand assumptions and
infrastructure needs identification as well as an improved project assessment. With a
better framing of the 2030-2050 assumptions and the inclusion of a mandatory
sustainability criterion, the PCI process will only select gas and electricity projects that
enable the Green Deal objectives.
The mandatory sustainability criterion in the PCI process would be applied to all gas
projects that will be within the future scope of the TEN-E Regulation. Hence, if fossil gas
is excluded from its scope, it would apply to other gas categories such as hydrogen, P2G,
and renewable gases, if included in its scope. This would have a direct impact on the
ranking of the candidate PCI projects, as the projects with little to no sustainability
benefits would be ranked lower and the ones that prove to bring high sustainability
benefits would be ranked higher. Overall, this option is expected to lead to an optimised
interlinked infrastructure planning.
Administrative burden
This option would complement the ENTSOs’ current role with an increased Commission
and ACER oversight. As such, the administrative burden on the Commission and ACER
will increase in line with the additional work related to continuous follow-up of the
TYNDPs development. There would be no direct impact on project promoters.
Social impact
Optimizing the infrastructure need identification and projects assessment within the
frame of TYNDPs will minimise the impact on network tariffs and final energy prices.
127
E.g. the ENTSOs 2020 Climate Action scenario assumes 70% gas import in 2050, while giving little to
no consideration on how and where such amount of gas is to be fully decarbonized.
55
Option B.2.2: New governance set-up and expansion of scope and role of the
TYNDP
The implementation of this option is expected to deliver similar economic, social and
environmental results as policy option B.2.1.
The key difference concerns the administrative burden. The transfer of responsibilities
also carries significant risks, as specific expertise would need to be built up very rapidly
by the Commission and ACER. The Commission, possibly with the help of a third party,
would have to, not only approve the results, as in option two, but also coordinate data
collections and crosschecks, projects submissions, manage studies and project
assessments. It would ultimately lead to parallel structures, as grid planning requires very
specific expertise. While the role of ENTSOs and TSOs would be significantly
weakened, they would still remain the main information providers which would
significantly increase transaction costs and may result in decreased data accuracy and
data sharing (as under option B.1.3).
6.3 Permitting and public participation
Option C.1.0 Business as usual
Environmental impacts
The TEN-E Regulation already ensures that PCIs have to abide by the highest standards
of environmental protection provided by national and EU law. However, lengthier
permitting processes could cause that the environmental assessments performed become
outdated and have to be redone.
Social impacts
Citizens would be affected as they would have less access to information regarding the
projects due to the fact that project websites are very often outdated. Moreover, citizens
would not be able to follow how their input was taken into account.
With lengthier, unclear, permitting processes, citizens are affected, firstly, because such
projects do not realize their benefits sooner, including their benefits for consumers (eg.
lower energy prices), but also because prolonged permitting procedures can create
confusion and uncertainty in the role and effect of public consultations which could
become obsolete by the time the permitting process is completed.
Economic impacts and administrative burden
The duration of court procedures, such as appeals, is not included in the maximum
duration of the permitting process of 3.5 years. Therefore, such court procedures
regarding PCIs can delay the overall implementation of the projects.
The current transitional provisions mention that for projects which submitted their
permitting application file before 16 November 2013, the permitting provisions and the
priority status do not apply (Chapter III). Several projects are encountering this issue and
have not yet completed their permitting process. This has caused significant delays in
their implementation and the situation would continue.
56
Lengthy permitting procedures increase administrative costs both for the project
promoter, but also for the national competent authorities and other authorities concerned
as certain permits that expire in the meantime might have to be obtained several times
before the completion of the entire permitting process.
Option C.1.1: Use of urgent court procedures
The time limits laid down for the permitting process, currently 3.5 years, do not include
administrative appeal procedures and judicial remedies before a court or tribunal which
delay implementation of the projects in addition to the timeline of the permitting process.
Requiring Member States that currently have in place urgent court procedures (e.g.
cutting in half court deadlines) in other cases to extend these to PCIs keeps the necessary
balance between the rule of law in the Member States and their sovereignty and the
acceleration of the implementation of PCIs.
The introduction of the requirement for Member States to ensure that accelerated
litigation procedures, where available, are applicable to PCIs under national legislations
should be seen in a similar manner, including for the purposes of safeguarding the
sovereignty and rule of law of the Member States, as the introduction, as per the current
Regulation, of the requirement that PCIs are granted the priority status where this exists
under national law: “Where such status exists in national law, projects of common
interest shall be allocated the status of the highest national significance possible…”.
Member States that do not have this status do not have the obligation. According to
available data, at least 11 Member States128
have such accelerated/urgent litigation
procedures in place that they could extend to PCIs. These procedures are used for a
variety of matters from family matters to insolvency proceedings or setting-up or
enforcing guarantees on movable or immovable assets. Some of these urgent matters are,
in fact, quite complex, but due to their urgent nature require acceleration.
Environmental impacts
The acceleration of court procedures should not have any environmental impacts.
Economic impact and administrative burden
An accelerated accomplishment of the project implementation through faster court
procedures decreases costs for both project promoters and competent authorities, while
entailing additional costs for national courts who would have to dedicate additional
resources to procedures regarding PCIs. However, the Union list of PCIs could contain
maximum 220 projects, in accordance with the TEN-E Regulation and, in practice, the
actual number of projects has been significantly lower. For example, the 4th
Union list
contains 149 projects. Therefore, the number of court cases for the entire EU that such
projects could generate is not high, by comparison to the frequency of other types of
urgent court procedures Member States already have in place.
128
Data from two studies prepared for the European Commission by CEPEJ (the European Commission for
the Efficiency of Justice) on the functioning of judicial systems in the EU Member States – 2018,
https://ec.europa.eu/info/publications/cepej-studies-2019_en, as well as, The Rule of Law Stress Test – EU
Member States’ Responses to Covid-19, https://democracy-reporting.org/dri_publications/the-rule-of-law-
stress-test-eu-member-states-responses-to-covid-19/
57
An accelerated accomplishment of the permitting process also allows for a faster
implementation of the project therefore bringing forward the benefits identified in the
CBA. This will have a significant economic impact on regional energy markets, if not,
even a European wide impact. The economic impact could be determined based on the
CBAs of the projects impacted by the accelerated procedures. No data is currently
available for fully capturing the impact. However, in a Working Paper by the Renewable
Grid Initiative and ENTSOE, Value of timely implementation from May 2019,
calculations were performed as to how much delays cost for an example project,
including the “Garenfeld substation” (Germany). A delay of 2 years due to an average
court procedure was estimated at a cost of 150 million €129
.
Option C1.2: Creating a one-stop shop per sea basin for infrastructure related to
offshore renewable projects
The creation of a one-stop shop per sea basin would enable the acceleration of the
permitting process for infrastructure related to the deployment of offshore renewable
generation in order for such projects to finish permitting within the maximum limitation
of 3.5 years. In practice, offshore projects cross many more jurisdictions than onshore
projects as they cross either national waters or the exclusive economic zones of several
Member States and, possibly, third countries. This makes their permitting process
particularly complex, as they have to follow all the specific rules of these jurisdictions.
Environmental impact
The creation of a one-stop shop per sea basin would bring positive environmental
impacts as strategic environmental assessments could be performed at sea basin level. On
this basis, environmental assessments for specific projects could be strengthened.
Moreover, one entity coordinating the permitting process would also enable a better
coordination of the environmental impact assessment across borders.
Economic impact
The creation of a one-stop shop per sea basin would have positive economic benefits as it
would lead to the swifter realization of infrastructure related to the deployment of
offshore renewable generation which would realize its benefits sooner. There are no
specific data allowing the calculation of the economic benefits realised by the swifter
implementation of such infrastructure to be brought as example, but the benefits
calculated in the example provided Option C1.1. could be taken as an indication.
Administrative burden
The option would considerably diminish the administrative burden and costs for the
project promoters who would also benefit and be able to use data from studies already
conducted for the sea basin. Project promoters would have to employ fewer personnel
129
Renewable Grid Initiative and ENTSOE, Value of timely implementation of “better projects”, May
2019, Working Paper https://eepublicdownloads.azureedge.net/clean-
documents/Publications/Position%20papers%20and%20reports/20190517_RGI_ENTSOE_working_paper
_better_projects.pdf
58
and use less resources than having to deal with every competent authority in all the
Member States where the project is located.
The one-stop shop would require very limited additional resources as the assessment
afferent to all permits would continue to take place on the basis of the national
requirements for the different Member States on the territory of which the project is
located. The one-stop shop is not a new institution, but would consist of a secretariat
formed of staff from the national competent authorities, with no additional staff required.
The one stop-shop would ensure a single point of contact for the project promoters and
the coordination of the national one-stop shops. While the creation of the one-stop shop
will lead to one off administrative costs for the establishment of the relevant procedures,
it could eventually save resources in national administrations as it would avoid parallel
national work streams for issuing several (national) comprehensive decisions.
6.4 Regulatory treatment
According to stakeholders, CBCA decisions are the main instrument to improve the
regulatory conditions of cross-border projects. While the approach taken to share costs
between Member States in relation to benefits is largely appraised, the details of the
mechanism reduce its attractiveness. The number of PCIs with a CBCA decision remains
relatively low: as of March 2020 only 42 CBCA decisions were issued. This indicates
that the desired effect is limited to a small number of projects only, but the contribution
to the improvement of the regulatory framework is, however, well appraised. Thus, as
issues in the details of the process for CBCAs persist, which are reflected in the low
number of cost sharing decisions130
, their removal should lead to an increased and correct
use of the CBCA procedure.
Option D.1.0: Business as usual
Environmental impacts
There would be no environmental impacts from maintaining unchanged the CBCA
provisions.
Social impacts
CBCA procedures, as currently provided, are underutilized and do not reach their
potential in assisting projects’ realization. This leads to unrealized benefits for the society
on the whole and for citizens directly by the fact that benefits such as energy cost
decreases are delayed.
Economic impact and administrative burden
Maintaining the current provisions regarding the CBCA procedure leaves this procedure
to be utilized mainly as a prior requirement for accessing CEF financial assistance.
Moreover, many CBCA decisions are conditional upon the receipt of CEF financial
130
Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure, Draft final report
59
assistance or do not fully allocate all costs of the projects into the tariffs, leaving a
financing gap and delaying project realization.
This option would not have an impact on the administrative burden.
Option D.1.1: Inclusion of full investment costs
Environmental impacts
CBCA procedure enables the implementation of PCIs, which have benefits across-
borders. In principle, clarifying the CBCA provisions should not have direct
environmental impacts.
Economic and financial impacts
The split of investment costs across borders and their full inclusion of investment costs in
the tariffs by the CBCA decision would enhance the potential for CEF financial
assistance to be used solely as a last resort financing option.
The CEF Regulation provides that: “First, the market should have the priority to invest.
Second, if investments are not made by the market, regulatory solutions should be
explored, if necessary the relevant regulatory framework should be adjusted, and the
correct application of the relevant regulatory framework should be ensured. Third, where
the first two steps are not sufficient to deliver the necessary investment in projects of
common interest, Union financial assistance could be granted if the project of common
interest fulfils the applicable eligibility criteria”131
. A stable regulatory environment
created for a project with full regulatory coverage is therefore a pre-requisite for any
project in order for it to have explored both market based financing solutions and
regulatory solutions.
Stakeholder views were found to be mixed both on the need to carry out a cross-border
cost allocation and on the method to be approach by NRAs. However, several
stakeholders indicated that affordability should be key to making a grant decision. As
such, the option safeguards the principle of “CEF last resort” whilst taking into account
suggestions from stakeholders on improving the CBCA mechanism.
Social impacts
The CBCA will enable the realization of PCIs and in turn the benefits of such projects as
identified in the CBA. This would also be taken into account for possible CEF financial
assistance. The full extent of such benefits cannot be estimated as there are no data
131
Regulation (EU) No 1316/2013 of the European Parliament and of the Council of 11 December 2013
establishing the Connecting Europe Facility, amending Regulation (EU) No 913/2010 and repealing
Regulations (EC) No 680/2007 and (EC) No 67/2010 Text with EEA relevance
OJ L 348, 20.12.2013, Recital 48
60
available, however, the example of costs of delay, as described above in the assessment
of Option C.1.1, remains a good indication.132
Administrative burden
According to the stakeholder consultation, the costs for NRAs as a result of TEN-E are
low the main cost driver is the CBCA process. For most NRAs less than 1 FTE is
estimated to be currently involved133
.
This option increases the administrative burden on NRAs, which will have to allocate
costs in full and include them in the tariffs. It also imposes on NRAs an obligation to
assess the investment requests more thoroughly since all CBCA decisions will be final.
However, this option decreases the administrative burden for project promoters and the
financial market as the projects will benefit from regulatory stability being able to also
obtain financing from the market.
7 HOW DO THE OPTIONS COMPARE?
The options considered are compared against the following criteria:
 Effectiveness: the extent to which different options would achieve the objectives;
 Efficiency: the benefits versus the costs; efficiency concerns "the extent to which
objectives can be achieved for a given level of resource/at least cost";
 The coherence of each option with the overarching objectives of EU policies;
 The compliance of the options with the proportionality principle.
Table 3 summarises the assessment of each option against these criteria. The
effectiveness of the policy options considers the extent to which the objectives, as set out
in Section 4, are achieved. Specific measures to simplify and improve the efficiency of
the TEN-E Regulation are set out in Section 8.2.
The TEN-E Regulation is a key instrument to achieve the timely development of
sufficient energy infrastructures to enable delivering on the EU’s energy and climate
objectives in line with the European Green Deal, in particular the 2030/50 targets, market
integration competitiveness, and security of supply. However, it is important to recognise
that it is only one element. A number of other complementary policy measures have
already been or need to be put in place at EU and national. These include investments in
the necessary infrastructure projects without a significant cross-border impact,
investment in research, development and innovation for new technologies, policies
supporting renewable energy generation, and initiatives supporting the acceptance of new
infrastructure projects.
132
The CBCA enables the timely implementation of PCIs and hence avoids delays in project
implementation. The benefits of a PCI are therefore realised earlier.
133
Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure, Draft final report
61
Table 3: Comparison of policy options
Policy option Description Effectiveness Efficiency Coherence Proportionality
A) SCOPE
Options A.1. Smart electricity grids and electricity storage
Option A.1.0 Business as usual o o o o
Option A.1.1 Update of eligibility criteria ++ + + +
Sub-option: Inclusion of non-
mechanical storage
+ o + -
Option A.2 Gas infrastructure, hydrogen networks and power-to-gas
Option A.2.0 Business as usual o o o o
Option A.2.1 Exclude all natural gas
infrastructure but include
hydrogen and P2G
+ + + +
Option A.2.2 Exclude natural gas
infrastructure / include
hydrogen, P2G & smart gas
grids
+ + ++ +
Sub-option: Natural gas
infrastructure for renewable
and low-carbon gases
- o - o
Sub-option: Exceptions for
natural gas PCIs (advanced
implementation)
- - - -
Option A.3 Projects of mutual interest (PMIs)
Option A.3.0 Business as usual o o o o
Option A.3.1 Inclusion of projects of mutual
interest (PMIs)
+ o + o
B) GOVERNANCE / INFRASTRUCTURE PLANNING
Option B.1 Offshore grids for renewable energy
Option B.1.0 Business as usual o o o o
Option B.1.1 Integrated offshore
development plans
++ + ++ +
Option B.1.2 Regional ISO / JU ++ o ++ -
Option B.2 Cross-sectoral infrastructure planning
Option B.2.0 Business as usual o o o o
Option B.2.1 Strengthened governance and
sustainability
++ + + +
Option B.2.2 New governance set-up + - + o
C) PERMITTING
Option C.1 Permitting
Option C.1.0 Business as usual o o o o
Option C.1.1. Use of urgent court procedures ++ ++ + +
Option C.1.2 One-stop shop per sea basin for
offshore renewable projects
++ ++ ++ o
D) REGULATORY TREATMENT
Option D.1 Regulatory treatment
Option D.1.0 Business as usual o o o o
Option D.1.1 Inclusion full investment costs + + + o
Legend: -=small negative impacts; --= large negative impact; 0= no change; + = limited improvement; ++=
significant improvement
Smart electricity grids and electricity storage
62
The assessment in section 6 showed that cross-border smart electricity grids constitute an
important infrastructure category to enable the achievement of climate neutrality, market
integration, competitiveness, security of supply in a rapidly changing and increasingly
digitalised energy system. Nevertheless, this potential is currently not sufficiently
exploited which would continue to be the case under BAU. Updating the eligibility
criteria for electricity smart grids, whilst safeguarding the cross-border impact with the
participation of project promotors from two or more Member States, would significantly
increase the effectiveness of the policy instrument by allowing more smart electricity
projects to apply for PCI status. It would therefore improve effectiveness by updating an
infrastructure category necessary for the achievement of the climate and energy
objectives. It would also have a positive impact on the efficiency as it would facilitate the
cooperation between DSOs and TSOs by reducing administrative costs. The broadened
scope would also improve the coherence of the policy instrument as it would address the
digital transition and support the electrification of the transport sector.
However, while the importance of electricity storage has been demonstrated in general
terms, the potential cross-border impact could not be fully demonstrated. Therefore, a
broadened scope with a sufficiently ambitious cross-border criteria for storage may result
in very few projects being selected potentially leading to higher costs than benefits,
although this will depend on the exact definition of the cross-border impact as eligibility
criterion and technological progress.
Gas infrastructure, hydrogen networks and power-to-gas
The continuation of the current framework would have a significantly negative impact on
its effectiveness against the identified objectives. The assessment showed that no new
cross-border natural gas infrastructure is needed in the EU due to the already
commissioned gas PCIs or those under development as well as due to the expected
reduction in demand for natural gas in the context of decarbonisation. Maintaining
eligibility for natural gas projects would create unnecessary administrative costs for all
actors involved in the PCI selection process as such projects would not be selected for
PCI status if they cannot demonstrate benefits against identified needs. It could even
entail the risk of financing stranded assets at the cost of consumers through network
tariffs. BAU would be in contradiction with the climate neutrality objective, strongly
incoherent with other EU policies and be at odds with the objective to create a future-
proof TEN-E framework.
Limiting the scope to new and repurposed hydrogen networks and P2G would be fully
coherent in view of the infrastructure required in the decarbonisation pathways towards
2050 and the expected role of hydrogen in it. It would also be more effective than the
current framework in identifying the projects and investments needed for carbon-
neutrality. The inclusion of hydrogen networks with cross-border relevance is necessary
for a wider and more cost-efficient role out of hydrogen infrastructure based on European
infrastructure planning for hydrogen. While current costs of these technologies are
significant, these would not directly affect network tariffs and final consumer prices as
long as these are non-regulated assets. Moreover, the inclusion of full conversion of
existing natural gas assets would lead to a more cost-effective and more socially
affordable pathway to the deployment of hydrogen infrastructure and avoid stranded
assets in the existing gas network. In addition, their inclusion under TEN-E could help
the deployment of hydrogen in different regions in the EU, also through CEF financial
assistance. As regards EU added value, the inclusion of hydrogen networks will facilitate
63
the development of cross-border hydrogen infrastructure and P2G assets of cross-border
relevance, which may otherwise not take place. The policy option is proportional, as the
prioritized projects would have to prove cross-border impact.
Including in the scope also smart gas grids could increase the effectiveness of the future
TEN-E and would help to deliver decarbonisation already in the shorter term (because
the emergence of cross-border hydrogen networks is expected as of 2030). The option is
coherent with the EU decarbonisation policies and technology-neutrality, as low-carbon
and renewable methane gases will play a role in the decarbonisation of the energy system
and projects with cross-border relevance can reduce the related costs. The inclusion of
smart gas grids would be proportional, as all projects would ensure better integration of
renewable and low carbon gases with the transmission level; at the same time such
projects have to prove cross-border relevance and EU added value.
In principle, keeping in the scope natural gas transmission projects specifically for low
carbon and renewable gases and adding hydrogen blending projects could also contribute
to these criteria; however, the coherence and effectiveness of this policy option depends
on the ability of such projects to deliver significant net GHG savings. This could be
mitigated to a certain extent by safeguards on the projects’ sustainability impact but it is
unlikely to fully avoid the risk of “green washing” and stranded assets. This is in
particular the case for new gas transmission infrastructure built for renewable gases,
where the risk that the created assets continue to be used for natural gas would be too big,
reducing this option’s effectiveness in reaching the policy objective as well as policy
coherence. Retrofits of existing natural gas transmission assets for hydrogen admixtures
have a limited scope to deliver sustainability benefits because of the lower energy value
of hydrogen and the feasibility and cost-effectiveness is lowered by the significant
adaptation and investment needs on the end-use side. Furthermore, such projects are
unlikely to have significant cross-border impact.
An exception for advanced natural gas PCIs would not be effective, neither coherent with
the more ambitious decarbonisation objectives of the climate target plan. Furthermore,
such an exception would not be efficient, as the projects captured by the exception should
be already sufficiently advanced to ensure their completion even in the absence of a PCI
status. Hence, such a provision could be considered disproportionate.
Projects of mutual interest
Under the BAU option, only a limited number of projects with third countries have been
identified as PCIs which is unlikely to change and limits the effectiveness and coherence
of the current framework. The inclusion of PMIs in the revised TEN-E Regulation would
take account of the increasing role of interconnections with third countries. The selection
of PMIs within the TEN-E framework would increase the effectiveness of the Regulation
since it would expand the scope of eligible infrastructure necessary to achieve EU
climate and energy policy objectives. However, this would require project specific
regulatory approximation with the relevant EU policies to limit adverse socio-economic
or environmental impacts. Procedures for monitoring and enforcement would need to be
established. This would entail additional administrative costs which would depend on the
number and specificities of the projects and countries involved. However, these
additional costs should be outweighed by the significant net socio-economic benefits of
these projects. In addition, the inclusion of PMIs would increase the coherence of the
TEN-E framework with other policies such as the EU neighbourhood policies and allow
64
extending the scope of benefits accruing from the implementation of the EU’s regulatory
framework beyond its borders.
Offshore grids for renewable energy
As described in Section 6, the current framework is not effective to identify the projects
necessary to contribute to the large role-out of the offshore infrastructure which are a
precondition to achieve the offshore renewable generation capacity needed to meet the
climate neutrality objective. The current approach to infrastructure planning does not
address the specific needs and challenges for offshore grids.
Integrated offshore development plans would significantly improve the effectiveness of
the TEN-E framework by departing from a bottom up planning approach to a planning
against agreed objectives at regional level whilst integrating aspects of maritime spatial
planning and environmental impact. This would address specific situation of offshore
grids starting from scratch and spanning across different Member States. An incremental
approach to cross-border interconnections building on existing (national) infrastructure
networks is not feasible and would not allow to progress at the speed required to reach
climate neutrality. Such an approach would also minimise the environmental impact of
the future offshore infrastructure. Due to an optimised cross-border grid planning at
regional level per sea basin it would reduce overall investments costs and provide an EU
added value. This policy option scores highly in terms of policy coherence as it is fully in
line with other EU policies such as the Green Deal and the forthcoming Offshore
Renewable Energy Strategy.
The establishment of a regional Independent System Operator or Joint Undertaking
would in the mid- to long-term be similarly effective to the previous option. However, it
would take significant time to establish such a new entity which requires the agreement
of all relevant parties involved (Member States, TSOs, NRAs) concerning
responsibilities and tasks of such an entity and its financing. This would delay the
implementation of a new approach to offshore infrastructure planning. It would also
entail significant costs which would be disproportionate and premature at this stage of
offshore renewable energy deployment. It would quite significantly interfere with the
responsibilities of Member States, TSOs, and NRA and hence appears disproportionate.
Cross-sectoral infrastructure planning
As regards the effectiveness in terms of both supporting the identification of the
infrastructure necessary to meet the set policy objectives and achieving an integrated
network planning, the continuation of the current TEN-E would perpetuate the sectoral
approach to network planning. This would not ensure that only those projects that are
necessary for the energy transition and climate targets are identified as projects of
common interest.
As compared to offshore grids for which the current infrastructure planning is considered
not suited to address the specific challenges and achieve the energy and climate
objectives, the situation for onshore infrastructure projects is different. The evaluation of
the current TEN-E concluded that the TYNDP process as basis for the identification of
PCIs has proven effective, but underlined the need for a more integrated approach to
planning across the different sectors and a more balanced approach concerning the actors
involved. A strengthened governance with a stronger oversight role for the Commission
and ACER to ensure that the key steps in the infrastructure planning process fully reflect
65
the climate neutrality objective and energy system integration would significantly
improve the effectiveness of the policy instrument by ensuring a more accurate needs
assessment based on a cross-sectoral approach. It would also ensure that this assessment
is based on objectively defined scenarios fully in line with decarbonisation objectives as
well as the energy efficiency first principle.
A new governance set-up would considerably weaken the role of the ENTSOs with a
new actor taking the lead in the TYNDP process. This would require the built-up of
significant expertise on infrastructure planning outside the ENTSOs and TSOs.
Nonetheless, it would still need to rely largely on the data and expertise of the TSOs.
This would result in significant additional transaction and administrative costs and
negatively affect the efficiency of the TEN-E. The effectiveness of this options is
expected to be slightly lower compared to the previous option which acknowledges the
central role of the TSOs and ENTSOs in the infrastructure planning but introduces
additional “checks and balances”.
Both options include a mandatory sustainability criterion for all gas projects that will be
within the future scope of the TEN-E Regulation (fossil gas, hydrogen, P2G, and/or
renewable gases). This would have a direct impact on the ranking of the candidate PCIs
and hence contribute to the identification of those projects in line with the climate
neutrality objective. Such inclusion of a sustainability criterion would also improve the
coherence of the initiative with other EU policies such as the EU taxonomy for
sustainable investments. The taxonomy as guidance for private investors cannot replace
the assessment as part of the PCI selection process which applies specific selection
criteria considering all its policy objectives. An improved needs assessment would
reinforce the energy efficiency first principle. This approach provides EU added value
through an optimised cross-sectoral infrastructure planning at European level based on
consistent assumptions. A better planning framework as achieved through this option
would also establish an enabling framework to trigger and accelerate necessary
investments.
Permitting
As explained in Section 6, business as usual is not considered effective to achieve the
timely implementation of PCIs. In terms of efficiency, delays in the implementation of
PCIs create exponentially higher costs to society than the administrative burden brought
by the permitting process to the project promoters and national competent authorities.
Therefore, the use of urgent court procedures in those Member States where such
procedures exist would reduce cost and significantly improve efficiency. It is also
coherent with EU policies as it allows for a better and swifter implementation of PCIs.
The creation of a one-stop shop per sea basin for offshore energy would entail significant
improvements in terms of effectiveness, efficiency, and coherence by enabling the
acceleration of the permitting process for infrastructure related to the deployment of
offshore renewable generation, in particular if combined with the establishment of
integrated offshore development plans (option B.1.1). A one-stop shop would avoid the
establishment of up to eight parallel permitting processes for a sea basin.
On permitting, the combination of options C1.1. (Use of urgent court procedures and
accelerating the permitting process (Option C.1.2, see Annex 9)) and C1.2 (One-stop
66
shop per sea basin for offshore renewable infrastructure projects) would result in
significant improvements.
Regulatory treatment
As regards the BAU option, the continuation of the current framework would not be
effective in ensuring the timely implementation of PCIs. As explained in Section 6, the
CBCA procedure has so far only been used in the context of a request for CEF grants and
the national approaches to CBCA decisions are often inconsistent creating uncertainty for
projects promoters and causing delays in project implementation. Costs related to delays
in project implementation makes this option less efficient.
By comparison, the inclusion in full of the investments costs into tariffs in combination
with clarifying the CBCA provisions, while creating additional administrative burden for
NRAs and the Commission, leads to a swifter implementation of projects and faster
realisation of their benefits being therefore both more effective and more efficient. The
option is also coherent with the EU policies pursued by the perspective PCIs and is
neutral as regards proportionality. In addition, the possibility for smart grids projects to
obtain a CBCA, the clarification of the CBCA provisions would make the framework
more effective by facilitating project implementation. Updating investment incentives to
account for the higher risks would enhance effectiveness and efficiency in view of the
expected benefits. It would also be coherent with the overall policy objectives and
proportionate.
8 PREFERRED OPTION
The options within each group of policy options (A.1, A.2, B.1, B.2) are alternatives
except for policy option group C.1 (permitting) and D.1 (regulatory treatment) where the
options are complementary. The options on the scope are independent from the options
on governance/infrastructure planning. The new planning framework will be applicable
to the scope of the revised TEN-E Regulation and hence cover all eligible infrastructure
categories not only those that may be affected by this initiative.
8.1 Package of preferred policy options
The assessment and the comparison of the options shows that no single option is
sufficient to meet the identified objectives. Therefore, a package of policy options
appears as best suited to achieve the specific objectives. The key political choices relate
to the future scope and the future approach to infrastructure planning.
Concerning the future scope of TEN-E, the main question is whether to keep natural gas
infrastructure as eligible infrastructure category or not. Based on the analysis in sections
6 and 7, the exclusion of methane gas infrastructure appears as the most effective and
coherent approach. In that case the future TEN-E would include all those infrastructure
categories that are needed to deliver on the EU’s energy and climate objectives in line
with the European Green Deal, in particular on the 2030/50 targets. As regards the future
approach to infrastructure planning, a radical change to infrastructure planning seems not
justified in view of the limited additional benefits and the significant increase in
transaction costs which reduce efficiency and may make the instrument less effective
compared to strengthening the current approach. However, given the specificities both in
terms of the current situation and expected contribution to the long-term climate and
67
energy objectives, a more radical change appears justified for offshore grids. A package
of preferred options is presented in Table 4.
Table 4: Package of preferred policy options
Policy option Description Package of
preferred
policy options
Specific objective 1: Enable the identification of the cross-border projects and investments
across the EU and with its neighbouring countries that are necessary for the energy
transition and climate targets
Options A.1. Smart electricity grids and electricity storage
Option A.1.0 Business as usual
Option A.1.1 Update of eligibility criteria X
Sub-option: Inclusion of non-mechanical storage
Option A.2 Gas infrastructure, hydrogen networks and power-to-gas
Option A.2.0 Business as usual
Option A.2.1 Exclude all natural gas infrastructure but include
hydrogen and P2G
Option A.2.2 Exclude natural gas infrastructure but include
hydrogen, P2G and smart gas grids
X
Sub-option: Include natural gas infrastructure for
renewable and low-carbon gases
Sub-option: Exceptions for natural gas PCIs at an
advanced implementation stage
Option A.3 Projects of mutual interest (PMIs)
Option A.3.0 Business as usual
Option A.3.1 Inclusion of projects of mutual interest (PMIs) X
Specific objective 2: Improve infrastructure planning for energy system integration and
offshore grids
Option B.1 Offshore grids for renewable energy
Option B.1.0 Business as usual
Option B.1.1 Integrated offshore development plans X
Option B.1.2 Regional ISO / JU
Option B.2 Cross-sectoral infrastructure planning
Option B.2.0 Business as usual
Option B.2.1 Strengthened governance and sustainability X
Option B.2.2 New governance set-up
Specific objective 3: Shorten permitting procedures for PCIs to avoid delays in projects
that facilitate the energy transition
Option C.1 Permitting
Option C.1.0 Business as usual
Option C.1.1. Accelerating the project implementation X
Option C.1.2 One-stop shop per sea basin for offshore renewable
projects
X
Specific objective 4: Ensure the appropriate use of the cost sharing tools and regulatory
incentives
Option D.1 Regulatory treatment
Option D.1.0 Business as usual
Option D.1.1 Inclusion full investment costs X
The options pertaining to “offshore grids” and “cross-sectoral infrastructure planning”
improve the governance and the infrastructure planning framework to enable the
68
identification of projects necessary for the energy transition and climate targets. There
are two main improvements: first, the introduction of an integrated network development
plan for offshore infrastructure on the basis of Member States’ joint commitments to the
amount of the offshore renewable deployment for each sea basin (top down approach for
offshore planning); second, adjustments to the roles of the key actors involved in the
development of the TYNDP with strengthened oversight from the Commission and
ACER on the ENTSOs. Policy options concerning “permitting” and “regulatory
treatment” will complement these improvements to facilitate the timely development of
the identified PCIs: a) the introduction of a one stop shop for offshore infrastructure per
sea basin, b) the access to urgent court procedures, where available, and c) the inclusion
of full investment costs in the cross-border cost allocation. Apart from the changes that
are specific to offshore grids, the changes will apply to the scope of the revised TEN-E
Regulation and all eligible infrastructure categories. Finally, the above benefits will be
extended to projects connecting the EU with third countries (PMIs) given their expected
increasing role in achieving the climate objectives.
In addition, oil pipelines and electricity highways will be removed as infrastructure
categories and thematic areas.
In addition, the following technical options (see Annex 9) would be part of the policy
package: accelerating the permitting process (option C.1.2.), increasing the transparency
of PCIs (option C.2.1), possibility for smart grids projects to obtain a CBCA (option
D.1.2), clarifying CBCA provisions (option D.1.3), and updating investment incentives
(option D.1.4).
The package aims to “future proof” the TEN-E Regulation. The options on the future
scope of the Regulation cover all technologies necessary for the energy transition and
climate targets. The definitions are at the same time specific and sufficiently broad to
accommodate technological developments to the extent possible. The PCI selection
framework and the new approach to cross-sectoral infrastructure planning sets the key
elements in terms of objectives and criteria. The future framework will maintain the role
of the regional groups in the selection process to further specify and adjust these
elements against new policy priorities and technological developments also considering
the regional context.
8.2 REFIT (simplification and improved efficiency)
In order to simplify and improve the efficiency of the TEN-E Regulation the following
measures have been identified to reduce compliance and regulatory costs. These are
explained in more detail in Annex 10.
a) Reduced reporting obligations
While annual reporting by project promoters needs to be maintained to achieve the
required transparency standards and allow the Regional Groups to tackle quickly any
implementation issues that the projects may encounter, the annual report of the
competent authorities could be transformed into input or additional information into the
report of the project promoters. This measure would reduce costs and administrative
burden for the project promoters, but in particular for competent authorities which would
not need to submit a separate report. The cost saving cannot be estimated as the relevant
data are not available, but it is a recurrent cost saving.
69
b) Reduced monitoring by ACER to once every two years
To simplify the reporting by ACER, their report could be issued once every two years, on
time for the Regional Groups, to take it into account for their assessment of the new PCI
candidates134
. Since ACER’s report is actually used only once every two years, this
option could help simplify the monitoring obligations without any costs and without
affecting the projects’ implementation. This measure would reduce costs and
administrative burden for ACER, for the members of the Regional Groups and the
Commission. This measure could generate efficiency gains of approximately 20% of
ACER’s workload on reporting, equivalent to annual savings of EUR 60 000 (or 0.4 FTE
per year).
c) Pre-consultation to become optional
The principles for public participation in the Regulation constitute minimum
requirements to ensure early engagement with local communities and stakeholders
affected by the construction of a PCI and include a pre-consultation process. In practice,
the obligation to consult ahead of the launch of permitting procedure may be adding to
existing national procedures. To avoid that two or more consultations are required at an
early stage, it is suggested to make the pre-consultation optional, if it is already covered
by national rules under the same or higher standards as in the TEN-E Regulation. The
cost savings which would occur mainly with project promoters cannot be estimated as the
relevant data are not available, but it is a recurrent cost saving.
d) Simplified inclusion in TYNDP for existing PCIs
An electricity or gas candidate project can apply for the inclusion in the Union list of
PCIs only if it is included in the latest available TYNDPs, developed biennially by the
ENTSOs. This process requires a significant amount of data and legal proofs135
.
Considering that existing PCI projects already delivered the necessary proofs in the
previous TYNDP process, an automatic inclusion in the subsequent TYNDPs for such
projects, as long as their administrative and technical data did not significantly change, is
recommended. The cost savings which would occur mainly with project promoters
cannot be estimated as the relevant data are not available, but it is a recurrent cost saving.
9 HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?
The actual impacts of the legislation will be monitored and evaluated against a set of
indicators tailored to the specific policy objectives to be achieved with the legislation. A
review of the effectiveness of the new legislation could take place in 2026, when the
second PCI selection process under the new framework should have been completed.
Under the existing TEN-E framework there are already regular reporting and monitoring
procedures in place. This well-established monitoring system constitutes an important
basis for monitoring the impacts of the legislation.
134
This option corresponds to the input of ACER to the stakeholder consultation.
135
ENTSO-E : https://tyndp.entsoe.eu/promoters-corner
ENTSOG: https://www.entsog.eu/sites/default/files/2019-
05/TYNDP%202020_Practical_Implementation_Document_20190502_0.pdf
70
9.1 Indicators
Building on the existing monitoring, the following indicators have been identified for the
specific policy objectives:
 Enable the identification of the necessary cross-border projects and
investments:
o the number and types of projects under the defined priority corridors / thematic
areas (planned, under construction or commissioned);
o the installed capacity per project type and priority corridors / thematic areas;
o the integration of renewable energy sources and reduced greenhouse gas
emissions;
o the interconnection level between Member States;
 Improve infrastructure planning for energy system integration and offshore
grids:
o installed capacities for offshore renewable energy generation;
 Shorten permitting procedures for projects of common interest
o the average and maximum total duration of authorisation procedures for projects
of common interest;
o the average duration of court proceedings for projects of common interest;
o the level of opposition faced by projects of common interest (number of written
objections during the public consultation, number of legal recourse actions).
 Ensure the appropriate use of the regulatory framework
o the number of projects of common interest having reached a cost allocation
agreement among TSOs and NRAs based on full cost inclusion;
o the average duration for reaching an cost allocation agreement;
o the number and type of projects of common interest having received specific
incentives and/or support by NRAs;
All data will be monitored on the basis of regular reports from project promoters and
national regulators.
9.2 Operational objectives
Based on the policy options, the following operational objectives have been identified:
Operational objectives Indicators
Implementation of PCIs that support the
achievement of the climate neutrality objective by
enabling RES integration
Reduced curtailment of renewable energy;
doubling the number of smart electricity projects
compared to current levels by 2026
Achieve a significant increase in the deployment of
offshore renewable energy
At least 10 PCIs to support the deployment of
offshore renewable energy by 2026
European approach to infrastructure planning for
hydrogen networks
Integration of hydrogen in the TYNDP or
establishment of a hydrogen network development
plan; at least 5 hydrogen PCIs by 2026
Reduce delays in PCI implementation Share of PCIs that are delayed in a given year
compared to the initially planned commissioning
date: reduce share compared to current situation
71
10 GLOSSARY
Term or acronym Meaning or definition
ACER Agency for the Cooperation of Energy Regulators
BAU Business as usual
CAPEX Capital expenditure
CBCA Cross-border cost allocation
CBA Cost-benefit analysis
DSO Distribution System Operator
ENTSO-E European Network of Transmission System Operators
for Electricity
ENTSOG European Network of Transmission System Operators
for Gas
GHG Greenhouse gas emissions
ISO Independent System Operator
JU Joint Undertaking
LNG Liquefied natural gas
MS Member State
OPEX Operating expense
P2G Power-to-gas
PCI Project of common interest
RAB Regulatory Asset Base
RES Renewable energy sources
TSO Transmission System Operator
TYNDP Ten Year Network Development Plan
72
ANNEX 1: PROCEDURAL INFORMATION
Lead DG, Decide Planning/CWP references
The Directorate-General (DG) for Energy was leading the preparation of this initiative
and the work on the Impact Assessment in the European Commission. The planning
entry was approved in Decide Planning under the reference PLAN/2020/6566. It is
included in the adjusted Commission Work Programme 2020 COM(2020) 440
final136
under the policy objective A European Green Deal.
Organisation and timing
The planned adoption date (Q4 2020) included in the Commission Work Programme
adopted on 29 January 2020, remained unchanged in the revised version adopted on 27
May 2020 following the COVID-19 crisis. An inter-service steering group (ISG), was
established for preparing this initiative composed of the following Commission services:
Secretariat General (SG), CLIMA, CNECT, GROW, RTD, NEAR, REGIO, ENV, JRC,
MOVE, DEVCO, COMP, SJ. The ISG met five times in the period from January until
adoption in December 2020.
Milestones Dates
Publication of the inception impact assessment 11 May 2020
Feedback period on inception impact assessment 11 March – 8 June 2020
Open public consultation and targeted consultation 18 May - 13 July 2020
Online webinars June 2020
Upstream meeting with Regulatory Scrutiny Board 14 July 2020
Submission to Regulatory Scrutiny Board 25 September 2020
Regulatory Scrutiny Board 21 October 2020
Resubmission to Regulatory Scrutiny Board 9 November 2020
ISC [to be added]
Consultation of the RSB
The Impact Assessment report was first submitted to the Regulatory Scrutiny Board
(RSB) on 25 September 2020 and discussed with the Board on 21 October 2020. The
RSB delivered a negative opinion on 23 October 2020. The below table summarises how
the revised Impact Assessment report addresses the requested improvements.
136
https://eur-lex.europa.eu/resource.html?uri=cellar%3Af1ebd6bf-a0d3-11ea-9d2d-
01aa75ed71a1.0006.02/DOC_1&format=PDF
73
RSB requested improvements Changes in the revised report:
(1) The report should clarify the context
of the revision. It should present the
origins of the TEN-E framework, its
current components (thematic areas,
priority corridors, regional groupings,
PCI selection criteria etc.) and
financing. It should more clearly set out
the current governance system for trans-
European network plans.
Section 1 of the report has been thoroughly
revised to clarify upfront the background and
key elements of the current TEN-E
Regulation. In addition, more details including
illustrations on the PCI selection process as
well as the TYNDP process have been added
in section 3 “Implementation/State of play” of
Annex 5 (Evaluation report). A new Annex 6
has been added to provide a more detailed
overview on the status of PCIs and the
relationship with CEF.
(2) Drawing on the evaluation, the
problem analysis should present what
has worked well under the existing
Regulation and where there are
shortcomings. It should detail which
institutional issues of the current
framework lead to non-alignment with
European policy objectives and
excessive time requirements for
decision-making. It should explain
which elements will remain unchanged
in the revised Regulation and which will
be up for review.
The key conclusions of the evaluation on the
successes and shortcomings of the current
TEN-E Regulation have been added at the
beginning of section 2 and they have been
systematically picked up the problem
definition. The new sub-section 2.4 clarifies
what elements will remain unchanged and
which elements are subject for review.
(3) The report should elaborate on the
new policy needs emerging from the
Green Deal. It should clearly position
how the TEN-E framework fits into this
context. It should explain the linkages to
other related policy initiatives (adopted
or being developed), such as the energy
efficiency and renewable energy
directives and the green taxonomy for
investments. The report should discuss
the estimated regulatory and investment
needs to establish the necessary energy
infrastructure to reach the 2030/2050
climate targets, and the contribution
from TEN-E.
The problem definition has been revised and
restructured to better explain how the TEN-E
framework fits into the new policy context of
the Green Deal (section 2), language on
regulatory and investments needs has been
strengthened and completed with additional
references (section 2.1). The baseline has
been revised to better explain the linkages to
other related policy initiatives (adopted or
being developed), such as the energy
efficiency and renewable energy directives
and the green taxonomy for investments and
how these affect the identified problems
(sections 2.1 and 2.3).
(4) The report should clarify what will
be the measures of success of the
revised Regulation in contributing to the
Green Deal and reducing delays.
Specific success indicators have been added to
the indicators (section 9.2).
74
(5) The report should clarify how the
revision intends to ensure technology
neutrality. It should specify how the
new planning framework will be able to
accommodate changes in objectives and
technologies. It should assess to what
extent the sectoral combinations of
options under “scope” are future proof,
given that they would be fixed in the
Regulation.
The issues of technology neutrality and
“future proof” of the initiative have been
explicitly addressed in comparison of the
options (section 7) in terms of the scope and
the governance, both the planning framework
and the PCI selection process including the
assessment methodologies. It has been
highlighted to what extent certain options
would be in conflict with making the revsied
TEN-E Regulation future proof.
(6) The options should link better with
the identified problems and objectives.
The report should substantiate why it
does not consider a more fundamental
revision of the TEN-E approach, to
improve the alignment with political
objectives and timeliness of the
planning process. The report should
explain how the introduction of a
mandatory sustainability criterion – next
to other selection criteria – would
ensure that the projects with the highest
contribution to sustainability would be
selected. The report should better justify
why it relegates the discussion of some
options to an annex.
In addition to the added clarifications on the
TEN-E framework (see point 1) as well as the
revised problem definition (see point 2), an
intervention logic diagram (Figure 4) has been
added to clarify how the objectives and
options relate to the problems and underlying
drivers.
The introduction of a mandatory sustainability
criterion has been explained in more detail
(section 5.2.2.2 and new Annex 8).
The options relegated to an Annex have been
revised to focus on those options that are of
technical nature. This has been clarified in the
report.
(7) The report should better justify why
the preferred option is the best response
to the identified problems. It should
explain how the inclusion of the updated
criteria can improve the selection of
projects of common interest, if the
governance structure continues to be
decentralised (with the European
Network of Transmission System
Operators continuing to initiate and lead
the award decisions). It should clarify
the role of the Agency for the
Cooperation of Energy Regulators in
this respect. It should make clear that
the proposed solution for eliminating
the delays applies only to some Member
States. The report should present cost
estimates for the proposed changes in
the governance framework.
The report has been strengthened to better
explain why the package of preferred options
are considered best suited to address the
identified problems (section 7 and 8, new
Table 4) and highlights possible alternatives.
The role of ACER and the Commission has
been clarified (section 5.2.2). It has been
clarified that option on accelerated court
procedures would apply to some Member
States only (section 6.3.1).
The assessment of impacts in terms of
administrative burden has been strengthened
and cost estimates added (section 6.2).
75
Evidence, sources and quality
The impact assessment draws on evidence from the evaluation of the Regulation
347/2013 on guidelines for the trans-European energy networks, from the stakeholder
input to the extensive consultations carried out in this respect, as well as from the results
of a series of topical studies on key elements of the TEN-E Regulation, which will be
presented below.
The impact assessment references the outcomes of a mid-term evaluation of the TEN-E
Regulation, as well as evaluations and assessments carried out in the framework of other
Commission initiatives, such as:
 Stepping up Europe’s 2030 climate ambition, Commission staff working
document Impact Assessment, SWD(2020) 176 final;
 A hydrogen strategy for a climate-neutral Europe, COM(2020) 301 final;
 Powering a climate-neutral economy: An EU Strategy for Energy System
Integration, COM(2020) 299 final;
 EU Technical Expert Group on Sustainable Finance: Taxonomy, Technical
Report (2020);
 Commission Expert Group on electricity interconnection targets, Third report of
the Public engagement and acceptance in the planning and implementation of
European electricity interconnectors (2019);
 A Clean Planet for all - A European long-term strategic vision for a prosperous,
modern, competitive and climate neutral economy, Commission Communication
COM(2018) 773;
Formal conclusions adopted in the framework of the Copenhagen Forum in 2018 and
2019 were also considered in the analysis. The Copenhagen Forum gathers annually
representatives of the EU institutions, transmission system operators, project promoters,
regulators, energy companies, NGOs and civil society and the financing community to
discuss the challenges of developing Europe’s energy infrastructure.
ACER’s annual consolidated monitoring reports on the progress of electricity and gas
PCIs, incremental capacity projects and virtual interconnection points as well other
updates on the cross-border cost allocation decisions, project-specific risk-based
incentives were equally considered.
Further information was gathered through several support studies previously
commissioned to external contractors to support the development of policy options and
assessment on:
Investment needs in infrastructure and costs of delays
 Ecofys (2017): Investments needs in trans-European infrastructure up to 2030 and
beyond Eurelectric (2019)
 Eurelectric (2019), The Value of the Grid
 Renewable Grid Initiative/ ENTSOE (2019): Working Paper on Value of timely
implementation of “better projects”
76
Market and technical data on different technologies
 Trinomics (2020): Study on Opportunities arising from the inclusion of Hydrogen
Energy Technologies in the National Energy & Climate Plans
 Tractebel (2020): Hydrogen generation in Europe
 Trinomics (2019): Impact of the use of the biomethane and hydrogen potential on
trans-European infrastructure
 International Energy Agency (2019): The Future of Hydrogen
 Artelys/Trinomics/Enerdata (2020): Study on energy storage – Contribution to
the security of the electricity supply in Europe
 International Energy Agency (2020): Energy Storage Study
 EY/ REKK (2018): Quo vadis EU gas market regulatory framework –Study on a
Gas Market Design for Europe
Digitalisation and innovation aspects
 Ecorys (2019): Do currrent regulatory frameworks in the EU support innovation
and security of supply in electricity and gas grids?
 International Energy Agency (2017): Digitalisation and Energy, OECD
 ETIP/SNET (2018): Digitalisation of the energy system and customer
participation Description and recommendations of Technologies, Use Cases and
Cybersecurity
Sustainability
 Artelys/ Trinomics (2020): Measuring the contribution of gas infrastructure
projects to sustainability as defined in the TEN-E Regulation [to be published]
Offshore grid development
 Navigant/SWECO (2020): Study on the offshore grid potential in the
Mediterranean region [to be published]
 Roland Berger GmbH (2019): How to reduce costs and space of offshore
development: North Seas offshore energy clusters study
 COWI (2019): Study on Baltic offshore wind energy cooperation under BEMIP
Public acceptance and delays in projects implementation
 Scope et al. (2020) Innovative actions and strategies to boost public awareness,
trust and acceptance of trans-European energy infrastructure projects
77
ANNEX 2: STAKEHOLDER CONSULTATION
In line with the Better Regulation Guidelines and Toolbox notably for “back-to-back
evaluations and impact assessments”, the Commission carried out a comprehensive
consultation based on a consultation strategy that included a range of consultation
methods and tools that combined both backward and forward-looking elements. The
strategy was designed in line with the intervention logic, placing the focus on relevance,
effectiveness, efficiency, coherence, and EU value-added of the TEN-E Regulation.
The consultation strategy aimed to ensure that all relevant evidence were taken into
account, including data about costs, about societal impact, and about the potential
benefits of the initiative.
In line with the Better Regulation guidelines, the goal of the stakeholder consultation
was:
 To collect views, experience and concrete examples from stakeholders that will
illustrate particular opportunities, challenges and impacts resulting from the
implementation of the TEN-E Regulation with the view to fill any potential
information/data gaps, and facilitate the analysis of the different evaluation
criteria;
 To solicit opinions on the extent to which the TEN-E Regulation is meeting its
objectives.
As a crucial part of the data collection strategy for the evaluation and the forward-
looking elements in the impact assessment, a stakeholder mapping exercise has been
carried out in order to identify and group the main stakeholders that are involved in and
affected by TEN-E Regulation. The consultation targeted stakeholders inside the EU,
both at national and European level. In force since 2013, the current TEN-E Regulation
has built an established and well-defined group of stakeholders. However, the exercise
has been fine-tuned to tailor the identification of those stakeholders that are less known
or active taking also into account new technological developments or contextual changes
that may have triggered increase interest amongst certain stakeholders on the TEN-E
Regulation and its revision.
The stakeholders identified have different roles, intervene at different stages and have
various levels of interest. Their input has therefore been taken into account into different
parts of the evaluation and the preparation of the Impact Assessment. Table 1 outlines the
stakeholder categories and includes a brief explanation of the role and relevance of each
group to the consultation. The list ensures a good coverage of all parties affected by the
Regulation.
Table 1: Types of stakeholder and their main role and source of relevance in the TEN-E framework
Type of
stakeholder
Main role and source of relevance in the TEN-E policy area
EU consumers and
EU citizens
EU consumers (both citizens and organized civil society) are key
stakeholders for the success of the energy transition and the
enabling role of the energy infrastructure policy. Aside from the
information on direct benefits and costs resulting from the actual
implementation of an infrastructure project, citizens and consumers
78
can offer insight on the burden of the overall functioning of the
market and specific expectations regarding the implementation of
projects and final energy price for electricity and gas.
Non-governmental
organisations
NGOs are relevant representative bodies that, within the context of
the TEN-E Regulation, generally provide additional views on
environmental values and targets. Contact with NGOs will provide a
better understanding of the environmental impacts and relevance of
the different policy scenarios.
Services in the
European
Commission and
agencies
DG ENER, DG ENV, DG CLIMA, DG CNECT and DG REGIO as
well as INEA are main points of contacts for policy initiatives
directly relevant for the implementation of the TEN-E Regulation.
European
Parliament
In line with Inter-institutional agreements and commitments made
by the Commission to this end, the Parliament will be closely
informed of the stages of the revision of the TEN-E Regulation,
European Union
Regulators
The Agency for the Cooperation of Energy Regulators (ACER) is
responsible and/or involved in various tasks under the TEN-E
Regulation.
National
Regulatory
Authorities
National regulators (NRAs) are authorised official public bodies
established in most EU Member States with a common aim to
exercise regulatory power on specific policy areas. Today, the
European Union has energy rules set at the European level, but in
practice it has 27 national regulatory frameworks. The relevant
NRAs of each country are found in the Board of regulators of
ACER. NRAs are significant stakeholders in the establishment of
the Energy Union and for the implementation of the TEN-E
Regulation.
National
Competent
Authorities and
their local and
regional
representatives (i.e.
Ministries and
outermost regions)
The Ministries and outermost regions are the institutions and
agencies competent for enforcing EU regulations. In each Member
State, there is at least one Ministry responsible for implementing
and enforcing the TEN-E Regulation.
European TSO
(ENTSO-E and
ENTSO-G)/DSO
branch
organisations
National TSOs and DSOs are represented by branch organisations at
European level, such as ENTSO-E (Electricity), ENSO-G (Gas) and
DSO Organisations (E.DSO for Smart Grids, Eurelectric, CEDEC,
GEODE, Eurogas). These branch organisations will help gaining
valuable insights concerning the implications and desires for the
TEN-E Regulation and evaluation.
Project promoters,
including
Transmission
System Operators
National companies operating electricity and gas networks and
project promoters are responsible for the implementation of PCIs.
Energy producers /
Industry
Other important parties that are affected by the TEN-E Regulation
are energy producers and (large) industry parties, including ICT
companies as well as the offshore renewable energy sector. This
79
also includes industry and its associations representing the hydrogen
and CCSU sectors.
Academics and
thematic experts
Key contacts for a better understanding of the interconnected
European energy grid and assessing the different policy scenarios.
This group also includes legal experts, which are relevant contacts
for data collection in order to prevent the different policy scenarios
and get a better understanding of the legal framework of the Energy
Union scheme.
The consultation strategy included a combination of consultation methods (i.e.
open/targeted) and tools to provide well-reasoned responses and generate the information
and evidence necessary to respond to the evaluation questions and inform forward-
looking elements in the policy preparation.
In particular, several consultation tools were employed to generate a wealth of
information and collect views on several aspects of the TEN-E Regulation, its
implementation, enforcement, and effects. These include:
 Online Public Consultation;
 Targeted online survey;
 In-depth interviews;
 (Four) online stakeholder webinars.
A clear delineation has be established between the various consultation tools to best
address the target groups and avoid stakeholder fatigue.
An online public consultation (OPC) open from 18 May to 13 July 2020 (midnight
Brussels time) provided the opportunity to anyone interested in the evaluation and
revision of the TEN-E Regulation to contribute. EU Survey was used to manage the
OPC. The questionnaire was available in 23 of the official languages of the EU. It was
addressed to mainly to citizens and organisations (e.g. NGOs, local government, local
communities, companies and industry associations) that have no specialist knowledge of
the TEN-E Regulation. This was reflected in the number, structure and wording of the
questionnaire. The questions were limited, simple, easy to answer, and included
sufficient contextual information to guide the contributor. Moreover, the questionnaire
for the open public consultation did not cover all evaluation criteria, but rather non-
technical elements on which citizens and the general public can share their views. The
questions in the open public consultation aimed to identify the relevance of the TEN-E
regulation in terms of its objectives, infrastructure categories, and the PCI features the
general public deemed most important. Contributors with specialist knowledge of the
TEN-E Regulation (e.g. as a professional for a national competent / regulatory authority,
TSO, DSO, company project promoter, energy producer, NGO with specific knowledge
on the subject) were invited to fill in a targeted survey. The online public consultation
was be accessible on the Commission's Have your say website137
, including links to
137
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12382-Revision-of-the-
guidelines-for-trans-European-Energy-infrastructure
80
background documents and to relevant webpages, such as the ones dedicated to the TEN-
E policy and the European Green Deal.
The open public consultation was shortened from the usual 12 weeks to 8 weeks. An
evaluation roadmap of the current TEN-E Regulation was launched already in June 2019,
setting the context and scope of the evaluation. The nearly 30 replies from the main
stakeholder groups, as well as regular contacts with stakeholders indicated that
stakeholders are informed and ready to engage in Commission’s on-going work in this
area. An inception impact assessment was equally launched ahead of the OPC on 11 May
facilitating all interested parties to respond to the public consultation. The availability of
the questionnaire in all official EU languages and the inclusiveness of the consultation
tools ensured open access of all parties to the consultation whilst secured evidence
collection through the targeted consultations (targeted survey, webinars, interviews).
The overall number of responses to the OPC questionnaire is 103. In addition, 169 emails
were received via a functional mailbox for the consultation. Most of the contributions to
the OPC questionnaire were in English (74 contributors chose to respond in English), but
contributions were also received in French, German, Slovenian, and Spanish. Out of the
169 received emails received via the functional project mailbox 129 submissions
represented identical replies from citizens, out of which 44 in Spanish, Italian, French,
German and Portuguese.
The main category of respondents was EU citizens (28 responses), followed by business
associations and company/business organisations. The following table outlines the
respondents by each category.
Type of respondent Number Percentage
Academic/research institution 2 2%
Business association 25 24%
Company/business organisation 22 21%
Environmental organisation 2 2%
EU citizen 28 27%
Non-EU citizen 2 2%
Non-governmental organisation (NGO) 12 12%
Other 5 5%
Public authority 5 5%
Grand Total 103 100%
In terms of the distribution of responses by country, most responses were received from
Belgium (31), followed by Germany (12), and Spain (9).
81
A targeted consultation (in English only) was carried out in parallel, specifically
addressing project promoters, public authorities (NRAs, NCAs, regional and local
governments), other actors of the energy system (e.g. DSOs, energy suppliers), civil
society (e.g. local communities, NGOs) wider industry representatives and academics or
researchers but was open to everyone.
The overall number of responses received to the targeted online survey is 112. The main
category of respondents was Transmission System Operators (27), followed by “other”
stakeholders (22) and industry representatives (17):
Type of respondent Number Percentage
National Regulatory Authority 4 4%
National Competent Authority 10 9%
Transmission system operator 27 24%
Distribution system operator 10 9%
Energy producer 10 9%
Industry 17 15%
Telecom company 0 0%
Local or regional authority 0 0%
Civil society 11 10%
Research, academia 1 1%
Other 22 20%
Total 112 100%
In terms of the distribution of responses by country, most responses were received from
Belgium (33), followed by Austria, France and Germany (9 respondents each). The
overrepresentation of Belgium stems from the fact that many of the civil society
organisations and industry associations that provided their input to the targeted survey
are based in Brussels.
1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 3 3 3 4 5 6 6
9
12
31
0
5
10
15
20
25
30
35
82
Approximately 46 in-depth interviews were carried out with the support of a consultant
with key stakeholders of the TEN-E Regulation to provide detailed information and
evidence on key aspects that could not be dealt with in length by the targeted
questionnaire. The interviews aimed to collect more detailed information than could be
collected through the targeted survey and online public consultation. As such, the
interviews focused primarily on the effectiveness and implementation of the Regulation,
but also touched upon its relevance, coherence, and EU added value.
The interviews were designed to complement the results of the targeted survey.
Four stakeholder webinars took place with the use of online conferencing systems to
ensure further outreach to stakeholders and create opportunities for structured feedback.
Each webinar will be dedicated to key elements of the inception impact assessment. The
webinars will last between 2.5 and 3 hours and will include presentations on the topics
addressed, as well as moderated discussions with the online audience. Interactive tools
such Sli.Do and/or in-built functions helped taking on questions from the audience.
 The first webinar on ‘TEN-E Infrastructure categories to ensure full consistency
with the climate neutrality objectives of the Green Deal’ took place on 02 June
2020. It was attended by 304 participants and 17 panellists.
 The second webinar on ‘Selection procedure and criteria for Projects of Common
Interest (PCIs)’ took place on 04 June 2020. It was attended by 298 participants
and 12 panellists.
 The third webinar on ‘TEN-E Regulatory toolbox and criteria for CEF financial
assistance’ took place on 09 June 2020. It was attended by 284 participants
and 9 panellists.
 The fourth and last webinar on ‘PCI Implementation: Permitting, monitoring and
involvement of stakeholders’ took place on 11 June 2020. It was attended
by 211 participants and 8 panellists.
In terms of the effectiveness of the TEN-E Regulation in reaching its objectives, the
replies to the OPC and the targeted survey converged. The majority of respondents of the
OPC found that the ‘integration of renewable energy sources into the grid’ (92%) is the
83
most important objective for trans-European energy infrastructure network138
. On a
positive scale, the objective to achieve ‘a competitive and properly functioning integrated
energy market’ was also perceived as relevant by 65% of the contributors. The
stakeholders replying to the targeted survey largely confirmed that the TEN-E Regulation
has had a positive impact towards meeting its objectives: it has contributed to energy
market integration (88%), achieved an adequate level of security of supply (77%), and
contributed to competitiveness in the EU energy market (63%). Less agreement was
indicated with the statement that the Regulation helped achieve the 2020 climate and
energy targets, however (47%). There are no clear trends across stakeholder groups.
OPC respondents’ contributions were more diverse when scoring the relevance of
infrastructure categories under the TEN-E. Electricity infrastructure (transmission lines
and storage) and smart electricity grids ranked first (87 and 83%, respectively) in
respondents’ choices as relevant. On the other side of the ranking, ‘geological storage of
CO2, LNG) terminals and CO2 networks (for transporting CO2) were deemed relevant to
a small extent, mostly justified (via the functional mail) of the consultation by opposition
from EU citizens to supporting fossil fuel energy infrastructure.
Whilst there is a broad agreement that the infrastructure categories on the effective
support of current infrastructure categories in achieving the overall objectives of the
TEN-E Regulation, the input indicate that priority corridors and thematic areas need to be
updated to address future challenges and incorporate new types of projects. The
stakeholder consultation shows that stakeholders generally agree on broadening the
technological scope of the TEN-E Regulation to integrate more technologies supporting a
decarbonised energy system, as well as encouraging innovation.
Suggestions included the consideration of new infrastructure categories, as well as
discarding existing ones. In general, stakeholders called for the reflection of the role of
decentralised electricity production in the revised TEN-E Regulation and the need for a
greater cooperation between TSOs and DSOs. Support was received for including cross-
sectoral projects, smart gas grid projects and hybrid wind offshore in the scope of the
TEN-E. Specifically on gas infrastructure categories, there was an agreement that
hydrogen and green gases will be required at large scale with deployment centered
around current industrial hydrogen clusters. Additionally, the position of NGOS and RES
promoters focused on the transitional role of green gases blending into the current gas
pipelines and the need to mainstream the “do no harm principle” thus, calling for the
removal of natural gas infrastructure.
138
TEN-E objectives, as set out in the survey: A competitive and properly functioning integrated energy
market; Increased resilience of energy infrastructure against technical failures, natural or man-made
disasters, and the adverse effects of climate change and threats to its security; Consumer empowerment -
making sure consumers' interests are considered in decisions related to energy infrastructure; Secure and
diversified EU energy supplies, sources, and routes; Integration of renewable energy sources into the grid;
Increase cross-border interconnections and deepen regional cooperation to transport energy from renewable
sources where it is most needed; Giving priority to energy efficiency (putting the ‘Energy efficiency first’
principle in practice); Achieving the EU’s decarbonisation objectives for 2030 and 2050, including climate
neutrality under the European Green Deal; Increased digitalisation of the energy infrastructure (e.g. Smart
Grids); Energy system integration and sector coupling (integration of the different energy sectors and
beyond)
84
Between 87 and 93 answers to the OPC qualified the facilitation of integration of
renewable energy sources into the grid, the contribution to greenhouse gas emissions
reduction and ensuring security of supply as important features out of all possible
features139 listed for PCIs. The environmentally sound implementation of PCIs and
generation of direct benefits to the local communities were considered equally important
by the contributors to the open public consultation. The contribution of PCIs towards
increasing the competition in the market was seen as positive, although ranked lower.
The replies to the targeted consultation on the PCI selection criteria complemented this
input. As in the case of the OPC, targeted stakeholders confirmed that the selected PCIs
are the most relevant projects to fulfil the TEN-E objectives (48% agree, 26% disagree).
In their view, the cost-benefit assessments for the selection of PCIs would benefit from a
more appropriate methodology (44%). In general, the roles of different actors in the
selection procedure was considered adequate, except for a significant wish to weaken the
role of the ENTSOs (39%) and to strengthen the role of DSOs (53%) and other
stakeholders, such as NGOs (39% - 67% of whom represented industry or civil society).
With regards to the criteria, the general criteria are considered appropriate (48% agree,
38% disagree), whilst the views on the appropriateness of the specific criteria for
electricity, gas and CO2 projects were mixed mostly justified by lack of knowledge.
Mirroring the feedback on the relevance of infrastructure categories, various stakeholders
indicated that current eligibility criteria do not sufficiently support climate neutrality by
insufficiently supporting network innovation and by including traditional, fossil fuel
infrastructure. Some of the current selection criteria might be too restrictive for the
inclusion of projects at DSO level, in particular: the cross-border impact criteria, and the
10 kV voltage threshold and 20% RES origin for smart grids.
In addition to this, several environmental NGOs and industry stakeholders indicated that
the weak assessment of climate impact is causing projects to be selected that do not have
a positive effect on the CO2 emissions. A need for revision of the PCI selection criteria
in light of the sustainability and climate effect is also echoed by some NRAs. TSOs do
not indicate strong opinions on the sustainability criterion. Further input from the
targeted stakeholders’ on the governance of the selection process showed an
overwhelming agreement among NRAs, NCAs and TSOs about the role of Regional
Groups in enabling regional cooperation (83%). Equally, High Level Groups were
deemed to provide added value through strategic steering and political guidance as well
as monitoring the PCIs in the priority regions (71%) There is a general agreement among
all respondent groups that the current reporting and monitoring procedures on the PCI
progress are sufficient to ensure transparency on PCI development (56% agree), but not
that PCIs implementation plans and the regular updates ensure timely project
implementation (33% agree).
139
Integration of renewable energy sources into the grid; Contribution to greenhouse gas emissions
reduction; Security of supply; Market integration (e.g. to improve infrastructure and increase system
flexibility); Increase competition in the market; Innovation; Contribution to increase the energy efficiency
of the energy system; Environmentally sound implementation, i.e. compliance with the relevant regulations
especially in the area of environment; Generation of direct benefits to the local communities
85
Several stakeholders pointed to the potential conflicting role of the ENTSOs, as project
promoters and developers of the scenarios and CBA methodology over which projects
are evaluated, indicated a the perception that the predominant role ENTSOs enjoy in the
infrastructure planning is not seen as fully independent. In their view, the current
planning involves an unequal treatment of non-TSO promoters and results in a biased
nature of the TYNDPs. The solutions put forward would include the involvement and
scrutiny of an independent organisation which would enable the development of a hybrid
energy system with a multimodal network design and holistic planning for grid
connection based on a strong scenario-building and a solid cost-benefit analysis (CBA).
In qualifying the coherence of the TEN-E Regulation Respondents with other policies or
initiatives at EU level, stakeholders indicated inconsistencies with regards to the
European Green Deal / Long Term Strategy for Decarbonisation (74%identified
inconsistencies, especially among civil society, DSOs and energy producers and
industry), the Paris Agreement (65% identified inconsistencies, especially among civil
society, DSOs and TSOs), and the Clean Energy Package / the Energy Union (55%
identified inconsistencies, especially among civil society, DSOs and energy producers).
As such, respondents considered that the TEN-E Regulation is lacking in terms of
adequately addressing key emerging issues such as improving energy efficiency and
mitigating climate change impacts. According to respondents, the three main (new)
challenges to be addressed are greenhouse gas emission reductions / climate neutrality
(mentioned by 54), integration of renewable energy sources (mentioned by 50) and
energy system integration (mentioned by 47). The two least important challenges are
energy financing capacity of TSOs (mentioned by 42) and market fragmentation / market
integration (mentioned by 20). In view of emerging issues however, the OPC results
show that 77% of the respondents agree that the revised TEN-E Regulation can make an
important contribution to the economic recovery in Europe through a green transition in
response to the COVID-19 crisis, while 8% disagree with the statement.
Both the targeted survey and the OPC addressed the effectiveness of the implementation
provisions, notably as regards public participation and transparency in the process of
building PCIs. Regarding public participation, 82% of the OPC respondents declared to
be aware of Projects of Common Interest (PCI) label and 78% know there is a public
participation process in the frame of PCI implementation. The majority (68%) consider
the public participation process as useful or useful to a large extent, ranking project
websites as the most useful communication channel for providing and exchanging
information on PCIs (78% consider it ‘Very useful’ or ‘Useful to a large extent’).
The targeted stakeholders drew a similarly positive picture, with more than half of the
respondents agreeing increased awareness of PCI projects (51% agree, 17% disagree),
improved public participation (41% agree, 12% disagree) and increased trust (37% agree,
38% disagree). Despite of perceived improvements in terms of awareness and trust in the
PCI process, the input indicated a limited impact on increasing public acceptance (22%
agree, 24% disagree) and on adjustments to the design of the projects following public
input during consultations (19% agree, 26% disagree). Nevertheless, most respondents
agreed that the requirement for at least one public consultation is enough for increasing
transparency and participation (46% agree, 20% disagree). During the webinars,
panellists called for increased trust and transparency both in the upstream process of
selection of PCIs (TYNDP, PCI process) as well as during project implementation.
86
Further input on implementation, notably the shortening of permit granting durations,
indicated mixed views: 20% (completely) agreed, while 36% (completely) disagreed that
TEN-E permit granting provisions enabled an accelerated implementation of PCIs
compared to the baseline. Similar differences in views were noted about the effectiveness
of the one-stop-shops. Limited feedback on the perceived reasons for delays include
notably environmental impact assessments and the statutory permit granting procedure.
The evaluation showed that TEN-E reduced the average duration of the permit granting
process for transmission PCIs after 16 November 2013 to less than 3 years compared to 9
years prior to Regulation entering into force. However, there was a general call for
acceleration and simplification of the permitting procedures is needed, whilst maintaining
the highest environmental standards. The close cooperation and interaction with
authorities was emphasized as key.
Stakeholder views on the effectiveness of the CBCA decision processes in enabling
effective investment were mixed, with 25% of the respondents agreeing to the statement,
17% disagreeing and 21% being neutral. A more positive view was expressed as to
whether investment incentives enable effective investments in PCIs, with a slight
majority (54%) agreeing to the statement.
The input from stakeholders indicated notably the need to re-think the link between
CBCA and CEF financing. The CBCA procedures were discussed as such, notably on
how to ease the burden and ensure easier access to CEF. Some proposals referred to
making smart grids eligible for CBCA. There were several calls for clarity on cost
recovery, monetization where possible where relevant and the valorisation of accelerated
implementation of PCIs in the CBA. For offshore grids specifically, stakeholders called
for a clear legal framework for cross-border hybrid projects notably on CBA/ CBCA.
Stakeholders largely believe that the benefits of the TEN-E Regulation outweigh the
costs (53% agree) whilst at the same time indicate that the TEN-E has not reduced such
(administrative) costs for project promoters (valid for TSOs - 81% agree, NCAs - 60%
agree and NRAs - 50% agree). A few suggestion for lowering the cost were provided,
such as fast-tracking PCI selection procedure for existing PCIs, without substantiated
analysis of impacts.
There is widespread agreement among OPC and targeted respondents that the TEN-E
Regulation has EU added value – the majority believe it achieved more than could have
been achieved at national/regional level (92 %, 79% respectively agree) and that the
issues addressed by the TEN-E Regulation continue to require action at EU level (91%
agree, 0 disagree). The main EU added value identified by respondents is access to
financing (mentioned by 99), followed by regional cooperation (mentioned by 84) and
the implementation of projects that could not have been implemented without TEN-E
(mentioned by 67).
87
ANNEX 3: WHO IS AFFECTED AND HOW?
3.1 Practical implications of the initiative
As indicated in Annex 2, the following key target groups have been identified for this
initiative:
 European citizens and consumers
 Non-governmental organisations
 European Union Regulators
 National Regulatory Authorities
 National Competent Authorities and their local and regional representatives (i.e.
Ministries and outermost regions)
 European TSO (ENTSO-E and ENTSO-G)
 DSO branch organisations
 Project promoters, including Transmission System Operators
 Energy producers / Industry
 Academics and thematic experts
The below table outlines the practical implications of the initiative for all key target
groups identified.
Type of stakeholder per
target group
Practical implications
European citizens and
consumers
Ensuring the consistency of energy infrastructure planning rules with
the climate-neutrality objective will benefit citizens by lowering
greenhouse gas emissions through optimal and efficient integrated
infrastructure planning, fossil fuels substitution by renewable or low-
carbon gases and significant deployment of onshore and offshore
renewable energies.
An efficient network operation, optimised onshore and offshore grid
planning, exploitation of demand-response management services and
enhanced digitalisation will bring a higher overall social welfare than
the current rules. Comprehensive control and monitoring of the grid
will reduce the need for curtailment of renewables and enable
competitive and innovative energy services for consumers.
The digitalisation of the grid will facilitate customer participation in
all stages of the development and expansion of the energy
system by digital tools such as participative geographical systems and
would support new energy market arrangements. It will facilitate the
integration and management of renewable energy produce locally
supporting energy consumers turning into energy producers
(“prosumers”).
Smart electricity grids to support the roll out pf charging
infrastructure for electric vehicles would directly benefit users of
electric vehicles.
88
Appropriate rules for project selection and cost allocation in line with
distributed benefits will stimulate investments in the grid in the most
efficient way and alleviate the burden on tariffs for consumers. A
coordinated process for integrated infrastructure planning can
ultimately reduce the overall need for infrastructure projects by
designing the infrastructure in an optimal way.
Citizens and local communities will benefit from increased
transparency in the implementation of projects of common interest,
which will create opportunities to understand the value of the energy
infrastructure investments and become involved. An accelerated
realization of key procedures in the permitting process will also allow
for a faster implementation of key project therefore bringing forward
the benefits identified in the cost-benefit analysis at national and
regional level and avoiding high dispatch costs for consumers
associated with delays.
Infrastructure enabling the expansion of offshore renewable energy
will have a positive effect on employment across the EU.
Project promoters,
including Transmission
System Operators
Transmission system operators of electricity will be required to
strengthen their coordination at transmission level, as well as with
distribution network operators, in view of a European approach to an
integrated onshore and offshore network planning. TSOs will benefit
from the increased efficiency in network operations due to measures
to broaden the scope of the smart grids, which will enhance the
exploitation of demand-response management services and increase
cross-border data and capacity exchange.
Project promoters will see a decrease in costs due to the provisions to
accelerate permitting processes, including the clarification of cross-
border provisions. The establishment of one-stop shops for sea basins
would equally create efficiencies for promoters, both in terms of
reduced administrative burden as well as in terms of access to
existing data and studies conducted for the sea basin.
The initiative will increase the cost visibility of a project, creating
regulatory stability allowing project promoters to obtain financing
from the market.
Project promoters will be equally impacted by the strengthened
monitoring and transparency in project implementation.
European TSO (ENTSO-E
and ENTSO-G)
The creation of a European infrastructure planning framework that
reflects the relevant needs will still be based on the TYNDPs but
would require higher levels of cooperation and interlinkages between
the electricity and gas transmission networks, as a well as
involvement of distribution system operators and non-TSOs project
promoters and other stakeholders. ENTSOs will see their role limited
in key phases of the planning process, such as the development of
scenarios and cost-benefit analysis methodologies, due to the
89
strengthened role of the Commission and ACER.
ENTSO-E’s role will increase in view of their new mandate to
develop offshore plans for time horizons 2030, 2040 and 2050
respectively for all the sea basins under the Commission’s steering
and binding opinion.
National Competent
Authorities and their local
and regional
representatives (i.e.
Ministries and outermost
regions)
The initiative will entail higher cooperation between National
Competent Authorities (NCAs) and possible restructuring of existing
structures in the context of the development of one-stop shops per sea
basin. NCAs will have to ensure the clarity and accessibility of cross-
border provisions. This will, in turn, trigger efficiencies for NCAs.
Measures that aim at an accelerated accomplishment of the permitting
process through faster court procedures as well as REFIT provisions
will have positive implications in terms of reducing administrative
burden associated with reporting obligations.
National Regulatory
Authorities
The role of the NRAs will increase due to the obligation to
thoroughly assess the investment requests since all CBCA decisions
issued will be final. The consideration and inclusion of the full
investment costs in the national tariff and the sequential performance
of an affordability assessment will increase the administrative burden
on NRAs.
ACER ACER will have a strengthened role in the approval of the
methodology to assess the costs and benefits of projects, which
together with the continuous follow-up of the TYNDPs development
will entail a limited increase in administrative burden. ACER will
equally be impacted by the simplification of monitoring obligations.
Distribution system
operators
The role of the distribution network operators will increase thanks to
their increased participation in the planning process. Equally, the
introduction of new infrastructure categories and the broadening of
existing ones will see a bigger role for DSOs as project promoters of
PCI projects.
Energy producers /
Industry
Broadening the scope to new and innovative infrastructure categories
will create a market for those specific technologies.
The hydrogen industry has estimated the impact of building 40 GW
electrolyser capacity in Europe and 40 GW electrolyser capacity in
neighbouring countries with the aim of exporting green hydrogen into
Europe.140
This would require total investments investment of €25-
140
Green Hydrogen for a European Green Deal – A 2x40 GW initiative, Hydrogen Europe, 2020
90
€30 billion, of which over 85% would be realised in the 2025-2030
timeframe141
. Depending on the scenario, 7.5 billion or 29 billion
EUR of value added can be generated annually in the whole EU-28,
by investment in and operation of hydrogen technologies. Most of the
value added is expected to be created by building and operating the
renewable electricity plants that provide energy to electrolysers.
Similarly, the establishment of an enabling grid planning framework
for offshore grids would open up a significant market for the
renewable energy industry, in particular in Europe, and partially
compensate for the slowdown in renewable development onshore in
some regions in Europe.
3.2 Summary of costs and benefits
The assessment of the benefits distinguishes between direct and indirect benefits.
Direct benefits of the package of preferred policy options are mainly related to
greenhouse gas emission savings and efficiency improvements at large scale through a
more coordinated approach to infrastructure planning at European level and streamlined
permitting for offshore developments. These direct benefits encompass both social
benefits, e.g. society at large benefits from reduced greenhouse gas emissions and the
achievement of the climate neutrality objective142
, and private benefits, e.g. reduced
administrative costs related to shorter permitting procedures.
The simplification measures, as discussed in section 8.2, will generate direct benefits
through reduced existing recurrent direct costs related to administrative burden as a result
of reduced monitoring and reporting obligations. These direct benefits are mainly private
benefits for certain stakeholders such as project promoters.
Indirect benefits include sectoral benefits by stimulating market demand for certain
innovative technologies and in turn contributing to potentially higher employment rates.
However, the net impact on total welfare and the net impacts on specific groups (i.e.
winners and losers) as well as overall affordability is important to inform policymaking.
Costs and benefits should usually be based on market prices (reflecting the opportunity
cost of action). However, these are not always available and so other methods may be
needed to express impacts in monetary terms or indeed sometimes impacts cannot be
expressed in monetary terms
The assessment of the preferred options showed positive impacts in social welfare and
economic terms for different categories of stakeholders. However, such impact for the
141
These are electrolyser investment cost only, the figures do not include the investments in solar and wind
farms, transport and storage infrastructure, nor end-use applications.
142
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
91
package of preferred policy options could not be fully quantified or monetised as this
would have required information regarding the deployment rate for future PCIs or market
upscale for new or emerging infrastructure categories which is not available and cannot
be estimated with sufficient degree of robustness. Ranges of impact in absolute or
relative terms are provided to the extent possible.
It is important to underline that one general selection criterion for each project of
common interest is that its potential overall benefits outweigh its costs, including in the
longer term.143
The below table summarises the direct and indirect benefits for the package of preferred
policy options compared to the baseline providing ranges of possible benefits.
I. Overview of Benefits (total for all provisions) – Package of preferred options
Description Amount Main recipient (stakeholder group)
A) SCOPE
 Broadened scope to reflect technological developments for smart electricity grids (elements of Option A.1.1;
expanding the category on electricity storage would not be proposed)
Direct benefits
Reduced transaction costs Not possible to monetise benefit. Benefits for project promoters.
Facilitate the integration of
renewable energy sources at
distribution level
Not possible to monetise benefit. Benefits for owners of renewable energy
generation units at distribution level.
Indirect benefits
Provision of demand-side
flexibility by consumer
connected to the distribution
grid
Not possible to monetise benefit.
Higher penetration of smart grids will allow for
120 GW-150 GW of flexible load available by
2045
Benefits identified for citizens and society as
a whole, transmission system operators
Support in the uptake of
electric cars
Not possible to monetise benefit. Benefits identified for citizens and society as
a whole
Comprehensive control and
monitoring of the grid would
reduce the need for
curtailment of renewables
and enable competitive and
innovative energy services
Not possible to monetise benefit.
According to the IEA, investments in enhanced
digitalisation would reduce curtailment in Europe
by 67 TWh by 2040144
.
Benefits identified for citizens and society as
a whole
143
TEN-E Regulation, Art. 4(1)(b)
144
with demand-response accounting for 22 TWh and storage accounting for 45 TWh - IEA 2016
92
for consumers.
 Limit scope to new and repurposed hydrogen network / Power-to-Gas installations (Option A.2.1) as well as smart
gas grids and retrofits of existing natural gas transmission assets for hydrogen admixtures/blends with safeguards in
place to ensure renewable and low-carbon gases are transported (elements of Option A.2.2; new transmission
pipelines for decarbonised gases and inclusion of advanced natural gas PCIs would not be proposed)
Direct benefits
Description Amounts Comments
GHG emission reduction
from the substitution of
fossil fuels by renewable or
low-carbon hydrogen
Not possible to monetise benefit.
In general, GHG emission reduction potential in
the range of 20-65 MtCO2/a, corresponding to
1.4%-4.5% of the reduction gap at EU-28 level
Benefits identified for citizens and society as
a whole
GHG emission reduction
from the substitution of
natural gas with biogas
Not possible to monetise benefit.
In general, GHG impact ranges from a 156
tCO2eq per TJ reduction to a 17 tCO2eq per TJ
increase in emissions
The exact impact will depend on the amount
of renewable and low carbon gases injected
into the grid and on the difference between
the GHG intensity of the specific renewable
and low carbon gas and the substituted fuel.
Benefits identified for citizens and society as
a whole
Increasingly interconnected
hydrogen networks will
create an internal market for
hydrogen and offer benefits
in terms of competition and
security of supply
Not possible to monetise benefit.
Up to 70% of additional demand for green
hydrogen projected by German TSOs for 2025
and 2030 is expected to be covered by imports of
decarbonised hydrogen from the Netherlands
Benefits for administrations (NCAs), energy
producers/ industry
Indirect benefits
Leveraging investments in
hydrogen technologies
In general, depending on the scenario, 7.5 billion
or 29 billion EUR of value added can be
generated annually in the whole EU-28, by
investment in and operation of hydrogen
technologies.
Benefits for energy producers/ industry
Job creation generated by
hydrogen-related
investments and operations
Not possible to monetise benefit.
29100–103 100 direct jobs (in production and
operations & maintenance) and contribute to
further 74 100–241 150 indirect jobs between
2020 and 2030
Benefits identified for citizens and society as
a whole
Job creation generated by
installed capacity of
renewable hydrogen
electrolysers
Not possible to monetise benefit.
Between 140,000 and 170,000 jobs for
manufacturing and maintenance of 2x40 GW
Benefits identified for citizens and society as
a whole
93
electrolyser capacity up to 2030.
Avoidance of stranded assets
through the conversion of
existing natural gas assets
into dedicated hydrogen
pipelines
Reduction of up to 90% compared to new build Benefits for administrations (NCAs), energy
producers/ industry
B) GOVERNANCE / INFRASTRUCTURE PLANNING
 Integrated offshore renewable development plans per each sea basin for better infrastructure planning and project
implementation (Option B.1.1); strengthened governance of the TYNDP planning and preparation and sustainability
of the gas infrastructure categories as proposed under the preferred option on “Scope” (Option B.2.1)
Direct benefits
Deployment cost savings 10 percent in cost savings, equivalent to between
EUR 300 million and EUR 2500 million for five
projects alone, depending of the size of the
comparable conventional projects
Benefits identified for citizens and society as
a whole, project promoters (including
transmission system operators),
administrations (NCAs)
GHG emission reduction
from the substitution of
fossil fuels by offshore
renewable energy.
Not possible to monetise benefit.
Given the expected deployment the emissions
reductions can be considered significant in a mid-
term perspective. These would depend on the
actual deployment rate and the greenhouse gas
intensity of the electricity it replaces. This is
influenced by various factors including demand
and supply patterns, price sensitivities,
localisations, grid congestions
Benefits identified for citizens and society as
a whole
Indirect benefits
Job creation in offshore RES
sectors (wind, wave, tidal,
floating solar)
Not possible to monetise benefit.
Approx. 520 000 jobs, as follows:
- Increase from current 77,000 jobs in
offshore wind to more than 200,000
jobs.
- 400,000 jobs in the ocean energy sector
(e.g. wave, tidal, floating solar) by 2050
Benefits identified for citizens and society as
a whole
C) PERMITTING AND PUBLIC PARTICIPATION
 Accelerating the completion of the permitting process though proposing to use preferential treatment for the PCIs on
court proceedings (Option C.1.1. without sub-option on shortening of the time limit for the permitting process); one-
stop shop per sea basin for offshore renewable projects (Option C.1.2)
Direct benefits
94
Avoidance of delay costs
due to court proceedings
A delay of 2 years due to an average court
procedure was estimated at a cost of 150 million
€145
.
Benefits identified for society at large, but
also for project promoters (including
transmission system operators),
administrations (NCAs)
For assessing the costs of the package of preferred policy options, the analysis
distinguishes between direct costs and indirect costs.146
The TEN-E Regulation does not introduce any regulatory charges, such as fees, levies,
taxes, etc. The package of preferred policy options results in direct costs in terms of
compliance costs and administrative burden for businesses (mainly project promoters)
and administrations (national competent authorities, national regulatory authorities, the
Commission, and ACER) in order to comply with substantive obligations or
requirements contained therein. The application of the package of preferred options
results in indirect costs for citizens/consumers, businesses and administrations through
an increase in network tariffs to finance investments in the regulatory asset base (RAB).
However, CEF financial assistance can alleviate the impact on network tariffs in case a
PCI shows significant externalities in terms of security of supply, solidarity, or
innovation.
The below table summarises the direct and indirect costs for those actions of the package
of preferred policy for which costs have been identified compared to the baseline. It is
not possible to estimate these costs for all actions at this stage but they are considered as
non-significant. The additional costs would be marginal compared to the current costs
which have been evaluated to be in the range of EUR 25 to 50 million and considered
low when compared to the benefits.147
Additional enforcement costs at national and EU level will depend on the
implementation.
II. Overview of costs – Package of preferred options
Citizens/Consumers Businesses Administrations
One-off Recurrent One-off Recurrent One-off Recurrent
145
Renewable Grid Initiative and ENTSOE, Value of timely implementation of “better projects”, May
2019, Working Paper https://eepublicdownloads.azureedge.net/clean-
documents/Publications/Position%20papers%20and%20reports/20190517_RGI_ENTSOE_working_paper
_better_projects.pdf
146
Better Regulation Guidelines, TOOL #58. TYPOLOGY OF COSTS AND BENEFITS
147
Ecorys et al. (2020) Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure, Draft final report, p. 122
95
Action (a)
Broadened
scope for
regulated
assets
(smart
grids)
Direct costs
Administrative
burden (project
promoters):
participation in
regional group
meetings,
collection and
submission of
information
required for
network
planning,
monitoring and
reporting
Administrativ
e burden:
participation
in regional
group
meetings
(NRAs),
organisation
of regional
group
meetings,
monitoring
Indirect costs Potential
increase of
network tariffs
Potential
increase of
network
Potential
increase of
network
tariffs
Action (b)
Establish
ment of
integrated
offshore
developme
nt plans
Direct costs
Administrative
costs (mainly
TSOs /
ENTSOs):
participation in
regional group
meetings,
collection and
submission of
information
required for
network
planning
Administrativ
e burden:
participation
in regional
group
meetings
(NRAs,
ACER),
organisation
of regional
group
meetings,
monitoring
(Commission,
ACER)
Indirect costs Potential
increase of
network tariffs
Potential
increase of
network tariffs
Potential
increase of
network
tariffs
Action
(c)
Integrate
d
infrastruc
ture
plans
Direct costs Administrative
costs related to
the
coordinated
approach
(mainly TSOs,
DSOs and
ENTSOs):
data
collection,
participation
in meetings
Administrati
ve costs
related to the
increased
oversight for
the
Commission
and ACER
(between
EUR 80 000
and 150 000,
one
additional
FTE)
Indirect costs
96
Action
(d) One-
stop shop
per sea
basin for
offshore
renewabl
e projects
Direct costs Administra
tive costs
to establish
the one
stop shop
Indirect costs
Action e)
Inclusion
full
investme
nt costs
Direct costs Administrati
ve costs
related to the
strengthened
obligation
on NRAs
97
ANNEX 4: ANALYTICAL METHODS
In order to quantify the benefits stemming from the implementation of the current TEN-E
regulation, in the field of electricity and gas, from its entering into force until the full
implementation of the latest PCI list (4th
list), the Commission used the REKK model and
cross-checked the key outcomes with the internal METIS model run by JRC.
Tools used
REKK used, for this impact assessment two models, one specific for each sector, EEMM
(electricity) and EGMM (gas).
The EEMM is a partial equilibrium microeconomic model. It assumes fully liberalised
and perfectly competitive electricity markets. 44 markets are modelled, including almost
all members of ENTSO-E148
. Production and trade are constrained by the available
installed capacity of power plants and net transfer capacity (NTC) of cross-border
transmission lines. In the model one country is one node (with a few exceptions, e.g. it
models two markets in Denmark and Ukraine), thus no internal congestion is assumed.
The model has an hourly time step, modelling 90 representative hours with respect to
load, covering all four seasons and all daily variations in electricity demand. The model
used as main inputs for the 2030 the EUCO 32,32.5, the NTC from ENTSOs capacity
maps the PCIs data and for the current situation input from the TSOs, NRAs and reports
of industry organisations (such as EWEA and Solar Power Europe). For natural gas
prices, REKK used its own forecast, prepared by the EGMM model of REKK,
differentiated country by country and year by year.
The EGMM is a competitive, dynamic, multi-market equilibrium model that simulates
the operation of the wholesale natural gas market across Europe. It includes a supply-
demand representation of European countries, including gas storage and transportation
linkages. Large external markets, including Russia, Turkey, Libya, Algeria and LNG
exporters are represented exogenously with market prices, long-term supply contracts
and physical connections to Europe. The timeframe of the model covers 12 consecutive
months, starting in April. Market participants have perfect foresight over this period.
Dynamic connections between months are introduced by the operation of gas storages
and take-or-play constraints of long-term contracts. Given the input data, the model
calculates a dynamic competitive market equilibrium for the modelled countries, where
all arbitrage opportunities across time and space are therefore exhausted to the extent that
storage facilities, transportation, infrastructure, and contractual conditions permit. As a
result, the competitive equilibrium yields an efficient, welfare-maximizing outcome. The
model used as main inputs for the 2030 the EUCO 32,32.5, the NTC from ENTSOs
capacity maps the PCIs data and for the current situation mainly input from the TSOs,
and NRAs.
As mentioned above, the crosscheck of the main REKK results was performed using the
Commission METIS model run by JRC. The Metis model is a modelling tool that can
quickly provide robust insights on complex energy related questions, focusing on the
short term operation of the energy system and markets.
148
Cyprus and Malta are not modelled in EEMM.
98
In METIS, the European power system is modelled with an hourly temporal resolution.
The power plants are represented as fleets of similar technological characteristics. In
METIS, units of the same technology or using the same fuel in each zone are bundled
together into the same asset in a cluster model which simulates the dynamic constraints
and starting costs in a relaxed (LP) unit commitment, without using binary variables. The
main input data are the same as the ones used for in the REKK models. The gas
system/market is modelled on a daily time step. The main parameters and constraints
describing the market/technological components concern: gas production, pipelines,
storages, LNG (both regasification and liquefaction facilities), underground gas storages,
gas demands. The main input data are the same as the ones used for in the REKK models.
Baseline cases
The assessment aimed to answer three questions: What did the TEN-E Regulation has
achieved until now?, targeting the benefits stemming from the PCIs already
commissioned; What did the TEN-E Regulation achieved overall?, covering therefore the
PCI already completed and the ones from the fourth PCI list; and What are the benefits of
the fourth PCI list?
In line with these questions, the REKK has developed two baselines for year 2020 and
2030 from which they took out/added the relevant group of PCIs:
The Baseline serves as the basis for comparison: this scenario shows what would have
been the situation on the electricity markets of Europe without any PCI projects being
implemented. For 2020, the Baseline scenario includes the present situation without the
PCI projects – thus, interconnector capacities are lower than as of today, capacities of the
twelve already commissioned projects are deducted. Similarly, in 2030 the most likely
future outcome is included, but same capacities are deducted, and none of the projects
from the 4th
PCI list are assumed to be commissioned.
In the TEN-E baseline, the possible effect of the already commissioned PCI projects is
calculated. For 2020, the present situation is used – meaning the difference between the
Baseline and the TEN-E scenarios is exactly the commissioning of the existing PCIs. The
same applies to 2030 –REKK took the most likely future market situation, including the
already commissioned PCIs, but di not include any project from the 4th
list.
In the Future baseline, the effect of the commissioning of all projects from the 4th
list are
modelled. This means, that the only relevant modelling year is 2030, as the first year of
commissioning from these projects is assumed to be 2021. For building up the Future
scenario in 2030 REKK used the TEN-E scenario as a starting point, and then included
all projects from the 4th
list to see how they would affect market outcomes in 2030. When
results are compared to the TEN-E Scenario, then the effect of the PCIs from the 4th
list
can be quantified. While comparing Future and Baseline shows the effect of all – already
commissioned and to be commissioned in the future – PCI projects on the European
electricity market.
ANNEX 5: EVALUATION REPORT
Since its establishment in 2013, the Regulation on trans-European energy networks laid
down rules for the timely development and implementation of key energy infrastructure
projects that interconnect Member States, whilst contributing to market integration,
security of supply, competitiveness and further integration of renewables.
In March 2019, as part of the partial political agreement between the European
Parliament and the Council on the Connecting Europe Facility for the period 2021-2027,
the co-legislators agreed on the need to evaluate the effectiveness and policy coherence
of the Regulation 347/2013 on the guidelines for trans-European energy infrastructure
(TEN-E Regulation) by 31 December 2020149
. In December 2019 the European
Commission published the European Green Deal with an aim to include the climate
neutrality objective in 2050 into the proposed European Climate Law. The
communication of the European Commission (COM(2019) 640)1 (the European Green
Deal) explicitly refers to the need for a review of the TEN-E Regulation to ensure
consistency with climate neutrality objectives.
In view of the timeline for the evaluation and revision of the TEN-E Regulation, the
Commission opted for a “back-to-back evaluation and impact assessment”. The
evaluation of the TEN-E Regulation was carried out between January 2019 and
September 2020. The evaluation was supported by a study “Support to the evaluation of
Regulation (EU) No 347/2013 on guidelines for trans-European energy infrastructure”
commissioned to an external contractor which helped gather, quantify and assess
evidence drawn from a range of sources on the performance of the TEN-E instrument to
date.The evaluation assessed in a retrospective manner the extent to which the TEN-E
Regulation has performed so far in achievingits stated objectives, identifying factors that
helped or hindered their achievement. Specifically, it assessed the effectiveness of the
Regulation compared to a baseline (i.e. the situation without the Regulation), to appraise
whether or not it has had a significant impact and added value.
In short, the evaluation looked at:
• How and why the current TEN-E Regulation has worked well or not so well, and
which factors have helped or hampered the achievement of its objectives;
• The impact of the Regulation, particularly in terms of progress towards achieving
its objectives.
The “back to back” approach ensured that formative element are drawn from the
outcomes of the evaluation to conclude on the extent to which the Regulation will remain
fit-for-purpose and relevant in the future ] in view of the adopted or planned policy
initiatives (the climate target plan, the revision of the Energy Efficiency Directive, the
Renewable Energy Directive, and the gas package) which will accelerate the mid- and
long-term decarbonisation. The forward-looking elements will looked into how to ensure
that enabling energy infrastructure is in place to match the increased decarbonisation and
renewable energy deployment ambitions and indicate areas of intervention.
149
https://www.consilium.europa.eu/media/38507/st07207-re01-en19.pdf
http://www.europarl.europa.eu/doceo/document/TA-8-2019-0420_EN.pdf
100
In line with the scope and applicability of the TEN-E Regulation, the evaluation covers
all Member States. In terms of legal acts covered as part of the evaluation, it does not
specifically cover the European Union's funding through the Connecting Europe Facility
(CEF) although the evaluation questions seek to identify synergies and
complementarities with CEF. Due to its timing but also its wider scope, the evaluation
does not fully assess the coherence with the sustainable finance framework (taxonomy)
but rather indicate increasing incoherence with the current TEN-E Regulation and CEF
financial assistance. The work on two Delegated Acts is currently ongoing with a view to
establish by end of 2020 a list of environmentally sustainable economic activities on the
basis of technical screening criteria for climate change mitigation and adaptation.
Contrary to the scope of the TEN-E regulation which established a method for multi-
criteria project selection, the taxonomy Regulation classifies and qualifies economic
activities as environmentally sustainable for the purposes of establishing whether or not
associated investments are environmentally sustainable.
Five core evaluation criteria were applied to evaluate the performance of the TEN-E
Regulation: effectiveness, efficiency, relevance, coherence, and EU added value. Section
4 further describes the method for the evaluation, including the rationale and questions
underpinning each of the criteria.
11 BACKGROUND TO THE INTERVENTION
Energy infrastructure is crucial for reaching wider EU energy and climate goals, whilst
ensuring access to safe, reliable, affordable and sustainable energy for all Europeans.
The TEN-E Regulation is part of a larger regulatory framework adopted to tackle a
number of barriers to the implementation of European energy infrastructure and
integrated energy networks. In line with the energy policy objectives of the Treaty on the
Functioning of the European Union (TFEU), the TEN-E Regulation aims to ensure the
functioning of the internal energy market and security of supply in the Union, promote
energy efficiency and energy savings and support the development of new and renewable
forms of energy the interconnecting energy networks.
The TEN-E Regulation is based on Article 172 of the Treaty on the Functioning of the
European Union. According to Article 171(1), “the Union shall establish a series of
guidelines covering the objectives, priorities and broad lines of measures envisaged in the
sphere of trans-European networks; these guidelines shall identify projects of common
interest”. The goals of the Regulation are the following:
• To ensure the functioning of the internal energy market and security of supply in
the Union;
• To promote the development of new and renewable forms of energy, energy
efficiency, and energy savings; and
• To promote the interconnection of energy networks.
To achieve these objectives, the TEN-E defines infrastructure priority corridors and
priority thematic areas, lays down criteria for the identification of key energy
infrastructure projects and builds on regional cooperation to identify and select necessary
PCIs in Union-wide lists. The TEN-E Regulation sets out guidelines for streamlining the
permitting processes for PCIs as well as increases cooperation and transparency towards
the public and wider stakeholder community. Aside from accelerated permitting, PCIs
101
benefit from improved regulatory conditions, cost-allocation and eligibility for financial
support from the Connecting Europe Facility (CEF).
The intervention logic, presented in Figure 1, links the objectives of the TEN-E
Regulation and input/actions to its outputs, results and impacts. It also visualizes some of
the relevant external factors to this regulation.
Figure 1: Intervention logic of current TEN-E framework
The Regulation lays down rules for the timely development and interoperability of Trans-
European Energy networks, by providing the following inputs:
1. The identification of PCIs necessary to implement priority corridors and areas
falling under the energy infrastructure categories in electricity, gas, oil, smart grid
and CO2 (Chapter II of the Regulation). Specifically, the Regulation: sets out the
criteria which PCIs should meet, ensures the adoption every two years by the
Commission of a Union list of the proposed PCIs and ensures that a plan is in
place to implement the PCI as well as procedures to monitor progress of the
project.
2. Provisions to facilitate the timely implementation of PCIs by streamlining,
closely coordinating, accelerating permit granting processes, and enhancing
public participation (Chapter III). The Regulation assigns the highest national
priority status to the PCIs and requires that they are included in national network
development plans, requires Member States to designate a national competent
authority responsible for facilitating and coordinating the permit granting process
for PCIs, requires that the competent authority publishes a manual of procedures
Objectives Input Output Results/Outcomes Impacts
Streamline permit
granting
procedures &
increase public
acceptance and
involvement for
PCIs
Union list of PCIs
Framework to
promote efficient and
transparent national
permit granting
procedures, including
at least one public
consultation at
national level
Appropriate regulatory
incentives for PCIs
Timely
construction
of projects
which
interconnect
the energy
markets
across
Europe
Improved
sustainability
and meet
EU s energy
and climate
goals
Need analysis: Tackle key barriers to implementation of energy infrastructure
projects that better integrate energy networks
• Extensive time required for projects to acquire building permits
• Public opposition to projects
• Regulatory challenges involved in building projects across more than one
country (challenge of imbalanced costs and benefits across borders)
• Lack of commercial viability of some projects that were identified as
important for market integration or security of supply
Activities
Assessment and selection of PCIs by
Regional Groups
Monitoring
Set up 12 Regional Groups to assess
infrastructure needs and PCI
candidates against criteria
ENTSOs setup CBA
CBCA methodologies
MSs set up their own competent
authority/ one stop shop for
permitting
Selection criteria of PCIs to
implement priority corridors
and areas including
conditions for eligibility for
Union financial assistance
(i.e. CEF)
Provisions to facilitate the
timely implementation of PCIs
by streamlining, coordinating
more closely, accelerating
permit granting processes
and enhancing public
consultation
Providing rule and guidance for
CBCA and risk related
incentives for PCIs
Effectiveness
External factors
- Critical infrastructure
- MS pressures/ requirements on
project promoters
- Public opposition
Other EU policies
- CEF, EEPR, ESIF
- Clean Energy for all
Europeans
- Energy security packages
- The European Green Deal
Ensure
implementation of
PCIS by providing
market-based and
direct EU financial
support
PCIs
implemented in
a timely manner
Facilitate the
regulatory
treatment of PCIs
Increase in
electricity & gas
interconnection
(capacity and
use)
Reduced public
opposition
PCIs with CBCA
decision
Involvement of
stakeholders in
identification and
monitoring of PCIS
PCI status
reduces admin
costs for project
promoters
PCIs receiving
specific
incentives
Better
security of
supply
Improved
competition
within
markets that
keeps
energy
prices in
check
MSs/NRAs set up incentives to
address PCIs risks
MSs publish permitting procedure
manual, including public
participation routes
EU added value
Efficiency
Coherence
Relevance
Assign European Coordinators
102
for the permit granting process applicable to PCIs, requires the project promoter
to draw up and submit a concept for public participation to the competent
authority, and ensure the necessary public consultation is conducted; and sets out
a maximum time-limit of 3.5 years for the pre-application and permit-granting
procedure combined.
3. Providing rules and guidance for the cross-border allocation of costs and risk
related incentives for PCIs. The Regulation requires member States and National
Regulatory Authorities to set up incentives to address PCIs’ risks; establishes the
use of cost-benefit methodologies for PCIs for an energy system-wide analysis, in
line with the principles laid out in Annex V of the Regulation and consistent with
the rules and indicators set out in Annex IV; and ensures that PCIs benefit from
cross-border cost allocation (CBCA) decisions, which assist the sharing of project
costs among countries in line with their expected benefits.
The outputs of the Regulation are, therefore, closely linked to each set of activities
described above:
1. establishment of relevant cross-border projects within priority corridors and areas
and energy infrastructure categories;
2. a framework to promote efficient and transparent national permit granting
procedures;
3. appropriate regulatory incentives for PCIs and long-term signals to meet EU
priorities;
4. involvement of stakeholders in identification and monitoring of PCIs.
The overall outcome is the timely construction of PCIs, which interconnect the energy
markets across Europe. More specifically:
1. PCIs receive permits more rapidly ensuring they are timely implemented;
2. PCIs status reduces administrative costs for the project promoters;
3. There is an increase in electricity and gas interconnection (capacity and use);
4. There is an increased public participation;
5. PCIs receive specific incentives; and
6. PCIs could receive a cross-border cost allocation decision.
As section 3 will further detail, the TEN-E Regulation has been effective in accelerating
the refurbishment of the existing energy grid and in deploying new projects to achieve
the Union’s energy and climate policy objectives. Thanks to a process for identification
of infrastructure needs and selection of projects, the TEN-E Regulation has shifted the
focus from national priorities to a regional and cross-border approach thus ensuring that
infrastructure is built where it is most needed. TEN-E introduced regulatory tools to
speed up implementation by incentivising investments by addressing existing
asymmetries between the costs and benefits of projects and by providing targeted support
to selected projects as last-resort. Under the TEN-E Regulation, four Union lists of
Projects of Common Interest formally adopted in 12 Regional Groups were established,
103
allowing for the implementation of 40 PCIs to date with 75 more expected to be
implemented by 2022. The TEN-E Regulation ensured that projects with the greatest
contribution towards set criteria would benefit from the utmost cooperation and
transparency between key stakeholders on the ground.
The adoption of the Green Deal and its climate-neutrality target has triggered a paradigm
shift in Union energy and climate objectives. Together with a number of adjacent
priorities that support Union’s increased climate ambitions (identified in the intervention
logic), the Green Deal became of one the main drivers the evaluation and revision of the
TEN-E Regulation in view of its inconsistencies with the climate neutrality objective
mostly due to the priorities at the time of its enactment. The evaluation showed that the
inconsistencies of the TEN-E Regulation with the Green Deal are twofold: on one hand,
the scope of the energy infrastructure categories, criteria and the governance of the
selection process is not aligned with the Green Deal objectives and latest developments
in innovation and technologies. On the other, delays in the implementation of PCIs are
still observed, triggering as such the non-delivery of their intended benefits.
The methodology for evaluating the performance of the TEN-E Regulation has been
developed to fit the intervention logic. As further detailed in section 4 on Method, an
evaluation matrix comprising of a set of evaluation questions and sub-questions per each
evaluation criteria was used to guide the evaluation process and define the manner in
which questions will be answered and presented.
The evaluation baseline captures the point of comparison for the evaluation, i.e. had the
2013 TEN-E Regulation not been introduced (a business-as-usual scenario). The baseline
has been used in the assessment of the replies to the evaluation questions (primarily on
effectiveness and efficiency), and in the modelling, which further informs the
assessment. The baseline for this evaluation is largely based on the baseline scenario in
the 2011 Impact Assessment of the TEN-E regulation. The baseline consists of four
components: 1. permit granting procedures in Member States; 2. financing; 3.
administrative cost estimates; and 4. infrastructure assessment. The baseline from the
2011 Impact Assessment was used for the analysis of the permit granting procedures in
Member States, financing, and administrative cost estimates. For the infrastructure
assessment, a different baseline than the one in the 2011 Impact Assessment was
considered due to the changes in the market an technological landscape.
The evaluation draws on evidence from the stakeholder input to the extensive
consultations carried out in this respect, PCI portfolio and case study analysis and related
monitoring reports, modelling, the results of a series of topical studies on key elements of
the TEN-E Regulation, as well as conclusions and work stemming from dedicated
stakeholder Fora (e.g. Copenhagen Forum).
12 IMPLEMENTATION/STATE OF PLAY
This section outlines how the TEN-E Regulation was implemented to date. In particular,
four main activities are considered: the PCI process, permit granting and public
participation, regulatory treatment and financing.
104
The PCI process
Article 3 of the TEN-E Regulation also defines the process for the PCI selection. The
TEN-E Regulation distinguishes and targets specific projects that are identified as PCI
from an internal energy market perspective. The process of selection and implement of
PCIs involves various stakeholders, both at national and European level. Representatives
from national competent authorities (NCAs), national regulatory authorities
(NRAs)project promoters, including transmission system operators (TSOs), and their
European association and agencies (ENTSOs and ACER) are members of regional
groups established by the Regulation. The membership of each group is based on a
priority corridor or thematic areas and reflects the respective geographical coverage.
These regional groups facilitate the cooperation and coordination amongst the
stakeholders. They are responsible for the assessment of candidate projects that are
proposed by the project promoters, but also for monitoring the execution of PCIs, and for
making recommendations to facilitate their implementation. The final decision-making
powers are restricted to Member States and the Commission (the Decision-Making Body
or DMB). Furthermore, to foster high-level (international) political commitment, support
in reaching consensus on regional actions plans and promote a specific goal regarding
EU energy network integration, Member States can establish High Level Groups. These
groups aim to pursue a specific long-term strategy and their organisation is not outside
the scope of the Regulation.
The PCI selection process is based on the National Development Plans (NDPs) and the
Ten-Year National Development Plans in electricity and gas (TYNDPs) prepared by the
ENTSOs. To ensure consensus, the PCI process involves consultation with multiple
stakeholders within the regional groups and via a public consultation. Figure 5 illustrates
the PCI selection process and the roles of the various stakeholders in this process.
105
Figure 5: PCI selection process
To become eligible for the PCI status, a candidate project is required to meet the
following general criteria:
 the project is considered necessary for at least one of the infrastructure priority
corridors and thematic areas;
 the potential benefits of the project outweigh its cost, including in the longer
term;
 the project significantly involves EU Member States, indicated by: - involving at
least two Member States by directly crossing the border of two or more Member
States; - being located in one Member State and having a significant cross-border
impact; - crossing the border of at least one Member State and a European
Economic Area country.
In addition to those, there are specific criteria that apply to PCIs depending on their
infrastructure category.
Table 1: Specific PCI criteria per infrastructure category
Energy
infrastructure
category
Specific criteria
Electricity
Market integration
Sustainability
Security of supply
Gas
Market integration
Security of supply
Competition
Sustainability
Smart grids
Integration and involvement of network users with regard to
supply and demand
106
Energy
infrastructure
category
Specific criteria
Efficiency and interoperability in day-to-day network
operation
Network security, system control and quality of supply
Optimised planning of future cost-efficient network
investments
Market functioning and customer services
Involvement of users in the management of their energy
usage
Oil
Security of supply
Efficient and sustainable use of resources
Interoperability
CO2
Avoidance of carbon dioxide emissions while maintaining
security of energy supply
Increasing resilience and security of CO2 transport
Efficient use of resources and Minimising environmental
burden and risks
Source: Regulation (EU) No 347/2013 Article 4
The TEN-E Regulation requires that ENTSO-E and ENTSO-G draft a methodology for
the Cost Benefit Analysis (CBA methodology) to assess the projects included in the
TYNDPs for electricity and gas projects respectively. According to the Regulation, to be
eligible for the PCI status, gas and electricity transmission and storage projects shall be
part of the TYNDP. To become a PCI, the project must apply for it in line with the rules
and timeline of the PCI selection process. The interlinkage between theprocess for
establishing the PCI list and the TYNDP can be summarised as shown on Figure 3.
107
Figure 3: TYNDP and PCI list process
The TYNDP-related approach does not apply to carbon dioxide network, smart grid or
oil PCIs. For smart grids, an updated methodology was published by the Joint Research
Centre (JRC) in 2017.
The 1st list of PCIs was adopted in October 2013 and contained 248 projects. The 2nd,
3rd and 4th PCI lists contained 195, 173 and 149 projects, respectively. Excluding PCIs
that appeared in several lists, the lists comprise 437 unique projects.
Amongst Member States, Poland is most frequently represented in the 4th list with 18
PCIs listed, followed by Lithuania, Germany and Estonia with respectively 15, 12 and 12
PCIs. Outside of the EU, the United Kingdom is most frequently represented with 16
PCIs. Electricity projects are most frequently hosted by the UK (14 PCIs) followed by
Lithuania (12 PCIs), gas PCIs are most frequently hosted by Greece (6 PCIs), and Poland
is the most dominant host of oil projects (3 PCIs).
Permit granting and public participation
A key objective of the Regulation is to streamline the permit granting process, while
ensuring sufficient public participation.
The Regulation allocates a ‘priority status’ for a project, once selected for the PCI list.
PCIs are granted the status of the highest national significance possible in the relevant
Member State for consideration especially during permit granting processes. The TEN-
Regulation defines and sets out a variety of activities that contribute to the streamlining
of the permit granting process. Member States are required to designate a “one-stop
shop’ (NCA), which shall be responsible for facilitating and coordinating the permit
granting process for PCIs and which all Member States have established by 16 November
2013 at the latest. The NCA is the sole point of contact for the project promoter in the
process leading to a comprehensive decision for a given PCI, and coordinates the
submission of all relevant documents and information.
Member States are required to additionally implement a two-stage permitting process. It
consists of a pre-application procedure and a statutory permit granting procedure. It also
sets time limits for each stage. The pre-application procedure should take place within
108
one year and six months. The combined process should not take more than 3.5 years, but
can be extended by a maximum of nine months on a case-by-case basis.
The progress of PCI implementation is monitored every year by ACER and reported to
the Commission and regional groups. Additionally, NCAs from associated Member
States report to the regional group on permit granting delays.
Monitoring data, as shown in figure 4, indicates that permit granting procedures have
shortened since the the entry into force of the TEN-E Regulation. Current the EU average
of 4 and 3.1 years for electricity and gas projects, respectively show significant progress
compared to baseline national averages of up to 10 years in 2011. As a central element of
the TEN-E Regulation, the establishment of one-stop shops is appraised as an instrument
to reduce the complexity and duration of permitting procedures.
Figure 4: PCI implementation progress to date
Source: Underlying data of the ACER monitoring reports. No reliable data available for 2019 since the
question was not part of the monitoring format or it was limited to the cases where there was a difference
compared to 2018 only.
As section 5 will describe, the effectiveness of permit granting procedures strongly
depends on national implementation; experiences of project promoters vary substantially
because of national differences in the way TEN-E provisions have been implemented
(e.g. as regards the responsibilities of authorities in the permit granting process. The table
below outlines the permitting schemes as chosen by Member States to facilitate and
coordinate the permit granting process for PCIs.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 2016 2017 2018 2015 2016 2017 2018
Electricity Gas
Delayed
Rescheduled
On time
Ahead of schedule
109
Table 2: Overview of schemes adopted by Member States
Integrated Coordinated Collaborative
BE X
BG X
CY X
CZ X
DE X
DK X X X
EE X
EL X X
ES X
FI X
FR X
HR X
HU X
IE X
IT X
LT X
LU X
LV X
MT X
NL X
PL X
PT X
RO X
SI X X
SK X
SE X
UK X
Source: Milieu (2016) Analysis of the manuals of procedures for the permit granting process applicable to
projects of common interest prepared under Art.9 Regulation No 347/2013. Based on the stakeholder
consultation, the implemented permitting scheme in Portugal was updated to “integrated” and for
Slovenia – to “integrated” and “collaborative”.
In spite of the introduction of targeted provisions, longer permitting durations in the
implementation of key projects of common interest are still experienced.
The TEN-E Regulation sets out specific requirements on transparency and public
participation. The purpose of the requirements is to improve public engagement and to
increase public acceptance of the implementation of PCIs. Project promoters, Member
States, NCAs and other involved parties are required to comply with the requirements
before submitting the application. As one of the central challenges to energy
infrastructure projects in 2011 was the opposition from affected citizens, the TEN-E
Regulation introduced an additional public consultation during the permitting process to
ensure early consultation of local communities and stakeholders and ultimately improve
public acceptance of such projects. Other key transparency provisions include the
110
creation of a dedicated PCI website by project promoters that displays updated relevant
information about the project and the publication of a manual of procedures by NCAs
that groups all required permitting provisions.
The most recent data on the implementation of the transparency and participation
provisions indicated that Belgium, France and Latvia are the only Member States that
have adopted specific legislation related to the Regulation on permit granting and public
participation. A study by Milieu (2016) show that only four Member States apply the
obligation for project promoters to draw up public participation concepts and only eight
have held public participation procedures in addition to the one envisaged in the EIA150
.
Although in place, the information available on the dedicated PCI websites vary
considerably in terms of detail, scope and accuracy151
.
Regulatory treatment
The Regulation applies to the regulatory treatment of PCIs by setting out rules for
establishing methodologies for cost-benefit analysis, guidelines on cost allocations and
risk-related incentives.
When at least one Member State, affected by a PCI, estimates net negative impacts, it
raises an important barrier for the project promoter(s) to invest in that PCI. The
Regulation aims to eliminate this barrier and thereby facilitate investments. This is done
by incorporating decisions on the allocation of the costs of such projects across borders
by National Regulatory Authorities (NRAs) and by the Agency for the Cooperation of
Energy Regulators (ACER) if project promoters submit an investment request, including
a request for Cross-Border Cost Allocation (CBCA). This mechanism has also been
effective to varying extents. Currently 42 CBCA decisions were made, of which
respectively 37 and 30 were reported in ACER’s 2019 list of CBCA decisions and
ACER’s 2018 CBCA monitoring report. Two of the total of 42 CBCA decisions were
taken by ACER, where for the remaining 40 were coordinated decisions by NRAs.
ACER indicated in their latest summary report152
on the CBCA decisions that 70% of all
CBCA decisions (21 out of 30) concluded before March 2018 concerned projects where
the project was built on the territory of one country and the costs were allocated to that
same country only. Despite showing a strong decrease in in the latest period from 2018-
2020, a relatively large share of these PCIs in one country with one cost carrier remained
as of March 2020 (24 out of 42 cases). These PCIs mostly involved internal lines with
cross-border impact. Another 30% of CBCA decisions taken until March 2018 (9 out of
30) concerned projects with multiple Member States involved. For 5 out of 9 cross-
border PCIs with CBCA decisions, the territorial principle (each country pays the part of
the project on its territory) is relevant for the project crossing two countries without
150
Milieu et al. 2016. Analysis of the manuals of procedures for the permit granting process applicable to
projects of common interest prepared under Art.9 Regulation No 347/2013
151
Websites can be accessed through the PCI Interactive map, available at
https://ec.europa.eu/energy/infrastructure/transparency_platform/map-viewer/main.html
152
ACER (2018), Third Edition of the Agency's Summary Report on Cross-Border Cost Allocation
Decisions - Status update as of March 2018.
111
offshore sections. For 2 of these cases all involved countries were estimated to be net
beneficiaries, thus the territorial principle was applied to formalise the cost division and
to clarify on the costs to be covered by each country’s national system tariffs.
Financing
The TEN-E Regulation is based on a three-step logic:
1. As a principle, infrastructure should be paid for through congestion rents. If
costs are covered through congestion rents a project can be considered
sufficiently commercially viable and therefore no further provisions are
applicable;
2. If a network operator is not able to recover the costs of the network through
congestion rents, the Regulation establishes the principle that it should be paid
for by network users through tariffs for network access. The Cross-Border Cost
Allocation (CBCA) provision allows for a (re)allocation of project costs across
borders to Members States, where the project has a net positive impact;
3. Finally, if reallocation of costs through CBCA is still not sufficient and a project
remains commercially non-viable, PCIs can, under certain conditions, apply for
Union financial assistance in the form of grants for studies and grants for works.
The share of congestion revenue effectively spent on maintaining or increasing
interconnection capacity increased between 2011 and 2015 (from 18% to 40%)153
.
CEF has provided EUR 3.7 billion to PCIs for 139 actions. A large share of the funding
provided has been used for works, and electricity projects have received more grants than
gas projects. Smart grid and CO2 infrastructure – which represent smaller numbers of
PCIs that also are less mature than electricity or gas transmission projects – only account
for marginal shares of CEF grants provided. As indicated in the most recent CEF-Energy
Report154
, transmission infrastructure projects attract the largest share of funding.
13 METHOD
This evaluation was supported by a study “Support to the evaluation of Regulation (EU)
No 347/2013 on guidelines for trans-European energy infrastructure” commissioned to
an external contractor which helped gather, quantify and assess evidence drawn from a
range of sources on the performance of the TEN-E instrument to date.
To provide relevant evidence on the implementation of the TEN-E Regulation, a number
of methods were employed to collect primary and secondary data. The data collection
included desk research, portfolio analysis, case study analysis, modelling and expert and
stakeholder consultations. As mentioned under section 2, the data was collected from
literature research, stakeholder input to the extensive consultations carried out in this
respect (notably expert interviews, 4 webinars and 2 stakeholder surveys), PCI portfolio
and case study analysis and related monitoring reports and modelling.
153
Consolidated data is not available for 2016-2019
154
INEA (2020). Connecting Europe Facility Energy. Supported Actions – May 2020
112
The evaluation questions were drafted with a strong focus on how the ‘activities’ of the
TEN-E Regulation perform (as listed in the intervention logic) and how they contribute
to its output and objectives. Each question has been further ramified into a set of sub-
questions.
The evaluation matrix included each set of questions and their sub-questions, as well as
assessment criteria; indicators which inform the assessment, data sources and collection
methods, analysis and approaches and ability to answer the evaluation question and
limitations.
The evaluation questions and sub-questions per each evaluation criteria as used in the
evaluation are outlined in the table below.
The main (implementation) provisions of the TEN-E Regulation have been further
looked into more detail and a set of questions directly assessing their effectiveness has
been developed in order to gather specific evidence on i) the PCI selection process; ii)
permit granting and public participation; iii) monitoring and iv) regulatory incentives
and CBCA. The replies to this set of implementation questions have been analysed
together with the evidence under the effectiveness criteria.
In the process of data collection and analysis the several challenges and limitations were
identified. These are presented below, together with the impact they may have had on
the evaluation itself and the corresponding mitigation measures.
Issue or limitation Impact Mitigation measure
Limited information
available as part of the desk
research
Low The available information was gathered
against the evaluation matrix at an early stage
of the evaluation. Therefore, the gaps were
identified at earlier stages and missing topics
were included in the questionnaires for the
targeted survey and open public consultation
In addition, further gaps have been identified
and addressed as part of the interviewing
process.
Fragmented quantitative
information on specific PCI
technical data
Medium Desk research revealed that quantitative
information on PCIs is fragmented or
somewhat difficult to access. Specifically
combining monitoring data with CEF funding
and historical PCI data is problematic due to
inconsistencies in formats and a lack of
centralised accessibility. This is why special
attention to this information was paid when
drafting the questionnaires for the OPC and
targeted survey.
Meaningful cost estimates
to answer the evaluation
Medium The questionnaires for the targeted survey and
OPC were composed in such a way to address
113
questions on efficiency this issue and include questions on the
estimates of FTE’s and cost drivers for cost
items which are considered ‘high’ or ‘too high’
according to stakeholders. Further information
was requested in the interviews. Results were
triangulated between different types of
stakeholders.
Divergence from initially
planned distribution of
interviewees
Medium The differences in representation of types of
stakeholders in comparison to the initially
planned representation are taken into account
in the qualitative analysis and presented in a
way that reflects the share of interviews
conducted with the different stakeholder
categories.
Data on permitting schemes
is potentially outdated.
Current information is
dispersed and difficult to
access.
Medium The latest study on permitting schemes
adopted in Member States dates from 2016. As
such, NCAs were further contacted
forclarity,and additional information on the
schemes currently in place.
Data quality issues project
monitoring data
Low Project monitoring data from ACER was used
for the analysis of the portfolio of electricity
and gas projects. Several data quality issues
were identified, as a result not all data could be
used (data quality of recent years improved).
Monitoring data is only used when complete
and accurate.
Fragmented quantitative
information on specific PCI
technical data
Medium Desk research revealed that quantitative
information on PCIs is fragmented or
somewhat difficult to access. The available
and consistent data was filtered where possible
, checked against insights from stakeholder
interviews and complemented with ACER
monitoring data...
Lack of cost estimates to
answer all the evaluation
questions on efficiency
Medium A more qualitative assessment of
administrative costs was carried out, whilst
aiming at the provision of quantitative results
to the extent possible.
Modelling: not all benefits
can be quantified
Low In the modelling, socio-economic benefits are
quantified but estimates do not reflect all
benefits. This has been addressed by
explaining socio-economic benefits in the
114
annex with the modelling results.
14 ANALYSIS AND ANSWERS TO THE EVALUATION QUESTIONS
This section presents the answers to each set of evaluation questions per criterion in an
aggregated manner. The questions, as well as the findings are mentioned under each
subsection
Effectiveness
Three main questions have guided the assessment of the effectiveness of the TEN-E
Regulation, as presented below:
 How effective has the regulatory approach of the TEN-E Regulation been both in
terms of scope and main provisions in contributing to the goals of market
integration, security of supply, competitiveness and the climate and energy targets
for 2020?
 To what extent has the Regulation’ main provisions addressed the needs
identified in the Impact Assessment accompanying the Commission proposal in
2011?
 What unintended or unexpected positive and negative effects, if any, have been
produced by the TEN-E Regulation? (e.g. in terms of human health, use of
resources, and natural ecosystems)?
In terms of the overall goals, the TEN-E Regulation has effectively improved market
integration and competitiveness, as shown in the evidence on interconnection targets and
energy prices and their convergence across the EU and thus contributed to the overall
development towards achieving them. 42 PCIs have been commissioned to date and
contributed to this development by creating the interconnection capacities.
As a main contextual driver to the design of the TEN-E Regulation, security of supply
has also been improved, to which PCIs in electricity, gas and oil have strongly
contributed. For gas, the infrastructure and supply resilience has improved substantially
since 2013. Member States are almost exclusively compliant with the N-1 rule and the
infrastructure resilient to disruption scenarios. The focus on cross-border projects that
increase the interconnection is found to have been an effective contribution to these
goals. Modelling indicates strong socio-economic benefits in gas security of supply
arising from implemented PCIs (118 m€/yr in 2020 market situation, which was even
more substantial in a 2013 market situation scenario (193 m€/yr)). Security of supply of
electricity is increased through enhanced interconnectivity with 19 Member States
reaching or going beyond the 10% interconnection target for 2020. Modelling shows that
electricity PCIs commissioned already deliver substantial benefits that might even
increase in the future.
The organisation of PCI selection in Regional Groups under the coordination of the
Commission is found to be an important factor, as well as the approach to share costs
between Member States to enable projects with benefits across borders. The financing
support provided by CEF also contributed to this. 4.7 billion EUR in CEF co-financing
115
have been allocated to 149 actions in relation to 95 PCIs. The grants for studies helped
projects to reduce risks in the early stages while grants for works supported projects
addressing key bottlenecks.
Analysed data on TEN-E’s performance shows a contribution towards EU’s energy and
climate targets, albeit less significant than compared to the other internal market
objectives (market integration, security of supply, competitiveness) due to the historic
priorities of the policy and difficulty in devising a robust sustainability assessment of gas
PCIs155
. Electricity interconnection PCIs are key elements for the integration of
renewable energy sources into the European market. Although quantitative data on the
effect of the TEN-E Regulation in this field is more limited, the modelling shows a
reduction of CO2 emissions of 2804 kilotons across EU (or 0.4% decrease) for the year
2020 compared to the baseline resulting from the implementation of electricity
interconnection PCIs. Quantified impact of gas PCIs on CO2 reduction is rather
negligible. A positive contribution has been qualitatively described during the
consultation by TSOs, NCAs Eastern Europe.
The regulation addressed the needs identified in the 2011 Impact Assessment, as regards
the lengthy and ineffective permit granting procedures, regulatory challenges for cross-
border projects and difficulties in financing such large infrastructure projects. The
specific objectives of reducing permit duration and complexity, advancing the regulatory
framework and improving the financing conditions of energy infrastructure projects in a
cross-border context have overall been improved since the Regulation entered into force
in 2013. However, the positive picture at the level of overall improvement also faces
challenges in the specific implementation of the main provisions.
As already indicated under section 3, the duration of permit granting processes in the
Member States has shortened compared to the baseline situation. Looking at the overall
155
For the calculation of sustainability benefits, the information provided by candidate projects in their
project fiches includes CO2 emissions and benefits deriving from fuel switch, used as input in the CBA
methodology. However, the current underlying assumption in the CBA is that all gas projects would
automatically show only positive benefits towards CO2 mitigation, with no negative impact (such as
possible increase in CO2 emissions). By only using CO2 savings from fuel-switches from coal to gas
without carrying out a detailed analysis of the different situations in the individual countries, other possible
sustainability benefits remain invisible and unquantifiable, hampering the robustness of the results of the
assessment of such benefits. This was also acknowledged by the Agency for the Cooperation of Energy
Regulators (ACER) in its Opinion No 19/2019 of the European Union of 25 September 2019 on the draft
regional lists of proposed gas projects of common interest 2019. In this opinion, ACER notes that ‘(28) the
contribution of the PCI candidate projects to sustainability in general and to meeting the climate change
policy goals of the European Union in particular, is not quite clear. ACER believes that the preliminary
assessment provided by ENTSOG, which assigned a positive sustainability benefit to each and every
candidate project, is tenable only under the specific assumptions that gas will be a substitute of more
polluting fuels in the European Union’s primary energy mix, and also that the total volume of consumed
gas will be within a range that ensures that overall greenhouse gas emissions resulting from gas use will
stay below the European Union’s policy targets. Therefore, the lack of detailed data and consistency, did
not allow to properly calculate the sustainability benefits.
116
picture, monitoring reports indicate an average duration of 4 years for electricity PCIs
and 3.1 years for gas PCIs.
Figure 5: Duration of the permit granting process for electricity PCIs
Source: adapted from ACER 2019 (Consolidated Progress Report).
Figure 6: Duration of the expected permit granting process for gas PCIs
Source: adapted from ACER 2019 (Consolidated Progress Report).
The permitting process constitutes one of the main causes for delays for both electricity
and gas PCIs. For instance, 25% of electricity PCIs were reported as delayed in the 2019
ACER report. Of these, 46% encountered delays specifically during the permit granting
process. These numbers are similar to those provided in the 2018 report but slightly
lower than those in the 2017 report, suggesting a slight improvement. For gas PCIs, the
picture looks similar - 12 PCIs have been delayed (i.e. 28% of gas PCIs), of which 7
(58%) report the permitting stage as the cause. These results are similar to those reported
in 2018.
22
25
13
11
3
6
2 3 3 2
5
0
5
10
15
20
25
Number
of
projects
117
Figure 7: Reasons for electricity and gas PCI delays
However, longer permitting durations are still observed, including PCIs needing up to 9
years before obtaining the permit according to ACER’s latest progress report, which
indicates a high difference in permit granting duration between individual projects. The
finding of differing permitting durations is strongly supported by the results of the
stakeholder consultation which indicate that the effectiveness of permit granting
procedures strongly depends on national implementation. Experiences of project
promoters vary substantially because of differences in applying TEN-E permitting
requirements such as the responsibilities of authorities in the permit granting process.
Project characteristics have a substantial influence on the requirements of the permitting
process. The nature of PCIs as large projects with cross-border impacts creates strong
needs for impact assessment and complex planning documentation according to project
promoters. In section 3 we have outlined the permitting schemes as chosen by Member
States to facilitate and coordinate the permit granting process for PCIs.
In terms of the effectiveness of the permitting scheme employed, the 2016 ACER
progress report156 estimated the duration of permit granting per scheme, which is shown
for electricity PCIs in the figure below. This report found that coordinated schemes had
the shortest duration for permit granting, followed by a similar duration for integrated,
collaborative and multiple schemes157. The table also shows that coordinated schemes
were compliant with the 3.5-year time limit, whereas the other types of schemes resulted
in durations of the permitting stage slightly above the limit established in Art. 10(2).
156
ACER (2016). Consolidated report on the progress of electricity and gas
projects of common interest for the year 2015.
157
Sample size for integrated scheme is too small to provide a robust indication
of the duration (ACER 2016).
118
Table 3: Distribution of permitting schemes for electricity PCIs and expected
duration of permit granting depending on the scheme
Source: ACER 2016, Milieu 2016.
However, the evaluation indicated that the underlying reasons for delays fall outside the
direct scope of the TEN-E Regulation and cannot be addressed by the Regulation
specifically. While continuously complex national procedures are one cause for this,
environmental procedures of PCIs and public opposition causing lengthy court cases
against the projects are other reasons for extended permitting times. However, in this
case, it is worth highlighting the procedural dimension of environmental obligation as
opposed to issues that relate to the substantial provision of the EU environmental
legislation. These environmental procedures that were found as reasons for delay are
often linked to the need for re-assessment of the project due to its re-routing. The
evaluation based on stakeholder input showed that the positive aspects of the projects’
compliance with the environmental acquis has been highlighted as mitigating possible
environmental and biodiversity impact. This in turn, substantiates the need for early
public consultations in timely implementation of any necessary re-assessment and
adjustment of projects. At the same time, the delays caused by lengthy court cases do
show that the provisions on public participation have increased and ensured opportunities
for the public to be involved in the permitting stages of a project, but have not been
effective in reducing public opposition to many PCIs.
As regards the effectiveness of the TEN-E Regulation provisions for cross-border cost
allocation (CBCA), the evaluation showed varying extents as already referred to under
section 3.
There are three ways through which CBCA decisions can support investment decisions:
• By allocating overall project costs to specifically compensate net negative impact
for at least one involved party, reducing the barrier to invest for these specific
parties;
• By providing clarity on the acceptance of the relevant costs to be covered by
national system tariffs in each concerned Member State; and
• By Providing access to (additional) financial support through CEF grants for
works.
While the approach taken to share costs between Member States in relation to benefits is
largely appraised, the details of the mechanism like time and data requirements as well as
its complexity reduce its attractiveness. Therefore, CBCAs prove to be effective in some
Permitting scheme
Number of Member States
applying the scheme (in
2016)
Number of PCIs (in 2016)
Average expected duration of
permit granting (years, in
2016)
Integrated 1 4 3.8
Coordinated 9 24 2.8
Collaborative 15 47 3.6
Multiple schemes 2 21 3.7
119
cases while a question on the valuation of the mechanism remains as it is a step to an
application for CEF grants. The complexity of obtaining data, the additional time until an
investment decision can be made and the lack of unambiguous results to base the
decision on are factors reducing the satisfaction of stakeholders with the process. At the
same time, the concept is appreciated in enabling the understanding of the benefits of a
project.
The evaluation showed that CBCAs are beneficial in some cases but less effective in
others. CBCA processes are often triggered to obtain access to CEF funding and are
regularly concluded with no costs allocated across borders. The analysis of the most
recent ACER data158
on CBCA decisions (triangulated with data on the CEF funding)
show that these are rarely used to provide additional clarity on the acceptance of the
relevant costs to be covered by national system tariffs in concerned Member States. 70%
of all CBCA decisions (21 out of 30) taken until March 2018 concerned projects where
the project was built on the territory of one country and the costs were allocated to that
same country only. Despite showing a strong decrease in in the latest period from 2018-
2020, still a relatively large share of these PCIs in one country with one cost carrier
remained as of March 2020 (24 out of 42 cases), potentially anticipating CEF-E grants
and not necessarily seeking a decision on cost allocation.
Moreover, the results showed that CBCA decisions are rarely used to reallocate costs to
compensate net negative impact for at least one involved party, reducing the barrier to
invest for these specific parties. With the exception of four cases in 2014 (all gas PCIs),
none of the CBCA decisions allocated costs to non-hosting countries. This indicates that
almost half of all cases (20 out of 42) involve situations where CBCA decisions did not
provide compensation of net negative impact for the hosting country through allocation
of overall project costs. Since these projects were internal project with benefits for the
one involved party, it can be concluded that for 48% of all cases the only intention for
project promoters to have requested a CBCA decision was to gain access to CEF
funding.
Ineffectiveness of the CBCA process can result in projects that are not realised due to a
lack of funding or may lead to the ‘disproportionate’ use of EU funding where
insufficient consideration was given to funding from tariffs in Member States. Due to its
ineffectiveness, project promoters, NRAs and ACER consider CBCAs as an
administrative burden with, in many cases, little to no direct benefits159
.
The availability of CEF funding has had the most significant influence on the financing
of energy infrastructure projects addressing the third need as identified in the 2011
impact assessment. The funding support offered in the form of grants by the CEF has
158
ACER (2018), Third Edition of the Agency's Summary Report on Cross-Border Cost Allocation
Decisions - Status update as of March 2018.
159
Also confirmed by Roland Berger (2016). Cost-Effective Financing Structures for Mature Projects of
Common Interest (PCIs) in Energy and Trinomics et al. (2018)
120
been found important for improving the financing conditions for PCIs160
. Public grants
are described to enable private investment in energy infrastructure by absorbing risks and
therefore effectively advancing PCIs. By providing support in early stages, the grants
offered for studies contribute to de-risk project development. This, on the one hand,
helped to improve project realisation according to project promoters and national
authorities, and also contributed to attracting investors. The visibility of the project due to
its PCI label and the political support that has been experienced by many project
promoters also supports the attractiveness of PCIs to investors. CEF grants for works can
also support projects that would not be economically viable otherwise and prevent high
increases in tariffs. The additional mechanism of risk-based incentives has been rarely
used161
mostly due to the assumptions from project promoters that NRA do not see
higher risks for PCIs or that the regulatory framework allows coping with the risks. As
such, I it has not had an effect to improve the financing situation of PCIs so far.
As regards selection criteria, selected PCI projects demonstrated to help fulfilling the
current objectives of the TEN-E Regulation as it was conceived in 2013. The evaluation
indicates that sustainability benefits were realised to a lesser extent than the other
benefits mostly due to the difficulty in devising a robust methodology for assessment of
sustainability impacts of gas projects. Some of the current selection criteria might be too
restrictive for the inclusion of projects at DSO level, in particular: the cross-border
impact criteria, and the 10 kV voltage threshold and 20% RES origin for smart grids. A
more flexible definition of the cross-border impact may allow to include relevant projects
in one Member State with significant and quantifiable benefits in other Member States
(or outermost regions) with regards to the objectives of the TEN-E regulation.
The electricity and gas network planning exercises are eminently related to the PCI
selection process. Energy infrastructure needs are identified in the network planning
process and potential projects addressing those needs must be evaluated according to the
general objectives of the TEN-E Regulation (security of supply, market integration,
competition and sustainability). A cost-benefit analysis methodology must be developed
by the ENTSOs to assess the projects they shall include in the TYNDP. This CBA is also
the basis to evaluate the candidate projects for PCI. In the network planning process, the
models of the electricity and gas systems are currently independent, not allowing
sufficient consideration of interdependencies between systems. However, the ENTSOs
are currently developing an interlinked model with view to develop in the future the
network planning process to a “system of systems” approach, including all energy
vectors and demand sectors. CBA methodologies are not aligned between electricity and
gas, which does not allow a fair comparison between electricity and gas projects, since
they can potentially compete to address system needs.
The evaluation brought forward a series of insights that relate to the governance of the
network planning exercise. The main finding concerns the lack of adequacy of roles of
160
Roland Berger (2016). Cost-Effective Financing Structures for Mature Projects of Common Interest
(PCIs) in Energy.
161
ACER reports indicate that two requests for such incentives have been made for electricity and four for
gas PCIs. In four cases overall (one electricity, three gas), risk-based incentives have been granted
121
the different agents in the PCI process. The role of the ENTSOs has been found as
conflicting with their interests as project promoters. Whilst the evaluation acknowledged
that the ENTSOs, as TSO operators, enjoy the necessary expertise and access to system
and planning data, a higher degree of stakeholder consultation and validation of ENTSOs
underlying planning assumptions (in scenarios and modelling) and CBA methodologies
developed may be needed to ensure an energy integrated system approach, where all
energy carriers’ interdependencies can be captured when evaluating the benefits of
projects.
Whilst certain stakeholders indicated that the biennial periodicity of the PCI lists is
unnecessarily burdensome and potentially carrying risks for investors in case of loss of
the PCI label, the evaluation has not found conclusive data to support the claims. There is
no evidence that the specificities of their business models in the case of smart grids and
CO2 infrastructure categories would qualify them for a streamlined reassessment in the
PCI process and serve as a derogation from the biennial process. Moreover, twos-speed
PCI processes for different types of infrastructure categories has been found
unmanageable and not serving the scope of the Regulation.
The evaluation concluded that priority corridors and thematic areas need to be updated to
address future challenges and incorporate new types of projects. As such, new categories
could be considered such as cross-sectoral projects, joint gas-electricity-hydrogen
corridors, sector coupling projects, smart gas grid projects, hydrogen, clean gases,
digitalization, distribution projects, energy storage, hybrid wind offshore, hybrid
solutions, electric priority corridor to South Mediterranean/North Africa, decarbonisation
of islands, smart sector integration, electrification of heating and cooling systems,
peripheral countries, sector integration technologies and solutions, renewable heating and
cooling infrastructures. On the other spectrum, electricity highways and oil priority
corridor have been appraised as non-effective.
As for the effectiveness of reporting and monitoring, the evaluation found that ACER’s
annual monitoring report could be done biennially with every PCI list by only focusing
on relevant changes and tackling inefficiencies. The transparency platform and the PCI
interaction map are positively valued.
Efficiency
Two main questions have guided the assessment of the efficiency of the TEN-E
Regulation, as presented below:
 To what extent are the costs resulting from the implementation of the TEN-E
Regulation proportionate to the benefits that have been achieved? What are the
major sources of inefficiencies?
 To what extent do the different types of costs resulting from the implementation
of the TEN-E Regulation vary based on the approach taken to implement the
legislation (while achieving the same results)? Which approach was most
efficient?
Although lack of sufficient data impeded the full and harmonised quantification of all the
benefits and costs, it is likely that benefits of the Regulation outweigh the costs. Benefits
include socio-economic net benefits and market efficiency. The analysis of effectiveness
122
shows that socio-economic net benefits were realised through an increase in security of
supply, competition and integration of markets and to a lesser extent sustainability.
Modelling shows that net benefits of electricity PCIs increase in scenarios with a higher
CO2 price, which in turn shows these projects have benefits in the context of the Green
Deal. The market efficiency benefits refer to benefits that improve information
availability, increase cost savings, and ensure that a wider range of products or services
are provided. The Regulation has resulted in improved transparency. The evidence on the
extent to which the Regulation resulted in improved processes and timely construction of
projects is, however, mixed and it is strongly linked to the various performance of the
different provisions due to national implementation.
The main cost drivers are the PCI selection process and monitoring, the permitting
process, stakeholder consultation and costs associated with decisions on CBCA and
regulatory incentives. In general, stakeholders view the costs associated with the
Regulation to be justified. Opportunities to improve the efficiency of the Regulation are
limited but there is potential to reduce the administrative burden for project promoters in
the CBCA process, the PCI application process and monitoring. CBCA decisions are
considered too burdensome when they are mainly used as a stepping stone for access to
CEF grants. Costs for re-application of a project for a new PCI lists and monitoring costs
are considered too high by some stakeholders mainly because data requests are
considered inefficient. The total impact on costs of any changes to the CBCA process and
application/monitoring processes is limited compared to the total benefits and costs of the
Regulation and changes can have a negative impact on other objectives of the
Regulation.
Relevance
Three main questions have guided the assessment of the relevance of the TEN-E
Regulation, as presented below:
• To what extent do the objectives of the TEN-E Regulation still respond to the
needs of the EU in relation to energy infrastructure?
• To what extent are the 12 priority corridors still relevant? Do they address current
and arising challenges for TEN-E networks (e.g. sector coupling, hydrogen)?
• To what extent are the provisions of the TEN-E Regulation able to respond to
new or emerging issues such as the energy and climate targets for 2030, the EU
long-term decarbonisation commitment towards carbon neutrality, the energy
efficiency first principle, and EU readiness for the digital age?
The Paris Agreement and the European Green Deal involve a significant transformation
of the current energy infrastructures into a fully carbon-neutral energy integrated system
by 2050. While the initial objectives of the TEN-E Regulation -security of supply, market
integration, competition and sustainability- are still relevant, the changes needed in the
way we develop energy infrastructure claim for a rebalance of the objectives in order to
fulfil the decarbonisation targets and be aligned with the climate-neutrality objectives.
Along the pathway towards a decarbonised economy in 2050, energy infrastructure needs
will gradually evolve as emerging technologies are deployed and the sectors gradually
123
interlink and switch to sustainable sources. There must be a realistic planning of the
network from its current state to the targets in 2050. In the analysis performed based on
desk review and the stakeholder’s consultation, many emerging technologies were
identified to be necessary in the future energy infrastructure. The following technologies
are currently not specifically addressed by the TEN-E regulation: decarbonisation of gas
– hydrogen, green gas infrastructures, retrofitting of existing gas networks, bidirectional
gas flow projects, energy system integration – power-to-gas, smart system integration,
gas smart grids, digitalization, electric vehicle charging infrastructures, decarbonisation –
carbon storage, RES deployment and integration – hybrid offshore wind, meshed wind
hubs.
In view of increasing its relevance, , sustainability will need to be prioritised amongst the
objectives of the TEN-E Regulation. In view of the necessary growing shares of
intermittent renewable energy generation, their integration whilst ensuring security of
supply is becoming increasingly more relevant. Moreover, further alignment of
sustainability aspects of energy infrastructure projects would have to be explored with
the sustainable finance framework, once completed. The flexibility needs of the system
can also be addressed by energy system integration, potentially an additional objective
per se in the regulation.
Some TEN-E provisions do not facilitate the deployment of emerging technologies that
are necessary in the context of the European Green Deal and which will inevitably gain
predominance in the future energy infrastructure investments in Europe in the next
decades. The methodologies developed by the ENTSOs, including scenario development,
modelling and CBA assessment, as the basis of the PCI selection process, are currently
undergoing major changes towards coordinated multi-sectorial planning and smart sector
coordination approach. The methodologies need to be adapted to include all new
emerging technologies and have a holistic view of the energy system. Some PCI
selection criteria may hinder deployment of emerging technologies. In particular, smart
grid projects, according to Annex IV.1.e of the Regulation, have a voltage threshold of
10 kV that leaves out essential installations of these projects. Additionally, the 20%
requirement of RES generations in the network can limit the deployment of smart grids
in regions with lower penetration of RES capacity. The permit granting process, as
conceived by the TEN-E regulation, seems to be only effective for large transmission
infrastructure projects. Concepts such as the one-stop-shop and provisions in Article 10
related to the duration and implementation of the permit granting process cannot be
adequately applied to smart grid projects, as it has been confirmed by all smart grid
project promoters who took part in the stakeholder consultation.
Coherence
Four main questions have guided the assessment of the coherence of the TEN-E
Regulation, as presented below:
• Three main questions have guided the assessment of the coherence of the TEN-E
Regulation, as presented below:
• Are the measures set out within the TEN-E Regulation mutually reinforcing or
are there any overlaps, inconsistencies, or incoherencies (when read in isolation)?
124
• How does the legislation interact with other EU/ national/ international initiatives
(e.g. actions in the field of environment, single market, climate action) which
have similar objectives?
• How well does the legislation fit with and complement other EU policies (e.g.
Regional Policy, Research and Innovation, Environment) but also other elements
of EU energy policy (e.g. internal market design, renewable energy framework,
energy efficiency first principle, Union energy and climate targets for 2030, the
EU long-term decarbonisation commitment, European Green Deal)?
Evidence obtained during the evaluation process identified limited concerns around the
internal coherence of the TEN-E Regulation although a number of points have been
identified concerning the implementation of certain elements such as insufficient
flexibility to adapt to rapidly evolving policy areas, potential conflicts on legal drafting
around cost allocation, insufficient precision on the definition of ‘maturity’ and limited
clarity on the process for the Commission’s publication of TYNDP Guideline updates.
The TEN-E Regulation is largely consistent with the legislative and policy environment
that was in place at the time of its introduction. However, the current TEN-E is not
consistent with the current legislative and policy environment, which has been triggered
by the various changes under the Clean Energy Package. Inconsistencies include
“mechanistic” examples (such as alignment with renewable energy and interconnector
targets), but also more nuanced examples such as PCI selection which is not currently
aligned with the intended policy goals behind the Clean Energy Package (such as greater
roles for DNOs).
The TEN-E Regulation requires substantial revision to bring the Regulation into line with
the priorities within the European Green Deal, and to bring greater synergies with other
sectoral instruments such as the TEN-T Regulation to drive decarbonisation by fostering
a more cross-sectoral approach. Evaluation findings as well as evidence drawn from
stakeholder consultations strongly support an ambitious, long-term approach when
redefining the scope of the TEN-E Regulation.
Some inconsistencies with national-level legal frameworks were identified. This seems
mainly related to national-level implementation and compliance in a limited number of
member states which have reported difficulties in their national-level legal frameworks as
opposed to a systemic issue with the TEN-E Regulation.
EU added value
The evaluation concluded that the TEN-E Regulation has provided added value
compared to what could have been achieved at national or regional level. The benefits of
the TEN-E Regulation, already referred to under the assessment of effectiveness and
efficiency, backed by input from stakeholders confirmed the added value arising from an
increase in security of supply, more competitive markets and more interconnected energy
networks.
The implementation of over 40 key energy infrastructure projects since its enactment
helped most Member States reach the 10% interconnection target for 2020 and achieve a
125
well-interconnected and shock-resilient gas grid. As such, the EU energy market is more
integrated and competitive than it was in 2013 and the Union’s energy security improved.
Access to targeted financing under CEF enabled the implementation of 95 PCIs which
have had otherwise difficulties in accessing financing under market rules.
. Various stakeholders confirmed the added value of the TEN-E Regulation, pointing to
the importance of regional cooperation in implementing cross-border projects,
transparency regulatory certainty and access to financing..
Figure 8: The EU added value of the TEN-E Regulation as indicated by
stakeholders
The TEN-E Regulation fosters the development of cross-border energy infrastructure in
the EU. Thus, it promoted cooperation among Member States, which might not have
occurred without the coordinated action at the EU level. The common approach of
benchmarking projects to one another were instrumental in enabling cooperation and
transparency. In addition, national and regional level legislation covers cross-border
cooperation in the EU assists projects that have cross-border relevance.
15 CONCLUSIONS
Since 2013, energy interconnections have increased across the EU as a result of the
implementation of the TEN-E Regulation and PCIs in all regions. Increased
interconnection effectively improved the integration of Member States’ networks, which
in turned made the EU energy market more integrated and competitive than it was before
the application of the TEN-E Regulation. Wholesale prices for electricity decreased and
88%
75%
60%
54%
52%
35%
32%
20%
15%
4%
Access to financing (e.g. CEF)
Regional cooperation
Certain projects could not have
been implemented otherwise
Increased transparency
Cooperation gains
Improved regulatory certainty
Increased acceptance of
energy infrastructure projects
Greater speed and/or effectiveness
of delivery of projects
Enhanced compliance with
environmental requirements
Other
126
converged in almost all Member States. Gas prices also converged. An increase in
security of gas supply has been achieved substantially since 2013 through new
interconnections and LNG terminals. PCIs have demonstrated to help fulfilling the
current objectives of the TEN-E Regulation as it was conceived in 2013. However, the do
not reflect the renewed climate ambitions and the climate neutrality objective nor the
latest technological developments. This progress should be taken into account in the
infrastructure categories covered by the Regulation, the PCI selection criteria as well as
the priority corridors and thematic areas.
The PCI identification and selection process within the Regional Groups has been found
effective in improving cooperation and enabling decisions on cross-border projects on the
basis of a regional and European approach. The TYNDP process has proven effective as
a first step for the identification of PCIs. However, while the ENTSOs and TSOs have an
important role to play in the process, there is a need for more inclusiveness and scrutiny
of the main inputs and assumptions to enhance trust in the process.
The cross-border cost allocation mechanism is an important enabler for project
implementation. However, in many cases the cross-border cost allocation did not result
reducing the financing gap of the project, as intended.
While permitting procedures have been shortened, long permitting procedures persist in
some cases. However, the underlying reasons are mainly related to national
implementation and outside the scope of the TEN-E Regulation.
CEF financial assistance granted to 95 projects were an effective enable of their
implementation. Grants for studies helped projects to reduce risks in the early stages of
development while grants for works supported projects addressing key bottlenecks that
market finance could not sufficiently address.
The evaluation found that the benefits of the Regulation outweigh the costs proving its
efficiency. TEN-E Regulation brought socio-economic benefits through an increase in
security of supply and more integrated and competitive energy markets. The Regulation
also contributed to improved information availability, coordination and transparency.
The initial objectives of the TEN-E Regulation -security of supply, market integration,
competition and sustainability- remain relevant. However, the increased climate
ambitions under the Paris Agreement and the European Green Deal call for a rebalancing
of the objectives in order to fulfil the decarbonisation targets and contribute to climate-
neutrality.
The evaluation showed limited evidence as to concerns around the internal coherence of
the TEN-E Regulation, other than potential mechanistic changes and a lack of flexibility
in adapting to rapidly evolving policy areas.
The TEN-E Regulation delivered results which could have not otherwise been achieved
by action at Member State level, proving EU added value.
127
128
ANNEX 6: PCIS AND CEF FINANCIAL ASSISTANCE
Projects of common interest (completed):
PCI number Regional
group/
sematic
area
Name of the PCI
1.1.1 NSOG 1.1.1 Interconnection between Gezelle (BE) and the vicinity of
Richborough (UK)
1.1.2 NSOG 1.1.2 Internal line between the vicinity of Richborough and
Canterbury (UK)
1.1.3 NSOG 1.1.3 Internal line between Dungeness to Sellindge and
Sellindge to Canterbury (UK)
1.3.2 NSOG 1.3.2 Internal line between Niebüll and Brunsbüttel (DE)
1.4.2 NSOG 1.4.2 Internal line between Audorf and Hamburg/Nord (DE)
1.4.3 NSOG 1.4.3 Internal line between Hamburg/Nord and Dollern (DE)
1.5 NSOG Denmark — Netherlands interconnection between Endrup (DK)
and Eemshaven (NL) [currently known as “COBRAcable”]
1.7.3 NSOG 1.7.3 Interconnection between Coquelles (FR) and Folkestone
(UK) [currently known as "ElecLink"]
2.2.2 NSI West
Electricity
2.2.2 Internal line between Lixhe and Herderen (BE)
2.2.3 NSI West
Electricity
2.2.3 New substation in Zutendaal (BE)
2.3.1 NSI West
Electricity
2.3.1 Coordinated installation and operation of a phase-shift
transformer in Schifflange(LU)
2.5.1 NSI West
Electricity
2.5.1 Interconnection between Grande Ile (FR) and Piossasco
(IT) [currently known as “Savoie-Piemont” project]
2.5.2 NSI West
Electricity
2.5.2 Internal line between Trino and Lacchiarella (IT)
2.6 NSI West
Electricity
PCI Spain internal line between Santa Llogaia and Bescanó
(ES) to increase capacity of the
interconnection between Bescanó (ES) and Baixas (FR)
129
2.8 NSI West
Electricity
Coordinated installation and operation of a phase-shift
transformer in Arkale (ES) to increase capacity of the
interconnection between Argia (FR) and Arkale (ES)
2.12 NSI West
Electricity
Germany — Netherlands interconnection between Niederrhein
(DE) and Doetinchem (NL)
2.16.2 NSI West
Electricity
2.16.2 Internal line between Pedralva and Vila Fria B (PT)
2.24 NSI West
Electricity
Internal line between Horta-Mercator (BE)
2.25.1 NSI West
Electricity
2.25.1 Internal lines Mudejar — Morella (ES) and Mezquite-
Morella (ES), including a substation in Mudejar (ES)
2.25.2 NSI West
Electricity
2.25.2 Internal line Morella-La Plana (ES)
3.1.3 NSI East
Electricity
3.1.3 Internal line between St. Peter and Ernsthofen (AT)
3.11.5 NSI East
Electricity
3.11.5 Internal line between Mirovka and Cebin (CZ)
3.13 NSI East
Electricity
Internal line in Germany between Halle/Saale and Schweinfurt
to increase capacity in the North-South Corridor East
3.15.1 NSI East
Electricity
3.15.1 Interconnection between Vierraden (DE) and Krajnik
(PL)
3.15.2 NSI East
Electricity
3.15.2 Installation of phase shifting transformers on the
interconnection lines between Krajnik (PL) — Vierraden (DE)
and coordinated operation with the PST on the interconnector
Mikułowa (PL) — Hagenwerder (DE)
3.19.1 NSI East
Electricity
3.19.1 Interconnection between Villanova (IT) and Lastva (ME)
3.22.5 NSI East
Electricity
3.22.5 Interconnection between Villanova (IT) and Lastva (ME)
4.1 BEMIP
Electricity
Denmark — Germany interconnection between Ishøj/
Bjæverskov (DK) and Bentwisch (DE) via offshore windparks
Kriegers Flak (DK) and Baltic 1 and 2 (DE) [currently known as
"Kriegers Flak Combined Grid Solution"]
4.4.1 BEMIP
Electricity
4.4.1 Internal line between Ventspils, Tume and Imanta (LV)
130
4.5.1 BEMIP
Electricity
4.5.1 LT part of interconnection between Alytus (LT) and
LT/PL border
4.5.5 BEMIP
Electricity
4.5.5 Internal line between Kruonis and Alytus (LT)
5.2 NSI West
Gas
PCI Twinning of Southwest Scotland onshore system between
Cluden and Brighouse Bay.
(United Kingdom)
5.7.1 NSI West
Gas
5.7.1 Val de Saône pipeline between Etrez and Voisines (FR)
5.7.2 NSI West
Gas
5.7.2 Gascogne-Midi pipeline (FR)
5.11 NSI West
Gas
Reverse flow interconnection between Italy and Switzerland at
Passo Gries interconnection point
5.13 NSI West
Gas
PCI New interconnection between Pitgam (France) and
Maldegem (Belgium)
5.14 NSI West
Gas
PCI Reinforcement of the French network from South to North
on the Arc de Dierrey pipeline
between Cuvilly, Dierrey and Voisines (France)
5.16 NSI West
Gas
PCI Extension of the Zeebrugge LNG terminal.
6.3 NSI East
Gas
PCI Slovakia – Hungary Gas Interconnection between Vel’ké
Zlievce (SK) – Balassagyarmat
border (SK/HU ) - Vecsés (HU)
6.5.5 NSI East
Gas
6.5.5 "Compressor station 1" at the Croatian gas transmission
system
8.1.1 BEMIP
Gas
8.1.1 Interconnector between Estonia and Finland
"Balticconnector",
8.2.3 BEMIP
Gas
8.2.3 Capacity enhancement of Klaipeda-Kiemenai pipeline in
Lithuania
Additional information on on-going PCIs and their status of implementation can be found
on the PCI Transparency Platform:
https://ec.europa.eu/energy/infrastructure/transparency_platform/map-viewer/main.html.
131
More details concerning PCIs included on the current 4th
PCI list can be found in the
technical document published alongside the 4th
PCI list:
https://ec.europa.eu/energy/sites/ener/files/technical_document_4th_pci_list.pdf.
Projects of common interest and CEF financial assistance
The status of project of common interest is awarded to projects that provide highest
European added value and that contribute the most to the implementation of the strategic
energy infrastructure priority corridors and areas. The majority of the PCIs are expected
to be commercially viable and financed through network tariffs. CEF support is
exceptional because most CEF funding for works is considered as ‘last resort option’ for
the financing of PCIs. A three-step logic applies to investments in PCIs. First, the market
should have the priority to invest. Second, if investments are not made by the market,
regulatory solutions should be explored, if necessary the relevant regulatory framework
should be adjusted, and the correct application of the relevant regulatory framework
should be ensured. Third, where the first two steps are not sufficient to deliver the
necessary investments in projects of common interest, Union financial assistance could
be granted if the project of common interest fulfils the applicable eligibility criteria
CEF support may be awarded to those PCIs which are not viable under the existing
regulatory framework and market conditions and provide significant externalities (such
as security of supply, innovation and solidarity). CEF promotes cooperation between
countries to develop and implement energy interconnection PCIs that otherwise would
not happen. This is especially the case for cross-border projects located in countries with
smaller population sizes or in a more remote location, where energy tariffs would need to
be increased substantially to cover the investment needs.
The selection process for CEF funding is independent from the selection process for PCI
status. PCI status is a pre-condition for applying for CEF (with exception of the new
window for cross-border renewable projects) and some elements of the PCI selection
process such as the project specific CBA and the cross-border cost allocation decision are
part of the CEF evaluation process. However, the selection process for CEF is based on
an evaluation with external experts against award criteria as set out in the relevant work
programme and call for proposals. CEF was subject to separate evaluation and impact
assessment in preparation of CEF proposals for the MFF2021-2027.
Since 2014, CEF has provided financing to 149 actions of which 114 (EUR 519 million)
for studies and 35 (EUR 4.2 billion) for works. Of total budget of EUR 4.7 billion, EUR
1.5 billion were allocated to gas projects and EUR 2.8 billion to electricity projects. So
far, around one fifth of all PCIs have received CEF financial assistance for studies and/or
works. This is illustrated in the below figures.
Figures 1 and 2: CEF financial assistance per sector (201-2020)
132
133
ANNEX 7: ADDITIONAL DISCARDED OPTIONS
 Breaking the link between the CBCA and CEF financing
Different stakeholder groups mentioned that the requirement to submit a CBCA decision
should no longer be mandatory for obtaining CEF financial assistance for works as it was
perceived as an unnecessary burden. ACER considers that the CBCA could still be a
mandatory step before a CEF application if the project has benefits widely spread
between many Member States, but not in case CEF grants would be requested for
affordability reasons. In such case, ACER considers that a simple confirmation from the
national NRA would suffice.
However, this option was expressed by stakeholders wishing to have easier access to
CEF financing, and does not take into account the aim and the limited nature of EU
funds. As mentioned in the Preamble of the CEF Regulation, CEF financing is a last
resort measure and projects should be realised primarily on the basis of the regulatory
environment and, secondly, seek financing from the market. The CBCA decision ensures
that the regulatory path has been explored for the projects which may by itself alone
ensure the realisation of the projects.
Moreover, the CBCA decisions ensure that possible CEF beneficiaries will be developed
under a stable regulatory regime leading to their successful realization. This is necessary
before the projects apply for any CEF financing. Furthermore, the CBCA decision
ensures that the project CBA and its results have been checked and coordinated with
TSOs and NRAs in Member States where the project shows benefits. This helps to make
the data reliable also for the purposes of the evaluation of a possible CEF financial
application. Therefore, the CBCA decisions are necessary to have been obtained before
any project applies for Union financing from CEF Energy.
 Conditional CBCA decisions
A series of stakeholders, particularly NRAs and ACER, mentioned that it is very difficult
to assess the investment requests submitted by the project promoters and decide in a
definitive manner as regards cross-border cost allocation and the inclusion of the
investment costs of the project in the tariffs. This is due to that fact that they do not know
what amount of Union financing the project will receive, if any. Therefore, they propose
to introduce the possibility for CBCA decisions to be drafted as conditional decisions
that can be amended, adapted or revoked altogether after the results of the request for
CEF financing.
This is already happening as some CBCA decisions were prepared considering the
possible aspects of the CEF financing. However, conditional CBCA decisions pose a
risk for the allocation of Union financing as the projects might ultimately not be realised
if the NRAs change their mind or consider the financing awarded too low. This creates
regulatory instability for the projects rendering them completely dependent on a certain
percentage of Union financing and unable to seek resources on the financial market. This
goes against the principle that CEF financing is a last resort option. CBCA decisions
need to be final in order to provide sufficient legal and economic clarity and certainty on
134
the investment conditions and expected costs to be borne for the project promoters and
Member States.
 Easing environmental and location approvals for PCIs
When providing input on the permitting procedures in the TEN-E Regulation a series of
project promoters mentioned that the permitting of PCIs will not be accelerated while
they are required to obtain the same environmental and location permits at the same
standards with other similar projects that are not PCIs. They, therefore, request that some
of the requirements for environmental and location permitting are removed or eased for
PCIs.
However, NGOs, citizens and local communities point out that public acceptance is
closely linked to their effect on the environment and climate impact. Easing the
requirements for such permits is both outside the scope of the TEN-E Regulation and
would not ensure that these projects duly comply with environmental requirements and
the conditions for establishing the optimal location. This could also create public
opposition and, ultimately, delay the permitting process.
The TEN-E Regulation already provides for the streamlining of the environmental
assessment procedures and for ensuring the coherent application of environmental
assessment procedures required under Union law for PCIs. The Commission issued non-
binding guidance162
to support Member States in defining adequate legislative and non-
legislative measures to this end and they had the obligation to assess, on the basis of the
non-binding guidance, what measures to take.
162
https://ec.europa.eu/environment/eia/pdf/PCI_guidance.pdf
135
ANNEX 8: INTRODUCTION OF A MANDATORY SUSTAINABILITY CRITERION
Under the current TEN-E framework, the gas and electricity PCI candidates must
contribute to at least one of the following specific criteria: market integration, security of
supply, competition (only for gas) and sustainability.
Options B2.1 and B.2.2 provide for the upgrade of the sustainability criterion from an
optional in the current TEN-E framework to a mandatory criterion. This change will
result in automatic inclusion of the sustainability criteria in the PCIs assessment
methodology and will as such affect the ranking of the candidate PCI projects. The actual
impact of the mandatory sustainability criterion on the final ranking will depend on the
methodologies used in the assessment process. These methodologies are developed for
each PCI selection process considering inter alia data availability and the needs identified
for each region in the Regional Groups as under the current framework. The full
assessment methodology of the last PCI selection process is publicly available on EC
CIRCABC platform163
.
The Commission seeks to have the same methodologies across the RGs within each
category of infrastructure e.g. one methodology for all the electricity RGs and one for all
the gas RGs. In this process the initial draft of the methodologies are developed within
the framework of the Cooperation Platform, which consists of representatives of the
European Commission (DG Energy), the Agency for the Cooperation of the Energy
Regulators (ACER) and the European Network of Transmission System Operators
(ENTSOs). The Cooperation Platform provides technical support to the work of the
Regional Groups. The final assessment methodologies to be used for the ranking of the
candidate PCI projects must be validated by the RGs members (Member States, National
Regulators, ENTSOs and the Commission), in line with the roles and responsibility each
party has in the process.
163
Electricity 4th
PCI assessment methodology: https://circabc.europa.eu/ui/group/3ba59f7e-2e01-46d0-9683-
a72b39b6decf/library/c1b40471-8605-45c3-8540-04451ed31094?p=1&n=10&sort=modified_DESC
Gas 4th
PCI assessment methodology: https://circabc.europa.eu/ui/group/3ba59f7e-2e01-46d0-9683-
a72b39b6decf/library/563f3273-e6a7-4d2f-b157-76a6514cf4ee?p=1&n=10&sort=modified_DESC
136
ANNEX 9: ASSESSMENT OF ADDITIONAL POLICY OPTIONS
This Annex sets out additional policy options of technical nature which relate to
permitting and public participation (C) and Regulation (D) as follows:
C) Permitting and public participation
C.1.2. Accelerating the permitting process
C.2 Public participation
C.2.0 Business as usual
C.2.1 Increasing the transparency of PCIs
D) Regulatory treatment
D.1.2 Possibility for smart grids projects to obtain a CBCA
D.1.3 Clarifying CBCA provisions
D.1.4 Updating investment incentives
These options are explained in more detail below followed by a short assessment of their
potential impacts.
Permitting
Option C.1.1: Accelerating the permitting process:
This option would include the following sub-options:
a) Clarifying the applicable procedure for projects falling between legal regimes
The transitional provisions regarding the permitting process meaning that all PCIs can
benefit from maximum time-limit of 3.5 years and from the one-stop shop would be
removed. Moreover, any permits already obtained would remain valid and be integrated
in the procedure. The provisions on 'priority status', where such status exists in national
law, would apply to all PCIs regardless of when they started permitting.
b) Acceleration of permit granting
The permitting provisions and the two permitting phases would have enough built in
flexibility to cater also for the acceleration of the permitting process for projects that do
not require all the permits of large infrastructure projects such as smart grids projects
which often do not require an EIA or a building permit.
The outcome of a completed permitting process under the TEN-E Regulation is the
issuance of a comprehensive decision164
for the project. Member States would have to
164
According to Article 2(2) of the TEN-E Regulation, the comprehensive decision is defined as follows:
the decision or set of decisions taken by a Member State authority or authorities not including courts or
tribunals, that determines whether or not a project promoter is to be granted authorisation to build the
137
ensure that any additional requirements or legislative amendments introduced during the
permit granting process would not affect the length of the permitting process started
before the amendments of the legislation. In view of ensuring a consistent application,
the revised TEN-E Regulation would also adapt the definition of the comprehensive
decision to clarify that the issuing of this decision means that the project is ready to begin
procurement procedures and construction in the respective Member States. This would
ensure that no additional requirements are added on top of and outside the permitting
process.
c) Making procedures accessible cross-border
Competent authorities would be obliged to coordinate and find synergies with
neighbouring countries in developing their manual of procedures and in the permit
granting procedures of individual PCIs without exceeding the 3.5 years time-limit. In
addition, the competent authorities would have to make available, as much as possible,
the manuals in all languages of the neighbouring Member States.
Assessment:
Amending key provisions aimed at accelerating the permitting process in its current set-
up would allow keeping the necessary balance between the rule of law in the Member
States and their sovereignty and the acceleration of the implementation of PCIs.
Permitting is a process that is to a large extent national or even local in nature.
The environmental assessment of PCIs is unaffected by the permitting provisions of the
TEN-E Regulation because this is out of the scope of the Regulation.
The suggested amendments in this option entail a better coordination between competent
authorities for projects crossing the border of more Member States as well as a
facilitation of the permitting process cross-border. This coordination will allow also a
better coordination of the assessment of the environmental impacts of the projects
leading to improved measures to tackle any environmental concerns that may be cross-
cutting issues in more Member States.
Permit granting procedures have shortened for PCIs compared to the pre-TEN-E
situation. The average duration is 4 years for electricity and 3.1 years for gas PCIs
compared to durations of more than 6 years in some Member States prior to the entry into
force of the TEN-E Regulation. The introduction of a one-stop shop provides a good
approach to reducing the complexity of the permitting process, but the effectiveness
depends strongly on the national implementation and existing permitting requirements in
the Member States.
As regards electricity projects, delays in project implementation have two direct
consequences for the EU achieving its carbon reduction targets: the missing grid capacity
energy infrastructure to realise a project without prejudice to any decision taken in the context of an
administrative appeal procedure.
138
hinders the further growth and integration of RES, while the resulting grid congestion
must be resolved by expensive and CO2 intensive redispatch measures.
The longer and more complicated the permitting process of a PCI is, the higher the costs
are incurred by the project promoter and the national competent authorities. Currently, an
estimated 0.5 FTE per year is given for the administrative costs for reporting and
compliance to the PCI monitoring procedure. The stakeholder consultation concluded
that the permitting process and the organisation of stakeholder consultation are amongst
the main cost drivers that provide unacceptable costs for project promoters. However, the
high administrative burden of the permitting process is considered not to be due to TEN-
E, but rather relate to issues on a national level, although three TSOs specifically pointed
out that the requirements of the Regulation add another bureaucratic layer on top of the
national system.
An accelerated permitting process decreases costs for both project promoters and
competent authorities. An accelerated permitting process also allows for a faster
implementation of the project therefore bringing forward the benefits identified in the
CBA. This will have a significant economic impact on regional energy markets, if not,
even a European wide impact. The economic impact could be determined on the basis of
the CBAs of the projects impacted by the accelerated procedures. No data is available at
the moment for calculating fully the impact, but the example described in rthe assessment
of option C.1.1. remains valid.
The permitting process and the provisions regarding public participation have a dual
social impact. On the one hand, society and citizens benefit from the implementation of
PCIs which increase competition, security of supply and market integration. On the other
hand, the construction of large infrastructure projects affect local communities by
changing the landscape, affecting tourist areas, affecting crops etc.
In a similar manner as the economic impact, an accelerated permitting process also
allows for a faster implementation of the project therefore bringing forward the benefits
to society identified in the CBA.
Public participation
Option C.2.0: Business as usual
Under the current provisions of the TEN-E Regulation, the project promoter or
competent authority is obliged to establish and regularly update the projects website with
relevant information about the PCI under its competence.
Option C.2.1: Increasing the transparency of PCIs
This option would introduce an obligation on the project promoters, as the owner of the
information regarding the implementation of the PCIs to publish and update dedicated
webpages in all languages of the Member States crossed or impacted by the PCIs. This
will affect their subsequent applications to become PCIs as the powers of the Regional
Groups as regards the monitoring of the implementation of PCIs are increased (see the
REFIT option of adding a criteria for the PCI selection process in this regard). The
139
minimum information to be included in the project websites would continue to be listed
in an annex of the TEN-E Regulation.
Stakeholder views: Stakeholder generally agreed that the transparency and participation
provisions introduced for PCIs are perceived to have increased public awareness of PCIs
and trust in the process. All communication tools employed by project promoters during
PCI implementation (project websites, information leaflets, meetings to discuss PCIs and
provision of information in writing) were considered useful. More specifically,
stakeholders considered PCI websites as important for ensuring transparency.
Assessment:
Public participation
Option C.2.0: Business as usual
Opting for business as usual would indicate that current provisions on transparency and
participation would still apply with no further scrutiny nor monitoring discretion of the
Regional Groups. Only 14% of the respondents to the open public consultation consider
that current TEN-E provisions triggered an improvement in the transparency of the
planning and building process of any PCIs in comparison to other energy infrastructure
projects. Most respondents (54%) could not answer if such improvements existed, whilst
28% of the respondents (company/business organisations, EU citizens, NGOs)
considered that there is no improvement, or there is an improvement only to a small
extent.
Options C.2.1 Increasing the transparency of PCIs
The implementation of key PCIs can be faced with opposition during the permit granting
process from local communities, landowners and citizens living in the proximity of
installations and routing of PCIs.
Article 9 and Annex VI of the TEN-E Regulation introduced the obligation for project
promoters to conduct at least one public consultation to inform stakeholders and help to
identify the most suitable location or routing for the project. The provisions further called
on project promoters to establish and regularly update a website with relevant
information regarding project’s consultation planning, status of the implementation
progress and contact details in view of conveying comments and possible objections.
Open access to information such as the economic and social benefits, costs or
environmental impact of projects and early consultation of those affected was sought to
address concerns and increase acceptance of the PCIs.
Whilst the majority of stakeholders’ confirmed the increased awareness of the projects
thanks to the provisions introduced by the Regulation, they did not consider that it would
necessarily lead to public acceptance. It was also reported that the websites of some PCIs
provide limited or outdated information and are often unclear whether or to which extent
the input from the local community was taken into account. While the consulting the
public is considered to be an important and necessary tool, there is a considerable room
for improvement in order to ensure the transparency and legitimacy of the process.
140
By increasing oversight of the obligation to ensure transparency of PCIs through
monitoring within the Regional Groups, the project promoters are incentivized to provide
open access to updated and transparent information on the key aspects of PCI
implementation.
Recent studies165166
found an important connection between the early involvement of the
public in energy infrastructure planning and lower opposition to projects because of an
improved understanding of the infrastructure needs. Transparent and accessible
information about the need for new energy infrastructure at a European grid level can
contribute to reducing public opposition167
.
In their third report on “Public engagement and acceptance in the planning and
implementation of European electricity interconnectors”168
the Commission Expert
Group on electricity interconnection targets found that early engagement could turn
opposition into an opportunity for transparency and information over costs and benefits
of different alternatives. Coupled with a two-way dialogue on what technical solutions
can be accepted at the local level and promoter's flexibility for adjustments, stakeholder
participation can be turned into an active process delivering better and more accepted
project. Best practices show that full transparency and involvement of local communities,
activists and non-governmental associations deliver collaborative solutions on the ground
that mitigate the environmental impacts of projects.
Opposition from local communities affected by PCIs hinders the delivery of their
intended economic and market efficiency benefits to society.
The results of the evaluation confirmed stakeholders’ opinion that the transparency and
public participation provisions of the Regulation proved to be a valuable instrument for
building connections with local communities and potentially affected groups and
increased the opportunities for the public to be informed and participate in the PCI
permitting process. Increased transparency of decision-making processes coupled with
meaningful consultations create new opportunities for stakeholder engagement that
carefully consider and address opinions, concerns and needs of citizens and impacted
communities. Administrative burden
The policy option would not add to the existing administrative burden associated with the
TEN-E compliance for project promoters, estimated at 1.5 FTE based on the available
information from the evaluation and stakeholder contributions.
165
Ecorys et al. (2019), Do current regulatory frameworks in the EU support innovation and security of
supply in electricity and gas infrastructure?
166
Scope et al. (2020) Innovative actions and strategies to boost public awareness, trust and acceptance of
trans-European energy infrastructure projects. Draft Revised Interim Report. Provided by DG ENER.
167
Trinomics (2018). Evaluation of the TEN-E Regulation and Assessing the Impacts of Alternative Policy
Scenarios. Final Report.
168
https://ec.europa.eu/energy/sites/ener/files/documents/3rd_report_on_public_acceptance_b5.pdf
141
As a general note, the majority of stakeholders consider the cost associated with the
organisation of public participation activities as acceptable.
Regulation
Option D.1.2: Possibility for smart grids projects to obtain a CBCA
This option would introduce the possibility to obtain a CBCA for smart grids projects.
Such a provision was supported by stakeholders as it would help smart grid projects that
encounter issues with splitting costs across borders.
Assessment:
Option D.1.2: Possibility for smart grids projects to obtain a CBCA
This option will benefit smart grids projects that may have an issue in splitting costs
across borders and where this would be necessary. However, due to the nature of such
projects, there are not many smart grids projects that will encounter this issue and might
require a CBCA, therefore the impact of the option is not so high overall. The option will
enable and accelerate the implementation of some smart grids projects, but there are no
data to assess how many these would be. The option, nevertheless, could be easily
implemented and does not bring any costs or administrative burden, being therefore a no
regret option.
Option D.1.3. Clarifying CBCA provisions
This option aims at the clarification and clarification of the CBCA procedure with the
aim of ensuring consistency between CBCA decision and their more extensive use. The
following elements are proposed to be implemented:
i. Clarify the notions that are currently either not defined in the TEN-E Regulation
or that have led to differences in interpretation169
,
ii. Require that the project promoters use the same scenario for their CBA part of
investment request as the one used in the PCI selection process and that they update the
CBA with the latest developments regarding the project.
iii. Moreover, in the context of the offshore renewable energy development, the need
to coordinate the CBCA for the infrastructure projects with the financing, market and
political arrangements of the generation projects was discussed extensively by
169
Clarify the procedure to be followed for submitting the investment request and requirements, maturity,
“concerned NRA”, “significant net positive impact”, “The national regulatory authorities may decide to
allocate only part of the costs, or may decide to allocate costs among a package of several projects of
common interest.”; “relevant NRA”, the content and minimum information that the CBCA decision needs
to contain.
142
stakeholders as well as Member States. In order to address this, the Commission could
issue a binding guidance in the form of an implementing regulation on how the CBCA
process could be coordinated with the development of the generation projects. As part of
this guidance, the Commission could also include detailed rules as regards the CBCA
procedure in general (similar as the current ACER Guidelines). This would end the
discussion on the selective application of these Guidelines, which are currently not
legally binding.
Assessment:
Environmental impacts
CBCA procedure enables the implementation of PCIs, which have benefits across-
borders. In principle, clarifying the CBCA provisions should not have direct
environmental impacts.
Economic and financial impacts
The clarification of the provisions regarding the CBCA procedure will enable a more
extensive and enhanced use of the CBCA procedure for allocating costs across borders.
This will enable the swifter implementation of projects, which will bring benefits sooner.
The impact of a Commission guidance on how the CBCA process could be coordinated
with the development of the generation projects in an offshore context that would include
also detailed rules as regards the CBCA procedure in general (similar as the current
ACER Guidelines) is two-fold. One type of impact refers to bringing clarity and
simplifying the CBCA procedure by making binding certain rules that have been
selectively applied so far. The second type of impact regards the clarification of the
complex process for the development of offshore hybrid assets which comprise
interconnectors and generation parks connected to such interconnectors. While the assets
themselves are subject to different types of legal regimes and manner of functioning, all
their afferent regulatory, financial and market aspects are deeply interrelated. Therefore,
clarity is necessary on how to deal with overlapping benefits and costs for the two types
of assets in order to ensure the creation of a net benefit for the various involved parties
and to advance their development. The elaboration and issuing of the guidance brings
administrative burden for the Commission, but helps ease considerably the burden on
project promoters, RES generation developers and Member States, while also helping to
reach the offshore RES potential of the EU.
Social impacts
The CBCA will enable the realization of PCIs and, in turn, the benefits of such projects
as identified in the CBA. This would also be taken into account for possible CEF
financial assistance. The full extent of such benefits cannot be estimated as there are no
143
data available, however, the example of costs of delay, as described above in the
assessment of Option C.1.1, remains a good indication.170
Administrative burden
According to the stakeholder consultation, the costs for NRAs as a result of TEN-E are
low the main cost driver is the CBCA process. For most NRAs less than 1 FTE is
estimated to be currently involved171
.
This option increases the administrative burden for project promoters as they will have to
update their CBA, but decreases the administrative burden for NRAs who will have more
straightforward procedures to follow.
Option D.1.4. Updating investment incentives
In order to increase the impact of the investment incentives provisions and make them
more operational, in particular for offshore wind related infrastructure projects, a specific
reference could be included in the legislation mentioning hybrid offshore infrastructure,
(which is likely to incur the highest risks, compared to the radial connection or internal
lines) as high risk projects. In addition, an obligation for NRAs to update their manual on
investment incentives and include a specific chapter for offshore assets could be inserted
(minimum requirements for such a manual could be included in an Annex to the revised
TEN-E) as well as an obligation to update the manual as regards OPEX intensive
projects.
Assessment:
A stable regulatory environment created for a project with full regulatory coverage is a
pre-requisite172
for any project in order for it to have explored both market based
financing solutions and regulatory solutions. The use of investment incentives is very
relevant in this context as they could assist with the adjustment of the regulatory
framework necessary for the development of certain higher risk projects.
170
The CBCA enables the timely implementation of PCIs and hence avoids delays in project
implementation. The benefits of a PCI are therefore realised earlier.
171
TEN-E Evaluation Report, page 116
172
The CEF Regulation provides that: “First, the market should have the priority to invest. Second, if
investments are not made by the market, regulatory solutions should be explored, if necessary the relevant
regulatory framework should be adjusted, and the correct application of the relevant regulatory framework
should be ensured. Third, where the first two steps are not sufficient to deliver the necessary investment in
projects of common interest, Union financial assistance could be granted if the project of common interest
fulfils the applicable eligibility criteria”
144
ANNEX 10: REFIT (SIMPLIFICATION AND IMPROVED EFFICIENCY)
In order to simplify and improve the efficiency of the TEN-E Regulation the following
measures have been identified to reduce compliance and regulatory costs.
a) Reduced reporting obligations
Reporting and monitoring serve to identify and tackle delays in the implementation of
PCIs. Monitoring also allows the identification of the projects that are stalling without
justified reasons and the projects do not comply with EU law or in relation to which false
information was provided. At the same time, monitoring and reporting serves to ensure
transparency of the projects’ concept and development by also allowing the Commission
maintained Transparency Platform to be regularly updated.
However, some stakeholders were critical of the monitoring and reporting mechanism
under the TEN-E Regulation. On the one hand NGOs and the public mentioned that there
is not enough transparency because the Transparency Platform is not always up to date
regarding the status of the PCIs and PCI websites sometimes do not exist, are not updated
or do not contain all the information required by the TEN-E Regulation. On the other
hand, project promoters and competent authorities mentioned that the reporting
obligations are too burdensome, as they have to report annually, maintain their websites
continuously updated, but also answer constant requests for information from the
Commission or ACER.
While annual reporting by project promoters needs to be maintained to achieve the
required transparency standards and allow the Regional Groups to tackle quickly any
implementation issues that the projects may encounter, the annual report of the
competent authorities could be transformed into input or additional information into the
report of the project promoters. In practice, the project promoters would draft their
report, submit it to the relevant competent authorities in the Member States where the
project is located. The competent authorities, would then add, without the possibility to
amend, any relevant information they hold as regards the on the progress or delays in the
implementation of the PCI and the reasons for such delays. The competent authorities
would then transmit the report at the same time to ACER, the Regional Group and
Commission.
The Commission can use the information in the report to update the Transparency
Platform. The Transparency Platform would also be regularly updated throughout the
year by retrieving information from the project websites which (in line with the Option
C.2.1 regarding public participation) the project promoters would be obliged to keep
continuously updated. The Transparency Platform could also have a feature that allows
retrieving information on the status of the project at a certain point in time. This will
allow the possibility to compare and assess the progress of the projects.
Pursuing this measure would reduce costs and administrative burden for the project
promoters, but in particular for competent authorities would not need to submit a separate
145
report. The cost saving cannot be estimated as the relevant data are not available, but it is
a recurrent cost saving.
b) Reduced monitoring by ACER to once every two years
According to the TEN-E Regulation, on the basis of the monitoring reports that the
project promoters submit every year to ACER, it has to issue a monitoring report
evaluating the progress achieved and make, where appropriate, recommendations on how
to overcome the delays and difficulties encountered. However, these monitoring reports
are used only once every two years with the occasion of the elaboration of the Union list
of PCIs for evaluating their progress since the last Union list. PCIs that have not
progressed and cannot objectively justify the lack of progress may not be included in the
next Union list. Therefore, to simplify the reporting by ACER, their report could be
issued once every two years, just in time for the Regional Groups, to take it into account
for their assessment of the new PCI candidates173
. Since ACER’s report is actually used
only once every two years, this option could help simplify the monitoring obligations
without any costs and without affecting the projects’ implementation. Moreover,
pursuing this measure would reduce costs and administrative burden for ACER, for the
members of the Regional Groups and the Commission. The cost saving has been
estimated at 0.4 FTE per year.
c) Stronger role of monitoring and reporting obligations in the PCI selection
process
In order to ensure that projects are developing according to their implementation plan
without any undue delays and in full compliance with national and EU law and that
project promoters duly abide by their reporting and transparency obligations174
these
elements could be included as a selection criterion in the TEN-E Regulation to be applied
for the subsequent PCI lists where the projects apply. Abiding by reporting and
transparency obligations and the progress of the project from one Union list to the next
could be added as one of the additional criteria that each Regional Group has to give
consideration to (under Article 4(4) of the TEN-E Regulation).
This option does not have any budgetary or administrative implications, but aids in the
implementation in practice of the measures described under b) and c) above which do
have administrative and budgetary implications. In addition, this option allows a
thorough monitoring by the Regional Groups as to how projects implement EU law
provisions, in particular environmental law and public procurement, therefore avoiding
any breaches and public opposition.
d) Pre-consultation to become optional
The principles for public participation set out in the Regulation constitute minimum
requirements to ensure early engagement with local communities and stakeholders
173
This option corresponds to the input of ACER to the stakeholder consultation.
174
Including their obligation to maintain a constantly updated website with all necessary data.
146
affected by the construction of a PCI and include a pre-consultation of relevant
stakeholders. In practice, the obligation to consult ahead of the launch of permitting
procedure may be adding to existing national procedures.
This is confirmed by the results of the consultation, where a large proportion of survey
respondents (46%) agreed that one public consultation is sufficient for increasing
transparency and participation. This opinion was particularly popular among TSOs,
industry representatives and NCAs. A fifth of the respondents, primarily comprised of
civil society representatives and energy producers, disagreed with this opinion. It is
noteworthy to add that several respondents explained that the public consultation
provision under the Regulation was, in their opinion, redundant as the national legal
frameworks of their Member States as well as the public participation requirements of the
environmental impact assessments carried out in the permitting process already made
public consultations obligatory. As such, this provision was seen by some as adding to
the complexity of the permit granting procedure as shown on below
To address this and avoid that two or more consultations are required for the purposes of
informing stakeholders about the project at an early stage, identifying the most suitable
location or trajectory and the relevant issues to be addressed in the application file, it is
suggest to make the pre-consultation optional if it is already covered by the national rules
under the same or higher standards as in the TEN-E Regulation. However, the project
promoter should be obliged to take into account the opinions expressed in the
consultation and demonstrate how it has done so. The cost savings which would occur
mainly with project promoters cannot be estimated as the relevant data are not available,
but it is a recurrent cost saving.
e) Simplified inclusion in TYNDP for existing PCIs
An electricity or gas candidate project can apply for the inclusion in the Union list only
if is included in the latest available TYNDPs, developed biennially by the ENTSOs.
Therefore, a project promoter, must submit or resubmit (in case it already is included in
the PCI list) every two years its project to both TYNDP and PCI processes. While the
submission process for candidate projects for the PCI selection process was already
simplified by having all the necessary data for the PCI process being delivered to the
Commission directly by the ENTSOs, there is scope for further simplification for the
TYNDP process.
In contrast to the PCI selection process, which is run by the Commission, the TYNDP
processes are run by the ENTSOs, which set administrative and technical criteria for
inclusion of projects in the TYNDPs. This process requires a significant amount of data
and legal proofs175
. Considering that existing PCI projects already delivered the
necessary proofs in the previous TYNDP processes, an automatic inclusion in the
subsequent TYNDPs for such projects, as long as their administrative and technical data
175
ENTSO-E : https://tyndp.entsoe.eu/promoters-corner
ENTSOG: https://www.entsog.eu/sites/default/files/2019-
05/TYNDP%202020_Practical_Implementation_Document_20190502_0.pdf
147
did not significantly change, is recommended. This would reduce the burden on the
project promoters and also on the ENTSOs having in mind that around 56% of 2018
TYNDP electricity projects became part of the 4th
PCI list. The cost savings which would
occur mainly with project promoters cannot be estimated as the relevant data are not
available, but it is a recurrent cost saving.


EN EN
EUROPEAN
COMMISSION
Brussels, 22.1.2021
SWD(2020) 346 final/2
CORRIGENDUM
This document corrects document SWD(2020) 346 final of 15.12.2020
Parts of the text revised as summarised in Annex I, point b).
The text shall read as follows:
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT
Accompanying the document
Proposal for a Regulation of the European Parliament and of the Council on guidelines
for trans-European energy infrastructure and repealing Regulation (EU) No 347/2013
{COM(2020) 824 final} - {SEC(2020) 431 final} - {SWD(2020) 347 final}
Europaudvalget 2020
KOM (2020) 0824
Offentligt
1
Table of Contents
1 INTRODUCTION: POLITICAL AND LEGAL CONTEXT............................................................... 3
1.1 Legal framework ...............................................................................................3
1.2 Benefits of the TEN-E Regulation ....................................................................5
1.3 Political context.................................................................................................6
2 PROBLEM DEFINITION .................................................................................................................... 7
2.1 Problem 1: Type and scale of cross-border infrastructure
developments are not fully aligned with EU energy policy objectives
in particular as regards the European Green Deal and the climate
neutrality objective ............................................................................................9
2.2 Problem 2: Delays in project implementation.................................................15
2.3 How will the problem evolve? ........................................................................19
2.4 Scope of the initiative......................................................................................20
3 WHY SHOULD THE EU ACT? ........................................................................................................ 20
3.1 Legal basis .....................................................................................................20
3.2 Subsidiarity: Necessity of EU action...............................................................21
3.3 Subsidiarity: Added value of EU action..........................................................21
4 OBJECTIVES: WHAT IS TO BE ACHIEVED? ............................................................................... 21
4.1 General objectives ...........................................................................................21
4.2 Specific objectives...........................................................................................22
5 WHAT ARE THE AVAILABLE POLICY OPTIONS? .................................................................... 23
5.1 What is the baseline from which options are assessed? ..................................25
5.2 Description of the policy options ....................................................................26
5.3 Options discarded at an early stage .................................................................35
6 WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? ........................................................... 37
6.1 Scope .....................................................................................................37
6.2 Governance / Infrastructure planning..............................................................51
6.3 Permitting and public participation .................................................................55
6.4 Regulatory treatment .......................................................................................58
7 HOW DO THE OPTIONS COMPARE?............................................................................................ 60
8 PREFERRED OPTION ...................................................................................................................... 68
8.1 Package of preferred policy options ................................................................68
8.2 REFIT (simplification and improved efficiency)............................................71
9 HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?.................................. 72
9.1 Indicators .....................................................................................................72
9.2 Operational objectives.....................................................................................73
10 GLOSSARY ........................................................................................................................ 74
ANNEX 1: PROCEDURAL INFORMATION............................................................................................ 75
2
ANNEX 2: STAKEHOLDER CONSULTATION....................................................................................... 82
ANNEX 3: WHO IS AFFECTED AND HOW? .......................................................................................... 92
ANNEX 4: ANALYTICAL METHODS ................................................................................................... 102
ANNEX 5: EVALUATION REPORT....................................................................................................... 104
ANNEX 6: PCIS AND CEF FINANCIAL ASSISTANCE ....................................................................... 132
ANNEX 7: ADDITIONAL DISCARDED OPTIONS............................................................................... 137
ANNEX 8: INTRODUCTION OF A MANDATORY SUSTAINABILITY CRITERION....................... 139
ANNEX 9: ASSESSMENT OF ADDITIONAL POLICY OPTIONS....................................................... 140
ANNEX 10: REFIT (SIMPLIFICATION AND IMPROVED EFFICIENCY).......................................... 148
3
1 INTRODUCTION: POLITICAL AND LEGAL CONTEXT
1.1 Legal framework
The Regulation on trans-European energy networks (TEN-E), adopted in 2013, lays
down rules for the timely development and interoperability of trans-European energy
networks in order to achieve the energy policy objectives of the Treaty on the
Functioning of the European Union (TFEU)1
to ensure the functioning of the internal
energy market and security of supply in the Union, to promote energy efficiency and
energy saving and the development of new and renewable forms of energy, and to
promote the interconnection of energy networks.
The TEN-E is a policy that is focused on linking the energy infrastructure – electricity,
natural and biogas, oil, CO2 – of EU countries. The TEN-E Regulation puts in place a
framework for Member States and relevant stakeholders to work together in a regional
setting to develop better connected energy networks with the aim to connect regions
currently isolated from European energy markets, strengthen existing cross-border
interconnections, and help integrate renewable energy.
As such, the TEN-E is a central instrument in the development of an internal energy
market and necessary to achieve the European Green Deal objectives. To achieve climate
neutrality by 2050 and higher levels of greenhouse gas emission reductions by 2030,
Europe will need a more integrated energy system, relying on higher levels of
electrification based on renewable sources and the decarbonisation of the gas sector2
. The
TEN-E can ensure that the EU energy infrastructure development supports the required
energy transition.
The key tools of the current TEN-E guidelines to identify and speed up the
implementation of the key infrastructure projects are to address the following problems:
a) market and regulatory failures for cross-border energy infrastructure investments also
due to asymmetric benefits and costs among Member States, b) too strong focus on
national priorities in infrastructure investments decision and the need to align cross-
border infrastructure projects with European infrastructure priorities to achieve synergies,
and c) insufficient market based financing to address the investments needs in cross-
border energy infrastructure.
Under the TEN-E Regulation, the Commission shall ensure that a Union list of PCIs is
established every two years. The TEN-E Regulation sets general and specific criteria for
the selection of PCIs. PCIs span Member State borders or, while remaining within the
territory of a single Member State, address an important bottleneck with significant
impact on cross-border trade. Specific selection criteria are defined for each
infrastructure category considering specific policy objectives (see Annex 5). While the
current framework includes the mid- and long-term decarbonisation objectives, it is not
systematically applied to all candidate PCI projects and hence limits the possibility to
1
Articles 170-172 TFEU
2
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
4
identify projects that support the energy transition to reach the European Green Deal
objectives.
For electricity and gas projects, in order to be eligible for inclusion in the PCI list,
projects must be part of the latest available 10-year network development plan (TYNDP).
Every two years the European Network of Transmission System Operators (ENTSOs for
Electricity and for Gas) establishes first the system needs under different future and
disruption scenarios. Then, a cost-benefit analysis (CBA) is performed for every
submitted project, assessing their contribution to the system needs. For smart grids, CO2
networks and oil projects specific assessment methods are used.
Project promoters submit their projects for selection as PCIs. The Regional Groups,
chaired by the Commission and including representatives from the Member States,
transmission system operators and their European networks, project promoters, national
regulatory authorities, as well as the Agency for the Cooperation of Energy Regulators
(ACER), assess the projects' contribution to implementing the priorities, the fulfilment of
the relevant criteria and their maturity. Stakeholders are invited to take part in these
meetings and bring their insight on the infrastructure bottlenecks and on the candidate
PCIs into the assessment process. The decision-making power in the Regional Groups is
restricted to a body comprising Member States and the Commission.
Based on this assessment, the Regional Groups propose regional lists of PCIs. Based on
the agreed regional lists, the Commission adopts the Union list of PCIs in the form of a
delegated regulation. When doing so, the Commission ensures compliance with the
relevant criteria, cross-regional consistency, and aims for a manageable total number of
PCIs. A Member State to whose territory a proposed project relates may not approve its
inclusion in the PCI list.
So far, four Union lists of PCIs have been established. The 4th
PCI list was adopted in
2019 and entered into force in March 2020. Since the first PCI list the total number of
PCIs per list has been significantly reduced and the distribution across the different
sectors has changed significantly with electricity PCIs representing two thirds of the total
number of projects in the latest PCI lists. Oil, CO2 and smart electricity grids have
represented a minor share (see Figure 1).
Figure 1: Number of PCIs per infrastructure category per PCI list
There is no automatism between the PCI status and CEF funding. Most PCIs are
expected to be commercially viable and financed through regulated network tariffs, CEF
funding for works is considered as ‘last resort option’ for the financing of PCIs. CEF is
131
108
102
100
109
77
53
32
6
7
6
6
4
5
2
3
4
6
0% 25% 50% 75% 100%
1st PCI list (2013) (n=248)
2nd PCI list (2015) (n=195)
3rd PCI list (2017) (n=169)
4th PCI list (2019) (n=149)
Electricity Gas Oil CO2 Smart grids
5
designed to address the gap between the socioeconomic value at regional/European level
(such as security of supply, innovation and solidarity) and the commercial viability of
projects. CEF promotes cooperation between countries to develop and implement energy
interconnection PCIs that otherwise would not happen. This is especially the case for
cross-border projects located in countries with smaller population sizes or in a more
remote location, where energy tariffs would need to be increased substantially to cover
the investment needs.
The key elements of the TEN-E Regulation are summarised in Figure 2 and Annex 5.
Figure 2: Key elements of the TEN-E Regulation
1.2 Benefits of the TEN-E Regulation
The TEN-E Regulation3
has established a new approach to cross-border energy
infrastructure planning. It brings together stakeholders in regional groups to identify and
help implement projects of common interest (PCIs) that contribute to the development of
energy infrastructure priority corridors and thematic areas.
In addition to an effective and cost-efficient approach to infrastructure planning, the
regulation has improved the permitting procedures. It requires Member States to ensure a
streamlined permit granting process for PCIs within a timeframe of 3½ year for a
permitting decision. They are to receive the highest national priority status and be
included in national network development plans. The regulation also provides for
regulatory assistance, rules and guidance for the cross-border allocation of costs and risk-
related incentives, and provides access to financing opportunities from the Connecting
Europe Facility (CEF).
The evaluation of the current TEN-E Regulation shows that it has effectively contributed
to connecting Member States networks and removing bottlenecks. Market integration
between Member States and competitiveness have improved, as reflected in the progress
towards the interconnection targets and the convergence of energy prices across the EU
3
OJ L 115, 25.4.2013, p. 39-75
6
(see Annex 5 for more details). The implementation of electricity PCIs will help most
Member States reach the 10% interconnection target for 2020. As a result, the EU energy
market is more integrated and competitive than it was in 2013. The projects also enable
the integration of renewable electricity and power exchange across borders reducing the
need to curtailment.
Security of supply, as one main driver behind the current TEN-E Regulation, has been
significantly improved through PCIs. By the early 2020s, when the gas PCIs currently
under implementation will be in operation, Europe should achieve a well-interconnected
and shock-resilient gas grid and all Member States will have access to at least three gas
sources or the global liquefied natural gas (LNG) market, a key element to improve the
Union’s energy security through the diversification of gas sources.
Since its adoption in 2013, TEN-E enabled the implementation of over 40 key energy
infrastructure projects and further 75 projects are expected to be implemented by 2022.
The financing support provided by CEF of EUR 4.7 billion in total enabled the
implementation of 95 PCIs. Since 2014, CEF has provided financing to 149 actions of
which 114 (EUR 519 million) for studies and 35 (EUR 4.2 billion) for works. Of the total
budget of EUR 4.7 billion, EUR 1.5 billion were allocated to gas projects and EUR 2.8
billion to electricity projects. So far, around one fifth of all PCIs have received CEF
financial assistance for studies and/or works4
.
1.3 Political context
Achieving climate neutrality by 2050, starting with a 55% reduction in GHG emissions
by 2030, is the key climate objective of the European Green Deal presented by the von
der Leyen Commission in December 20195
. With the current climate and energy policy
framework, the EU is not on track to achieve carbon neutrality by mid-century. The
impact assessment carried out for the climate target plan estimates that full achievement
of the currently legislated 2030 energy targets would lead to a reduction of 60% below
1990 by 20506
. Adopted before the climate neutrality objective, current climate and
energy legislation is thus not sufficiently ambitious to deliver a 2030 climate target of at
least 55% GHG emission reductions, as proposed by the Commission7
.
Energy production and consumption represent 75% of total EU GHG emissions. To
achieve the 55% target and to become climate neutral by 2050 Europe needs to lower its
energy consumption and transition to cleaner energy. Energy infrastructure is a key
enabler for the energy transition as reflected in the Commission’s communication on the
European Green Deal and A Clean Planet for all8
. Infrastructure is a long-lived asset and
will therefore need to be consistent with the climate neutrality objective so as to enable
rapid and cost-effective decarbonisation of the energy system and more broadly the
economy. This will require stepping up electrification of the economy; the average
4
See Annex 6 for more information.
5
The European Green Deal, COM(2019) 640 final
6
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
7
Stepping up Europe’s 2030 climate ambition, Investing in a climate-neutral future for the benefit of our
people, COM(2020) 562 final
8
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52018DC0773
7
annual investments needed for the period 2021-2030 amount to EUR 50.5 billion for the
power grid including both the transmission and distribution networks – more than twice
the investments in the period 2011-20209
.
Furthermore, to achieve the levels of renewable energy for a 55% reduction of GHG
emissions by 2030, Europe needs to significantly scale up renewable electricity
generation. This requires investment in offshore renewable energy, which can bring the
scale that is needed. The Commission adopted an EU strategy for offshore renewable
energy in November10
. In order to achieve the required massive scale up of offshore
renewable energy in the whole EU up to 2050, the strategy will also address the issue of
coordinating long-term planning and development of offshore and onshore electricity
grids, which are assessed as part of this impact assessment. Other on-going policy
initiatives of direct relevance include the revision of the TEN-T Regulation11
and the EU
taxonomy for sustainable investments12
, as well as the review of the Renewable Energy
Directive envisaged for 2021.
At the same time, the Commission’s communication on energy system integration13
underlines the need for integrated energy infrastructure planning across energy carriers,
infrastructures, and consumption sectors. Such system integration addresses in particular
the decarbonisation needs of the hard to abate sectors, such as industry or transport,
where electrification can be technically or economically challenging. Such investments
include emerging technologies such as hydrogen, power-to-gas which are progressing
towards commercial large-scale deployment.
Already in March 2019, as part of the political agreement between the European
Parliament and the Council on the Connecting Europe Facility for the period 2021-2027,
the co-legislators agreed that the Commission should evaluate the effectiveness and
policy coherence of the TEN-E Regulation and submit an evaluation to the European
Parliament and to the Council by 31 December 2020. The Commission is requested, if
appropriate, to accompany the evaluation by a legislative proposal for the revision of the
guidelines.14
Stakeholders as well have called for this revision to align the TEN-E policy
framework with the new policy context.
2 PROBLEM DEFINITION
An evaluation of the current TEN-E Regulation was carried out back-to-back with this
impact assessment to identify potential shortcomings. The main results can be
summarised as follows (for more details see Annex 5):
9
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
10
COM(2020) 741 final
11
https://ec.europa.eu/transport/themes/infrastructure/ten-t/review_en
12
https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance/eu-taxonomy-
sustainable-activities_en
13
COM(2020) 299 final
14
https://www.consilium.europa.eu/media/38507/st07207-re01-en19.pdf,
http://www.europarl.europa.eu/doceo/document/TA-8-2019-0420_EN.pdf
8
 The TEN-E Regulation has effectively improved integration of Member States’
networks, stimulated energy trade and hence contributed to EU competitiveness,
as shown in the evidence on interconnection targets and energy prices and their
convergence across the EU.
 PCIs in electricity and in particular in gas have strongly contributed to security of
supply as a main contextual driver to the design of the TEN-E Regulation. For
gas, the infrastructure is now well connected and supply resilience has improved
substantially since 2013.
 Regional cooperation in Regional Groups and through cross-border cost
allocation is an important enabler for project implementation. However, in many
cases the cross-border cost allocation did not result in reducing the financing gap
of the project, as intended.
 While permitting procedures have been shortened, long permitting procedures
persist in some cases. While the underlying reasons are mainly related to national
implementation and outside the scope of the TEN-E Regulation and need to be
addressed through an increased focus on implementation and enforcement, there
are elements that can be improved also at Union level.
 CEF financial assistance was an important factor, grants for studies helped
projects to reduce risks in the early stages of development while grants for works
supported projects addressing key bottlenecks that market finance could not
sufficiently address.
 While the objectives of the current Regulation remain largely valid, their focus on
2020/30 targets must be upgraded to reflect the new political context and the 2050
climate neutrality objective under the European Green Deal.
 Besides the new political context and objectives, technological development has
been rapid in the past decade. This progress should be taken into account in the
infrastructure categories covered by the Regulation, the PCI selection criteria as
well as the priority corridors and thematic areas.
 The TYNDP process as basis for the identification of PCIs has proven effective.
However, while the ENTSOs and TSOs have an important role to play in the
process, there is a need for more scrutiny, in particular as regards defining the
scenarios for the future, setting long-term infrastructure needs and bottlenecks
and assessing individual projects, to enhance trust in the process.
It is worth noting that the evaluation did not look specifically at the issue of offshore
grids as this was not a specific objective of the current TEN-E Regulation. As mentioned
above, enhancing renewable energy and specifically offshore is a necessary part of the
energy transition to achieve climate neutrality by 2050 in a cost-effective manner. The
problems defined in this section and the policy options defined in Section 5 build on the
results of the evaluation and on the numerous comments received from stakeholders (see
Annex 2).15
15
In 2017, a mid-term evaluation of the TEN-E Regulation was completed. In 2019, an evaluation of the
TEN-E Regulation was formally launched with the publication of an evaluation roadmap, which was
complemented in May 2020 with the publication of an inception impact assessment.
9
2.1 Problem 1: Type and scale of cross-border infrastructure developments are
not fully aligned with EU energy policy objectives in particular as regards the
European Green Deal and the climate neutrality objective
The increased 2030 climate target and the 2050 climate-neutrality objective of the
European Green Deal and the Communication “A Clean Planet for All” require a
profound transition of the European energy system, both on the supply and the demand
side. Energy will be produced and consumed in a different manner and in different places
than today. The role of electricity will increase radically, but there will also be an
increasing role for renewable and low carbon gases.
The Commission’s analysis shows that by 2050 more than 80% of electricity will stem
from renewable energy sources, to an increasing extent located offshore16
. EU renewable
electricity production should as a minimum double from today’s 32% share of renewable
electricity in the energy mix to around 65% share in 203017
. To achieve the European
Green Deal objective of climate neutrality 2050 and 55% GHG emission reduction by
2030, the EU needs to significantly scale up the generation of renewable energy. For the
upscaled deployment of renewable generation to have real economic, climate and societal
value, the relevant grid infrastructure should be in place. Electricity grids are essential to
transport renewable energy over medium to long distances, from production sites to the
sites of consumption, and for integrating the European energy markets. An annual
average investment of EUR 50.5 billion are needed in the electricity transmission and
distribution grids, to achieve the 2030 targets alone. This compares to an annual average
investment of EUR 24 billion in the period 2011-2020. This means that the grid
investment should double from the previous decade.
The Commission’s impact assessment for the 2030 targets shows that the offshore wind
capacity in Europe should increase to about 280 GW by 2050 in order to meet the 2030
energy and climate objectives.18
This represents an increase of about 25 times compared
to the current situation. As much as two thirds of the costs of the foreseen upscale in
offshore renewable energy is related to infrastructure, a large part of which will be of
cross-border nature. Over the last 30 years, about 12 GW offshore wind has been
deployed in Europe, mainly as national projects. Continuing with the current deployment
pace, offshore wind and related infrastructure would reach about 25 GW in 2050, or 1/10
of the required 280 GW to achieve climate neutrality.
At the same time, all existing scenarios modelling pathways for the achievement of the
climate neutrality objective by 2050 require a substantial role for renewable and low-
carbon gases in the energy mix, since a 100% electrified energy system is not considered
feasible.19
Therefore, by 2050 the use of unabated natural gas is to be reduced by 66 -
16
A Clean Planet for all. A European long-term strategic vision for a prosperous, modern, competitive and
climate neutral economy, COM(2018) 773 final
17
Stepping up Europe’s 2030 climate ambition, Investing in a climate-neutral future for the benefit of our
people, COM(2020) 562 final
18
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
19
These scenarios include those in the EU Long-Term Strategy (2018), the TYNDP 2020 scenarios
developed by ENTSOG and ENTSO-E (2020), Eurelectric's "Decarbonisation pathways" (2018) or those
10
71%, with a steep increase of renewable and low-carbon gases, with hydrogen
accounting for approximately 46% - 49% of all renewable and low-carbon gases in 2050.
However, there is currently very limited dedicated or retrofitted infrastructure in place to
transport and trade hydrogen across borders from one Member State to another. By 2030,
total investments needs in hydrogen electrolysers are estimated between EUR 24-42
billion. About EUR 65 billion is needed for hydrogen transport, distribution and
storage47
.
These forecasts, and in particular the impact assessment accompanying the 2030 climate
target plan, show that the energy mix of the future will be very different from the one
today. The current energy infrastructure investments are clearly insufficient to transform
and build the energy infrastructure of the future. This also means infrastructure needs to
be in place to support this European energy transition, including rapid electrification,
scaling up of renewable electricity generation, the increased use of renewable and low-
carbon gases, energy system integration and a higher uptake of innovative solutions.
Given the role of clean hydrogen in the decarbonisation and as energy carrier and storage
for an integrated energy system, the lack of dedicated energy infrastructure for hydrogen
would negatively affect the pathway to climate neutrality, especially for the
decarbonisation of the industry sectors that have limited decarbonisation options
available.20
Trans-European cross-border energy infrastructures have to make a more important
contribution to build and establish the cross-border infrastructure necessary for achieving
climate neutrality. A recent JRC study assessing the impacts of replacing coal with non-
CO2-emitting resources, mainly onshore wind power, by 2030 concludes that, in a power
system largely based on renewables electricity, interconnectors are “a definitive enabler,
not only of market integration, but also of a path towards a renewables-based power
system”21
. Investments to upgrade the electricity interconnections between European
regions, within the EU but also with neighbouring countries, by 53 GW would have the
potential to reduce the carbon footprint of the European power system by more than a
quarter in 2030. A more interconnected power system would require the deployment of
significantly less renewable generation capacity as well as significantly less thermal
backup capacity. These findings confirm earlier studies pointing to the need and benefits
of a more interconnected energy systems to enable a decarbonised power system22
.
Concerning the future gas infrastructure needs, the Commission’s hydrogen strategy
developed for DG ENER in the framework of the study "Impact of the use of the biomethane and hydrogen
potential on trans-European infrastructure" (2019).
20
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
21
Kanellopoulos K., Kavvadias K., De Felice M., Wind and other CO2-free assets replacing coal in 2030,
EUR 30343 EN, Publications Office of the European Union, Luxembourg, 2020, ISBN 978-92-76-21440-
3, doi:10.2760/007407, JRC121605, p. 2
22
Kanellopoulos K., Scenario analysis of accelerated coal phase-out by 2030A study on the European
power system based on the EUCO27 scenario using the METIS model, EUR 29203 EN,PublicationsOffice
of the European Union, Luxembourg, 2018, ISBN 978-92-79-81888-2,doi:10.2760/751272, JRC111438;
Faunhofer ISI (2014): Optimized pathways towards ambitious climate protection in the European
electricity system (EU Long-term scenarios 2050 II), Final Report.
11
concluded that for the required deployment of hydrogen a large-scale infrastructure
network is one important element that only the EU and the single market can offer.23
A study on infrastructure needs, commissioned by the Commission, concluded that total
investment needs in the trans-European transmission energy infrastructure are around
EUR 200 billion, in the period between 2021 and 2030.24
The upgrade of the electricity
interconnections between European regions by 53 GW, as set out above, would require
total investments of between EUR 35 and 70 billion by 2030.25
The upscale of offshore
renewable energy in Europe by 2050 has an estimated cost of EUR 800 billion of which
EUR 530 billion EUR is related to grid infrastructure. To reduce the costs as much as
possible, a strong focus on rational grid development is key.
The evaluation showed that the current TEN-E Regulation has made an important
contribution in advancing cross-border energy infrastructure and in meeting energy
policy objectives, and in particular security of supply. While the share of electricity PCIs
has constantly increased since the first PCI list (see Figure 1), the share of the different
sectors does not fully reflect future needs. Although transmission networks for offshore
renewables are eligible under the current TEN-E Regulation and despite a priority
corridor for offshore grid in the Northern Seas, very few offshore grid PCIs have been
selected so far. The number of PCIs on smart electricity grids has never exceeded six.
Gas PCIs have focussed on natural gas projects with no role for renewable and low
carbon gases, including hydrogen.
Problem driver 1.1: TEN-E infrastructure categories do not sufficiently reflect the
Green Deal and technological progress
The infrastructure categories eligible for PCI status under the current TEN-E Regulation
do neither reflect the European Green Deal objectives and the related infrastructure needs
nor technological progress made since 2013. This prevents the uptake of PCIs that are
necessary to achieve the climate neutrality objective under the European Green Deal. In
the gas sector, hydrogen networks are currently not eligible for PCI status, for which
nearly all stakeholders considered EU-wide coordinated planning relevant for a cost-
efficient transition to renewable and low-carbon gases.26
In addition to the technological
advancement in renewable and low-carbon gases, digitalisation, automation, and other
innovations, including the electrification of the transport sector, have made important
progress. Smart grid solutions, including demand response, have developed considerably
over the past years because of the acceleration of the digital transformation of the energy
sector and will play a crucial role in enabling renewable energy integration27
. The need to
update infrastructure categories to adapt to future challenges was widely shared among
23
A hydrogen strategy for a climate-neutral Europe, COM(2020) 301 final
24
Ecofys (2017): INVESTMENT NEEDS IN TRANS-EUROPEAN ENERGYINFRASTRUCTURE UP
TO 2030 AND BEYOND, Final report, http://publications.europa.eu/resource/cellar/431bc842-437c-11e8-
a9f4-01aa75ed71a1.0001.01/DOC_1
25
Kanellopoulos K., Kavvadias K., De Felice M., Wind and other CO2-free assets replacing coal in 2030,
EUR 30343 EN, Publications Office of the European Union, Luxembourg, 2020, ISBN 978-92-76-21440-
3, doi:10.2760/007407, JRC121605
26
Most stakeholders who responded to the targeted survey consider that hydrogen is relevant for the TEN-
E framework and required at large scale.
27
International Energy Agency (2017): Digitalisation and Energy, OECD.
12
the stakeholders28
, who consider that the current set-up is not aligned with today’s
decarbonisation ambitions nor reflect emerging technologies.
This links directly to the eligibility for CEF financial assistance for which PCI status
under TEN-E is a precondition.29
New infrastructure categories that can make an
important contribution to achieve the climate neutrality objective, e.g. hydrogen are less
mature and hence need access to financing e.g. for studies to help make the projects
“bankable”.
The above-referenced JRC study on the implications of a renewables based energy
system also shows that cross-border interconnectors with third countries play an
increasing role to achieve a decarbonised energy system cost-effectively. The
Commission Expert Group on electricity interconnection targets also highlighted the role
of interconnectors with neighbouring countries for the better integration of renewable
energy sources and security of supply.30
Under the current TEN-E Regulation projects
with third countries are only eligible if they show a physical cross-border impact for at
least two Member States which is difficult to demonstrate.31
At the same time, the TFEU
provides for the possibility that the Union may decide to cooperate with third countries to
promote projects of mutual interest (PMI)32
and to ensure the interoperability of networks
in the EU’s neighbourhood. Such cooperation can help reduce GHG emission in the EU
and in third countries, thus contributing to achieving the Green Deal objectives.
However, PMIs do currently not benefit from the provisions of the TEN-E framework.
Problem driver 1.2: Lack of a mandatory sustainability criterion in the PCI selection
process
The current TEN-E Regulation defines a set of selection criteria for projects that are
eligible for PCI status. The specific criteria include sustainability, security of supply,
market integration and competition. Electricity and gas PCI candidate projects need to
contribute significantly to at least one of these specific criteria. As a result, projects that
enable, for example, the increase in gas supply/demand may become PCIs even if they do
not demonstrate benefits in terms of sustainability but address security of supply risks.
Some stakeholders consider that this poses a risk that infrastructure developments and
28
Replies to the targeted survey showed that there is higher disagreement than agreement in the fitness of
the current priority corridors and thematic areas to the future challenges. For priority corridors, 36
respondents (of 112) disagree and 32 agree they are fit for purpose for future challenges to the energy
infrastructure. As for thematic areas, 46 disagree, while only 15 respondents agree on the prior statement.
29
Except for cross-border projects in the field of renewable energy for which a new window is foreseen
under the new CEF Regulation for the MFF2021-2027.
30
“Electricity interconnections with neighbouring countries”, Second report of the Commission Expert
Group, https://op.europa.eu/en/publication-detail/-/publication/785f224b-93cd-11e9-9369-01aa75ed71a1
on electricity interconnection targets
31
On the previous and current 4th
PCI lists, there have been several projects with third countries that
fulfilled current conditions, i.e. demonstrating socio-economic benefits for at least two Member States For
example, electricity interconnections between Italy and Montenegro, between Italy and Tunisia (ELMED),
and from Israel to Greece via Cyprus (Euroasia), the gas interconnection between Bulgaria and Serbia, the
Southern Gas Corridor or an oil interconnector between Ukraine and Poland.
32
Art. 171(3) TFEU: “The Union may decide to cooperate with third countries to promote projects
of mutual interest and to ensure the interoperability of networks.”
13
specifically PCIs may not be on track to achieve EU energy and climate policy
objectives.33
Problem driver 1.3: Sectoral bottom-up approach to infrastructure planning
The evaluation of the current framework concluded that the approach to cross-border
infrastructure planning is in principle working well and that the central role of the
ENTSOs (and TSOs) is justified by their specialised knowledge and expertise in network
planning. However, it pointed to shortcomings of a sectoral approach to planning and to
the lack of an independent validation of the assessment methodology and underlying
assumptions used since TSOs are at the same time the promoters of most of the
infrastructure projects submitted to the EU-wide TYNPD (and hence eligible for PCI
status). This gives the ENTSOs an incentive to emphasise security of supply risks above
e.g. investments in improving the efficiency of the system and hence to higher needs for
infrastructure construction. Other actors such as the Commission and ACER have a
limited role under current TEN-E Regulation, which cannot prevent that the ENTSOs
assume e.g too significant gas/electricity demand for the future, import of fuel and
unreasonable technology development. This in turn may lead to the identification of
infrastructure gaps that are not realistic and overestimates the potential benefits of the
proposed projects. This problem is reinforced by a sectoral planning approach.
Today’s energy system is built on parallel vertical energy value chains, which rigidly link
specific energy resources with specific end-use sectors. This is mirrored in a sectoral
approach to infrastructure planning where electricity and gas networks are planned and
managed mostly independently from each other. Whilst this approach has worked in the
past, the Commission communication on energy system integration34
recalls that this
model of separate silos cannot deliver a climate neutral economy by 2050. It is
technically and economically inefficient, and leads to substantial losses in the form of
waste heat and low energy efficiency35
. The insufficient integration of the energy system
hinders the decarbonisation of electricity as well as major energy consuming sectors,
notably transport and industry.
The selection of infrastructure projects of common interest in the electricity and gas
sectors is based on 10-Year Network Development Plans (TYNDPs). These plans are
developed at national level and since 2013 integrated to the EU level for gas and
electricity. The EU-wide TYNDPs are elaborated by the European Network of
Transmission System Operators for Electricity (ENTSO-E)36
and for Gas (ENTSOG)37
33
In the public consultation several environmental NGOs, NRAs and industry stakeholders indicated that
the current selection process has resulted in projects being selected that do not have a positive effect on the
CO2 emissions, do not sufficiently support network innovation and include traditional, fossil fuel
infrastructure which will ultimately hamper the achievement of climate neutrality. TSOs did not indicate
strong opinions on the sustainability criterion.
34
COM(2020) 299 final
35
In Trinomics et al. (2018), it was stressed that the current setup for selecting PCI projects is partially
adequate given the deficiency in accounting for energy efficiency in the evaluation process, although
energy efficiency gains are accounted for in the demand levels of the scenarios to be modelled according to
the TYNDP 2020 Scenario report.
36
https://tyndp.entsoe.eu/about-the-tyndp/
37
https://www.entsog.eu/tyndp#
14
which consist of the National Transmission System Operators (see Annex 5 for a more
information). The two TYNDPs remain two separate sectorial processes. This represents
a significant impediment in the identification of optimal infrastructure solution in cases
where e.g. a need identified in the electricity sector could be tackled by a solution in the
gas sector. Although the scenarios reflect the 2050 climate-neutrality objectives, the
trajectories chosen are debatable and tend to favour in particular high levels of gas
demand38
.
A significant number of stakeholders across different stakeholder groups agree that the
current sectoral approach to infrastructure planning does not match the needs for system
integration and question the adequacy of roles and the coordination with the distribution
operators and synergies with other sectors. Stakeholders indicated the wish to weaken the
role of the ENTSOs (39%) and to strengthen the role of DSOs (53%) and other
stakeholders, such as NGOs (39% - 67% of whom represented industry or civil society).
Stakeholders state that the process is geared towards the construction of additional
infrastructure39
and may be at odds with the energy efficiency first principle and not
necessarily lead to those PCIs being selected and implemented that are most efficient
from a technical, economic and social perspective.40
The risk of stranded assets exists.
While the current bottom-up infrastructure planning via the TYNDP provides a solid
basis for the identification of necessary infrastructure projects onshore, this is not the
case for offshore grids. The onshore electricity grid developed over a long period and
with an incremental and integrated approach when utilities were the owners of the
generation units and networks. The starting point for the development of offshore
networks is fundamentally different. An incremental approach, as used for onshore
networks, is not sufficient to identify offshore infrastructure needs at the necessary scale
as set out above. The bottom-up approach is too fragmented and nationally focused,
which leads to a less rational offshore wind development, resulting in higher costs and
irrational use of maritime space. Lack of grids and grid connections are perceived as a
key barrier to large-scale offshore wind by the industry. Continuing the current practice
would not bring along many new offshore wind parks at the required speed41
.
Like for onshore infrastructures, there is also a risk of stranded assets offshore. A
coordinated approach allows for developing an optimised offshore grid both with a view
to interconnection and to evacuate offshore wind. A recent study42
has demonstrated that
the current practice of nationally developing offshore wind with radial connections to
38
ENTSO-E/ENTSOG (2020): TYNDP 2020 Scenario Report,
https://eepublicdownloads.azureedge.net/tyndp-
documents/TYNDP_2020_Joint_Scenario_Report_ENTSOG_ENTSOE_200629_Final.pdf
39
In the public consultation, a number of stakeholders indicated that ENTSOs role in planning and owning
assets ultimately creates a potential conflict of interest that favours TSOs over non-TSOs promoters with a
limited role of other technologies or actors.
40
It is important to note that security of supply requires redundant infrastructure and needs to be taken into
account in the context of the energy efficiency first principle.
41
E.g. Navigant/SWECO (2020): Study on the offshore grid potential in the Mediterranean region,
ENER/B1/2019-508, Final draft report; ENTSO-E (2020): Position on Offshore Development,
https://www.entsoe.eu/2020/05/29/entso-e-position-on-offshore-development/
42
E.g. Roland Berger (2019; “How to reduce costs and space of offshore development : North Seas
offshore energy clusters study, https://ec.europa.eu/energy/studies/hybrid-projects-how-reduce-costs-and-
space-offshore-developments_en?redir=1
15
shore, and in parallel develop cross-border interconnectors often is not the optimal way,
although this may vary between regions. Hybrid assets in the North Sea region, i.e.
interconnectors with offshore production connected to them would reduce costs
significantly and make better use of the maritime space, compared to developing
interconnections and evacuation of offshore wind separately.
An inadequate framework for offshore infrastructure planning explains the slow progress
in the identification of cross-border offshore infrastructure projects, whereas current
permitting procedures for offshore projects explain delays in project implementation (see
problem driver 2.1).
2.2 Problem 2: Delays in project implementation
Delays in the implementation of the projects of common interest, identified as necessary
to achieve the EU climate and energy policy objectives, would jeopardise the accelerated
change in the energy system as set out above. The implementation of PCIs still takes too
long as projects have to overcome several challenges during the implementation process
as is further outlined below. In 2020, 27% of electricity PCIs were delayed by on average
17 months against their initially planned commissioning date and the share of delayed
electricity PCIs has been fairly stable (23%-31%) between 2016-2019. This would
appear particularly problematic given the increasing role of electricity and resulting
infrastructure needs to achieve the 2030 and 2050 GHG reduction targets. As for gas
PCIs, in 2020, 38% of all PCIs encountered delays of on average 33 months.43
Problem driver 2.1: Long permitting procedures
About 40% of PCIs are still expected to take more than the legal requirement to complete
the permit granting procedure.44
According to ACER, the average permitting durations
are 4 years for electricity PCIs and 3.1 years for gas PCIs with some PCIs requiring
substantially longer than the foreseen maximum of 3.5 years.45
However, out of the 18
PCIs that already passed the 5-year mark, 13 had started the permitting process before the
entry into force of the TEN-E regulation and therefore did not benefit from the permitting
provisions therein due to the transitional provisions and are still in permitting under the
applicable national rules.
The evaluation (see Annex 5) finds that while permitting has been shortened as a
consequence of the provisions in the TEN-E Regulation, long permitting procedures
persist in some cases. However, the underlying reasons are mainly related to national
implementation and, mainly, outside the scope of the TEN-E Regulation. The
Commission will intensify enforcement and implementation efforts in this respect mainly
through the mechanisms provided by the TEN-E Regulation, such as the regional groups.
Nevertheless, during the public consultation it appeared that a series of changes and
43
ACER (2020): Consolidated Report on the progress of electricity and gas Projects of Common Interest,
https://www.acer.europa.eu/Official_documents/Acts_of_the_Agency/Publication/Consolidated%20Report
%20on%20the%20progress%20of%20electricity%20and%20gas%20Projects%20of%20Common%20Inter
est%20%282020%29.pdf
44
Ibidem.
45
Ibidem.
16
improvements at Union level would still aid in further accelerating the permitting
process, avoiding delays and ensure an uniform adequate national practice.
According to ACER’s report, three electricity PCIs were delayed at a permitting stage
due to public opposition, while three more are facing lawsuits and court procedures that
have resulted in delays as well46
. Public opposition continues to be one of the key factors
for lengthy implementation procedures of PCIs driven by reasons such as insufficient or
late use of participatory processes.47
Lack of public awareness on the specific needs for
new infrastructure hampers the acceptance of PCIs and may result in a significant
number of objections during consultations, thereby leading to significant additional
efforts and delays in the permitting process. Ultimately, public opposition might lead to
court claims by organised local communities, landowners and citizens living in the
vicinity of potential installations and routing of PCIs. Since the administrative appeals
and judicial remedies before court or tribunal do not fall under the foreseen permitting
timeline of 3.5 years48
, this causes further delays. For instance, if there is an appeal
regarding any of the issued permits, the permitting process is not complete until the
appeal is complete and the permits issued are final. The TEN-E Regulation does not
currently provide for any means of accelerating project implementation from the
perspective of court proceedings. In this respect, a series of stakeholders mentioned that a
streamlining of appeals regarding PCIs would also be considered so that the accelerated
permitting process becomes truly effective.
Strong regional cooperation is key to implement more cross-border hybrid and joint
offshore projects. The permitting experience49
, so far, of offshore cables shows that they
often encounter additional delays by comparison to onshore projects due to the need for
additional studies, maritime spatial planning and crossing international waters of several
countries. Cross-border hybrid and joint offshore projects bring even more challenges as
the implementation of the infrastructure needs to be coordinated with the deployment of
generation projects. As such, stakeholders called for streamlined permitting procedures
for cross-border offshore projects. Delays in permitting leads to delay in infrastructure
such as renewable electricity generation and grids that are needed for the energy
transition towards climate neutrality in 2050.
Problem driver 2.2: Sub-optimal implementation and insufficient use of cost sharing
tools and regulatory incentives
The TEN-E Regulation introduced a regulatory framework aiming at facilitating the
implementation of PCIs, by creating financial and regulatory certainty: the split of costs
across borders (cross border costs allocation, CBCA), inclusion of the investment costs
into tariffs and additional investment incentives for riskier projects. In practice, these
46
Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure, Draft final report
47
Scope et al. (2020) Innovative actions and strategies to boost public awareness, trust and acceptance of
trans-European energy infrastructure projects. Draft Revised Interim Report. DG ENER.
48
Article 10 (6)
49
Input from National Grid regarding the development of the Viking Cable during the PCI Days,
December 2019 edition, the recording is accessible here:
https://www.youtube.com/watch?v=uk84QPpEUyY, and input in the stakeholder consultation regarding
the development of projects such as the Baltic Pipe.
17
provisions remained underutilised depriving PCIs of the benefits they could have
obtained thus delaying or failing to remove barriers to their implementation.
The current CBCA provisions have rarely been used as intended to reduce or eliminate
the financing gap but have been applied only for projects requesting CEF funding for
works50
, as the CBCA is one of the required documents to be submitted. This is
supported by ACER’s finding of 70% of all CBCA decisions made up to March 2018
concerning projects with only a single Member State involved51
. By March 2020, this
share decreased to just under 50%.52
Allocation of costs to non-hosting countries, with
the benefits that entails in terms of enabling and accelerating implementation, has only so
far occurred for gas PCIs.53
Moreover, the manner in which national regulators approach CBCA decisions is very
diverse and very often diverts from the principles above as regards the financing of
infrastructure. NRAs often only allocate partially the investment costs into tariffs (or not
at all) mentioning that the rest of the financing should come from a CEF grant or even
issue CBCA decisions conditional upon obtaining CEF grants. This creates regulatory
instability for the projects, which cannot obtain financing on the market and are rendered
completely dependent on Union financial assistance leading, thus, to hampering their
realisation. In addition, viewing the CBCA procedure solely as a precondition to CEF
applications54
deprives the provision of its main purpose, which is creating a framework
for the procedure of splitting the costs of PCIs across borders for the purposes of
enabling and accelerating their implementation.
An additional issue arises with the application of the ACER CBCA Guidelines from
2015, which are not legally binding. Some NRAs and project promoters apply them and
others do not, some choose to apply the most convenient elements. The correct
implementation of the CBCA procedure becomes even more relevant in the context of
infrastructure to support the development of offshore renewables. The reason is that the
constructing countries will not necessarily coincide with the beneficiary countries due to
the location of the offshore renewable energy potential in a certain sea basin, maritime
spatial planning and environmental restrictions. Without the application of clear CBCA
guidelines, the benefits from such projects could be widely split amongst Member States,
not reflecting the benefits, and thus make the realisation of the projects difficult.
The use of regulatory investment incentives introduced by the TEN-E for projects that
incur higher risks has been low and, even though they were crucial for some of the
projects, their overall contribution to the advancement of PCIs remains limited, with only
50
Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure, Draft final report.
51
ACER (2018), Third Edition of the Agency’s Summary Report on Cross-Border Cost Allocation
Decisions – Status update as of March 2018.
52
Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure, Draft final report.
53
Ibidem.
54
For all cases where CBCA decisions were made, the project promoters consecutively applied for CEF
grants. The objective of accessing CEF funding was indicated by stakeholders as more important than the
allocation of costs between Member States.
18
eleven PCIs applying.55
According to ACER only in four cases overall (one electricity,
three gas), risk-based incentives have been granted.56
Stakeholder input has shown that
while some TSOs see an added value in these incentives in adjusting the financial risk,
regulators refer to the low number of applications to illustrate the lacking need for
additional risk-based incentives.
Offshore wind related infrastructure projects will most likely have a higher risk profile
than traditional interconnectors57
also substantiated by offshore energy industry
stakeholders and project promoters, and could benefit from a facilitating regulatory
regime that starts from an acknowledgement of their inherent higher risk, to be
recognised in their regulatory regime. As such, stakeholders called for a clear legal
framework for cross-border hybrid projects notably as regards the assessment of benefits
and the cross-border allocation of costs. Moreover, the current provisions for investment
incentives do not cater for more innovative grid solutions, for instance if they are more
OPEX intensive relative to the CAPEX intensive traditional grids.
In sum, the identified problem drivers are largely independent from each other, although
reinforcing sustainability during PCI selection can contribute to limit the number of
projects that are not fully in line with Green Deal objectives. The problem drivers behind
problem 1 are largely driven by a new political context and technological progress. The
problem drivers behind problem 2 are mainly related to implementation and the current
TEN-E legal framework and to a lesser extent to technological progress (offshore wind).
Figure 3 summarises the problems and the underlying drivers.
55
Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure.
56
ACER (2019). Consolidated Report on the Progress of Electricity and Gas Projects of Common Interest.
ACER (2018). Summary report on project-specific risk-based incentives.
57 As resulting from the Study on How to reduce costs and space of offshore development: North Seas
offshore energy clusters study, European Commission, Roland Berger GmbH, available at:
https://op.europa.eu/en/publication-detail/-/publication/59165f6d-802e-11e9-9f05-01aa75ed71a1/language-
en?WT.mc_id=Searchresult&WT.ria_c=37085&WT.ria_f=3608&WT.ria_ev=search and the Study on
Baltic offshore wind energy cooperation under BEMIP, COWI , Directorate-General for Energy (European
Commission) , Ea Energy Analyses , THEMA Consulting group, available at:
https://op.europa.eu/en/publication-detail/-/publication/9590cdee-cd30-11e9-992f-01aa75ed71a1/language-
en/format-PDF/source-search
19
Figure 3: Problems and problem drivers
The initiative is justified by market and regulatory failures also driven by a new policy
context, new technological developments, and achievements since the adoption of the
current TEN-E Regulation in 2013.
2.3 How will the problem evolve?
The problems and the underlying problem drivers are likely to become even more
important in the short and mid-term. Adopted or planned policy initiatives such as the
2030 Climate Target Plan, the revision of the ETS Directive, the Effort Sharing
Regulation, the Energy Efficiency Directive, the Renewable Energy Directive, the
Energy Taxation Directive and the planned initiative for the decarbonisation of gas are
expected to significantly increase the ambition on the mid- and long-term
decarbonisation and renewable energy targets, in line with the 2030 55% GHG reduction
objective. This will lead to an accelerated pathway to the decarbonisation of the energy
system, significantly higher penetration of renewables in power and heating at the
expense of fossil fuels, reduction of demand for energy, and hence to a significant
increase in the need for an enabling energy infrastructure in place by 2030 and beyond.
Without changes in TEN-E Regulation, investments necessary for this transition will
happen in a sub-optimal, uncoordinated manner at a higher cost. The gap in cross-border
infrastructure investments in line with the decarbonisation objectives is expected to
increase, in particular as regards investment related to renewable generation, although
there should be a lower demand for gas projects due to the progress in the completion of
new gas infrastructure projects and changes in the market framework such as the
taxonomy. Investments in technologies that allow moving towards decarbonisation more
quickly would not be fully prioritised. Investments in cross-border hydrogen pipelines
would not come forward fast enough, offshore wind developments would be incremental,
smart grids needed for better functioning of the European network could not be fully
exploited. Also, the identification of the future infrastructure needs and their planning
would continue to be in silos, without contributing to the integration of the energy
system.
Moreover, the Covid19 sanitary crisis reinforces some of the identified problems such as
delays in project implementation and access to financing for cross-border infrastructure
projects. However, investments in energy infrastructure, in particular in the context of the
roll out of renewable energy generation, is a key component of the recovery and
resilience fund (RRF). Investments in smart and sustainable energy infrastructure has
20
been identified as a key enabling factor to achieve the European Green Deal objectives
and a green recovery in line with political objectives.
The Taxonomy Regulation58
creates a classification system for (environmentally)
sustainable economic activities, a fundamental tool to channel capital towards
investments crucial for, inter alia, the decarbonisation of the EU. The Taxonomy
Regulation creates disclosure obligations for financial market participants with respect to
financial products and for certain non-financial undertakings. The Commission is
currently preparing two Delegated Acts to establish an actual list of environmentally
sustainable economic activities by defining technical screening criteria for climate
change mitigation and adaptation, which should enter into force by mid-2021. Without a
review of TEN-E there would be a risk of increasing incoherence with the guidance to
private investment as established in the Taxonomy Regulation.
2.4 Scope of the initiative
Based on the evaluation results, the stakeholder feedback, and the problem analysis, key
principles of the current TEN-E Regulation would remain unchanged and are not further
analysed in the impact assessment: the TYNDP as such as tool to European infrastructure
planning as basis for the PCI selection process (except for smart grids and CO2 transport
networks), and regional cooperation based on priority corridors and thematic areas.
Whilst the regional groups and the priority corridors and areas will remain as the key
working method to identify and monitor the implementation of PCIs, they would be
adjusted to the new scope of the TEN-E Regulation in terms of eligible infrastructure
categories. The focus of the initiative is on four impact areas of the current TEN-E
framework (see Figure 2): a) scope (infrastructure categories), b)
governance/infrastructure planning (planning for offshore grids, and cross-sectoral
infrastructure planning/PCI selection criteria), c) permitting, and d) regulatory treatment.
3 WHY SHOULD THE EU ACT?
3.1 Legal basis
Article 170 of the Treaty on the Functioning of the European Union foresees that the
Union shall contribute to the establishment and development of trans-European networks,
inclosing in the area of energy infrastructure. The Union will need to promote
interconnection of national networks. The TEN-E Regulation is based on Article 172 of
the Treaty on the Functioning of the European Union which provides for the legal base to
adopt guidelines covering the objectives, priorities and broad lines of measures envisaged
in the sphere of trans-European networks as set out in Article 171. The guidelines are to
identify projects of common interest that are necessary for making the TEN-E fit for
purpose. The guidelines also set the conditions under which the EU may financially
support the PCIs.
58
Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment, and
amending Regulation (EU) 2019/2088, OJ L 198, 22.6.2020, p. 13
21
3.2 Subsidiarity: Necessity of EU action
Energy transmission infrastructure (including an interconnected offshore grid and smart
grid infrastructure) has a European added value due to its cross-border impacts and is
essential to achieve a climate neutral energy system. The TEN-E Regulation has provided
value and has contributed to achieving results regarding the EU energy market
integration, competition and security of supply. A framework for regional cooperation
across Member States is necessary to develop cross-border energy infrastructure.
Individual Member State regulations and actions are insufficient to deliver these
infrastructure projects as a whole.
3.3 Subsidiarity: Added value of EU action
Internal energy market is based on cross-border interconnectors, development of which
requires cooperation of two or more Member States, all with their own regulatory
framework. The TEN-E Regulation has provided additional value compared to what
could have been achieved at national or regional level alone. There is widespread
agreement among stakeholders on the EU added value of the Regulation, achieved
through regional cooperation, access to financing, improved information and
transparency, and improved planning and permitting processes. The majority believe that
TEN-E achieved more than could have been achieved at national/regional level (92 %,
79% respectively agree) and that the issues addressed by the TEN-E Regulation continue
to require action at EU level (91% agree, 0 disagree) (see Annex 2). Many Member
States have benefitted from an increase in security of supply, more competitive markets
and more interconnected energy networks. Given the recognition of TEN-E as effective
and cost-efficient instrument in the evaluation, the current instrument should be further
improved to address the above-identified problems instead of developing a new
instrument.
4 OBJECTIVES: WHAT IS TO BE ACHIEVED?
In line with the results of the evaluation, the general objective of the initiative builds very
closely on the general objective of the current TEN-E Regulation but develops it further.
By referring explicitly to both energy and climate objectives as well as the 2030/50
targets, the revised general objective reflects the new political context and the
achievements of the current TEN-E Regulation, e.g. in terms of gas security of supply.
The overall objective is to align the TEN-E Regulation with the European Green Deal
objectives, and the policy initiatives proposed within its framework and thereby to
support the timely transition towards climate neutrality by 2050, starting with a 55%
reduction in GHG emissions by 2030 in a cost-efficient manner.
4.1 General objectives
The general objective of the revision is to facilitate the timely development of adequate
energy infrastructure across the EU and in its neighbourhood to enable delivering on the
EU’s energy and climate objectives in line with the European Green Deal, in particular
on the 2030/50 targets including the climate-neutrality objective, as well as market
integration, competitiveness, and security of supply at least cost to consumers and
businesses. Stakeholders in the targeted survey identified greenhouse gas emission
reductions / climate neutrality as the most important challenge in the field of energy
22
infrastructure today followed by the integration of renewable energy sources and energy
system integration, both closely linked to greenhouse gas emission reduction.
4.2 Specific objectives
The specific objectives to be pursued by the policy options are to correct the problems
and underpinning drivers identified in Section 2, namely to:
 Enable the identification of the cross-border projects and investments across the
EU and with its neighbouring countries that are necessary for the energy
transition and climate targets
 Improve infrastructure planning for energy system integration and offshore grids
 Shorten permitting procedures for PCIs to avoid delays in projects that facilitate
the energy transition
 Ensure the appropriate use of cost sharing tools and regulatory incentives
Figure 4 illustrates how the problems and their underlying drivers relate to the general
and specific objectives of the initiative. The last column indicates how the policy options
that will be developed in more detail in the next section relate to the problem drivers and
objectives.
Figure 4: Intervention logic diagram
Problem/Driver Objective Policy option
Problem 1
Type and scale of cross-border
infrastructure developments are
not fully aligned with EU energy
policy objectives in particular as
regards European Green Deal and
the climate neutrality objective
General objective (Part 1)
Facilitate the development of
adequate energy infrastructures
across the EU and in its
neighbourhood to enable
delivering on the EU’s energy
and climate objectives, in
particular on the 2030/50 targets,
as well as market integration
competitiveness, and security of
supply
Driver 1.1
TEN-E infrastructure categories
do not sufficiently reflect the
Green Deal and technological
progress
Specific objective 1
Enable the identification of the
cross-border projects and
investments across the EU and
with its neighbouring countries
that are necessary for the energy
transition and climate targets
Option A.1: Smart
electricity grids and
electricity storage
Option A.2: Gas
infrastructure, hydrogen
networks and power-to-
gas
Option A.3: Projects of
mutual interest (PMIs)
Driver 1.2
Lack of a mandatory
sustainability criterion in the PCI
selection process
Option B.2: Cross-
sectoral infrastructure
planning
Driver 1.3
Sectoral bottom-up approach to
Specific objective 2
Improve infrastructure planning
Option B.1: Offshore
grids for renewable
23
infrastructure planning for energy system integration and
offshore grids
energy
Option B.2: Cross-
sectoral infrastructure
planning
Problem 2
Delays in project implementation
General objective (Part 2)
Facilitate the timely development
of adequate cross-border energy
infrastructures across the EU at
least cost for consumers and
businesses
Driver 2.1
Long permitting procedures
Specific objective 3
Shorten permitting procedures
for PCIs to avoid delays in
projects that facilitate the energy
transition
Option C.1: Permitting
Driver 2.2
Sub-optimal implementation and
insufficient use of the cost
sharing tools and regulatory
incentives
Specific objective 4
Ensure the appropriate use of
cost sharing tools and regulatory
incentives
Option D.1: Regulatory
treatment
In addition to the above objectives, the initiative seeks to simplify and improve the
efficiency of the TEN-E Regulation as further specified in section 8.2.
5 WHAT ARE THE AVAILABLE POLICY OPTIONS?
Building on the inception impact assessment and the evaluation as well as the issues
identified in Section 2 and the objectives set out in Section 4, policy options to address
the problems and its underlying drivers, will be presented and discussed for four impact
areas of the current TEN-E framework: scope, governance/infrastructure planning,
permitting and public participation, and regulation. A preliminary analysis will allow
discarding those (sub-)options with the least positive impact. Table 1 provides an
overview of the policy options subject to assessment.
24
Table 1: Overview of assessed policy options
Policy option Description
A) SCOPE
Option A.1. Smart electricity grids and electricity storage
Option A.1.0 Business as usual
Option A.1.1 Broadened scope to reflect technological developments
Sub-option: Non-mechanical storage
Option A.2 Gas infrastructure, hydrogen networks and power-to-gas
Option A.2.0 Business as usual
Option A.2.1 Exclude all natural gas infrastructure but include hydrogen and P2G
Option A.2.2 Exclude natural gas infrastructure but include hydrogen, P2G and smart gas
grids for low-carbon and renewable gases
Sub-option: Natural gas infrastructure for renewable and low-carbon gases
Sub-option: Exceptions for natural gas PCIs (advanced implementation)
Option A.3 Projects of mutual interest (PMIs)
Option A.3.0 Business as usual
Option A.3.1 Inclusion of projects of mutual interest (PMIs)
B) GOVERNANCE / INFRASTRUCTURE PLANNING
Option B.1 Offshore grids for renewable energy
Option B.1.0 Business as usual
Option B.1.1 Integrated offshore development plans
Option B.1.2 Regional Independent System Operator / Joint Undertaking
Option B.2 Cross-sectoral infrastructure planning
Option B.2.0 Business as usual
Option B.2.1 Strengthened governance and sustainability
Option B.2.2 New governance set-up and expansion of scope and role of the TYNDP
C) PERMITTING
Option C.1 Permitting
Option C.1.0 Business as usual
Option C.1.1 Use of urgent court procedures
Option C.1.2 One-stop shop per sea basin for offshore renewable infrastructure projects
D) REGULATORY TREATMENT
Option D.1 Regulatory treatment
Option D.1.0 Business as usual
Option D.1.1 Inclusion of full investment costs
The options set out in this section are those with a significant potential to address the
problems identified above. Additional options are set out in Annex 9. These options
propose changes or improvements of mainly technical nature and are considered non-
essential in view of their potential to address the problem drivers. They do not entail
political choices concerning the future TEN-E Regulation.
During the evaluation study and the stakeholder consultations, several issues were
subject to a large consensus between stakeholders. They are not re-discussed in detail in
this report, as their positive impacts and contribution to the objectives of the initiative are
considered well accepted. These issues are the following:
a) Removal of oil pipelines as infrastructure category and thematic area:
New cross-border oil pipelines are not in line with the long-term decarbonisation
objectives. The Green Deal, and the relevant interim emission reduction
objectives, put the transport sector on a more dynamic decarbonisation pathway
25
then earlier targets59
. This is expected to drastically reduce oil demand and phase-
out all unabated oil consumption. This trend and the already existing crude oil
supply infrastructure coupled with the security of supply measures (e.g.
emergency oil stocks) does not necessitate the inclusion of oil supply
infrastructure in the revised TEN-E.
b) Removal of electricity highways as infrastructure category and thematic
area:
Electricity highways are fully covered under the priority electricity corridors.
Hence, the removal of electricity highways would not affect the outcome of the
PCI selection procedure but simplify the process and remove unnecessary
administrative burden.
5.1 What is the baseline from which options are assessed?
In the baseline, the current TEN-E Regulation is assumed to continue. The provisions as
described above would continue to apply and constitute the basis of the bi-annual
selection of PCIs and their implementation. The Regulation is likely continue to deliver
results/outcomes and impacts as shown in the evaluation (see Annex 5) and the expected
benefits from future PCIs.60
While the infrastructure planning and the PCI selection
process would not change in substance, a methodology to assess the sustainability
criterion for gas projects has been developed and may affect the number of gas projects
on future PCI lists under the current TEN-E Regulation. Investments in system
integration projects, such as hydrogen or biogas, would happen at local level but the
necessary scaling up for an European market to emerge would be hampered because of
lack of cross-border cooperation and planning framework. As for permitting, the existing
Regional Groups could be used to support better enforcement of the existing provisions,
which may improve and ultimately shorten project implementation. These changes are
incremental and would not significantly affect the outputs, results/outcomes and impacts
as identified in the evaluation. At the same, the significant progress in establishing a
resilient gas infrastructure is likely to decrease the number of natural gas candidate PCIs,
whereas an increase of electricity candidate PCIs can be expected – within the limits of
the current scope of the Regulation. In addition, external factors will affect the PCI
process. Adopted or planned policy initiatives such as the 2030 Climate Target Plan, the
revision of the Energy Efficiency Directive, the Renewable Energy Directive, and the gas
package may enter into force and increase the demand for energy infrastructure. The
taxonomy regulation is expected to influence private investments towards more
sustainable infrastructure categories. The Covid-19 sanitary crisis is likely to affect the
level of investments and may delay project implementation (see also section 2.3).
59
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
60
See modelling results in Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013
on guidelines for trans-European energy infrastructure, Draft final report
26
5.2 Description of the policy options
5.2.1 Scope
5.2.1.1 Smart electricity grids and electricity storage
Option A.1.0: Business as usual
The TEN-E Regulation defines each infrastructure category and a set of general and
specific selection criteria for PCI projects. The criteria for a smart electricity grid is
exhaustive and very detailed from a technical point of view and are thus difficult to be
met at the same time. Only a few smart grid projects have been eligible as PCIs to date,
nine in total since the adoption of the first PCI List. Concerning electricity storage the
current definition is limited to mechanical storage with 13 storage projects on the current
PCI list.
On the cross border criterion for the smart electricity grids, a project needs to
demonstrate in detail the involvement of the project promoters (a TSO or a DSO from
two or more Member States, or from at least one Member State and an EEA country).
Since the concept of “involvement" is not clearly defined in the current Regulation, the
current practice has provided further interpretation regarding the necessary support from
a TSO level (not being a direct project promoter but supporting it in any case) . Under the
current cross border criterion, only large hydro and compressed air storage facilities are
eligible for PCI status for electricity storage, prohibiting utilisation of other advanced
electricity storage technologies such as batteries.
Option A.1.1: Broadened scope to reflect technological developments
The definition and the description of smart electricity grids thematic area would be
updated by including elements regarding innovation and digital aspects that could be
considered among the equipment or installations for smart grids. The criteria would be
adjusted accordingly to reflect the broadened scope. Whereas the requirement for the
involvement of project promotors from two or more Member States remains, it would be
clarified that not all involved DSOs and TSOs do not need to be project promoters, but it
is important that the relevant TSOs and DSOs are duly informed about and supportive of
the project. In addition, smart grid projects at TSO level, not involving DSOs, would also
be allowed. The update would also include a specific reference to smart grids enabling
charging infrastructure for electric vehicles at the medium to high-voltage level.
Sub-option: Non-mechanical storage technologies
The definition of electricity storage would be updated by including elements related to
new technologies utilised for electricity storage. Key changes would be to define new
criteria to prove significant cross border impact for new non-mechanical storage
technologies (for ex. electrochemical storage in batteries or chemical storage in
hydrogen). For non-mechanical storage technologies new values for minimum installed
power in MW and energy capacity in MWh would be proposed. Those values would be
smaller compared to the current values and be based on the latest Commission storage
27
study61
and would need to be sufficiently high to ensure significant cross-border benefits.
The current criteria would remain for mechanical storage facilities.
This would allow the TEN-E frameworks integrate technological progress necessary to
support a cost-efficient energy transition.
Stakeholder views: Many stakeholders underline the significance of electricity
distribution infrastructure in an interconnected European energy market that increasingly
relies on distributed generation and active participation of end consumers62
. In this
context, many stakeholders pointed out a necessary update of smart electricity grids
thematic area by including new smart technologies, solutions and concepts. Stakeholders
suggested that the current eligibility criteria for storage technologies do not provide
sufficient flexibility for the support of different and emerging storage technologies.
5.2.1.2 Gas infrastructure, hydrogen networks and power-to-gas
Option A.2.0: Business as usual
This policy option would keep the status quo regarding the scope of the Regulation with
regard to gas infrastructure. Natural gas projects would remain eligible for PCI status and
CEF funding, if they contribute to the TEN-E objectives. Hydrogen, power-to-gas
facilities and smart gas grids are not in the scope of the regulation and therefore not
eligible for PCI status, nor CEF funding, except in case they fall under the new cross-
border renewable window of CEF II coming into force under the 2021-2027 MFF.
Retrofitting to allow for hydrogen blends and projects aiming specifically to integrate
renewable gases (biogas/biomethane) would remain eligible in principle (as long as they
affect the transmission infrastructure) but in practice unlikely to meet all the current
selection criteria, since such projects typically do not aim at increasing cross-border
transport capacity.
Option A.2.1: Exclude all natural gas infrastructure, but include hydrogen and P2G
Under this policy option, the scope of the TEN-E Regulation would cover only the
following projects:
 Dedicated new and repurposed hydrogen networks with cross border relevance
(including hydrogen transmission pipelines and related equipment such as
compressors; storage facilities; facilities for liquefied hydrogen).
 Power-to-gas facilities and related infrastructure with cross-border relevance (i.e.
aiming to supply at least two Member States and consideration of setting a
capacity threshold
61
Artelys/Trinomics/Enerdata (2020): Study on energy storage – Contribution to the security of the
electricity supply in Europe, https://op.europa.eu/en/publication-detail/-/publication/a6eba083-932e-11ea-
aac4-01aa75ed71a1
62
Stakeholder views are briefly summarised for each sub-section, for further details on the different
stakeholder positions see Annex 2.
28
Only the above projects would be eligible for PCI status (apart from electricity and CO2
transportation projects). All infrastructure projects related to the methane gas grid would
be excluded from the scope.
Policy option A.2.2: Exclude natural gas infrastructure but include hydrogen, P2G
and smart gas grids for low-carbon and renewable gases
In addition to the inclusion of new and repurposed hydrogen networks and P2G (as
described in the previous option), a new PCI category would be created for smart gas
grids. This would support investments at distribution and/or transmission level to
integrate locally produced renewable and low carbon gases (typically biogas and
biomethane but also hydrogen) in the network and help manage a resulting more complex
system, building on innovative technologies. The candidate projects would consist of a
range of investments directed at "smartening" and decarbonising a given gas network.
Some of the investments would affect the TSO level, such as for instance compressor
stations to enable DSO-to-TSO reverse flow. The following requirements could help
ensure project scale and cross-border impact:
 To require the involvement of DSOs and TSOs from at least two Member States
(mirroring the cross-border criterion for smart electricity grids).
 To require involvement of one or several DSOs as well as one or several TSOs.
 To establish a threshold, for instance based on the number of consumers and/or
energy consumption volume, similar as for smart electricity grids.
Sub-option: Natural gas transport infrastructure for renewable and low-carbon gases
Under this option, natural gas projects would no longer be eligible for PCI status,
regardless of their contribution to the TEN-E objectives.
However, an exception could be made for gas infrastructure projects that specifically aim
at integrating renewable and low-carbon gases (i.e. biogas, biomethane, synthetic
methane produced from hydrogen, or pure hydrogen) into the existing natural gas
(methane) transmission network. This exception could comprise one or both of the
following project types:
1. Newly built gas transmission infrastructure projects of cross-border relevance
aiming to integrate biomethane and synthetic methane into the European gas
network;
2. Retrofits of existing natural gas transmission assets for hydrogen
admixtures/blends.
While certain investments on the transmission level could also form part of a smart gas
grid project, the infrastructure categories under this exception would affect exclusively
the transmission level and would not necessarily involve any “smart” elements.
Sub-option: Exceptions for natural gas PCIs at an advanced implementation stage
29
A further exception could be made (under either of the two policy options) for existing
natural gas PCI projects at an advanced stage of implementation to cater for legitimate
expectations by the affected promoters. This would mean the following: existing gas
PCIs which are already under construction, or will start construction before [the end of
2022]63
, or for which a CEF grant agreement for works has been concluded before [the
end of 2022], would remain eligible for PCI status under current rules to allow the
finalisation of these projects under a preferential treatment. There could be an additional
limitation which would make the affected projects eligible under the current rules only
for the first list to be adopted under the revised TEN-E.
The choices on the updated gas infrastructure priorities and eligible infrastructure
categories will be reflected in the structure and objectives of the affected regional groups
and thematic priority areas defined in the TEN-E Regulation.
Table 2: Overview of policy options for gas infrastructure
Gas policy options
and infrastructure
categories
A.2.0:
Business-as-
usual
A.2.1:
Hydrogen and
P2G
A.2.2: Green
gas
infrastructure
Hydrogen networks X ✔ ✔
Power-to-gas X ✔ ✔
Smart gas grids X X ✔
Natural gas
infrastructure
✔ X X
Exception for advanced
natural gas PCIs
NA ✔ ✔
Exception for natural
gas TSO infrastructure
to integrate biomethane
and synthetic methane
(✔) X ✔
Exception for natural
gas TSO retrofits for
hydrogen admixtures
(✔) X ✔
Legend: ✔ : infrastructure category possibly included in the scope; (✔): included in principle but unlikely
to meet (all) PCI eligibility criteria; X: excluded from the scope; NA: not applicable
The eligibility for CEF financial assistance would be adjusted to the infrastructure
categories of the revised TEN-E Regulation, i.e. expand eligibility to all or some of those
categories that were added, while those removed would by default be excluded from CEF
63
Exact date tbd – but should be sufficiently early before the establishment of the first list under the
revised TEN-E Regulation. Counting with a legislative proposal in December 2020 and entry into force of
the revised regulation in June 2022 (ambitious timeline of 1.5 years for co-decision), and counting with the
6th
list being adopted by end-2023 – requiring sufficient maturity by the end of 2022 seems like a
meaningful working assumption for a cut-off date.
30
financial assistance. For CEF financial assistance for works the same principles as under
the current framework (commercial non-viability and externalities) would apply.
However, as electrolysers would be already eligible for CEF financial assistance as cross-
border projects in the field of renewable energy under CEF II (so-called cross-border
RES window), under this option electrolysers would not be eligible for CEF financial
assistance under the future TEN-E Regulation.
Stakeholder views: While several stakeholder groups, mainly representing TSOs and
industry associations, considered the inclusion of hydrogen infrastructures, smart gas
distribution grids as well as power-to-gas important, there was mixed support notably
from NGOs. Environmental NGOs in particular, but also some stakeholders representing
the electricity sector, were against the inclusion of natural gas infrastructure in the future
scope of TEN-E and voiced concerns about the sustainability of the new types of gases.
5.2.1.3 Projects of mutual interest (PMIs)
Option A.5.0: Business as usual
Only projects, which are able to demonstrate socio-economic benefits for at least two EU
Member States are eligible for PCI status. Significant cross-border impact needs to be
demonstrated by meeting a certain capacity threshold.
Option A.5.1: Inclusion of PMIs under the TEN-E Regulation
The status of projects, which are able to demonstrate significant net socio-economic
benefits for at least two EU Member State and at least one third country could be
recognised by the revised TEN-E Regulation by introducing specific criteria for such
projects. For such projects to obtain a priority status, the conditions of regulatory
approximation with the EU would need to be fulfilled, and the projects would need to
contribute to the EU overall energy and climate objectives in terms of security of supply,
decarbonisation. In addition, the third country, when supporting the priority status of the
given project, would also commit to full support of the project in view of complying with
a similar timeline for accelerated implementation and other policy support measures, as
stipulated in the TEN-E Regulation.
The presented options would not effect the very few projects with third countries which
already qualify under the existing PCI eligibility criteria.
This would allow identifying cross-border infrastructure between the EU and
neighbourhood countries that is mutually beneficial and necessary for the energy
transition and the achievement of the climate targets.
Stakeholder views: There was mixed support among stakeholders to extend the scope of
the Regulation to Energy Community countries and other third countries. Support was
mainly expressed by TSOs of Member States with borders to non-EU countries as well as
non-EU stakeholders. Some stakeholders called for a specific regime for this kind of
projects to ensure that similar regulatory standards are complied with.
31
5.2.2 Governance / Infrastructure planning
5.2.2.1 Offshore grids for renewable energy
The offshore grids for renewable energy is a transmission infrastructure, with dual
functionality: interconnection and transport of offshore renewable energy from the
offshore generation sites to two or more Member States (thereafter hybrid grids). The
offshore grid can also include the Member States internal high voltage transmission
infrastructures (new or reinforcements) that demonstrate significant necessity for the
transport of offshore renewable energy to the consumption sites, as well as any offshore
adjacent equipment or installation essential to operate safely, securely and efficiently,
including protection, monitoring and control systems and necessary substations.
Option B.1.0: Business as usual
This option would continue the incremental development of offshore grids observed so
far. As regards planning, ENTSO-E would identify and analyse within the Regional
Investment Plans (which are part of the ten-Year Network Development Plans package)
the necessary regional offshore grid infrastructure. The identification of the infrastructure
needs, project proposals and assessment done in line with the latest available
Commission scenarios and Member States commitments on offshore renewable energy.
This enhanced TYNDP would be the basis for the PCI selection process.
Option B.1.1 Integrated offshore development plans
This option would strengthen the cooperation in offshore infrastructure planning and
implementation. It would require Member States within each sea basin to jointly commit
to the amount of the offshore renewable deployment for each sea basin64
. In addition, it
would mandate ENTSO-E, with the involvement of the relevant TSOs and in line with
the political commitments, to develop offshore plans for time horizons 2030, 2040 and
2050 respectively for all the sea basins. The integrated offshore network development
plan is to be coherent with the TYNDP and developed under the Commission’s steering
and binding opinion. If, based on ENTSO-E’s report, a group cannot agree on an
integrated offshore network development plan, or ENTSO-E does not develop such plans
on time, the Commission may take over, possibly with input from a third party in view of
having an integrated offshore network development plan established per sea basin.
Finally, this option would include a requirement for the Commission to develop a
specific cost-benefit and cost-sharing method for offshore infrastructure that will enable
Member States to properly assess the direction they want to take and carry out a
preliminary cost sharing procedure.
Option B.1.2 Regional Independent System Operator / Joint Undertaking
This option gives the task of offshore grid planning, including the identification of
infrastructure gaps, proposal and implementation and offshore grids, investment per sea
64
In line with the NECPs, considering also the new ambition of the proposed Climate Target Plan, other
national and regional investment plans, renewable potentials, maritime spatial plans and environmental
aspects
32
basin and cross border cost allocation process for offshore infrastructures to a new entity,
either a regional Independent System Operator or a Joint Undertaking e.g. per sea basin.
A single entity could optimise the grid planning and investment per sea basin more
efficiently, than a group of TSOs. The entity would have to take over key responsibilities
from the national TSOs.
Options B.1.1 and B.1.2 would allow going beyond the bottom-up approach to
infrastructure planning for offshore infrastructure.
Stakeholders view: Stakeholders did not express specific views on the future offshore
infrastructure planning regime. However, there was the general view that hybrid assets
and meshed offshore wind hubs will be essential for the development of offshore
renewable energy in Europe.
5.2.2.2 Cross-sectoral infrastructure planning
Option B.2.0: Business as usual
The current conditions continue to apply without changes. The Electricity and Gas
Regulations mandate the ENTSOs to develop every two years their respective 10-year
Network Development Plans (TYNDP) and give ACER the power to deliver a non-
binding opinion on these plans. The Commission has no direct role in the development of
these plans. The sole oversight of the Commission is on the ENTSOs’ gas/electricity
Cost-Benefit Analysis (CBA) methodologies, which must receive approval from the
Commission before their use in the TYNDPs and the PCI selection process.
Sustainability is an integral part of the CBA methodologies for PCI selection. Under the
TEN-E framework, sustainability is as optional criterion alongside security of supply,
competition or market integration. Although in practice the Cost-Benefit Analysis
methodology provides leeway to prioritise some criteria over others, prioritisation is not
enshrined in the current TEN-E text. Thus, keeping the current frame would allow a
project with negative impact on the sustainability criterion but good results on other
criteria be selected as PCI.
Option B.2.1: Strengthened governance and sustainability
This option entails maintaining the current governance of the TYNDPs and the role of
the ENTSOs with significant improvements in the Commission and ACER oversight on
the TYNDP. This includes in particular three elements. First, a strengthened oversight
role for the Commission, through means of binding opinions, on the ENTSOs’ scenarios
and system needs identification, which are key steps in the process to deliver the
TYNDPs and define what infrastructures are needed. This would allow the Commission
to safeguard the alignment of the ENTSOs’ scenarios to climate and energy targets and
Commission scenarios, along with the improved identification of the infrastructure needs.
Second, a reinforced role for ACER in the development of scenarios and in the Cost-
Benefit Analysis methodology by mandating the Agency to develop framework
guidelines for the ENTSOs’ scenarios and approve incremental improvements of the Cost
Benefit methodology. Third, a deeper interlinkage between the sectoral TYNDPs to
reinforce their contribution to the energy system integration process and increased
participation of the DSOs in the planning process.
33
This option would also require the inclusion of a mandatory sustainability criterion for all
infrastructure categories with at least one other criterion (market integration, security of
supply, competition) at the stage of project selection. The relevance of each criterion in
the ranking of the projects would be defined in the assessment methodology for the
ranking of the candidate projects. This methodology is discussed and validated by the
regional groups as under the current TEN-E Regulation65
. While the details of the
assessment methodology would be agreed by the regional groups, all candidate project
would need to contribute to at least the sustainability criterion.
Option B.2.2: New governance set-up and expansion of the scope and the role of the
TYNDP
This option would establish a new governance set-up for the TYNDPs and expand the
scope of the TYNDP in order to integrate energy system-wide cost-efficiency. Through a
governance reform, a neutral actor (such as the Commission or ACER) would take a
leading role in the TYNDPs development. Within this frame, the Commission or ACER
would not be responsible of delivering any opinion or approval of the ENTSOs work as
in option B2.1. Instead, the neutral actor will be responsible of the entire planning
process, meaning developing scenarios and the associated data, run market and network
studies to identify infrastructure gaps within electricity and gas sectors, assess the
benefits of possible and draft and publish the planning reports. The role of ENTSOs and
TSOs would be limited to providing information given their unique expertise in
networks. This option would also require the inclusion of a mandatory sustainability
criterion for all infrastructure categories as per option B.2.1.
Options B.2.1 and B.2.2 would allow overcoming the sectoral approach to infrastructure
planning and ensuring that sustainability will be considered during the PCI selection
process.
Stakeholders view: ACER and a majority of other stakeholders, while recognising the
merits of having the ENTSOs’ expertise in the process, asked for a stronger oversight
from the Commission and ACER on scenarios, cost-benefit analysis and identification of
system needs. There is a large consensus among stakeholders that the importance of
sustainability in the PCI selection process of the (decarbonised) gas projects needs to be
reinforced. Some categories of stakeholders also underline the importance of maintaining
strong weighting for other criteria, in particular security of supply, in a multi-criteria
selection approach.
5.2.3 Permitting and public participation66
Option C.1.0 Business as usual
The permitting provisions in the TEN-E Regulation, which are very innovative and have
already proven their effectiveness with the permitting duration of PCIs decreasing
significantly, would remain unchanged.
65
See Annex 8 for more information.
66
For improving the readability of the report, we maintained in the man text only political options, with
additional options of a technical nature being include and assessed in Annex 8.
34
Option C.1.1: Use of urgent court procedures
While the evaluation of the TEN-E Regulation finds that the underlying reasons for
permitting delays are to a large extent related to national implementation and, mainly,
outside the scope of the TEN-E Regulation, some aspects could still be tackled at Union
level that would allow a swifter implementation of PCIs. For example, the length of PCI
related court procedures was not tackled in the current TEN-E Regulation, but appears, in
accordance with the stakeholders views, to be a factor that could delay project
implementation.
Administrative appeal procedures and judicial remedies before a court or tribunal do not
fall within the time limit prescribed for the permitting process of 3.5. years meaning that
their duration, if they happen, adds on to the project implementation delay. To accelerate
the completion of the permitting process, Member States, which already have urgent
court procedures under national legislation in other domains, would have to ensure that
these accelerated litigation procedures are applicable to PCIs under national legislations.
Option C1.2: One-stop shop per sea basin for offshore renewable infrastructure
projects
The one-stop shop would issue the comprehensive decisions for the infrastructure
elements for offshore projects by coordinating all the national and regional permits to be
obtained within the 3.5 years time-limit and ensure that offshore projects do not
encounter delays beyond this period. It would enable coordination between the
permitting process for the infrastructure and the one for the generation assets and it
would act as a single point of contact for project promoters and a repository of existing
sea basin studies and plans, which would facilitate the permitting of individual projects.
The one stop shop would be comprised of staff from all the already existing national
permitting one-stop shops. This option is complementary to the ones mentioned above.
Options C1.1 and C1.2 would allow shortening permitting procedures.
Stakeholder views: While a series of stakeholders pointed to the difficulties with
complex and lengthy permitting process for offshore projects crossing several
jurisdictions and called for a simplified permitting process, no stakeholder expressed any
specific opinion on a possible new one-stop-shop for offshore wind projects.
Stakeholders involved in the permitting procedures indicated that several notions in the
permitting chapter could be clarified (see additional options in Annex 9). Stakeholders
also raised the delay with the court and appeal procedures regarding PCIs and called for
streamlines court procedures for PCIs.
5.2.4 Regulatory treatment67
Option D.1.0: Business as usual
67
For improving the readability of the report, the main text includes only political options, with additional
options of a technical nature being included and assessed in Annex 9.
35
The current CBCA provisions, which provide the principles and tools to ensure that costs
are allocated cross-border in an orderly manner enabling the development of such
projects, would be maintained. However, in practice this means that the CBCA procedure
would be used only as a pre-requisite for requesting CEF grants for work and the
provisions would not reach their potential in enabling projects implementation.
Option D.1.1: Inclusion of full investment costs
This option aims at ensuring consistency between the CBCA decisions and safeguarding
the primary goal of the CBCA. This would entail a two-stage approach in which: (i) The
NRAs would allocate all investment costs across borders and include them in full in the
national tariffs and, afterwards, if necessary, (ii) assess whether any affordability issues
arise as regards the increase in tariffs due to the inclusion of such costs. The NRAs would
always assess how much a certain project would cost if it were paid for completely by
tariffs and this should be the basis for the affordability test and, ultimately, for
calculating any public financing.
This would allow for a better implementation and use of the cost sharing tools.
5.3 Options discarded at an early stage
 Expand CO2 infrastructure category to include CO2 transport by ship and
infrastructure necessary for the permanent geological storage of CO2
Mainly stakeholders representing the CO2 industry argued for the inclusion of CO2
transport by ship and infrastructure necessary for the permanent geological storage of
CO2in the TEN-E Regulation. The transport infrastructure category would be enlarged
from only pipeline infrastructure to also include shipping infrastructure, both the
facilities necessary to enable shipping as the actual ships themselves, and infrastructure
related to CO2 storage.
However, it is not clear how the inclusion of transport with mobile assets such as ships in
the TEN-E Regulation would help the implementation of such projects. There are no
regulatory or administrative barriers in relation to cross-border networks that could be
addressed by the provisions in the TEN-E Regulation. The key barrier to the deployment
of CO2 infrastructure, including for the geological storage of CO2 and shipping, is access
to financing.68
The only benefit sought by such projects being eligible for PCI status
would be that they may get access to CEF financial assistance. However, the key
objectives of the TEN-E is to support the timely implementation of infrastructure projects
of cross-border nature where CEF financial assistance is only one element as a last resort
financing option. Moreover, such expansion would not relate to transmission networks
and interconnections in accordance with the legal base. Other EU and national financing
instruments are available to support CO2 infrastructure for geological storage and
shipping such as the Innovation Fund.
68
Ecofys (2018): Market testing for low-carbon innovation support to energy intensive industry and to
power generation, https://op.europa.eu/en/publication-detail/-/publication/906bea83-b6fe-11e8-99ee-
01aa75ed71a1
36
 Projects to reduce methane leakage
Methane leakage projects would be unlikely to demonstrate cross-border impact.
Methane leakage projects consist of retrofits and repairs of different elements of a gas
network. They often do not involve capital investments but rather network management
and repair methods (more related to operational expenses). The investments involved are
often targeted at the distribution level, which is responsible for around 60% of methane
emissions from gas operations in Europe. Such investments are therefore per definition
related to one country’s network and aim at improving the efficiency of the network
operation and emission savings but do not aim at increasing cross-border capacity,
neither do they have indirect effects on cross-border trade or capacities. Therefore,
projects specifically aiming at methane leakage reductions do not really fit the
intervention logic of the TEN-E Regulation nor under the concept of projects of common
interest of a trans-European importance. Based on IEA data, the gas industry itself has
cost-effective options to make its contribution to methane emission reductions by
deploying best available technologies for the various gas chain elements and processes;
and by adopting best practices and implementing leak detection and repair programmes.
 Removing cross-border requirements for smart electricity projects (inclusion
of pure DSO level projects at local level)
Different stakeholders have called for the eligibility of all smart electricity grid projects,
also those with no involvement of TSOs, for PCI status. With 2 400 DSOs in Europe, the
potential number of eligible projects would be very high. At the same time, without the
involvement of a TSO, it would be difficult, if not impossible, to demonstrate a
significant cross-border impact for such projects. It would not be in line with the legal
base, which requires a clear link to the transmission level. The required resources for the
selection process would be disproportionate in view of the projects that could actually
qualify. The inclusion of projects at a DSO level and hence without a (significant) cross-
border impact would neither imply more investments at the distribution level nor an
easier implementation process for such projects. To the contrary, it may rather create
wrong expectations and add unnecessary burden on all parties involved in the PCI
selection process.
 Heat networks as new infrastructure category
Some stakeholders such as heat network operators argued for the inclusion of smart heat
networks in the TEN-E Regulation as this could bring benefits in terms of system
integration. However, heat networks are local in nature with no or very limited cross-
border impact. There are no heat transmission networks as it is not efficient to transport
heat over long distances. European infrastructure planning for the purpose of
interconnections and interoperability is therefore not needed for heat networks.
Additional discarded options of more technical nature, also based on the evaluation
results and stakeholder views, are included in Annex 7 and relate to the following topics:
breaking the link between the CBCA and CEF financing, conditional CBCA decisions,
and the easing of environmental and location approvals for PCIs.
37
6 WHAT ARE THE IMPACTS OF THE POLICY OPTIONS?
The assessment of the impacts of each policy option relies to a large extent on a
qualitative approach looking at the main environmental, economic, and social impacts as
well as administrative burden, if applicable. It was not possible to quantify the impacts
for all options because the specifics of future PCIs would need to be available for that
purpose which is particularly challenging for new or emerging infrastructure categories.
Moreover, many of the proposed changes are mainly improvements to the current
framework, which has been deemed to work relatively well and broadly meet its aims.
Relevant sectoral studies or literature are used to provide a quantitative indication of
certain impacts even if their scope is not limited to PCIs. While PCIs as cross-border
infrastructure project cover a comparatively small number of energy infrastructure
projects and needs in Europe, they constitute key infrastructure projects that enable and
trigger additional investments with impacts beyond the direct benefits of the projects of
common interest.
The TEN-E Regulation does not impose obligations on economic operators, but it does
set requirements on promoters of PCIs, mainly TSOs and DSOs, which decide to apply
for PCI status and subsequently become subject to certain obligations, mainly in the form
of monitoring and reporting obligations. In addition, the TEN-E Regulation sets
obligations on competent national authorities and regulators concerning permitting,
regulatory incentives, and public participation as well as on network operators
concerning long-term network planning. Consumers are mainly affected through network
tariffs to finance investments in the regulatory asset base (RAB).
6.1 Scope
6.1.1 Smart electricity grids end electricity storage
Option A.1.0: Business as usual
To keep the current eligibility criteria would imply that the smart electricity grids
thematic area remains restricted and only accessible for a limited number of
infrastructure projects. In the case of electricity storage, it would imply that it remains
limited to large mechanical/hydro storage projects. In the case of smart electricity grids,
digitalisation and innovation in the grids creates would not sufficiently reflect recent
technologies and hence potential positive environmental, economic and social impacts
would not be enough exploited (see below). Regulatory frameworks and regulatory
practice in the Member States in many cases do not sufficiently support innovative grid
investments by the TSOs or even constitute a barrier to such investments.69
Option A.1.1: Broadened scope to reflect technological developments
Environmental impacts
69
Ecorys 2019, Do currrent regulatory frameworks in the EU support innovation and security of supply in
electricity and gas grids.
38
The broadened scope for electricity smart grids would support the changing infrastructure
and system security needs with a higher uptake of innovation and digitalisation in the
grids. Over 90% of distributed renewable energy generation will most likely continue to
be connected at distribution grid level70
. Consumers, mostly connected to the distribution
grid, are allowed to provide demand-side flexibility, with 120 GW-150 GW of flexible
load available by 2045. The ongoing rollout of smart metering will boost this
development. Further synergies with the TEN-T Regulation would help to enhance the
future charging infrastructure for electric vehicles and would benefit users of electric
vehicles by supporting smart grid projects enabling charging infrastructure for electric
vehicles. It is expected that the vehicle stock share of electric cars will increase to up to
11% by 203071
from currently below 1%. Electric vehicles with “smart charging” could
provide capacity for flexibility and demand response. These use cases alone or as
elements of virtual power plant platforms could become an important interface between
energy and mobility, since digital infrastructure is a key enabler for the energy transition
in these two sectors with a significant greenhouse gas reduction potential. While TEN-E
would only cover smart grid projects with a cross-border impact, these projects could
make a significant impact to ensure interoperability across Member States.
Sub-option: Non-mechanical storage technologies
The estimated daily flexibility required to be provided by electricity storage in 2030 is 97
GW for EU-2772
. Electricity storage provides flexibility to the power system operation
and decreases the need for new power lines within the power system73
. In certain cases
energy storage systems can be deployed faster than transmission lines and have a smaller
footprint than transmission projects eliminating environmental impacts from construction
of those projects74
. The increased demand of different storage technologies, especially
electrochemical (batteries) would support development and usage of new, more advanced
storage systems, decreasing the overall impact on the environment.
Higher uptake of electric storage in the form of batteries would result in potential
emissions associated with the production of batteries. However, the emission factors
calculated vary significantly depending on the type of battery in terms of materials and
energy density and the source of energy used for its production. However, it is
anticipated that the potential environmental impacts could decrease very significantly. In
its 2019 Strategic Action Plan on Batteries75
, the Commission points to the importance of
improved recycling processes, and an extension of the battery lifetime. Re-use of
batteries in stationary applications can reduce environmental impacts over the life- cycle.
Economic impacts
70
Eurelectric (2019): The Value of the Grid, https://cdn.eurelectric.org/media/3921/value-of-the-grid-final-2019-030-
0406-01-e-h-D1C80F0B.pdf
71
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
72
Artelys/Trinomics/Enerdata (2020): Study on energy storage – Contribution to the security of the
electricity supply in Europe, https://op.europa.eu/en/publication-detail/-/publication/a6eba083-932e-11ea-
aac4-01aa75ed71a1
73
IEA Energy Storage Study 2020, https://www.iea.org/reports/energy-storage
74
FLUENCE 2019 White Paper, Redrawing the Network Map: Energy Storage as Virtual Transmission
75
COM(2019) 176 final
39
A broadened scope of smart grids would increase the network operational efficiency
through the implementation of flexibility features of existing HVDC (High Voltage
Direct Connection) cables and the enhancement of the exploitation of demand-response
management services based on the increased cross-border data and capacity exchange,
together with the provision of ancillary services between the related TSOs and/or DSOs.
In addition, cross-border smart electricity grids facilitate the growing penetration of
renewable energy sources in the grid and enable a better integration of the behaviours
and actions of all users connected to the network across borders.
In the light of changing infrastructure and system security needs, this policy option
would contribute to stimulate the use and implementation of new innovative technologies
and activities in the domain of digital technologies, which will enhance the already
existing positive impact of cross-border smart electricity grids. Development of new
standards and technology for the interoperability of smart grid systems with increased
reliability and cybersecurity protection would be further supported across borders.
Comprehensive control and monitoring of the grid would reduce the need for curtailment
of renewables and enable competitive and innovative energy services for consumers.
According to the IEA, investments in enhanced digitalisation would reduce curtailment
in Europe by 67 TWh by 204076
. Electricity storage could simultaneously reduce the
volatility of the electricity prices, reduce the cost of the electricity system increasing
energy efficiency and facilitate a higher share of variable renewable energy sources in the
energy system77
. Due to lack of data, it is not possible to quantify the potential cross-
border impact for non-mechanical storage projects. However, at this stage it would be
difficult for non-mechanical storage technologies (for ex. electrochemical storage in
batteries or chemical storage in hydrogen) to meet cross-border criteria to prove a
significant cross-border impact. The opportunities provided by energy storage are
increasingly supported by the momentum in research and innovation making the
European economy more competitive.
This option would allow more market players to get involved in smart electricity
projects. The updated eligibility criteria would enable TSO/TSO cooperation in the area
of smart grids, where DSO/DSO combinations would still be possible with the respective
TSO support. To open the possibility to purely TSO level projects would enhance the
number of cross-border smart electricity grids to be developed under the TEN-E
framework, which are unlikely to happen otherwise.
Social impacts
The digitalisation of the grid and metering would facilitate customer participation in all
stages of the development and expansion of the energy system by digital tools such
as participative geographical systems and new energy market arrangements78
. This would
76
with demand-response accounting for 22 TWh and storage accounting for 45 TWh - IEA 2016
77
EC report “Role of electricity in energy storage”, February 2017,
https://ec.europa.eu/energy/sites/ener/files/documents/swd2017_61_document_travail_service_part1_v6.pd
f
78
E.g. ETIP SNET (2018): DIGITALIZATION OF THE ENERGY SYSTEM AND CUSTOMER
PARTICIPATION: Description and recommendations of Technologies, Use Cases and Cybersecurity,
40
allow consumers to directly benefit from a more competitive energy market and monetise
the flexibility in their consumption patterns.
6.1.2 Gas infrastructure, hydrogen networks and power-to-gas
Policy options A.2 combine different infrastructure categories. The overall impact of
these options depends on the impacts stemming from the individual infrastructure
categories included under each option.
Option A.2.0: Business as usual
Hydrogen networks, power-to-gas projects, smart gas grids would remain out of scope.
Green gas-related transmission infrastructure projects are in the scope but unlikely to
meet the cross-border criterion. This option would mean that, as regards gas, the TEN-E
would keep its focus on natural gas transmission infrastructure and fail to accommodate
renewable and low carbon gas projects. Although the number of natural gas PCIs is
expected to decrease in the coming years (see section 5.1), the continued focus on natural
gas and failing to stimulate the decarbonisation of the gas sector would significantly
weaken TEN-E’s potential contribution to greenhouse gas emission reduction.
Environmental impacts
Continued PCI status for new natural gas infrastructure is not compatible with the long-
term decarbonisation objectives. A reduction of natural gas demand is expected in all
decarbonisation pathways developed by the Commission: even in business-as-usual,
demand for natural gas shrinks by 13% between 2015 and 2030 and, by 2050, natural gas
is expected to be largely replaced by alternative renewable and low-carbon gaseous fuels
in all decarbonisation scenarios79
. Infrastructure projects create assets with a long
lifetime (e.g. a gas pipeline can be used for 50 years or more) and would contribute to a
lock in to the use of fossil fuels which is inconsistent with the long-term climate
neutrality objective.
Economic impacts
Keeping natural gas PCIs in the scope of the regulation creates risks of financing
stranded assets because there is no need for policy support for additional cross-border
natural gas infrastructure. The TEN-E framework has been successful in delivering a
secure and well-interconnected gas grid in Europe (see section Annex 5), which is largely
sufficient to guarantee security of gas supply for consumers and to enable closer market
integration. The evaluation report80
confirms that the existing gas infrastructure allows
https://www.etip-snet.eu/wp-content/uploads/2018/11/ETIP-SNET-Position-Paper-on-Digitalisation-short-
for-web.pdf
79
IN-DEPTH ANALYSIS IN SUPPORT OF THE COMMISSION COMMUNICATION COM(2018) 773
A Clean Planet for all, A European long-term strategic vision for a prosperous, modern, competitive and
climate neutral economy,
https://ec.europa.eu/clima/sites/clima/files/docs/pages/com_2018_733_analysis_in_support_en_0.pdf
80
REKK study concluded that Europe overall benefited significantly from the implementation of the
already commissioned PCIs which are estimated to bring more than 132 m€ of socio-economic benefit per
year, leading to an increase in trading of 42.5 TWh/year and an increase in LNG flow of around 18.3
TWh/year.
41
access for a wide range of supplies and it is resilient in a number of disruption cases. This
understanding is also supported REKK’s previous modelling81
along with the ENTSOG
TYNDP results82
. REKK concluded that there are no isolated markets in the EU and the
market players can make good use of the substantial LNG terminal and storage capacities
when market circumstances are favourable, as in 2019-2020. Today Europe enjoys a
resilient gas network, where gas prices are in majority correlated and infrastructure
capacities are auctioned and used to provide the necessary flexibility to the market83
. In a
similar vein, ACER’s latest monitoring report on the incremental capacity procedure
concludes that no market demand seems to exist for additional cross-border gas transport
capacity. From 55 non-binding demand assessment phase projects, only five proceeded to
the binding stage and none received sufficient market coverage to be realised.84
The remaining and already well-identified natural gas infrastructure needs are primarily
in the Eastern Baltic Sea region, the Central and South-Eastern part of Europe, and those
needs can be addressed by the most advanced gas PCIs in the 4th
PCI list. The evaluation
study shows that the implementation of the most advanced projects would further reduce
price differentials across EU countries. However, the relatively small incremental
benefits are also an indication that building even further natural gas projects do not seem
justified from a security of supply, market integration or solidarity point of view.85
Nor
would it align well with the more ambitious climate objectives of the European Green
Deal.
Following the implementation of the existing gas PCIs, there is no need for support for
additional cross-border natural gas infrastructure or LNG terminals. If there is market
demand for new capacity, it can be met through the appropriate internal energy market
rules (incremental procedure under the Network Code for Capacity Allocation and
Congestion Management) but the priority status coming with a PCI label is no longer
justified.
Social impacts
81
European Commission (2018) Quo vadis EU gas market regulatory framework –Study on a Gas Market
Design for Europe, https://ec.europa.eu/energy/sites/ener/files/documents/quo_vadis_report_16feb18.pdf
82
ENTSO-G (2017), Ten Year Network Development Plan 2017,
83
See ACER monitoring reports, eg. ACER/CEER: Annual Report on the Results of Monitoring the
Internal Natural Gas Markets in 2018
84
ACER: Monitoring update on incremental capacity projects and virtual interconnection points, July
2020, available at:
https://www.acer.europa.eu/Official_documents/Acts_of_the_Agency/Publication/ACER%20Monitoring%
20update%20on%20incremental%20capacity%20projects%20and%20virtual%20interconnection%20point
s.2020.pdf
85
REKK modelling concluded that by implementing all the advanced gas projects (i.e. those that have
already made a final investment decision) from the 4th
PCI list, Europe would have a decrease in price
dispersion of about EUR0.69/MWh (reaching EUR0.83/MWh if all PCIs on the 4th
PCI list were to be
build). Although minor, this decrease in average wholesale price illustrates that on some markets these
projects may bring incremental benefits. Regarding trade, all PCIs of the 4th
PCI list would decrease the
total flow levels on the network by 1%, showing therefore that the European network infrastructure is
adequate to serve the demand and PCIs from the fourth list will mostly help only with the better utilisation
of the grid by providing shorter routes and route diversification. These messages are also supported by an
internal JRC study run in parallel on the same topic.
42
Support for stranded assets would inevitably translate into higher tariffs for consumers,
thereby rendering the energy transition slower and less affordable.
Option A.2.1: Exclude all natural gas infrastructure but include hydrogen and P2G
Economic impacts
A condition for a widespread use of hydrogen as an energy carrier in the European Union
is the availability of dedicated cross-border hydrogen infrastructure. Today, the existing
hydrogen networks are not regulated assets; they are typically privately owned pipelines
connecting specific production and consumption sites. This is expected to change in the
future, as hydrogen use expands and its transportation is expected to happen over longer
distances. Hydrogen networks – which may initially be restricted to isolated local
distribution grids and later national hydrogen networks – will, starting around 2030,
increasingly be connected to create an internal market for hydrogen and offer benefits in
terms of competition and security of supply.86
This may have a profound impact on the
pattern of gas flows in Europe: countries with renewable power generation potential,
where green hydrogen can be produced, may become hydrogen exporters, while
consumption centres would be importers.
There is today no systematic network planning for hydrogen infrastructure at EU or
national level. The TEN-E framework could facilitate the European level planning for
hydrogen infrastructure. Depending on future developments, the planning and assessment
of hydrogen network could either be based on the TYNDP or the TEN-E could require
that hydrogen projects to apply for PCI status in the context of a hydrogen network
development plan, developed by the affected countries and/or project promoters87
which
would reduce costs. Coordinated planning would allow for a more efficient utilisation of
resources and locations, save costs, and speed up implementation. Without coordinated
network planning, the resulting infrastructure risks being fragmented along national lines
and hindering the emergence of an EU internal market for hydrogen. The location of P2G
facilities with a cross-border relevance will be crucial for the planning of hydrogen grids.
P2G facilities are also essential enablers for energy system integration, as they will create
links between gas and electricity systems, facilitating the decarbonisation of hard-to-
decarbonize sectors, such as heavy goods transport or industry.88
Future hydrogen networks are expected to consist to a great extent of infrastructure
converted to hydrogen from existing natural gas assets, however new production and
consumption centres for hydrogen may also require the construction of new assets
86
For instance, up to 70% of additional demand for green hydrogen projected by German TSOs for 2025
and 2030 is expected to be covere by imports of decarbonised hydrogen from the Netherlands (FNB Gas:
Gas Network Development Plan 2020-2030, p. 142). European gas TSOs expect that a European hydrogen
backbone would start to emerge from around 2030 and the initial regional clusters would progressively
expand into a truly European hydrogen transport network (see European Hydrogen Backbone, report by 11
European gas TSOs, July 2020, available at: https://gasforclimate2050.eu/sdm_downloads/european-
hydrogen-backbone/).
87
This would be on analogy of CO2 networks which are also not included in a TYNDP. Depending on the
infrastructure category, PCI status is not limited to projects that are included in a TYDNP.
88
See A hydrogen strategy for a climate-neutral Europe, COM(2020) 301 final; and Powering a climate-
neutral economy: An EU Strategy for Energy System Integration, COM(2020) 299 final
43
specifically for hydrogen.89
It is therefore important to include both of those categories
into the TEN-E. The conversion of existing natural gas assets into dedicated hydrogen
pipelines is up to 90% cheaper than new build90
, thus this can ensure a more cost-
effective pathway to the deployment of hydrogen infrastructure and avoid stranded assets
in the existing gas network. The rollout of hydrogen infrastructure will require
coordinated planning, taking into account the location of supply and demand (see section
6.2.2).
The International Energy Agency (IEA) estimates that the transmission of hydrogen as
gas by pipeline is the cheapest option.91
Transporting renewable energy in the form of
green hydrogen via pipeline offers a cost-effective solution to integrate renewable energy
into the energy grids. It can also help overcome network bottlenecks in electricity that
limit the ability of the energy system to integrate renewable power production.
While today only a few member states have 100% operating hydrogen networks, ongoing
developments in this area are likely to affect the whole EU. According to ACER, 11
Member States have or are working on a hydrogen strategy and 4 member states
(Germany, France, Netherlands and Poland) are planning to roll out 100% hydrogen
networks.92
Half of the national energy and climate plans (NECPs) mention concrete
hydrogen related objectives and national hydrogen strategies, roadmaps, or plans been or
are being developed.93
The industry’s vision for a European hydrogen backbone was
presented by gas TSOs from 10 European countries: Germany, France, Italy, Spain, the
Netherlands, Belgium, Czech Republic, Denmark, Sweden and Switzerland.94
Investment in hydrogen infrastructure would have a significant economic impact. The
European hydrogen backbone vision presented by the industry estimates that creating a
23 000 km dedicated hydrogen network by 2040 would require a total investment of €27-
89
In existing plans to create a hydrogen backbone in the Netherlands and in Germany, up to 90% of the
future hydrogen network is planned to be based on the conversion of no longer needed natural gas assets,
the rest would be new infrastructure (see http://www.get-h2.de/en/initiativeandvision/ and
https://www.gasunie.nl/en/expertise/hydrogen/hydrogen-projects). The 23 000 km European hydrogen
backbone envisaged by 11 European gas TSOs for 2040 would consist 75% of converted natural gas
infrastructure, connected by 25% new hydrogen assets
(https://gasforclimate2050.eu/sdm_downloads/european-hydrogen-backbone).
90
European TSOs estimate that while new hydrogen pipelines could cost 10-50% more than similar natural
gas pipelines, repurposed hydrogen pipelines would cost only 10-35% of new hydrogen pipelines
(European Hydrogen Backbone, report by 11 European gas TSOs, July 2020, available at:
https://gasforclimate2050.eu/sdm_downloads/european-hydrogen-backbone/). German TSOs estimate that
investment costs for conversion projects is up to 90% cheaper than for new build (FNB Gas: Gas Network
Development Plan 2020-2030, p. 148).
91
International Energy Agency: The Future of Hydrogen, June 2019, esp. pp, 67-84. For cost estimates of
different hydrogen transport options, see also Asset project (funded by the European Commission): Jan
Cihlar et al.: Hydrogen generation in Europe: Overview of costs and figures, June 2020, pp. 12-14. ; see
also Navigant (2019): Gas for Climate The optimal role for gas in a net-zero emissions energy system,
March 2019, table on p. 98
92
ACER: NRA Survey on Hydrogen, Biomethane, and Related Network Adaptations, Evaluation of
Responses Report, July 2020
93
see Trinomics: Study on Opportunities arising from the inclusion of Hydrogen Energy Technologies in
the National Energy & Climate Plans, final report, June 2020, chapter 2
94
https://gasforclimate2050.eu/sdm_downloads/european-hydrogen-backbone
44
64 billion based on using 75% of converted natural gas pipelines connected by 25% new
pipeline stretches.95
The Commission has put forward the strategic objective to install at least 40 GW of
renewable hydrogen electrolysers in Europe by 2030.96
The hydrogen industry has
estimated the impact of building such electrolyser capacity (complemented by a further
40 GW electrolyser capacity in neighbouring countries with the aim of exporting green
hydrogen into Europe).97
This electrolyser capacity can produce 173 TWh of hydrogen,
which represents around half of today’s hydrogen demand in Europe. This would require
total investments investment of €25-€30 billion, of which over 85% would be realised in
the 2025-2030 timeframe98
and would create between 140,000 and 170,000 jobs for
manufacturing and maintenance of 2x40 GW electrolyser capacity up to 2030.
A recent study for the Fuel cells and Hydrogen Joint Undertaking (FCHJU)99
has
estimated the overall accumulated investment in hydrogen technologies in the EU-28 at
70-240 billion EUR up to 2030. Renewable energy supply accounts for 50%-60% of total
investments, end user applications account for 20%-30% and electrolysis units account
for almost 10%. The investments related to infrastructure, including power and gas grids,
refuelling stations and hydrogen storage are 5%-10% of total investments. Depending on
the scenario, 7.5 billion or 29 billion EUR of value added can be generated annually in
the whole EU-28, by investment in and operation of hydrogen technologies. Most of the
value added is expected to be created by building and operating the renewable electricity
plants that provide energy to electrolysers. A significant share of value added would also
be created by the development of hydrogen transport infrastructure.
Environmental impacts
As mentioned above, the inclusion of hydrogen networks and P2G facilities with cross-
border relevance into the TEN-E would ensure a new coordinated and efficient planning
to these types of infrastructure. Such a coordinated process can reduce the overall need
for infrastructure projects Allowing PCI status conversion projects (existing natural gas
assets to be turned into hydrogen assets) will further limit the environmental impact, as it
will avoid the need to build new infrastructure and make better use of the existing one.
In general terms, the facilitation of hydrogen and P2G projects would bring
environmental benefits because the impact of renewable and low-carbon hydrogen
technology is expected to be positive in terms of greenhouse gas emissions: the
substitution of fossil fuels by renewable or low-carbon hydrogen would translate into
95
https://gasforclimate2050.eu/sdm_downloads/european-hydrogen-backbone
96
A hydrogen strategy for a climate-neutral Europe, COM(2020) 301 final
97
Green Hydrogen for a European Green Deal – A 2x40 GW initiative, Hydrogen Europe, 2020
98
These are electrolyser investment cost only, the figures do not include the investments in solar and wind
farms, transport and storage infrastructure, nor end-use applications.
99
Data from Trinomics: Study on Opportunities arising from the inclusion of Hydrogen Energy
Technologies in the National Energy & Climate Plans, Final report, June 2020
45
GHG emission reductions in the range of 20-65 MtCO2/a, corresponding to 1.4%-4.5%
of the reduction gap at EU-28 level.100
P2G based on electrolysis is an important enabler for smart sector integration and the
decarbonisation of the gas and hydrogen grids. The source of the hydrogen produced is
crucial in terms of the GHG impact. If grid electricity is used, then the climate impact
would reflect the CO2 intensity of the electricity mix. However, if electricity comes from
a renewable source, then the hydrogen produced is carbon-neutral.101
This green
hydrogen can be used in gaseous form (and injected in dedicated hydrogen networks or
admixed to methane in natural gas networks) or it can be turned into synthetic methane or
synthetic liquid fuels, e.g. kerosene or diesel. Therefore, green hydrogen can play a
crucial role in decarbonising end use sectors, such as industry, transport or heating. It can
also offer flexibility options for the power grid and seasonal storage options for
renewable energy.
The strategic goal is to support renewable hydrogen; however, other forms of low-carbon
hydrogen will also be needed in the short-to-medium term to rapidly reduce emissions
from existing hydrogen production and support the parallel and future uptake of
renewable hydrogen.102
P2G facilities should contribute to the strategic goal in order to
maximize the positive GHG reduction impact, a similar approach would not be
appropriate for hydrogen networks, as for reasons of economic efficiency non-
discriminatory third party access to such infrastructure could be considered.
Social impact
The inclusion of hydrogen in the TEN-E framework and eligibility for CEF financial
assistance would have no impact on consumer prices103
. Support through TEN-E to these
emerging technologies could facilitate upscaling and bringing down costs and hence
improve affordability of the energy transitions. Hydrogen-related investments and
operations are estimated to generate in 2020-2030 employment of 29 100–103 100 direct
jobs (in production and operations & maintenance) and contribute to further 74 100–241
150 indirect jobs.104
Option A.2.2: Exclude natural gas infrastructure but include hydrogen, P2G and
smart gas grids for low-carbon and renewable gases
The impact of the inclusion of hydrogen and P2G is described above. The additional
impacts stem from the inclusion of smart gas grids. Specific impacts of the sub-option on
100
Artelys-Trinomics (2020): Measuring the contribution of gas infrastructure projects to sustainability as
defined in the TEN-E Regulation, Draft final report
101
Artelys-Trinomics (2020) has calculated that, when substituting natural gas with hydrogen, 56 tCO2
equivalent per TJ savings are achieved in case hydrogen from renewable sources is used and savings of 48
tCO2 equivalent per TJ are achieved in case the hydrogen is produced from natural gas with carbon capture
and storage; by contrast, the climate impact is negative when EU grid electricity used (72 tCO2 equivalent
per TJ increase), see table 5 in Annex 8.
102
See A hydrogen strategy for a climate-neutral Europe, COM(2020) 301 final
103
Solidarity and the effect of CEF financial assistance in terms of affordability of PCIs is one element
when assessing applications for CEF financial assistance.
104
Artelys-Trinomics (2020): Measuring the contribution of gas infrastructure projects to sustainability as
defined in the TEN-E Regulation, Draft final report
46
the exception for natural gas transmission projects that enable renewable and low carbon
gases (i.e. new cross-border transmission infrastructure for biomethane and/or retrofits
for hydrogen blends) are discussed separately.
Economic impacts
Indigenous renewable gas sources are expected to play an important role in the way
towards climate neutrality. The most significant current production of renewable gases in
the EU are biogas and biomethane105
with some 17 bcm annually. The Commission
estimates that biogas consumption would have to increase between 14-48% in the period
2015-2030 and between 37-378% in the period 2015-2050 to reach carbon neutrality.106
After upgrading biogas to biomethane, this gas can be transported, distributed and stored
in the existing methane gas grid. Hydrogen can also be blended into the methane grid up
to certain limits or subject to adaptations.
The vast majority of today’s 500 biomethane plants in the EU are connected to the
distribution grid, without the possibility to inject gas into the transmission level, meaning
the gas has to be consumed close to its place of production. Some of the green hydrogen
is also expected to be injected at DSO level. Smart gas grid projects would aim to tap
into this potential by implementing infrastructure facilitating the integration of those
locally produced renewable and low-carbon gases into the DSO and TSO grids and
making use of modern ICT technologies to help manage a more complex grid. Smart gas
grid projects would also include related investments enabling reverse flow to the
transmission level, which could ensure that excess local green gas supply is injected into
the transmission grid and used elsewhere, enabling the full use of local green gas
potential.
The inclusion of smart gas grids would ensure the seamless integration of the
transmission and distribution grids that will be increasingly necessary107
because of the
rapidly changing natural gas infrastructure system.
At the same time, smart gas grid projects would not meet the current cross-border
criterion for gas transmission infrastructure because they would not aim at creating
additional transmission capacity. Instead, the cross-border relevance would come from
the requirements to include promoters from at least two Member States in project design
and implementation. While projects to enable biogas to be injected from the distribution
to the transmission grid are indeed local, they may enable trade with those gases, as the
gas transmission grid is already interconnected at EU level. Biomethane and synthetic
methane pose in principle no technical problems for their injection into natural gas grids
as long as they meet quality standards. At transmission level, investments in grid
expansion may be needed in case capacity at certain network sections or interconnection
105
Biogas is about 60% methane, 40% CO2 + some impurities. To enable its injection into the transmission
grid, biogas must be treated to meet standardized gas quality requirements. The upgrading of biogas to
biomethane requires the removal of CO2 and impurities. If used and, more importantly, stored, the CO2
obtained in production of biomethane from biogas is sometimes argued to create ‘negative’ emissions.
106
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
107
Gas distribution projects are not currently in the scope of the TEN-E Regulation.
47
points become insufficient due to a change in the gas flow patterns caused by an increase
in biogas production in certain EU regions.
Environmental impact
Gas infrastructure projects may contribute to sustainability by enabling the substitution
of fossil fuels with renewable and low-carbon gases in various applications. The exact
impact will depend on the amount of renewable and low carbon gases injected into the
grid and on the difference between the GHG intensity of the specific renewable and low
carbon gas and the substituted fuel. For the substitution of natural gas with biogas, the
GHG impact ranges from a 156 tCO2eq per TJ reduction to a 17 tCO2eq per TJ increase
in emissions108
.
Specifically on projects that aim to increase the share of hydrogen that can be blended
into the natural gas grid: it must be noted that, even when electrolysers run on renewable
electricity to produce green hydrogen, the GHG reduction potential is limited by the fact
that hydrogen has a lower energy content than methane. Since the calorific value of
hydrogen is about 1/3 of the calorific value of natural gas, a 10 vol% H2 admixture is
equivalent to only 3.3% of the energy content. This translates into -11.6% CO2 effect for
an admixture of 30 vol% hydrogen, providing only relatively limited room for
decarbonisation in the medium- to long-term.109
Projects that specifically aim at enabling the integration of renewable and low-carbon
gases into the gas grid would have to prove significant net GHG savings to be eligible for
PCI status. This poses a number of difficulties because fossil and green gas molecules
share the same network infrastructure and therefore the GHG reductions would result
from a planned increase of renewable and low-carbon gases in a given network, which
are enabled, but not directly influenced, by such projects110
. The project promoter
(typically a TSO) has limited ability to influence the gas mix. Under the unbundling
rules, a TSO (or DSO) is responsible for network operation but it does not determine
what type of gas is injected into its grid because it has to grant equal access to all
network users. A network operator can invest in pipeline projects that enable more
injections of renewable and low-carbon gases (for instance a transmission pipeline
leading to an area with major biogas production potential where there are transmission
bottlenecks) but this pipeline will be able to carry biomethane and natural gas alike.
Therefore, investments in gas networks can only indirectly reduce GHG emissions by
108
The assessment takes negative emissions into account. The net CO2 impact shows the difference
between the natural gas CO2 emissions factor and the emissions factor of a specific renewable or low-
carbon gas. For further details: Artelys-Trinomics (2020): Measuring the contribution of gas infrastructure
projects to sustainability as defined in the TEN-E Regulation, Draft final report
110
Methodologies such as the EIB's Project Carbon Footprint Methodology elaborates on the assessment
of GHG emissions and emission variations generated by a wide spectrum of projects, including energy
transmission and distribution assets. However, such methodologies would not fit the purpose of the present
IA in the case of power lines and gas transmission infrastructure, given that it is based on estimations of
CO2 emissions for the entire network and an emissions factors per unit of supply. In most cases, emissions
for the current level of supply would go up without the investment. The percentage share of the network
assets replaced/rehabilitated is estimated. Carbon footprints (absolute and baseline) are calculated using
this percentage share of the total emissions of the network (with and without the project) for the pre-project
levels of demand.
48
enabling a greener gas mix, while the actual GHG impact will depend on actual gas
flows, which is to a large extent beyond the control of network operators. This creates a
risk of “greenwashing” as any new gas infrastructure ostensibly built for renewable gases
could in practice end up being used for natural gas because it will in the end form part of
a given gas network operator’s regulated asset base.
Infrastructure types linked more closely to the supply of green gases can contribute more
directly to the decarbonisation objectives. For instance, a connecting pipeline linking a
biomethane plant to the transmission grid can be expected to transport only biomethane.
A P2G facility producing green hydrogen with a view to injecting it into the gas network
(together with its connecting pipeline) can be expected to directly contribute to GHG
reductions. However, such connecting pipelines and facilities related to gas supply are
typically non-regulated assets, meaning they relate to competitive activities and have no
regulatory scrutiny of costs.
To a certain extent, additional requirements could offer some safeguards that the selected
gas PCIs do indeed contribute to significant GHG reductions and avoid the risk of
creating assets that would continue to be used predominantly for natural gas. This could
include a stronger sustainability assessment of candidate PCIs (see section 6.2.2) or a
requirement that the projects are presented in the context of credible policy and/or
network development plans to roll out renewable and low-carbon gases (see section
6.2.2). However, while this may work for smart gas grids, in other cases such as new
infrastructure for renewable gases or retrofits for hydrogen blends (see below sub-option,
such safeguards may not entirely address the risk of financing infrastructure that would
end up being used primarily for fossil energy in reality.
Social impacts
Access to PCI and CEF funding could limit the effect of related investments on tariffs.
Sub-option: Natural gas transport infrastructure for renewable and low-carbon gases
In addition to the above impacts, the following impacts are relevant for this sub-option. A
study for DG Energy111
has estimated a total technical biogas/biomethane production
potential of 1 150 TWh/yr for 2050112
. This compares to 193 TWh biogas production in
2016, almost a six-fold increase. The full deployment of the biomethane potential
identified in the study would have a profound impact on the pattern of gas flows in
Europe with flows originating from countries with high biomass potential to centres of
consumption. While gas transmission grid capacity in the short- to mid-term is unlikely
to present a bottleneck, there would be a need for investment in additional cross-border
capacity in the long run113
. In such a case, the TEN-E framework could add value by
prioritizing such possible projects of cross-border relevance (even though it has to be
added that in practice there have not been any projects thus far that would have aimed
111
Trinomics (2019): Impact of the use of the biomethane and hydrogen potential on trans-European
infrastructure, Study for DG ENER
112
This is equal to about 118 bcm, based on a calorific value of 35.17 MJ/m3, see https://unit-
converter.gasunie.nl/
113
See assessment and depiction of the possible effect of hydrogen on gas flows and capacity investments
in Trinomics (2019) pp. 102-111.
49
specifically at enabling cross-border renewable gas flows). A methane-heavy 2050
scenario involves higher investment need in cross-border gas networks than a hydrogen-
heavy scenario114
. However, the system-wide costs are also higher, since the production
of carbon-free methane from hydrogen increases conversion losses and electricity
consumption for the same amount of energy. 115
It should be noted that the biomethane
potential assumed by the study is higher than in the Commission’s impact assessment for
the climate target plan116
, so the effect depends on those assumptions.
By contrast to biomethane, the blending of hydrogen into the methane gas grid is much
more complex and requires careful consideration. Hydrogen can also be directly injected
into the natural gas (methane) grid – but only up to strict limits because hydrogen is a
different molecule than methane. Industry data show that nearly all network elements at
both distribution and transmission level can handle up to 10% hydrogen (with the
exception of compressor stations and some other equipment). Going beyond this limit
usually requires adaptations.117
Importantly, blending changes gas quality and prevents
the direct use of hydrogen in higher-value applications, such as industry and transport.
Therefore, the main bottleneck for blending is not necessarily the transport infrastructure
but the end-use applications. While blending may be a relatively low-cost118
solution in
specific circumstances and could lay the ground for scaling up hydrogen use, hydrogen
admixture levels beyond 20% would be impractical and have important implications for
end users. A number of EU countries do foresee a role for hydrogen blends during a
transition period and see a need for EU level coordination to avoid creating barriers for
cross-border gas flows119
. Such projects are unlikely to meet the existing cross-border
criterion, as they are not directed at creating additional cross-border transmission
capacity. The risk of “greenwashing”, as discussed above, is particularly relevant for this
sub-option, i.e. new infrastructure for renewable gases or retrofits for hydrogen blends,
which are intended to be used for renewable and low carbon gases but may in practice be
used (predominantly or exclusively) for natural gas.
Sub-option: Exceptions for natural gas PCIs at an advanced implementation stage
New natural gas PCIs – beyond the most advanced PCI projects on the 4th
PCI list – are
unlikely to be needed for security of supply or market integration.
114
The study estimates that, by 2050, investment needs in cross-border gas infrastructure would be €5
billion per annum in a hydrogen heavy scenario and €1.2 billion p.a. in a methane heavy scenario, while
overall system costs are lower in the hydrogen scenario due to higher efficiency, i.e. smaller conversion
losses (see Annex 8 for more details).
115
Trinomics: Impact of the use of the biomethane and hydrogen potential on trans-European
infrastructure, Study for DG ENER, 2019
116
To note that the scenarios in the Commission’s impact assessment for the climate target plan count with
biogas volumes of 56-63 Mtoe by 2050, or around 650-730 TWh (with a conversion factor of around 11.6
TWh / Mtoe).
117
See Marcogaz: Overview of available test results and regulatory limits for hydrogen admission into
existing natural gas infrastructure and end use, October 2019
118
For instance, French gas operators count with limited costs up to 6-10% blending ratios (Technical and
economic conditions for injecting hydrogen into natural gas networks, Final report by French gas network
operators, June 2019, see esp. p. 22 for investment estimates). See Annex 8 for more detail.
119
See ACER: NRA Survey on Hydrogen, Biomethane, and Related Network Adaptations, Evaluation of
Responses Report, July 2020
50
If the revised TEN-E Regulation excludes natural gas infrastructure from the scope, all
existing PCI projects – including the most advanced ones – would lose eligibility for PCI
status. There might be expectations for special treatment for existing PCIs which are still
not completed but which will have started construction by the time the first PCI list under
the revised regulation enters into force or which will have already received CEF support
by that time (as described in the policy option). The implementation of those projects
should not be prevented or significantly delayed due to the loss of PCI status which
would not affect signed grant agreements for CEF financial assistance.
Based on the planned commissioning dates of the existing gas PCI projects on the 4th
PCI
list, many are expected to be completed by the time when the first PCI list under the
revised Regulation would be established120
(provided there are no implementation
delays). However, according to ACER monitoring data, there may still be up to 21 gas
PCIs121
from the current list that are presently less mature and may wish to apply for PCI
status under the revised framework. Provided these projects are advanced by then
(according to the definition set out in the policy option), they could be captured by this
possible exception.
The projects that could benefit from the exception would already need to be well-
advanced. For such projects, the loss of PCI status is unlikely to prevent or delay timely
project implementation, as they will have either started construction or already secured
funding, including through a CEF grant agreement. Therefore, only the implementation
of less advanced gas projects (i.e. those that are only planned or still under permitting)
would be affected by the loss of PCI status due to the change in the Regulation’s scope.
However, these projects are unlikely to bring significant benefits according to the
evaluation report and other evidence presented in this impact assessment (see above).
6.1.3 Projects of mutual interest
Option A.5.0: Business as usual
Projects, which are not able to demonstrate socio-economic benefits for at least two EU
Member States, could be pursued relying on other policy instruments, in particular under
the accession and neighbourhood policy, but would not benefit from the provisions of the
TEN-E revision and would not have access to CEF financial assistance.
Option A.5.1: Inclusion of PMIs under the TEN-E Regulation
Socio-economic impacts
The inclusion of PMIs in the TEN-E framework would enable the identification of
additional projects that demonstrate significant net socio-economic benefits, e.g. in terms
of enhancing security of supply and/or contributing to higher share of renewables in the
EU and in the neighbouring countries. The requirement from an involved third country
that a priority status under the TEN-E is conditioned to project specific regulatory
120
It is assumed that end 2023 is the earliest possible date for the adoption of the first PCI list under the
revised TEN-E Regulation.
121
ACER: Consolidated Report on the progress of electricity and gas Projects of Common Interest, July
2020
51
approximation with the EU in terms of internal energy market policies can provide
socio-economic benefits by extending the pro-competitive impact of the EU’s internal
market rules to infrastructure connecting the internal market with third countries,
including avoidance of distortion of competition.
Environmental impacts
The inclusion of PMIs under the TEN-E framework would be conditional on the
infrastructure projects beyond the EU territory, often in EU’s immediate neighbourhood,
being aligned with the EU’s energy and climate objectives. In order for the project to
benefit from priority status under the TEN-E, there would be a requirement on the
involved third country for approximation with the EU also in terms of sustainability,
environmental and climate policies, which could contribute to the achievement of the
decarbonisation objectives beyond the EU’s border while limiting the risk of carbon
leakage.
Administrative burden
Building on the current governance model of the TEN-E and PCI process which already
foresees the participation of stakeholders from third countries (like project promoters,
energy regulatory agencies, ministries, and NGOs), there would be very limited
adjustments needed. The requirement of regulatory alignment concerning different EU
policies from third countries which have not adopted the EU acquis yet (i.e. those which
are not signatories of the Energy Community Treaty), would require the establishment of
procedures for monitoring and enforcing these particular provisions vis-à-vis the
concerned third countries. The administrative burden would depend on the number and
specificities of the projects and countries involved.
6.2 Governance / Infrastructure planning
6.2.1 Offshore grids for renewable energy
Option B.1.0: Business as usual
Environmental impacts
Despite the initiatives that will create more ambition on offshore renewable energy, the
continuation of the current framework would not change the incremental progress in
developing the necessary offshore grid infrastructure. While this would reduce the impact
on maritime space, the required greenhouse gas emissions to reach climate neutrality by
2050 could not be achieved.
Socio-economic impacts
There would be significant costs of delays and lack of leveraging the infrastructure
investments needed to meet the 2050 energy and climate objectives, which is a
prerequisite for a significant upscale of offshore wind energy in Europe. The European
industry would lose its technology leadership in an important future technology market
and not exploit the jobs and growth potential in this sector.
Option B.1.1: Integrated offshore development plans
52
Environmental impacts
An optimised offshore grid would result in two key environmental benefits: first, it
would enable the integration of a significant amount of renewable electricity from
offshore renewable energy sources into the European power grid and, secondly, the
consideration, from the initial stage, of the maritime spatial plans and environmental
aspects within the infrastructure planning will allow minimising the environmental
impact of the future offshore infrastructure.
The potential greenhouse gas emission reductions from the development of offshore
renewable energy, and related infrastructure, have not been quantified yet. However,
given the expected deployment the emissions reductions can be considered significant in
a mid-term perspective. These would depend on the actual deployment rate and the
greenhouse gas intensity of the electricity it replaces. This is influenced by various
factors including demand and supply patterns, price sensitivities, localisations, grid
congestions. It is expected that the coordinated and optimised grid planning at regional
level would reduce the need for landing points. This would have a direct positive
environmental impact.
Economic impacts
An efficient market framework and optimised offshore grid planning is likely to bring a
higher overall social welfare than the current trajectory. In 2019, a Commission study on
hybrid projects in the North Seas by Roland Berger shows possible cost savings of about
10 percent, which would be equivalent to between EUR 300 million and EUR 2500
million for five projects alone, depending of the size of the comparable conventional
projects122
.
According to ENTSO-E, holistic planning and coordination of development of on- and
offshore transmission systems is a requirement to ensure timely development and low
cost for the end consumer concerning offshore grids. Such an approach would limit the
expected increase in grid expansion costs for offshore network developments. It would
also help to shorten the time required for offshore grid development and hence to keep
pace with the shorter lead times for the deployment of offshore wind.123
The establishment of an enabling grid planning framework for offshore grids would open
up a significant market for the renewable energy industry, in particular in Europe, and
partially compensate for the slowdown in renewable development onshore in some
regions in Europe. This could have significant positive impacts on turnover and
employment by contributing to maintain Europe’s technological leadership in this area.
Social impacts
It is expected that the expansion of offshore renewable energy could have a positive
effect on employment across the EU. For instance, based on industry estimates, 77,000
122
Roland Berger (2019): Hybrid projects: How to reduce the cost and space of offshore wind projects
123
WindEurope (2019): Industry position on how offshore grids should develop,
https://windeurope.org/wp-content/uploads/files/policy/position-papers/WindEurope-Industry-position-on-
how-offshore-grids-should-develop.pdf
53
people work in offshore wind in Europe today and this is expected to increase to more
than 200,000 if the commitments for offshore wind expansion such as in the NECPs are
met124
. According to the European Technology and Innovation Platform for Ocean
Energy (ETIP Ocean125
), with a clear development strategy and by creating the right
policy conditions, 400,000 jobs could be created in the EU by 2050 in the ocean energy
sector (e.g. wave, tidal, floating solar).
Large TSO investments in offshore grids can lead to a tariff increase, to the detriment of
consumers. That is why an appropriate cost-benefit cost allocation is key to stimulate
these investments in the most efficient way (see policy option D.1.1).
Administrative burden
The option would build on ENTSOs’ existing capabilities on network planning and the
resource implications are considered limited for ENTSOs and TSOs. It would require
participation in regional group meetings, data collection.
Option B.1.2: Regional Independent System Operator / Joint Undertaking
While the environmental, economic and social impact are expected to be similar as under
option B.1.2, there would be an initial administrative burden in setting up a new entity in
the form of Regional Independent System operator or a Joint Undertaking either per
regional priority corridors or sea basins. When established, this entity could reduce some
of the administrative burden related to planning for the Commission, TSOs and Member
States as the entity would take on the responsibility for developing the offshore gird. In
addition to the resources for the administrative tasks, the entity would need the necessary
network modelling capabilities with significant additional costs.
This option would have significant impacts on all actors involved in the offshore
planning. The Regional Independent System operator or Joint Undertaking bodies would
not only be responsible for the planning of the offshore infrastructure but it would also
decide on the costs to be allocated to each Member State. Member States, TSOs, and
NRAs would lose influence in this process. This is also likely to result in higher
transaction costs and the risk of non-synchronised planning due to split responsibilities
for the offshore and onshore infrastructure planning.
While the role of ENTSOs and TSOs would be significantly weakened for the offshore
planning, they would remain the main information providers. This may result in
decreased interest in cooperation between the TSOs on the planning level, and possibly
in decreased data accuracy and sharing. Given the institutional changes, setting up a
Regional Independent System operator or Joint Undertaking bodies would require a
rather long lead time also because there is no equivalent body in place that could be used
as best practice.
124
EU27 + UK but excluding Norway, Source: WindEurope
125
https://www.etipocean.eu/
54
6.2.2 Cross-sectoral infrastructure planning
Option B.2.0: Business as usual
Environmental and economic impacts
While the scenarios and system needs assessments that underpin the TYNDP and the PCI
selection process, as carried out by the ENTSOs, are based on DG ENER scenarios and
reflect the 2050 climate-neutrality objectives and relevant policy initiatives, the
trajectories chosen may favour in particular high levels of gas demand and result in
estimations of flows for the different energy carriers that favour the construction of more
infrastructure than is actually required for achieving the 2050 carbon-neutrality
objective.126
Therefore, this option may lead to the selection of PCI projects that would
not be in line with long-term policy objectives. This would lead to negative
environmental and the socio-economic impact, the latter mainly linked to risk of stranded
assets. The possibility to repurpose gas pipelines for hydrogen transport and the potential
cost savings should only be applied to existing gas pipelines or those that are already
under construction / development. Developing new natural gas infrastructure projects
with the assumption that they may be repurposed in the future would need to take into
account the costs for developing the infrastructure in the first place and hence
significantly affect the potential cost advantages of repurposing and bear the significant
risk of green washing (see section 6.1.2).
Option B.2.1: Strengthened governance and sustainability
Environmental and economic impacts
An increased oversight by the Commission over the scenarios and system needs
identification, a strengthened role for ACER in the methodology to assess the costs and
benefits of the projects, as well as an increased role for the DSOs in the planning process
is expected to result in more realistic electricity and gas demand assumptions and
infrastructure needs identification as well as an improved project assessment.
The mandatory sustainability criterion in the PCI process would be applied to all project
categories that will be within the future scope of the TEN-E Regulation. This would have
a direct impact on the ranking of the candidate PCI projects, as the projects with little
sustainability benefits would be ranked lower and the ones that prove to bring high
sustainability benefits would be ranked higher. While the actual ranking will depend on
the details of the assessment methodology that will be agreed in the regional groups, the
mandatory sustainability assessment establishes as such a minimum requirement for
candidate projects and will notably ensure that they contribute to greenhouse gas
emission reductions in a way coherent with the Green Deal objectives. This will
contribute to align the PCI selection process with the EU policy objectives. Overall, this
option is expected to lead to an optimised interlinked infrastructure planning.
126
E.g. the ENTSOs 2020 Climate Action scenario assumes 70% gas import in 2050, while giving little to
no consideration on how and where such amount of gas is to be fully decarbonized.
55
Ensuring that the 2030-2050 assumptions reflect the agreed policy targets and objectives,
the consideration of the energy efficiency first principle as well as the inclusion of a
mandatory sustainability criterion for all candidate projects will align the PCI selection
process with the EU policy objectives.
Administrative burden
This option would complement the ENTSOs’ current role with an increased Commission
and ACER oversight. As such, the administrative burden on the Commission and ACER
will increase in line with the additional work related to continuous follow-up of the
TYNDPs development. There would be no direct impact on project promoters.
Social impact
Optimizing the infrastructure need identification and projects assessment within the
frame of TYNDPs will minimise the impact on network tariffs and final energy prices.
Option B.2.2: New governance set-up and expansion of scope and role of the
TYNDP
The implementation of this option is expected to deliver similar economic, social and
environmental results as policy option B.2.1.
The key difference concerns the administrative burden. The transfer of responsibilities
also carries significant risks, as specific expertise would need to be built up very rapidly
by the Commission and ACER. The Commission, possibly with the help of a third party,
would have to, not only approve the results, as in option two, but also coordinate data
collections and crosschecks, projects submissions, manage studies and project
assessments. It would ultimately lead to parallel structures, as grid planning requires very
specific expertise. While the role of ENTSOs and TSOs would be significantly
weakened, they would still remain the main information providers which would
significantly increase transaction costs and may result in decreased data accuracy and
data sharing (as under option B.1.3).
6.3 Permitting and public participation
Option C.1.0 Business as usual
Environmental impacts
The TEN-E Regulation already ensures that PCIs have to abide by the highest standards
of environmental protection provided by national and EU law. However, lengthier
permitting processes could cause that the environmental assessments performed become
outdated and have to be redone.
Social impacts
Citizens would be affected as they would have less access to information regarding the
projects due to the fact that project websites are very often outdated. Moreover, citizens
would not be able to follow how their input was taken into account.
56
With lengthier, unclear, permitting processes, citizens are affected, firstly, because such
projects do not realize their benefits sooner, including their benefits for consumers (eg.
lower energy prices), but also because prolonged permitting procedures can create
confusion and uncertainty in the role and effect of public consultations which could
become obsolete by the time the permitting process is completed.
Economic impacts and administrative burden
The duration of court procedures, such as appeals, is not included in the maximum
duration of the permitting process of 3.5 years. Therefore, such court procedures
regarding PCIs can delay the overall implementation of the projects.
The current transitional provisions mention that for projects which submitted their
permitting application file before 16 November 2013, the permitting provisions and the
priority status do not apply (Chapter III). Several projects are encountering this issue and
have not yet completed their permitting process. This has caused significant delays in
their implementation and the situation would continue.
Lengthy permitting procedures increase administrative costs both for the project
promoter, but also for the national competent authorities and other authorities concerned
as certain permits that expire in the meantime might have to be obtained several times
before the completion of the entire permitting process.
Option C.1.1: Use of urgent court procedures
The time limits laid down for the permitting process, currently 3.5 years, do not include
administrative appeal procedures and judicial remedies before a court or tribunal which
delay implementation of the projects in addition to the timeline of the permitting process.
Requiring Member States that currently have in place urgent court procedures (e.g.
cutting in half court deadlines) in other cases to extend these to PCIs keeps the necessary
balance between the rule of law in the Member States and their sovereignty and the
acceleration of the implementation of PCIs.
The introduction of the requirement for Member States to ensure that accelerated
litigation procedures, where available, are applicable to PCIs under national legislations
should be seen in a similar manner, including for the purposes of safeguarding the
sovereignty and rule of law of the Member States, as the introduction, as per the current
Regulation, of the requirement that PCIs are granted the priority status where this exists
under national law: “Where such status exists in national law, projects of common
interest shall be allocated the status of the highest national significance possible…”.
Member States that do not have this status do not have the obligation. According to
available data, at least 11 Member States127
have such accelerated/urgent litigation
procedures in place that they could extend to PCIs. These procedures are used for a
variety of matters from family matters to insolvency proceedings or setting-up or
127
Data from two studies prepared for the European Commission by CEPEJ (the European Commission for
the Efficiency of Justice) on the functioning of judicial systems in the EU Member States – 2018,
https://ec.europa.eu/info/publications/cepej-studies-2019_en, as well as, The Rule of Law Stress Test – EU
Member States’ Responses to Covid-19, https://democracy-reporting.org/dri_publications/the-rule-of-law-
stress-test-eu-member-states-responses-to-covid-19/
57
enforcing guarantees on movable or immovable assets. Some of these urgent matters are,
in fact, quite complex, but due to their urgent nature require acceleration.
The fact that only a limited number of Member States have in place accelerated/urgent
litigation procedures reduces the impact of the option. However, EU action in this respect
remains adequate as: (i) this would mirror the priority status provisions in their permit
granting process and spatial planning enshrined in the current TEN-E legislation, which
also applies in the limited number of Member States where such procedures are
available, and (ii) introduces a new tool to save time in project implementation which has
not been introduced in the current TEN-E Regulation and which concerns a source of
significant delays.
Environmental impacts
The acceleration of court procedures should not have any environmental impacts.
Economic impact and administrative burden
An accelerated accomplishment of the project implementation through faster court
procedures decreases costs for both project promoters and competent authorities, while
entailing additional costs for national courts who would have to dedicate additional
resources to procedures regarding PCIs. However, the Union list of PCIs could contain
maximum 220 projects, in accordance with the TEN-E Regulation and, in practice, the
actual number of projects has been significantly lower. For example, the 4th
Union list
contains 149 projects. Therefore, the number of court cases for the entire EU that such
projects could generate is not high, by comparison to the frequency of other types of
urgent court procedures Member States already have in place.
An accelerated accomplishment of the permitting process also allows for a faster
implementation of the project therefore bringing forward the benefits identified in the
CBA. This will have a significant economic impact on regional energy markets, if not,
even a European wide impact. The economic impact could be determined based on the
CBAs of the projects impacted by the accelerated procedures. No data is currently
available for fully capturing the impact. However, in a Working Paper by the Renewable
Grid Initiative and ENTSOE, Value of timely implementation from May 2019,
calculations were performed as to how much delays cost for an example project,
including the “Garenfeld substation” (Germany). A delay of 2 years due to an average
court procedure was estimated at a cost of 150 million €128
.
Option C1.2: Creating a one-stop shop per sea basin for infrastructure related to
offshore renewable projects
The creation of a one-stop shop per sea basin would enable the acceleration of the
permitting process for infrastructure related to the deployment of offshore renewable
generation in order for such projects to finish permitting within the maximum limitation
128
Renewable Grid Initiative and ENTSOE, Value of timely implementation of “better projects”, May
2019, Working Paper https://eepublicdownloads.azureedge.net/clean-
documents/Publications/Position%20papers%20and%20reports/20190517_RGI_ENTSOE_working_paper
_better_projects.pdf
58
of 3.5 years. In practice, offshore projects cross many more jurisdictions than onshore
projects as they cross either national waters or the exclusive economic zones of several
Member States and, possibly, third countries. This makes their permitting process
particularly complex, as they have to follow all the specific rules of these jurisdictions.
Environmental impact
The creation of a one-stop shop per sea basin would bring positive environmental
impacts as strategic environmental assessments could be performed at sea basin level. On
this basis, environmental assessments for specific projects could be strengthened.
Moreover, one entity coordinating the permitting process would also enable a better
coordination of the environmental impact assessment across borders.
Economic impact
The creation of a one-stop shop per sea basin would have positive economic benefits as it
would lead to the swifter realization of infrastructure related to the deployment of
offshore renewable generation which would realize its benefits sooner. There are no
specific data allowing the calculation of the economic benefits realised by the swifter
implementation of such infrastructure to be brought as example, but the benefits
calculated in the example provided Option C1.1. could be taken as an indication.
Administrative burden
The option would considerably diminish the administrative burden and costs for the
project promoters who would also benefit and be able to use data from studies already
conducted for the sea basin. Project promoters would have to employ fewer personnel
and use less resources than having to deal with every competent authority in all the
Member States where the project is located.
The one-stop shop would require very limited additional resources as the assessment
afferent to all permits would continue to take place on the basis of the national
requirements for the different Member States on the territory of which the project is
located. The one-stop shop is not a new institution, but would consist of a secretariat
formed of staff from the national competent authorities, with no additional staff required.
The one stop-shop would ensure a single point of contact for the project promoters and
the coordination of the national one-stop shops. While the creation of the one-stop shop
will lead to one off administrative costs for the establishment of the relevant procedures,
it could eventually save resources in national administrations as it would avoid parallel
national work streams for issuing several (national) comprehensive decisions.
6.4 Regulatory treatment
According to stakeholders, CBCA decisions are the main instrument to improve the
regulatory conditions of cross-border projects. While the approach taken to share costs
between Member States in relation to benefits is largely appraised, the details of the
mechanism reduce its attractiveness. The number of PCIs with a CBCA decision remains
relatively low: as of March 2020 only 42 CBCA decisions were issued. This indicates
that the desired effect is limited to a small number of projects only, but the contribution
to the improvement of the regulatory framework is, however, well appraised. Thus, as
issues in the details of the process for CBCAs persist, which are reflected in the low
59
number of cost sharing decisions129
, their removal should lead to an increased and correct
use of the CBCA procedure.
Option D.1.0: Business as usual
Environmental impacts
There would be no environmental impacts from maintaining unchanged the CBCA
provisions.
Social impacts
CBCA procedures, as currently provided, are underutilized and do not reach their
potential in assisting projects’ realization. This leads to unrealized benefits for the society
on the whole and for citizens directly by the fact that benefits such as energy cost
decreases are delayed.
Economic impact and administrative burden
Maintaining the current provisions regarding the CBCA procedure leaves this procedure
to be utilized mainly as a prior requirement for accessing CEF financial assistance.
Moreover, many CBCA decisions are conditional upon the receipt of CEF financial
assistance or do not fully allocate all costs of the projects into the tariffs, leaving a
financing gap and delaying project realization.
This option would not have an impact on the administrative burden.
Option D.1.1: Inclusion of full investment costs
Environmental impacts
CBCA procedure enables the implementation of PCIs, which have benefits across-
borders. In principle, clarifying the CBCA provisions should not have direct
environmental impacts.
Economic and financial impacts
The split of investment costs across borders and their full inclusion of investment costs in
the tariffs by the CBCA decision would enhance the potential for CEF financial
assistance to be used solely as a last resort financing option.
The CEF Regulation provides that: “First, the market should have the priority to invest.
Second, if investments are not made by the market, regulatory solutions should be
explored, if necessary the relevant regulatory framework should be adjusted, and the
correct application of the relevant regulatory framework should be ensured. Third, where
the first two steps are not sufficient to deliver the necessary investment in projects of
common interest, Union financial assistance could be granted if the project of common
129
Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure, Draft final report
60
interest fulfils the applicable eligibility criteria”130
. A stable regulatory environment
created for a project with full regulatory coverage is therefore a pre-requisite for any
project in order for it to have explored both market based financing solutions and
regulatory solutions.
Stakeholder views were found to be mixed both on the need to carry out a cross-border
cost allocation and on the method to be approach by NRAs. However, several
stakeholders indicated that affordability should be key to making a grant decision. As
such, the option safeguards the principle of “CEF last resort” whilst taking into account
suggestions from stakeholders on improving the CBCA mechanism.
Social impacts
The CBCA will enable the realization of PCIs and in turn the benefits of such projects as
identified in the CBA. This would also be taken into account for possible CEF financial
assistance. The full extent of such benefits cannot be estimated as there are no data
available, however, the example of costs of delay, as described above in the assessment
of Option C.1.1, remains a good indication.131
Administrative burden
According to the stakeholder consultation, the costs for NRAs as a result of TEN-E are
low the main cost driver is the CBCA process. For most NRAs less than 1 FTE is
estimated to be currently involved132
.
This option increases the administrative burden on NRAs, which will have to allocate
costs in full and include them in the tariffs. It also imposes on NRAs an obligation to
assess the investment requests more thoroughly since all CBCA decisions will be final.
However, this option decreases the administrative burden for project promoters and the
financial market as the projects will benefit from regulatory stability being able to also
obtain financing from the market.
7 HOW DO THE OPTIONS COMPARE?
The options considered are compared against the following criteria:
 Effectiveness: the extent to which different options would achieve the objectives;
 Efficiency: the benefits versus the costs; efficiency concerns "the extent to which
objectives can be achieved for a given level of resource/at least cost";
 The coherence of each option with the overarching objectives of EU policies;
 The compliance of the options with the proportionality principle.
130
Regulation (EU) No 1316/2013 of the European Parliament and of the Council of 11 December 2013
establishing the Connecting Europe Facility, amending Regulation (EU) No 913/2010 and repealing
Regulations (EC) No 680/2007 and (EC) No 67/2010 Text with EEA relevance
OJ L 348, 20.12.2013, Recital 48
131
The CBCA enables the timely implementation of PCIs and hence avoids delays in project
implementation. The benefits of a PCI are therefore realised earlier.
132
Ecorys et al. (2020): Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure, Draft final report
61
Table 3 summarises the assessment of each option against these criteria. The
effectiveness of the policy options considers the extent to which the objectives, as set out
in Section 4, are achieved. Specific measures to simplify and improve the efficiency of
the TEN-E Regulation are set out in Section 8.2.
The TEN-E Regulation is a key instrument to achieve the timely development of
sufficient energy infrastructures to enable delivering on the EU’s energy and climate
objectives in line with the European Green Deal, in particular the 2030/50 targets, market
integration competitiveness, and security of supply. However, it is important to recognise
that it is only one element. A number of other complementary policy measures have
already been or need to be put in place at EU and national. These include investments in
the necessary infrastructure projects without a significant cross-border impact,
investment in research, development and innovation for new technologies, policies
supporting renewable energy generation, and initiatives supporting the acceptance of new
infrastructure projects.
62
Table 3: Comparison of policy options
Policy option Description Effectiveness Efficiency Coherence Proportionality
A) SCOPE
Options A.1. Smart electricity grids and electricity storage
Option A.1.0 Business as usual o o o o
Option A.1.1 Update of eligibility criteria ++ + + +
Sub-option: Non-mechanical
storage
+ o + -
Option A.2 Gas infrastructure, hydrogen networks and power-to-gas
Option A.2.0 Business as usual o o o o
Option A.2.1 Exclude all natural gas
infrastructure but include
hydrogen and P2G
+ + + +
Option A.2.2 Exclude natural gas
infrastructure / include
hydrogen, P2G & smart gas
grids
+ + ++ +
Sub-option: Natural gas
infrastructure for renewable
and low-carbon gases
- o - o
Sub-option: Exceptions for
natural gas PCIs (advanced
implementation)
- - - -
Option A.3 Projects of mutual interest (PMIs)
Option A.3.0 Business as usual o o o o
Option A.3.1 Inclusion of projects of mutual
interest (PMIs)
+ o + o
B) GOVERNANCE / INFRASTRUCTURE PLANNING
Option B.1 Offshore grids for renewable energy
Option B.1.0 Business as usual o o o o
Option B.1.1 Integrated offshore
development plans
++ + ++ +
Option B.1.2 Regional ISO / JU ++ o ++ -
Option B.2 Cross-sectoral infrastructure planning
Option B.2.0 Business as usual o o o o
Option B.2.1 Strengthened governance and
sustainability
++ + + +
Option B.2.2 New governance set-up + - + o
C) PERMITTING
Option C.1 Permitting
Option C.1.0 Business as usual o o o o
Option C.1.1. Use of urgent court procedures ++ ++ + +
Option C.1.2 One-stop shop per sea basin for
offshore renewable projects
++ ++ ++ o
D) REGULATORY TREATMENT
Option D.1 Regulatory treatment
Option D.1.0 Business as usual o o o o
Option D.1.1 Inclusion full investment costs + + + o
Legend: -=small negative impacts; --= large negative impact; 0= no change; + = limited improvement; ++=
significant improvement
63
Smart electricity grids and electricity storage
The assessment in section 6 showed that cross-border smart electricity grids constitute an
important infrastructure category to enable the achievement of climate neutrality, market
integration, competitiveness, security of supply in a rapidly changing and increasingly
digitalised energy system. Nevertheless, this potential is currently not sufficiently
exploited which would continue to be the case under BAU. Updating the eligibility
criteria for electricity smart grids, whilst safeguarding the cross-border impact with the
participation of project promotors from two or more Member States, would significantly
increase the effectiveness of the policy instrument by allowing more smart electricity
projects to apply for PCI status. It would therefore improve effectiveness by updating an
infrastructure category necessary for the achievement of the climate and energy
objectives. It would also have a positive impact on the efficiency as it would facilitate the
cooperation between DSOs and TSOs by reducing administrative costs. The broadened
scope would also improve the coherence of the policy instrument as it would address the
digital transition and support the electrification of the transport sector.
However, while the importance of electricity storage has been demonstrated in general
terms, reducing the threshold for non-mechanical storage technologies would undermine
the potential cross-border impact. Therefore, a broadened scope with a sufficiently
ambitious cross-border criteria for non-mechanical storage technologies may result in
very few projects being selected potentially leading to higher costs than benefits,
although this will depend on the exact definition of the cross-border impact as eligibility
criterion and technological progress.
Gas infrastructure, hydrogen networks and power-to-gas
The continuation of the current framework would have a significantly negative impact on
its effectiveness against the identified objectives. The assessment showed that no new
cross-border natural gas infrastructure is needed in the EU due to the already
commissioned gas PCIs or those under development as well as due to the expected
reduction in demand for natural gas in the context of decarbonisation. Maintaining
eligibility for natural gas projects would create unnecessary administrative costs for all
actors involved in the PCI selection process as such projects would not be selected for
PCI status if they cannot demonstrate benefits against identified needs. It could even
entail the risk of financing stranded assets at the cost of consumers through network
tariffs. BAU would be in contradiction with the climate neutrality objective, strongly
incoherent with other EU policies and be at odds with the objective to create a future-
proof TEN-E framework.
Limiting the scope to new and repurposed hydrogen networks and P2G would be fully
coherent in view of the infrastructure required in the decarbonisation pathways towards
2050 and the expected role of hydrogen in it. It would also be more effective than the
current framework in identifying the projects and investments needed for carbon-
neutrality. The inclusion of hydrogen networks with cross-border relevance is necessary
for a wider and more cost-efficient role out of hydrogen infrastructure based on European
infrastructure planning for hydrogen. While current costs of these technologies are
significant, these would not directly affect network tariffs and final consumer prices as
long as these are non-regulated assets. Moreover, the inclusion of full conversion of
existing natural gas assets would lead to a more cost-effective and more socially
affordable pathway to the deployment of hydrogen infrastructure and avoid stranded
64
assets in the existing gas network. In addition, their inclusion under TEN-E could help
the deployment of hydrogen in different regions in the EU, also through CEF financial
assistance. As regards EU added value, the inclusion of hydrogen networks will facilitate
the development of cross-border hydrogen infrastructure and P2G assets of cross-border
relevance, which may otherwise not take place. The policy option is proportional, as the
prioritized projects would have to prove cross-border impact.
Including in the scope also smart gas grids could increase the effectiveness of the future
TEN-E and would help to deliver decarbonisation already in the shorter term (because
the emergence of cross-border hydrogen networks is expected as of 2030). The option is
coherent with the EU decarbonisation policies and technology-neutrality, as low-carbon
and renewable methane gases will play a role in the decarbonisation of the energy system
and projects with cross-border relevance can reduce the related costs. The inclusion of
smart gas grids would be proportional, as all projects would ensure better integration of
renewable and low carbon gases with the transmission level; at the same time such
projects have to prove cross-border relevance and EU added value.
In principle, keeping in the scope natural gas transmission projects specifically for low
carbon and renewable gases and adding hydrogen blending projects could also contribute
to these criteria; however, the coherence and effectiveness of this policy option depends
on the ability of such projects to deliver significant net GHG savings. This could be
mitigated to a certain extent by safeguards on the projects’ sustainability impact but it is
unlikely to fully avoid the risk of “green washing” and stranded assets. This is in
particular the case for new gas transmission infrastructure built for renewable gases,
where the risk that the created assets continue to be used for natural gas would be too big,
reducing this option’s effectiveness in reaching the policy objective as well as policy
coherence. Retrofits of existing natural gas transmission assets for hydrogen admixtures
have a limited scope to deliver sustainability benefits because of the lower energy value
of hydrogen and the feasibility and cost-effectiveness is lowered by the significant
adaptation and investment needs on the end-use side. Furthermore, such projects are
unlikely to have significant cross-border impact.
An exception for advanced natural gas PCIs would not be effective, neither coherent with
the more ambitious decarbonisation objectives of the climate target plan. Furthermore,
such an exception would not be efficient, as the projects captured by the exception should
be already sufficiently advanced to ensure their completion even in the absence of a PCI
status. Hence, such a provision could be considered disproportionate.
Projects of mutual interest
Under the BAU option, only a limited number of projects with third countries have been
identified as PCIs which is unlikely to change and limits the effectiveness and coherence
of the current framework. The inclusion of PMIs in the revised TEN-E Regulation would
take account of the increasing role of interconnections with third countries. The selection
of PMIs within the TEN-E framework would increase the effectiveness of the Regulation
since it would expand the scope of eligible infrastructure necessary to achieve EU
climate and energy policy objectives. However, this would require project specific
regulatory approximation with the relevant EU policies to limit adverse socio-economic
or environmental impacts. Procedures for monitoring and enforcement would need to be
established. This would entail additional administrative costs which would depend on the
number and specificities of the projects and countries involved. However, these
65
additional costs should be outweighed by the significant net socio-economic benefits of
these projects. In addition, the inclusion of PMIs would increase the coherence of the
TEN-E framework with other policies such as the EU neighbourhood policies and allow
extending the scope of benefits accruing from the implementation of the EU’s regulatory
framework beyond its borders.
Offshore grids for renewable energy
As described in Section 6, the current framework is not effective to identify the projects
necessary to contribute to the large role-out of the offshore infrastructure which are a
precondition to achieve the offshore renewable generation capacity needed to meet the
climate neutrality objective. The current approach to infrastructure planning does not
address the specific needs and challenges for offshore grids.
Integrated offshore development plans would significantly improve the effectiveness of
the TEN-E framework by departing from a bottom up planning approach to a planning
against agreed objectives at regional level whilst integrating aspects of maritime spatial
planning and environmental impact. This would address specific situation of offshore
grids starting from scratch and spanning across different Member States. An incremental
approach to cross-border interconnections building on existing (national) infrastructure
networks is not feasible and would not allow to progress at the speed required to reach
climate neutrality. Such an approach would also minimise the environmental impact of
the future offshore infrastructure. Due to an optimised cross-border grid planning at
regional level per sea basin it would reduce overall investments costs and provide an EU
added value. This policy option scores highly in terms of policy coherence as it is fully in
line with other EU policies such as the Green Deal and the forthcoming Offshore
Renewable Energy Strategy.
The establishment of a regional Independent System Operator or Joint Undertaking
would in the mid- to long-term be similarly effective to the previous option. However, it
would take significant time to establish such a new entity which requires the agreement
of all relevant parties involved (Member States, TSOs, NRAs) concerning
responsibilities and tasks of such an entity and its financing. This would delay the
implementation of a new approach to offshore infrastructure planning. It would also
entail significant costs which would be disproportionate and premature at this stage of
offshore renewable energy deployment. It would quite significantly interfere with the
responsibilities of Member States, TSOs, and NRA and hence appears disproportionate.
Cross-sectoral infrastructure planning
As regards the effectiveness in terms of both supporting the identification of the
infrastructure necessary to meet the set policy objectives and achieving an integrated
network planning, the continuation of the current TEN-E would perpetuate the sectoral
approach to network planning. This would not ensure that only those projects that are
necessary for the energy transition and climate targets are identified as projects of
common interest.
As compared to offshore grids for which the current infrastructure planning is considered
not suited to address the specific challenges and achieve the energy and climate
objectives, the situation for onshore infrastructure projects is different. The evaluation of
the current TEN-E concluded that the TYNDP process as basis for the identification of
PCIs has proven effective, but underlined the need for a more integrated approach to
66
planning across the different sectors and a more balanced approach concerning the actors
involved. A strengthened governance with a stronger oversight role for the Commission
and ACER to ensure that the key steps in the infrastructure planning process fully reflect
the climate neutrality objective and energy system integration would significantly
improve the effectiveness of the policy instrument by ensuring a more accurate needs
assessment based on a cross-sectoral approach. It would also ensure that this assessment
is based on objectively defined scenarios fully in line with decarbonisation objectives as
well as the energy efficiency first principle.
A new governance set-up would considerably weaken the role of the ENTSOs with a
new actor taking the lead in the TYNDP process. This would require the built-up of
significant expertise on infrastructure planning outside the ENTSOs and TSOs.
Nonetheless, it would still need to rely largely on the data and expertise of the TSOs.
This would result in significant additional transaction and administrative costs and
negatively affect the efficiency of the TEN-E. The effectiveness of this options is
expected to be slightly lower compared to the previous option which acknowledges the
central role of the TSOs and ENTSOs in the infrastructure planning but introduces
additional “checks and balances”.
Both options include a mandatory sustainability criterion for all candidate projects that
will be within the future scope of the TEN-E Regulation. This would have a direct impact
on the ranking of the candidate PCIs and hence contribute to the identification of those
projects in line with the climate neutrality objective. Such inclusion of a sustainability
criterion would also improve the coherence of the initiative with other EU policies such
as the EU taxonomy for sustainable investments. The approach under the Taxonomy
Regulation as such would not be sufficient for the purpose of the PCI selection process
considering their different scopes and objectives.
Whereas the Taxonomy Regulation creates disclosure obligations for financial market
participants with respect to financial products and for certain non-financial undertakings,
the objective of the TEN-E Regulation is to facilitate the timely development of energy
infrastructure across the EU that ensures market integration, competitiveness, security of
supply, affordability and importantly, climate-neutrality. Serving this general objective,
the revised TEN-E Regulation establishes a framework to identify priority projects
necessary for the energy transition and to meet climate and energy policy objectives
based on a ranking list of candidate projects. This framework requires that projects are
selected based on specific selection criteria that address the climate and energy policy
objectives as set out in the TEN-E Regulation and allow for their quantification.
While the Taxonomy applies a binary approach to defining sustainability133
, the PCI
selection requires a more granular approach based on quantified criteria for the purpose
of establishing a ranking list of candidate projects. Sustainability is one element in this
assessment, besides other specific criteria such as security of supply and market
integration. This requires a coherent and specific assessment methodology. In addition,
an improved needs assessment would reinforce the energy efficiency first principle and
133
In addition to substantially contributing to one of the environmental objectives of the Taxonomy
Regulation, it must also be demonstrated that an activity does not significantly harm any of those
objectives.
67
consider with priority all relevant non-infrastructure related solutions to address the
identified gaps. Such an approach, combined with regular reporting on the compliance
with environmental legislation by project promoters, during project implementation,
would ensure that projects do no significant harm to the environment. This approach
reflects that the maturity of PCI candidate projects would not allow for a meaningful
assessment of whether projects will do no significant harm to the other environmental
objectives during the PCI selection process.
This approach provides EU added value through an optimised cross-sectoral
infrastructure planning at European level based on consistent assumptions. A better
planning framework as achieved through this option would also establish an enabling
framework to trigger and accelerate necessary investments.
Permitting
As explained in Section 6, business as usual is not considered effective to achieve the
timely implementation of PCIs. Although the evaluation of the TEN-E Regulation has
found that permitting of PCIs has significantly accelerated and the main problems that
remain concern national implementation, EU level action by further improving the
provisions in the TEN-E Regulation would accelerate project implementation and hence
the achievement of the policy objectives. In terms of efficiency, delays in the
implementation of PCIs create exponentially higher costs to society than the
administrative burden brought by the permitting process to the project promoters and
national competent authorities. Therefore, the use of urgent court procedures in those
Member States where such procedures exist, even if less than half of the Member States,
would reduce cost and significantly improve efficiency. It is also coherent with EU
policies as it allows for a better and swifter implementation of PCIs.
The creation of a one-stop shop per sea basin for offshore energy would entail significant
improvements in terms of effectiveness, efficiency, and coherence by enabling the
acceleration of the permitting process for infrastructure related to the deployment of
offshore renewable generation, in particular if combined with the establishment of
integrated offshore development plans (option B.1.1). A one-stop shop would avoid the
establishment of up to eight parallel permitting processes for a sea basin.
On permitting, the combination of options C1.1. (Use of urgent court procedures and
accelerating the permitting process (Option C.1.2, see Annex 9)) and C1.2 (One-stop
shop per sea basin for offshore renewable infrastructure projects) would result in
significant improvements.
Regulatory treatment
As regards the BAU option, the continuation of the current framework would not be
effective in ensuring the timely implementation of PCIs. As explained in Section 6, the
CBCA procedure has so far only been used in the context of a request for CEF grants and
the national approaches to CBCA decisions are often inconsistent creating uncertainty for
projects promoters and causing delays in project implementation. Costs related to delays
in project implementation makes this option less efficient.
By comparison, the inclusion in full of the investments costs into tariffs in combination
with clarifying the CBCA provisions, while creating additional administrative burden for
NRAs and the Commission, leads to a swifter implementation of projects and faster
68
realisation of their benefits being therefore both more effective and more efficient. The
option is also coherent with the EU policies pursued by the perspective PCIs and is
neutral as regards proportionality. In addition, the possibility for smart grids projects to
obtain a CBCA, the clarification of the CBCA provisions would make the framework
more effective by facilitating project implementation. Updating investment incentives to
account for the higher risks would enhance effectiveness and efficiency in view of the
expected benefits. It would also be coherent with the overall policy objectives and
proportionate.
8 PREFERRED OPTION
The options within each group of policy options (A.1, A.2, B.1, B.2) are alternatives
except for policy option group C.1 (permitting) and D.1 (regulatory treatment) where the
options are complementary. The options on the scope are independent from the options
on governance/infrastructure planning. The new planning framework will be applicable
to the scope of the revised TEN-E Regulation and hence cover all eligible infrastructure
categories not only those that may be affected by this initiative.
8.1 Package of preferred policy options
The assessment and the comparison of the options shows that no single option is
sufficient to meet the identified objectives. Therefore, a package of policy options
appears as best suited to achieve the specific objectives. The key political choices relate
to the future scope and the future approach to infrastructure planning.
Concerning the future scope of TEN-E, the main question is whether to keep natural gas
infrastructure as eligible infrastructure category or not. Based on the analysis in sections
6 and 7, the exclusion of methane gas infrastructure appears as the most effective and
coherent approach. In that case the future TEN-E would include all those infrastructure
categories that are needed to deliver on the EU’s energy and climate objectives in line
with the European Green Deal, in particular on the 2030/50 targets.
As regards the future approach to infrastructure planning, a radical change to
infrastructure planning seems not justified in view of the limited additional benefits and
the significant increase in transaction costs which reduce efficiency and may make the
instrument less effective compared to strengthening the current approach. However,
given the specificities both in terms of the current situation and expected contribution to
the long-term climate and energy objectives, a more radical change appears justified for
offshore grids. A package of preferred options is presented in Table 4.
69
Table 4: Package of preferred policy options
Policy option Description Package of
preferred
policy options
Specific objective 1: Enable the identification of the cross-border projects and investments
across the EU and with its neighbouring countries that are necessary for the energy
transition and climate targets
Options A.1. Smart electricity grids and electricity storage
Option A.1.0 Business as usual
Option A.1.1 Update of eligibility criteria X
Sub-option: Non-mechanical storage
Option A.2 Gas infrastructure, hydrogen networks and power-to-gas
Option A.2.0 Business as usual
Option A.2.1 Exclude all natural gas infrastructure but include
hydrogen and P2G
Option A.2.2 Exclude natural gas infrastructure but include
hydrogen, P2G and smart gas grids
X
Sub-option: Include natural gas infrastructure for
renewable and low-carbon gases
Sub-option: Exceptions for natural gas PCIs at an
advanced implementation stage
Option A.3 Projects of mutual interest (PMIs)
Option A.3.0 Business as usual
Option A.3.1 Inclusion of projects of mutual interest (PMIs) X
Specific objective 2: Improve infrastructure planning for energy system integration and
offshore grids
Option B.1 Offshore grids for renewable energy
Option B.1.0 Business as usual
Option B.1.1 Integrated offshore development plans X
Option B.1.2 Regional ISO / JU
Option B.2 Cross-sectoral infrastructure planning
Option B.2.0 Business as usual
Option B.2.1 Strengthened governance and sustainability X
Option B.2.2 New governance set-up
Specific objective 3: Shorten permitting procedures for PCIs to avoid delays in projects
that facilitate the energy transition
Option C.1 Permitting
Option C.1.0 Business as usual
Option C.1.1. Accelerating the project implementation X
Option C.1.2 One-stop shop per sea basin for offshore renewable
projects
X
Specific objective 4: Ensure the appropriate use of the cost sharing tools and regulatory
incentives
Option D.1 Regulatory treatment
Option D.1.0 Business as usual
Option D.1.1 Inclusion full investment costs X
The options pertaining to “offshore grids” and “cross-sectoral infrastructure planning”
improve the governance and the infrastructure planning framework to enable the
identification of projects necessary for the energy transition and climate targets. There
70
are two main improvements: first, the introduction of an integrated network development
plan for offshore infrastructure on the basis of Member States’ joint commitments to the
amount of the offshore renewable deployment for each sea basin (top down approach for
offshore planning); second, adjustments to the roles of the key actors involved in the
development of the TYNDP with strengthened oversight from the Commission and
ACER on the ENTSOs. The combined impact of the preferred options will ensure that
future PCIs will contribute to the achievement of Green Deal objectives including
climate neutrality. Sustainability in terms of climate mitigation will be achieved through
the adjusted scope of the TEN-E Regulation in terms of eligible infrastructure categories
(removal of natural gas and oil pipelines, inclusion of hydrogen), integrated offshore
development plans, as well as strengthened governance with a mandatory sustainability
criterion for all candidate projects.
Policy options concerning “permitting” and “regulatory treatment” will complement
these improvements to facilitate the timely development of the identified PCIs: a) the
introduction of a one stop shop for offshore infrastructure per sea basin, b) the access to
urgent court procedures, where available, and c) the inclusion of full investment costs in
the cross-border cost allocation. Apart from the changes that are specific to offshore
grids, the changes will apply to the scope of the revised TEN-E Regulation and all
eligible infrastructure categories. Finally, the above benefits will be extended to projects
connecting the EU with third countries (PMIs) given their expected increasing role in
achieving the climate objectives.
In addition, oil pipelines and electricity highways will be removed as infrastructure
categories and thematic areas.
In addition, the following technical options (see Annex 9) would be part of the policy
package: accelerating the permitting process (option C.1.2.), increasing the transparency
of PCIs (option C.2.1), possibility for smart grids projects to obtain a CBCA (option
D.1.2), clarifying CBCA provisions (option D.1.3), and updating investment incentives
(option D.1.4).
The package aims to “future proof” the TEN-E Regulation. The options on the future
scope of the Regulation cover all technologies necessary for the energy transition and
climate targets. The definitions are at the same time specific and sufficiently broad to
accommodate technological developments to the extent possible. The PCI selection
framework and the new approach to cross-sectoral infrastructure planning sets the key
elements in terms of objectives and criteria. The future framework will maintain the role
of the regional groups in the selection process to further specify and adjust these
elements against new policy priorities and technological developments also considering
the regional context.
Removing the list of eligible infrastructure categories to provide for full flexibility in
future PCI selection processes to take account of new developments such as a changing
political context or new technological developments would not allow meeting the
objectives of the TEN-E Regulation. Pre-defined infrastructure categories are needed for
the identification of projects of common interest. The selection process builds on
coordinated cross-border infrastructure planning which is only feasible and manageable
if the scope and selection criteria are defined per infrastructure category. If infrastructure
categories are not defined in the TEN-E Regulation, they would need to be defined
during the implementation of the Regulation, i.e. during the PCI selection process. Given
71
the political nature of this decision, it seems appropriate to establish these definitions in
the Regulation by the co-legislators.
8.2 REFIT (simplification and improved efficiency)
In order to simplify and improve the efficiency of the TEN-E Regulation the following
measures have been identified to reduce compliance and regulatory costs. These are
explained in more detail in Annex 10.
a) Reduced reporting obligations
While annual reporting by project promoters needs to be maintained to achieve the
required transparency standards and allow the Regional Groups to tackle quickly any
implementation issues that the projects may encounter, the annual report of the
competent authorities could be transformed into input or additional information into the
report of the project promoters. This measure would reduce costs and administrative
burden for the project promoters, but in particular for competent authorities which would
not need to submit a separate report. The cost saving cannot be estimated as the relevant
data are not available, but it is a recurrent cost saving.
b) Reduced monitoring by ACER to once every two years
To simplify the reporting by ACER, their report could be issued once every two years, on
time for the Regional Groups, to take it into account for their assessment of the new PCI
candidates134
. Since ACER’s report is actually used only once every two years, this
option could help simplify the monitoring obligations without any costs and without
affecting the projects’ implementation. This measure would reduce costs and
administrative burden for ACER, for the members of the Regional Groups and the
Commission. This measure could generate efficiency gains of approximately 20% of
ACER’s workload on reporting, equivalent to annual savings of EUR 60 000 (or 0.4 FTE
per year).
c) Pre-consultation to become optional
The principles for public participation in the Regulation constitute minimum
requirements to ensure early engagement with local communities and stakeholders
affected by the construction of a PCI and include a pre-consultation process. In practice,
the obligation to consult ahead of the launch of permitting procedure may be adding to
existing national procedures. To avoid that two or more consultations are required at an
early stage, it is suggested to make the pre-consultation optional, if it is already covered
by national rules under the same or higher standards as in the TEN-E Regulation. The
cost savings which would occur mainly with project promoters cannot be estimated as the
relevant data are not available, but it is a recurrent cost saving.
d) Simplified inclusion in TYNDP for existing PCIs
134
This option corresponds to the input of ACER to the stakeholder consultation.
72
An electricity or gas candidate project can apply for the inclusion in the Union list of
PCIs only if it is included in the latest available TYNDPs, developed biennially by the
ENTSOs. This process requires a significant amount of data and legal proofs135
.
Considering that existing PCI projects already delivered the necessary proofs in the
previous TYNDP process, an automatic inclusion in the subsequent TYNDPs for such
projects, as long as their administrative and technical data did not significantly change, is
recommended. The cost savings which would occur mainly with project promoters
cannot be estimated as the relevant data are not available, but it is a recurrent cost saving.
9 HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?
The actual impacts of the legislation will be monitored and evaluated against a set of
indicators tailored to the specific policy objectives to be achieved with the legislation. A
review of the effectiveness of the new legislation could take place in 2026, when the
second PCI selection process under the new framework should have been completed.
Under the existing TEN-E framework there are already regular reporting and monitoring
procedures in place. This well-established monitoring system constitutes an important
basis for monitoring the impacts of the legislation.
9.1 Indicators
Building on the existing monitoring, the following indicators have been identified for the
specific policy objectives:
 Enable the identification of the necessary cross-border projects and
investments:
o the number and types of projects under the defined priority corridors / thematic
areas (planned, under construction or commissioned);
o the installed capacity per project type and priority corridors / thematic areas;
o the integration of renewable energy sources and reduced greenhouse gas
emissions;
o the interconnection level between Member States;
 Improve infrastructure planning for energy system integration and offshore
grids:
o installed capacities for offshore renewable energy generation;
 Shorten permitting procedures for projects of common interest
o the average and maximum total duration of authorisation procedures for projects
of common interest;
o the average duration of court proceedings for projects of common interest;
o the level of opposition faced by projects of common interest (number of written
objections during the public consultation, number of legal recourse actions).
135
ENTSO-E : https://tyndp.entsoe.eu/promoters-corner
ENTSOG: https://www.entsog.eu/sites/default/files/2019-
05/TYNDP%202020_Practical_Implementation_Document_20190502_0.pdf
73
 Ensure the appropriate use of the regulatory framework
o the number of projects of common interest having reached a cost allocation
agreement among TSOs and NRAs based on full cost inclusion;
o the average duration for reaching an cost allocation agreement;
o the number and type of projects of common interest having received specific
incentives and/or support by NRAs;
All data will be monitored on the basis of regular reports from project promoters and
national regulators.
9.2 Operational objectives
Based on the policy options, the following operational objectives have been identified:
Operational objectives Indicators
Implementation of PCIs that support the
achievement of the climate neutrality objective by
enabling RES integration
Reduced curtailment of renewable energy;
doubling the number of smart electricity projects
compared to current levels by 2026
Achieve a significant increase in the deployment of
offshore renewable energy
At least 10 PCIs to support the deployment of
offshore renewable energy by 2026
European approach to infrastructure planning for
hydrogen networks
Integration of hydrogen in the TYNDP or
establishment of a hydrogen network development
plan; at least 5 hydrogen PCIs by 2026
Reduce delays in PCI implementation Share of PCIs that are delayed in a given year
compared to the initially planned commissioning
date: reduce share compared to current situation
74
10 GLOSSARY
Term or acronym Meaning or definition
ACER Agency for the Cooperation of Energy Regulators
BAU Business as usual
CAPEX Capital expenditure
CBCA Cross-border cost allocation
CBA Cost-benefit analysis
DSO Distribution System Operator
ENTSO-E European Network of Transmission System Operators
for Electricity
ENTSOG European Network of Transmission System Operators
for Gas
GHG Greenhouse gas emissions
ISO Independent System Operator
JU Joint Undertaking
LNG Liquefied natural gas
MS Member State
OPEX Operating expense
P2G Power-to-gas
PCI Project of common interest
RAB Regulatory Asset Base
RES Renewable energy sources
TSO Transmission System Operator
TYNDP Ten Year Network Development Plan
75
ANNEX 1: PROCEDURAL INFORMATION
Lead DG, Decide Planning/CWP references
The Directorate-General (DG) for Energy was leading the preparation of this initiative
and the work on the Impact Assessment in the European Commission. The planning
entry was approved in Decide Planning under the reference PLAN/2020/6566. It is
included in the adjusted Commission Work Programme 2020 COM(2020) 440
final136
under the policy objective A European Green Deal.
Organisation and timing
The planned adoption date (Q4 2020) included in the Commission Work Programme
adopted on 29 January 2020, remained unchanged in the revised version adopted on 27
May 2020 following the COVID-19 crisis. An inter-service steering group (ISG), was
established for preparing this initiative composed of the following Commission services:
Secretariat General (SG), CLIMA, CNECT, GROW, RTD, NEAR, REGIO, ENV, JRC,
MOVE, DEVCO, COMP, SJ. The ISG met five times in the period from January until
adoption in December 2020.
Milestones Dates
Publication of the inception impact assessment 11 May 2020
Feedback period on inception impact assessment 11 March – 8 June 2020
Open public consultation and targeted consultation 18 May - 13 July 2020
Online webinars June 2020
Upstream meeting with Regulatory Scrutiny Board 14 July 2020
Submission to Regulatory Scrutiny Board 25 September 2020
Regulatory Scrutiny Board 21 October 2020
Resubmission to Regulatory Scrutiny Board 9 November 2020
Consultation of the RSB
The Impact Assessment report was first submitted to the Regulatory Scrutiny Board
(RSB) on 25 September 2020 and discussed with the Board on 21 October 2020. The
RSB first delivered a negative opinion on 23 October 2020 and after examining the
resubmitted version (submitted on 9 November 2020) delivered a positive opinion with
reservations on 1 December 2020. The below tables summarise how the revised Impact
Assessment report addresses the requested improvements.
a) First RSB opinion
136
https://eur-lex.europa.eu/resource.html?uri=cellar%3Af1ebd6bf-a0d3-11ea-9d2d-
01aa75ed71a1.0006.02/DOC_1&format=PDF
76
RSB requested improvements Changes in the revised report:
(1) The report should clarify the context
of the revision. It should present the
origins of the TEN-E framework, its
current components (thematic areas,
priority corridors, regional groupings,
PCI selection criteria etc.) and
financing. It should more clearly set out
the current governance system for trans-
European network plans.
Section 1 of the report has been thoroughly
revised to clarify upfront the background and
key elements of the current TEN-E
Regulation. In addition, more details including
illustrations on the PCI selection process as
well as the TYNDP process have been added
in section 3 “Implementation/State of play” of
Annex 5 (Evaluation report). A new Annex 6
has been added to provide a more detailed
overview on the status of PCIs and the
relationship with CEF.
(2) Drawing on the evaluation, the
problem analysis should present what
has worked well under the existing
Regulation and where there are
shortcomings. It should detail which
institutional issues of the current
framework lead to non-alignment with
European policy objectives and
excessive time requirements for
decision-making. It should explain
which elements will remain unchanged
in the revised Regulation and which will
be up for review.
The key conclusions of the evaluation on the
successes and shortcomings of the current
TEN-E Regulation have been added at the
beginning of section 2 and they have been
systematically picked up the problem
definition. The new sub-section 2.4 clarifies
what elements will remain unchanged and
which elements are subject for review.
(3) The report should elaborate on the
new policy needs emerging from the
Green Deal. It should clearly position
how the TEN-E framework fits into this
context. It should explain the linkages to
other related policy initiatives (adopted
or being developed), such as the energy
efficiency and renewable energy
directives and the green taxonomy for
investments. The report should discuss
the estimated regulatory and investment
needs to establish the necessary energy
infrastructure to reach the 2030/2050
climate targets, and the contribution
from TEN-E.
The problem definition has been revised and
restructured to better explain how the TEN-E
framework fits into the new policy context of
the Green Deal (section 2), language on
regulatory and investments needs has been
strengthened and completed with additional
references (section 2.1). The baseline has
been revised to better explain the linkages to
other related policy initiatives (adopted or
being developed), such as the energy
efficiency and renewable energy directives
and the green taxonomy for investments and
how these affect the identified problems
(sections 2.1 and 2.3).
(4) The report should clarify what will
be the measures of success of the
revised Regulation in contributing to the
Green Deal and reducing delays.
Specific success indicators have been added to
the indicators (section 9.2).
77
(5) The report should clarify how the
revision intends to ensure technology
neutrality. It should specify how the
new planning framework will be able to
accommodate changes in objectives and
technologies. It should assess to what
extent the sectoral combinations of
options under “scope” are future proof,
given that they would be fixed in the
Regulation.
The issues of technology neutrality and
“future proof” of the initiative have been
explicitly addressed in comparison of the
options (section 7) in terms of the scope and
the governance, both the planning framework
and the PCI selection process including the
assessment methodologies. It has been
highlighted to what extent certain options
would be in conflict with making the revsied
TEN-E Regulation future proof.
(6) The options should link better with
the identified problems and objectives.
The report should substantiate why it
does not consider a more fundamental
revision of the TEN-E approach, to
improve the alignment with political
objectives and timeliness of the
planning process. The report should
explain how the introduction of a
mandatory sustainability criterion – next
to other selection criteria – would
ensure that the projects with the highest
contribution to sustainability would be
selected. The report should better justify
why it relegates the discussion of some
options to an annex.
In addition to the added clarifications on the
TEN-E framework (see point 1) as well as the
revised problem definition (see point 2), an
intervention logic diagram (Figure 4) has been
added to clarify how the objectives and
options relate to the problems and underlying
drivers.
The introduction of a mandatory sustainability
criterion has been explained in more detail
(section 5.2.2.2 and new Annex 8).
The options relegated to an Annex have been
revised to focus on those options that are of
technical nature. This has been clarified in the
report.
(7) The report should better justify why
the preferred option is the best response
to the identified problems. It should
explain how the inclusion of the updated
criteria can improve the selection of
projects of common interest, if the
governance structure continues to be
decentralised (with the European
Network of Transmission System
Operators continuing to initiate and lead
the award decisions). It should clarify
the role of the Agency for the
Cooperation of Energy Regulators in
this respect. It should make clear that
the proposed solution for eliminating
the delays applies only to some Member
States. The report should present cost
estimates for the proposed changes in
the governance framework.
The report has been strengthened to better
explain why the package of preferred options
are considered best suited to address the
identified problems (section 7 and 8, new
Table 4) and highlights possible alternatives.
The role of ACER and the Commission has
been clarified (section 5.2.2). It has been
clarified that option on accelerated court
procedures would apply to some Member
States only (section 6.3.1).
The assessment of impacts in terms of
administrative burden has been strengthened
and cost estimates added (section 6.2).
b) Second RSB opinion
78
RSB requested improvements Changes in the revised report:
(1) The report should provide a better
justification for creating a separate system
for assessing the sustainability of
candidate projects of common interest. It
is not clear why the TEN-E sustainability
assessment requires specific selection
criteria or how they would differ from
those of the taxonomy Regulation. While
the report acknowledges that the details of
the sustainability methodology would be
developed later with the ENTSOs and
ACER, the report should at least provide
the minimum requirements to align the
PCI selection with EU policy objectives.
The text has been revised (sections 7) to
further clarify the different scope and
purpose of the TEN-E Regulation and the
Taxonomy Regulation. It explains why
specific selection criteria are needed in the
TEN-E Regulation in order to meet its
objectives. It also further clarifies (section 8)
how the full alignment with the Green Deal
objectives as key objective of the revision is
achieved.
The revised report (section 6.2.2) explains
that the mandatory sustainability assessment
constitutes as such a minimum requirement
but is only one element to align the PCI
selection with the EU policy objectives
(sections 6.2.2 and 8).
(2) The report should be more specific
on how it will ensure that the
mandatory sustainability criterion will
take precedence over other criteria in the
project selection process, to ensure
alignment with the Green Deal. It should
also clarify why it proposes not to apply
the sustainability criterion to electricity
projects. Although these automatically
fulfil the taxonomy requirements for
climate mitigation, they should also do no
significant harm to other environmental
and social objectives.
Text was added (section 8) to clarify that the
combined impacts of the proposed changes,
i.e. the adjusted scope of the TEN-E
Regulation, integrated offshore development
plans, as well as strengthened governance
with a mandatory sustainability assessment
for all candidate projects will align the PCI
selection with EU policy objectives
including the Green Deal.
The revised report (section 6.2.2) explains
that sustainability as mandatory selection
criterion would be applied to all candidate
projects.
Text was added (Section 7) to clarify how
the assessed options would ensure that
projects do no significant harm to the
environment.
(3) The report should better substantiate
why the revised Regulation should keep
the list of infrastructure categories. It
should consider how it can make the
initiative more future-proof. It should also
explain why it does not directly use the
taxonomy Regulation to ensure the
alignment of the list with the Green Deal.
Text was added (section 8) to explain why
the definition of eligible infrastructure
categories are required and what the
consequences would be, if this was not done.
The text has been revised (section 7) to
further clarify the different scope and
purpose of the TEN-E Regulation and the
Taxonomy Regulation and why the approach
under the Taxonomy would not be sufficient
for the PCI selection process (see also point
79
1).
(4) The evaluation concludes that the
delays in acquiring the permits for PCIs
are largely influenced by national laws
and practices. The report should be
clearer about the role of the EU versus
national levels in addressing these
delays. In this context, it should better
explain the inclusion and the likely
effectiveness of the policy option on ‘use
of urgent court procedures’, as it would
only apply to Member States that have
such procedures in place (less than half).
The revised text (sections 2 and 5.2.3)
clarifies that the evaluation concludes that
national implementation and enforcement is
a key issue to address permitting delays. It
also better explains (sections 6.3 and 7) the
effectiveness of the policy option on ‘use of
urgent court procedures’.
Evidence, sources and quality
The impact assessment draws on evidence from the evaluation of the Regulation
347/2013 on guidelines for the trans-European energy networks, from the stakeholder
input to the extensive consultations carried out in this respect, as well as from the results
of a series of topical studies on key elements of the TEN-E Regulation, which will be
presented below.
The impact assessment references the outcomes of a mid-term evaluation of the TEN-E
Regulation, as well as evaluations and assessments carried out in the framework of other
Commission initiatives, such as:
 Stepping up Europe’s 2030 climate ambition, Commission staff working
document Impact Assessment, SWD(2020) 176 final;
 A hydrogen strategy for a climate-neutral Europe, COM(2020) 301 final;
 Powering a climate-neutral economy: An EU Strategy for Energy System
Integration, COM(2020) 299 final;
 EU Technical Expert Group on Sustainable Finance: Taxonomy, Technical
Report (2020);
 Commission Expert Group on electricity interconnection targets, Third report of
the Public engagement and acceptance in the planning and implementation of
European electricity interconnectors (2019);
 A Clean Planet for all - A European long-term strategic vision for a prosperous,
modern, competitive and climate neutral economy, Commission Communication
COM(2018) 773;
Formal conclusions adopted in the framework of the Copenhagen Forum in 2018 and
2019 were also considered in the analysis. The Copenhagen Forum gathers annually
representatives of the EU institutions, transmission system operators, project promoters,
regulators, energy companies, NGOs and civil society and the financing community to
discuss the challenges of developing Europe’s energy infrastructure.
ACER’s annual consolidated monitoring reports on the progress of electricity and gas
PCIs, incremental capacity projects and virtual interconnection points as well other
80
updates on the cross-border cost allocation decisions, project-specific risk-based
incentives were equally considered.
Further information was gathered through several support studies previously
commissioned to external contractors to support the development of policy options and
assessment on:
Investment needs in infrastructure and costs of delays
 Ecofys (2017): Investments needs in trans-European infrastructure up to 2030 and
beyond Eurelectric (2019)
 Eurelectric (2019), The Value of the Grid
 Renewable Grid Initiative/ ENTSOE (2019): Working Paper on Value of timely
implementation of “better projects”
Market and technical data on different technologies
 Trinomics (2020): Study on Opportunities arising from the inclusion of Hydrogen
Energy Technologies in the National Energy & Climate Plans
 Tractebel (2020): Hydrogen generation in Europe
 Trinomics (2019): Impact of the use of the biomethane and hydrogen potential on
trans-European infrastructure
 International Energy Agency (2019): The Future of Hydrogen
 Artelys/Trinomics/Enerdata (2020): Study on energy storage – Contribution to
the security of the electricity supply in Europe
 International Energy Agency (2020): Energy Storage Study
 EY/ REKK (2018): Quo vadis EU gas market regulatory framework –Study on a
Gas Market Design for Europe
Digitalisation and innovation aspects
 Ecorys (2019): Do currrent regulatory frameworks in the EU support innovation
and security of supply in electricity and gas grids?
 International Energy Agency (2017): Digitalisation and Energy, OECD
 ETIP/SNET (2018): Digitalisation of the energy system and customer
participation Description and recommendations of Technologies, Use Cases and
Cybersecurity
Sustainability
 Artelys/ Trinomics (2020): Measuring the contribution of gas infrastructure
projects to sustainability as defined in the TEN-E Regulation [to be published]
Offshore grid development
 Navigant/SWECO (2020): Study on the offshore grid potential in the
Mediterranean region [to be published]
 Roland Berger GmbH (2019): How to reduce costs and space of offshore
development: North Seas offshore energy clusters study
81
 COWI (2019): Study on Baltic offshore wind energy cooperation under BEMIP
Public acceptance and delays in projects implementation
 Scope et al. (2020) Innovative actions and strategies to boost public awareness,
trust and acceptance of trans-European energy infrastructure projects
82
ANNEX 2: STAKEHOLDER CONSULTATION
In line with the Better Regulation Guidelines and Toolbox notably for “back-to-back
evaluations and impact assessments”, the Commission carried out a comprehensive
consultation based on a consultation strategy that included a range of consultation
methods and tools that combined both backward and forward-looking elements. The
strategy was designed in line with the intervention logic, placing the focus on relevance,
effectiveness, efficiency, coherence, and EU value-added of the TEN-E Regulation.
The consultation strategy aimed to ensure that all relevant evidence were taken into
account, including data about costs, about societal impact, and about the potential
benefits of the initiative.
In line with the Better Regulation guidelines, the goal of the stakeholder consultation
was:
 To collect views, experience and concrete examples from stakeholders that will
illustrate particular opportunities, challenges and impacts resulting from the
implementation of the TEN-E Regulation with the view to fill any potential
information/data gaps, and facilitate the analysis of the different evaluation
criteria;
 To solicit opinions on the extent to which the TEN-E Regulation is meeting its
objectives.
As a crucial part of the data collection strategy for the evaluation and the forward-
looking elements in the impact assessment, a stakeholder mapping exercise has been
carried out in order to identify and group the main stakeholders that are involved in and
affected by TEN-E Regulation. The consultation targeted stakeholders inside the EU,
both at national and European level. In force since 2013, the current TEN-E Regulation
has built an established and well-defined group of stakeholders. However, the exercise
has been fine-tuned to tailor the identification of those stakeholders that are less known
or active taking also into account new technological developments or contextual changes
that may have triggered increase interest amongst certain stakeholders on the TEN-E
Regulation and its revision.
The stakeholders identified have different roles, intervene at different stages and have
various levels of interest. Their input has therefore been taken into account into different
parts of the evaluation and the preparation of the Impact Assessment. Table 1 outlines the
stakeholder categories and includes a brief explanation of the role and relevance of each
group to the consultation. The list ensures a good coverage of all parties affected by the
Regulation.
Table 1: Types of stakeholder and their main role and source of relevance in the TEN-E framework
Type of
stakeholder
Main role and source of relevance in the TEN-E policy area
EU consumers and
EU citizens
EU consumers (both citizens and organized civil society) are key
stakeholders for the success of the energy transition and the
enabling role of the energy infrastructure policy. Aside from the
information on direct benefits and costs resulting from the actual
implementation of an infrastructure project, citizens and consumers
83
can offer insight on the burden of the overall functioning of the
market and specific expectations regarding the implementation of
projects and final energy price for electricity and gas.
Non-governmental
organisations
NGOs are relevant representative bodies that, within the context of
the TEN-E Regulation, generally provide additional views on
environmental values and targets. Contact with NGOs will provide a
better understanding of the environmental impacts and relevance of
the different policy scenarios.
Services in the
European
Commission and
agencies
DG ENER, DG ENV, DG CLIMA, DG CNECT and DG REGIO as
well as INEA are main points of contacts for policy initiatives
directly relevant for the implementation of the TEN-E Regulation.
European
Parliament
In line with Inter-institutional agreements and commitments made
by the Commission to this end, the Parliament will be closely
informed of the stages of the revision of the TEN-E Regulation.
European Union
Regulators
The Agency for the Cooperation of Energy Regulators (ACER) is
responsible and/or involved in various tasks under the TEN-E
Regulation.
National
Regulatory
Authorities
National regulators (NRAs) are authorised official public bodies
established in most EU Member States with a common aim to
exercise regulatory power on specific policy areas. Today, the
European Union has energy rules set at the European level, but in
practice it has 27 national regulatory frameworks. The relevant
NRAs of each country are found in the Board of regulators of
ACER. NRAs are significant stakeholders in the establishment of
the Energy Union and for the implementation of the TEN-E
Regulation.
National
Competent
Authorities and
their local and
regional
representatives (i.e.
Ministries and
outermost regions)
The Ministries and outermost regions are the institutions and
agencies competent for enforcing EU regulations. In each Member
State, there is at least one Ministry responsible for implementing
and enforcing the TEN-E Regulation.
European TSO
(ENTSO-E and
ENTSO-G)/DSO
branch
organisations
National TSOs and DSOs are represented by branch organisations at
European level, such as ENTSO-E (Electricity), ENSO-G (Gas) and
DSO Organisations (E.DSO for Smart Grids, Eurelectric, CEDEC,
GEODE, Eurogas). These branch organisations will help gaining
valuable insights concerning the implications and desires for the
TEN-E Regulation and evaluation.
Project promoters,
including
Transmission
System Operators
National companies operating electricity and gas networks and
project promoters are responsible for the implementation of PCIs.
Energy producers /
Industry
Other important parties that are affected by the TEN-E Regulation
are energy producers and (large) industry parties, including ICT
companies as well as the offshore renewable energy sector. This
84
also includes industry and its associations representing the hydrogen
and CCSU sectors.
Academics and
thematic experts
Key contacts for a better understanding of the interconnected
European energy grid and assessing the different policy scenarios.
This group also includes legal experts, which are relevant contacts
for data collection in order to prevent the different policy scenarios
and get a better understanding of the legal framework of the Energy
Union scheme.
The consultation strategy included a combination of consultation methods (i.e.
open/targeted) and tools to provide well-reasoned responses and generate the information
and evidence necessary to respond to the evaluation questions and inform forward-
looking elements in the policy preparation.
In particular, several consultation tools were employed to generate a wealth of
information and collect views on several aspects of the TEN-E Regulation, its
implementation, enforcement, and effects. These include:
 Online Public Consultation;
 Targeted online survey;
 In-depth interviews;
 (Four) online stakeholder webinars.
A clear delineation has be established between the various consultation tools to best
address the target groups and avoid stakeholder fatigue.
An online public consultation (OPC) open from 18 May to 13 July 2020 (midnight
Brussels time) provided the opportunity to anyone interested in the evaluation and
revision of the TEN-E Regulation to contribute. EU Survey was used to manage the
OPC. The questionnaire was available in 23 of the official languages of the EU. It was
addressed to mainly to citizens and organisations (e.g. NGOs, local government, local
communities, companies and industry associations) that have no specialist knowledge of
the TEN-E Regulation. This was reflected in the number, structure and wording of the
questionnaire. The questions were limited, simple, easy to answer, and included
sufficient contextual information to guide the contributor. Moreover, the questionnaire
for the open public consultation did not cover all evaluation criteria, but rather non-
technical elements on which citizens and the general public can share their views. The
questions in the open public consultation aimed to identify the relevance of the TEN-E
regulation in terms of its objectives, infrastructure categories, and the PCI features the
general public deemed most important. Contributors with specialist knowledge of the
TEN-E Regulation (e.g. as a professional for a national competent / regulatory authority,
TSO, DSO, company project promoter, energy producer, NGO with specific knowledge
on the subject) were invited to fill in a targeted survey. The online public consultation
was be accessible on the Commission's Have your say website137
, including links to
137
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12382-Revision-of-the-
guidelines-for-trans-European-Energy-infrastructure
85
background documents and to relevant webpages, such as the ones dedicated to the TEN-
E policy and the European Green Deal.
The open public consultation was shortened from the usual 12 weeks to 8 weeks. An
evaluation roadmap of the current TEN-E Regulation was launched already in June 2019,
setting the context and scope of the evaluation. The nearly 30 replies from the main
stakeholder groups, as well as regular contacts with stakeholders indicated that
stakeholders are informed and ready to engage in Commission’s on-going work in this
area. An inception impact assessment was equally launched ahead of the OPC on 11 May
facilitating all interested parties to respond to the public consultation. The availability of
the questionnaire in all official EU languages and the inclusiveness of the consultation
tools ensured open access of all parties to the consultation whilst secured evidence
collection through the targeted consultations (targeted survey, webinars, interviews).
The overall number of responses to the OPC questionnaire is 103. In addition, 169 emails
were received via a functional mailbox for the consultation. Most of the contributions to
the OPC questionnaire were in English (74 contributors chose to respond in English), but
contributions were also received in French, German, Slovenian, and Spanish. Out of the
169 received emails received via the functional project mailbox 129 submissions
represented identical replies from citizens, out of which 44 in Spanish, Italian, French,
German and Portuguese.
The main category of respondents was EU citizens (28 responses), followed by business
associations and company/business organisations. The following table outlines the
respondents by each category.
Type of respondent Number Percentage
Academic/research institution 2 2%
Business association 25 24%
Company/business organisation 22 21%
Environmental organisation 2 2%
EU citizen 28 27%
Non-EU citizen 2 2%
Non-governmental organisation (NGO) 12 12%
Other 5 5%
Public authority 5 5%
Grand Total 103 100%
In terms of the distribution of responses by country, most responses were received from
Belgium (31), followed by Germany (12), and Spain (9).
86
A targeted consultation (in English only) was carried out in parallel, specifically
addressing project promoters, public authorities (NRAs, NCAs, regional and local
governments), other actors of the energy system (e.g. DSOs, energy suppliers), civil
society (e.g. local communities, NGOs) wider industry representatives and academics or
researchers but was open to everyone.
The overall number of responses received to the targeted online survey is 112. The main
category of respondents was Transmission System Operators (27), followed by “other”
stakeholders (22) and industry representatives (17):
Type of respondent Number Percentage
National Regulatory Authority 4 4%
National Competent Authority 10 9%
Transmission system operator 27 24%
Distribution system operator 10 9%
Energy producer 10 9%
Industry 17 15%
Telecom company 0 0%
Local or regional authority 0 0%
Civil society 11 10%
Research, academia 1 1%
Other 22 20%
Total 112 100%
In terms of the distribution of responses by country, most responses were received from
Belgium (33), followed by Austria, France and Germany (9 respondents each). The
overrepresentation of Belgium stems from the fact that many of the civil society
organisations and industry associations that provided their input to the targeted survey
are based in Brussels.
1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 3 3 3 4 5 6 6
9
12
31
0
5
10
15
20
25
30
35
87
Approximately 46 in-depth interviews were carried out with the support of a consultant
with key stakeholders of the TEN-E Regulation to provide detailed information and
evidence on key aspects that could not be dealt with in length by the targeted
questionnaire. The interviews aimed to collect more detailed information than could be
collected through the targeted survey and online public consultation. As such, the
interviews focused primarily on the effectiveness and implementation of the Regulation,
but also touched upon its relevance, coherence, and EU added value.
The interviews were designed to complement the results of the targeted survey.
Four stakeholder webinars took place with the use of online conferencing systems to
ensure further outreach to stakeholders and create opportunities for structured feedback.
Each webinar will be dedicated to key elements of the inception impact assessment. The
webinars will last between 2.5 and 3 hours and will include presentations on the topics
addressed, as well as moderated discussions with the online audience. Interactive tools
such Sli.Do and/or in-built functions helped taking on questions from the audience.
 The first webinar on ‘TEN-E Infrastructure categories to ensure full consistency
with the climate neutrality objectives of the Green Deal’ took place on 02 June
2020. It was attended by 304 participants and 17 panellists.
 The second webinar on ‘Selection procedure and criteria for Projects of Common
Interest (PCIs)’ took place on 04 June 2020. It was attended by 298 participants
and 12 panellists.
 The third webinar on ‘TEN-E Regulatory toolbox and criteria for CEF financial
assistance’ took place on 09 June 2020. It was attended by 284 participants
and 9 panellists.
 The fourth and last webinar on ‘PCI Implementation: Permitting, monitoring and
involvement of stakeholders’ took place on 11 June 2020. It was attended
by 211 participants and 8 panellists.
In terms of the effectiveness of the TEN-E Regulation in reaching its objectives, the
replies to the OPC and the targeted survey converged. The majority of respondents of the
OPC found that the ‘integration of renewable energy sources into the grid’ (92%) is the
88
most important objective for trans-European energy infrastructure network138
. On a
positive scale, the objective to achieve ‘a competitive and properly functioning integrated
energy market’ was also perceived as relevant by 65% of the contributors. The
stakeholders replying to the targeted survey largely confirmed that the TEN-E Regulation
has had a positive impact towards meeting its objectives: it has contributed to energy
market integration (88%), achieved an adequate level of security of supply (77%), and
contributed to competitiveness in the EU energy market (63%). Less agreement was
indicated with the statement that the Regulation helped achieve the 2020 climate and
energy targets, however (47%). There are no clear trends across stakeholder groups.
OPC respondents’ contributions were more diverse when scoring the relevance of
infrastructure categories under the TEN-E. Electricity infrastructure (transmission lines
and storage) and smart electricity grids ranked first (87 and 83%, respectively) in
respondents’ choices as relevant. On the other side of the ranking, ‘geological storage of
CO2, LNG) terminals and CO2 networks (for transporting CO2) were deemed relevant to
a small extent, mostly justified (via the functional mail) of the consultation by opposition
from EU citizens to supporting fossil fuel energy infrastructure.
Whilst there is a broad agreement that the infrastructure categories on the effective
support of current infrastructure categories in achieving the overall objectives of the
TEN-E Regulation, the input indicate that priority corridors and thematic areas need to be
updated to address future challenges and incorporate new types of projects. The
stakeholder consultation shows that stakeholders generally agree on broadening the
technological scope of the TEN-E Regulation to integrate more technologies supporting a
decarbonised energy system, as well as encouraging innovation.
Suggestions included the consideration of new infrastructure categories, as well as
discarding existing ones. In general, stakeholders called for the reflection of the role of
decentralised electricity production in the revised TEN-E Regulation and the need for a
greater cooperation between TSOs and DSOs. Support was received for including cross-
sectoral projects, smart gas grid projects and hybrid wind offshore in the scope of the
TEN-E. Specifically on gas infrastructure categories, there was an agreement that
hydrogen and green gases will be required at large scale with deployment centered
around current industrial hydrogen clusters. Additionally, the position of NGOS and RES
promoters focused on the transitional role of green gases blending into the current gas
pipelines and the need to mainstream the “do no harm principle” thus, calling for the
removal of natural gas infrastructure.
138
TEN-E objectives, as set out in the survey: A competitive and properly functioning integrated energy
market; Increased resilience of energy infrastructure against technical failures, natural or man-made
disasters, and the adverse effects of climate change and threats to its security; Consumer empowerment -
making sure consumers' interests are considered in decisions related to energy infrastructure; Secure and
diversified EU energy supplies, sources, and routes; Integration of renewable energy sources into the grid;
Increase cross-border interconnections and deepen regional cooperation to transport energy from renewable
sources where it is most needed; Giving priority to energy efficiency (putting the ‘Energy efficiency first’
principle in practice); Achieving the EU’s decarbonisation objectives for 2030 and 2050, including climate
neutrality under the European Green Deal; Increased digitalisation of the energy infrastructure (e.g. Smart
Grids); Energy system integration and sector coupling (integration of the different energy sectors and
beyond)
89
Between 87 and 93 answers to the OPC qualified the facilitation of integration of
renewable energy sources into the grid, the contribution to greenhouse gas emissions
reduction and ensuring security of supply as important features out of all possible
features139 listed for PCIs. The environmentally sound implementation of PCIs and
generation of direct benefits to the local communities were considered equally important
by the contributors to the open public consultation. The contribution of PCIs towards
increasing the competition in the market was seen as positive, although ranked lower.
The replies to the targeted consultation on the PCI selection criteria complemented this
input. As in the case of the OPC, targeted stakeholders confirmed that the selected PCIs
are the most relevant projects to fulfil the TEN-E objectives (48% agree, 26% disagree).
In their view, the cost-benefit assessments for the selection of PCIs would benefit from a
more appropriate methodology (44%). In general, the roles of different actors in the
selection procedure was considered adequate, except for a significant wish to weaken the
role of the ENTSOs (39%) and to strengthen the role of DSOs (53%) and other
stakeholders, such as NGOs (39% - 67% of whom represented industry or civil society).
With regards to the criteria, the general criteria are considered appropriate (48% agree,
38% disagree), whilst the views on the appropriateness of the specific criteria for
electricity, gas and CO2 projects were mixed mostly justified by lack of knowledge.
Mirroring the feedback on the relevance of infrastructure categories, various stakeholders
indicated that current eligibility criteria do not sufficiently support climate neutrality by
insufficiently supporting network innovation and by including traditional, fossil fuel
infrastructure. Some of the current selection criteria might be too restrictive for the
inclusion of projects at DSO level, in particular: the cross-border impact criteria, and the
10 kV voltage threshold and 20% RES origin for smart grids.
In addition to this, several environmental NGOs and industry stakeholders indicated that
the weak assessment of climate impact is causing projects to be selected that do not have
a positive effect on the CO2 emissions. A need for revision of the PCI selection criteria
in light of the sustainability and climate effect is also echoed by some NRAs. TSOs do
not indicate strong opinions on the sustainability criterion. Further input from the
targeted stakeholders’ on the governance of the selection process showed an
overwhelming agreement among NRAs, NCAs and TSOs about the role of Regional
Groups in enabling regional cooperation (83%). Equally, High Level Groups were
deemed to provide added value through strategic steering and political guidance as well
as monitoring the PCIs in the priority regions (71%) There is a general agreement among
all respondent groups that the current reporting and monitoring procedures on the PCI
progress are sufficient to ensure transparency on PCI development (56% agree), but not
that PCIs implementation plans and the regular updates ensure timely project
implementation (33% agree).
139
Integration of renewable energy sources into the grid; Contribution to greenhouse gas emissions
reduction; Security of supply; Market integration (e.g. to improve infrastructure and increase system
flexibility); Increase competition in the market; Innovation; Contribution to increase the energy efficiency
of the energy system; Environmentally sound implementation, i.e. compliance with the relevant regulations
especially in the area of environment; Generation of direct benefits to the local communities
90
Several stakeholders pointed to the potential conflicting role of the ENTSOs, as project
promoters and developers of the scenarios and CBA methodology over which projects
are evaluated, indicated a the perception that the predominant role ENTSOs enjoy in the
infrastructure planning is not seen as fully independent. In their view, the current
planning involves an unequal treatment of non-TSO promoters and results in a biased
nature of the TYNDPs. The solutions put forward would include the involvement and
scrutiny of an independent organisation which would enable the development of a hybrid
energy system with a multimodal network design and holistic planning for grid
connection based on a strong scenario-building and a solid cost-benefit analysis (CBA).
In qualifying the coherence of the TEN-E Regulation Respondents with other policies or
initiatives at EU level, stakeholders indicated inconsistencies with regards to the
European Green Deal / Long Term Strategy for Decarbonisation (74%identified
inconsistencies, especially among civil society, DSOs and energy producers and
industry), the Paris Agreement (65% identified inconsistencies, especially among civil
society, DSOs and TSOs), and the Clean Energy Package / the Energy Union (55%
identified inconsistencies, especially among civil society, DSOs and energy producers).
As such, respondents considered that the TEN-E Regulation is lacking in terms of
adequately addressing key emerging issues such as improving energy efficiency and
mitigating climate change impacts. According to respondents, the three main (new)
challenges to be addressed are greenhouse gas emission reductions / climate neutrality
(mentioned by 54), integration of renewable energy sources (mentioned by 50) and
energy system integration (mentioned by 47). The two least important challenges are
energy financing capacity of TSOs (mentioned by 42) and market fragmentation / market
integration (mentioned by 20). In view of emerging issues however, the OPC results
show that 77% of the respondents agree that the revised TEN-E Regulation can make an
important contribution to the economic recovery in Europe through a green transition in
response to the COVID-19 crisis, while 8% disagree with the statement.
Both the targeted survey and the OPC addressed the effectiveness of the implementation
provisions, notably as regards public participation and transparency in the process of
building PCIs. Regarding public participation, 82% of the OPC respondents declared to
be aware of Projects of Common Interest (PCI) label and 78% know there is a public
participation process in the frame of PCI implementation. The majority (68%) consider
the public participation process as useful or useful to a large extent, ranking project
websites as the most useful communication channel for providing and exchanging
information on PCIs (78% consider it ‘Very useful’ or ‘Useful to a large extent’).
The targeted stakeholders drew a similarly positive picture, with more than half of the
respondents agreeing increased awareness of PCI projects (51% agree, 17% disagree),
improved public participation (41% agree, 12% disagree) and increased trust (37% agree,
38% disagree). Despite of perceived improvements in terms of awareness and trust in the
PCI process, the input indicated a limited impact on increasing public acceptance (22%
agree, 24% disagree) and on adjustments to the design of the projects following public
input during consultations (19% agree, 26% disagree). Nevertheless, most respondents
agreed that the requirement for at least one public consultation is enough for increasing
transparency and participation (46% agree, 20% disagree). During the webinars,
panellists called for increased trust and transparency both in the upstream process of
selection of PCIs (TYNDP, PCI process) as well as during project implementation.
91
Further input on implementation, notably the shortening of permit granting durations,
indicated mixed views: 20% (completely) agreed, while 36% (completely) disagreed that
TEN-E permit granting provisions enabled an accelerated implementation of PCIs
compared to the baseline. Similar differences in views were noted about the effectiveness
of the one-stop-shops. Limited feedback on the perceived reasons for delays include
notably environmental impact assessments and the statutory permit granting procedure.
The evaluation showed that TEN-E reduced the average duration of the permit granting
process for transmission PCIs after 16 November 2013 to less than 3 years compared to 9
years prior to Regulation entering into force. However, there was a general call for
acceleration and simplification of the permitting procedures is needed, whilst maintaining
the highest environmental standards. The close cooperation and interaction with
authorities was emphasized as key.
Stakeholder views on the effectiveness of the CBCA decision processes in enabling
effective investment were mixed, with 25% of the respondents agreeing to the statement,
17% disagreeing and 21% being neutral. A more positive view was expressed as to
whether investment incentives enable effective investments in PCIs, with a slight
majority (54%) agreeing to the statement.
The input from stakeholders indicated notably the need to re-think the link between
CBCA and CEF financing. The CBCA procedures were discussed as such, notably on
how to ease the burden and ensure easier access to CEF. Some proposals referred to
making smart grids eligible for CBCA. There were several calls for clarity on cost
recovery, monetization where possible where relevant and the valorisation of accelerated
implementation of PCIs in the CBA. For offshore grids specifically, stakeholders called
for a clear legal framework for cross-border hybrid projects notably on CBA/ CBCA.
Stakeholders largely believe that the benefits of the TEN-E Regulation outweigh the
costs (53% agree) whilst at the same time indicate that the TEN-E has not reduced such
(administrative) costs for project promoters (valid for TSOs - 81% agree, NCAs - 60%
agree and NRAs - 50% agree). A few suggestion for lowering the cost were provided,
such as fast-tracking PCI selection procedure for existing PCIs, without substantiated
analysis of impacts.
There is widespread agreement among OPC and targeted respondents that the TEN-E
Regulation has EU added value – the majority believe it achieved more than could have
been achieved at national/regional level (92 %, 79% respectively agree) and that the
issues addressed by the TEN-E Regulation continue to require action at EU level (91%
agree, 0 disagree). The main EU added value identified by respondents is access to
financing (mentioned by 99), followed by regional cooperation (mentioned by 84) and
the implementation of projects that could not have been implemented without TEN-E
(mentioned by 67).
92
ANNEX 3: WHO IS AFFECTED AND HOW?
3.1 Practical implications of the initiative
As indicated in Annex 2, the following key target groups have been identified for this
initiative:
 European citizens and consumers
 Non-governmental organisations
 European Union Regulators
 National Regulatory Authorities
 National Competent Authorities and their local and regional representatives (i.e.
Ministries and outermost regions)
 European TSO (ENTSO-E and ENTSO-G)
 DSO branch organisations
 Project promoters, including Transmission System Operators
 Energy producers / Industry
 Academics and thematic experts
The below table outlines the practical implications of the initiative for all key target
groups identified.
Type of stakeholder per
target group
Practical implications
European citizens and
consumers
Ensuring the consistency of energy infrastructure planning rules with
the climate-neutrality objective will benefit citizens by lowering
greenhouse gas emissions through optimal and efficient integrated
infrastructure planning, fossil fuels substitution by renewable or low-
carbon gases and significant deployment of onshore and offshore
renewable energies.
An efficient network operation, optimised onshore and offshore grid
planning, exploitation of demand-response management services and
enhanced digitalisation will bring a higher overall social welfare than
the current rules. Comprehensive control and monitoring of the grid
will reduce the need for curtailment of renewables and enable
competitive and innovative energy services for consumers.
The digitalisation of the grid will facilitate customer participation in
all stages of the development and expansion of the energy
system by digital tools such as participative geographical systems and
would support new energy market arrangements. It will facilitate the
integration and management of renewable energy produce locally
supporting energy consumers turning into energy producers
(“prosumers”).
Smart electricity grids to support the roll out pf charging
infrastructure for electric vehicles would directly benefit users of
electric vehicles.
93
Appropriate rules for project selection and cost allocation in line with
distributed benefits will stimulate investments in the grid in the most
efficient way and alleviate the burden on tariffs for consumers. A
coordinated process for integrated infrastructure planning can
ultimately reduce the overall need for infrastructure projects by
designing the infrastructure in an optimal way.
Citizens and local communities will benefit from increased
transparency in the implementation of projects of common interest,
which will create opportunities to understand the value of the energy
infrastructure investments and become involved. An accelerated
realization of key procedures in the permitting process will also allow
for a faster implementation of key project therefore bringing forward
the benefits identified in the cost-benefit analysis at national and
regional level and avoiding high dispatch costs for consumers
associated with delays.
Infrastructure enabling the expansion of offshore renewable energy
will have a positive effect on employment across the EU.
Project promoters,
including Transmission
System Operators
Transmission system operators of electricity will be required to
strengthen their coordination at transmission level, as well as with
distribution network operators, in view of a European approach to an
integrated onshore and offshore network planning. TSOs will benefit
from the increased efficiency in network operations due to measures
to broaden the scope of the smart grids, which will enhance the
exploitation of demand-response management services and increase
cross-border data and capacity exchange.
Project promoters will see a decrease in costs due to the provisions to
accelerate permitting processes, including the clarification of cross-
border provisions. The establishment of one-stop shops for sea basins
would equally create efficiencies for promoters, both in terms of
reduced administrative burden as well as in terms of access to
existing data and studies conducted for the sea basin.
The initiative will increase the cost visibility of a project, creating
regulatory stability allowing project promoters to obtain financing
from the market.
Project promoters will be equally impacted by the strengthened
monitoring and transparency in project implementation.
European TSO (ENTSO-E
and ENTSO-G)
The creation of a European infrastructure planning framework that
reflects the relevant needs will still be based on the TYNDPs but
would require higher levels of cooperation and interlinkages between
the electricity and gas transmission networks, as a well as
involvement of distribution system operators and non-TSOs project
promoters and other stakeholders. ENTSOs will see their role limited
in key phases of the planning process, such as the development of
scenarios and cost-benefit analysis methodologies, due to the
94
strengthened role of the Commission and ACER.
ENTSO-E’s role will increase in view of their new mandate to
develop offshore plans for time horizons 2030, 2040 and 2050
respectively for all the sea basins under the Commission’s steering
and binding opinion.
National Competent
Authorities and their local
and regional
representatives (i.e.
Ministries and outermost
regions)
The initiative will entail higher cooperation between National
Competent Authorities (NCAs) and possible restructuring of existing
structures in the context of the development of one-stop shops per sea
basin. NCAs will have to ensure the clarity and accessibility of cross-
border provisions. This will, in turn, trigger efficiencies for NCAs.
Measures that aim at an accelerated accomplishment of the permitting
process through faster court procedures as well as REFIT provisions
will have positive implications in terms of reducing administrative
burden associated with reporting obligations.
National Regulatory
Authorities
The role of the NRAs will increase due to the obligation to
thoroughly assess the investment requests since all CBCA decisions
issued will be final. The consideration and inclusion of the full
investment costs in the national tariff and the sequential performance
of an affordability assessment will increase the administrative burden
on NRAs.
ACER ACER will have a strengthened role in the approval of the
methodology to assess the costs and benefits of projects, which
together with the continuous follow-up of the TYNDPs development
will entail a limited increase in administrative burden. ACER will
equally be impacted by the simplification of monitoring obligations.
Distribution system
operators
The role of the distribution network operators will increase thanks to
their increased participation in the planning process. Equally, the
introduction of new infrastructure categories and the broadening of
existing ones will see a bigger role for DSOs as project promoters of
PCI projects.
Energy producers /
Industry
Broadening the scope to new and innovative infrastructure categories
will create a market for those specific technologies.
The hydrogen industry has estimated the impact of building 40 GW
electrolyser capacity in Europe and 40 GW electrolyser capacity in
neighbouring countries with the aim of exporting green hydrogen into
Europe.140
This would require total investments investment of €25-
140
Green Hydrogen for a European Green Deal – A 2x40 GW initiative, Hydrogen Europe, 2020
95
€30 billion, of which over 85% would be realised in the 2025-2030
timeframe141
. Depending on the scenario, 7.5 billion or 29 billion
EUR of value added can be generated annually in the whole EU-28,
by investment in and operation of hydrogen technologies. Most of the
value added is expected to be created by building and operating the
renewable electricity plants that provide energy to electrolysers.
Similarly, the establishment of an enabling grid planning framework
for offshore grids would open up a significant market for the
renewable energy industry, in particular in Europe, and partially
compensate for the slowdown in renewable development onshore in
some regions in Europe.
3.2 Summary of costs and benefits
The assessment of the benefits distinguishes between direct and indirect benefits.
Direct benefits of the package of preferred policy options are mainly related to
greenhouse gas emission savings and efficiency improvements at large scale through a
more coordinated approach to infrastructure planning at European level and streamlined
permitting for offshore developments. These direct benefits encompass both social
benefits, e.g. society at large benefits from reduced greenhouse gas emissions and the
achievement of the climate neutrality objective142
, and private benefits, e.g. reduced
administrative costs related to shorter permitting procedures.
The simplification measures, as discussed in section 8.2, will generate direct benefits
through reduced existing recurrent direct costs related to administrative burden as a result
of reduced monitoring and reporting obligations. These direct benefits are mainly private
benefits for certain stakeholders such as project promoters.
Indirect benefits include sectoral benefits by stimulating market demand for certain
innovative technologies and in turn contributing to potentially higher employment rates.
However, the net impact on total welfare and the net impacts on specific groups (i.e.
winners and losers) as well as overall affordability is important to inform policymaking.
Costs and benefits should usually be based on market prices (reflecting the opportunity
cost of action). However, these are not always available and so other methods may be
needed to express impacts in monetary terms or indeed sometimes impacts cannot be
expressed in monetary terms
The assessment of the preferred options showed positive impacts in social welfare and
economic terms for different categories of stakeholders. However, such impact for the
141
These are electrolyser investment cost only, the figures do not include the investments in solar and wind
farms, transport and storage infrastructure, nor end-use applications.
142
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT, Stepping up Europe’s
2030 climate ambition, SWD(2020) 176 final
96
package of preferred policy options could not be fully quantified or monetised as this
would have required information regarding the deployment rate for future PCIs or market
upscale for new or emerging infrastructure categories which is not available and cannot
be estimated with sufficient degree of robustness. Ranges of impact in absolute or
relative terms are provided to the extent possible.
It is important to underline that one general selection criterion for each project of
common interest is that its potential overall benefits outweigh its costs, including in the
longer term.143
The below table summarises the direct and indirect benefits for the package of preferred
policy options compared to the baseline providing ranges of possible benefits.
I. Overview of Benefits (total for all provisions) – Package of preferred options
Description Amount Main recipient (stakeholder group)
A) SCOPE
 Broadened scope to reflect technological developments for smart electricity grids (elements of Option A.1.1;
expanding the category on electricity storage would not be proposed)
Direct benefits
Reduced transaction costs Not possible to monetise benefit. Benefits for project promoters.
Facilitate the integration of
renewable energy sources at
distribution level
Not possible to monetise benefit. Benefits for owners of renewable energy
generation units at distribution level.
Indirect benefits
Provision of demand-side
flexibility by consumer
connected to the distribution
grid
Not possible to monetise benefit.
Higher penetration of smart grids will allow for
120 GW-150 GW of flexible load available by
2045
Benefits identified for citizens and society as
a whole, transmission system operators
Support in the uptake of
electric cars
Not possible to monetise benefit. Benefits identified for citizens and society as
a whole
Comprehensive control and
monitoring of the grid would
reduce the need for
curtailment of renewables
and enable competitive and
innovative energy services
Not possible to monetise benefit.
According to the IEA, investments in enhanced
digitalisation would reduce curtailment in Europe
by 67 TWh by 2040144
.
Benefits identified for citizens and society as
a whole
143
TEN-E Regulation, Art. 4(1)(b)
144
with demand-response accounting for 22 TWh and storage accounting for 45 TWh - IEA 2016
97
for consumers.
 Limit scope to new and repurposed hydrogen network / Power-to-Gas installations (Option A.2.1) as well as smart
gas grids and retrofits of existing natural gas transmission assets for hydrogen admixtures/blends with safeguards in
place to ensure renewable and low-carbon gases are transported (elements of Option A.2.2; new transmission
pipelines for decarbonised gases and inclusion of advanced natural gas PCIs would not be proposed)
Direct benefits
Description Amounts Comments
GHG emission reduction
from the substitution of
fossil fuels by renewable or
low-carbon hydrogen
Not possible to monetise benefit.
In general, GHG emission reduction potential in
the range of 20-65 MtCO2/a, corresponding to
1.4%-4.5% of the reduction gap at EU-28 level
Benefits identified for citizens and society as
a whole
GHG emission reduction
from the substitution of
natural gas with biogas
Not possible to monetise benefit.
In general, GHG impact ranges from a 156
tCO2eq per TJ reduction to a 17 tCO2eq per TJ
increase in emissions
The exact impact will depend on the amount
of renewable and low carbon gases injected
into the grid and on the difference between
the GHG intensity of the specific renewable
and low carbon gas and the substituted fuel.
Benefits identified for citizens and society as
a whole
Increasingly interconnected
hydrogen networks will
create an internal market for
hydrogen and offer benefits
in terms of competition and
security of supply
Not possible to monetise benefit.
Up to 70% of additional demand for green
hydrogen projected by German TSOs for 2025
and 2030 is expected to be covered by imports of
decarbonised hydrogen from the Netherlands
Benefits for administrations (NCAs), energy
producers/ industry
Indirect benefits
Leveraging investments in
hydrogen technologies
In general, depending on the scenario, 7.5 billion
or 29 billion EUR of value added can be
generated annually in the whole EU-28, by
investment in and operation of hydrogen
technologies.
Benefits for energy producers/ industry
Job creation generated by
hydrogen-related
investments and operations
Not possible to monetise benefit.
29100–103 100 direct jobs (in production and
operations & maintenance) and contribute to
further 74 100–241 150 indirect jobs between
2020 and 2030
Benefits identified for citizens and society as
a whole
Job creation generated by
installed capacity of
renewable hydrogen
electrolysers
Not possible to monetise benefit.
Between 140,000 and 170,000 jobs for
manufacturing and maintenance of 2x40 GW
Benefits identified for citizens and society as
a whole
98
electrolyser capacity up to 2030.
Avoidance of stranded assets
through the conversion of
existing natural gas assets
into dedicated hydrogen
pipelines
Reduction of up to 90% compared to new build Benefits for administrations (NCAs), energy
producers/ industry
B) GOVERNANCE / INFRASTRUCTURE PLANNING
 Integrated offshore renewable development plans per each sea basin for better infrastructure planning and project
implementation (Option B.1.1); strengthened governance of the TYNDP planning and preparation and sustainability
of the gas infrastructure categories as proposed under the preferred option on “Scope” (Option B.2.1)
Direct benefits
Deployment cost savings 10 percent in cost savings, equivalent to between
EUR 300 million and EUR 2500 million for five
projects alone, depending of the size of the
comparable conventional projects
Benefits identified for citizens and society as
a whole, project promoters (including
transmission system operators),
administrations (NCAs)
GHG emission reduction
from the substitution of
fossil fuels by offshore
renewable energy.
Not possible to monetise benefit.
Given the expected deployment the emissions
reductions can be considered significant in a mid-
term perspective. These would depend on the
actual deployment rate and the greenhouse gas
intensity of the electricity it replaces. This is
influenced by various factors including demand
and supply patterns, price sensitivities,
localisations, grid congestions
Benefits identified for citizens and society as
a whole
Indirect benefits
Job creation in offshore RES
sectors (wind, wave, tidal,
floating solar)
Not possible to monetise benefit.
Approx. 520 000 jobs, as follows:
- Increase from current 77,000 jobs in
offshore wind to more than 200,000
jobs.
- 400,000 jobs in the ocean energy sector
(e.g. wave, tidal, floating solar) by 2050
Benefits identified for citizens and society as
a whole
C) PERMITTING AND PUBLIC PARTICIPATION
 Accelerating the completion of the permitting process though proposing to use preferential treatment for the PCIs on
court proceedings (Option C.1.1. without sub-option on shortening of the time limit for the permitting process); one-
stop shop per sea basin for offshore renewable projects (Option C.1.2)
Direct benefits
99
Avoidance of delay costs
due to court proceedings
A delay of 2 years due to an average court
procedure was estimated at a cost of 150 million
€145
.
Benefits identified for society at large, but
also for project promoters (including
transmission system operators),
administrations (NCAs)
For assessing the costs of the package of preferred policy options, the analysis
distinguishes between direct costs and indirect costs.146
The TEN-E Regulation does not introduce any regulatory charges, such as fees, levies,
taxes, etc. The package of preferred policy options results in direct costs in terms of
compliance costs and administrative burden for businesses (mainly project promoters)
and administrations (national competent authorities, national regulatory authorities, the
Commission, and ACER) in order to comply with substantive obligations or
requirements contained therein. The application of the package of preferred options
results in indirect costs for citizens/consumers, businesses and administrations through
an increase in network tariffs to finance investments in the regulatory asset base (RAB).
However, CEF financial assistance can alleviate the impact on network tariffs in case a
PCI shows significant externalities in terms of security of supply, solidarity, or
innovation.
The below table summarises the direct and indirect costs for those actions of the package
of preferred policy for which costs have been identified compared to the baseline. It is
not possible to estimate these costs for all actions at this stage but they are considered as
non-significant. The additional costs would be marginal compared to the current costs
which have been evaluated to be in the range of EUR 25 to 50 million and considered
low when compared to the benefits.147
Additional enforcement costs at national and EU level will depend on the
implementation.
II. Overview of costs – Package of preferred options
Citizens/Consumers Businesses Administrations
One-off Recurrent One-off Recurrent One-off Recurrent
145
Renewable Grid Initiative and ENTSOE, Value of timely implementation of “better projects”, May
2019, Working Paper https://eepublicdownloads.azureedge.net/clean-
documents/Publications/Position%20papers%20and%20reports/20190517_RGI_ENTSOE_working_paper
_better_projects.pdf
146
Better Regulation Guidelines, TOOL #58. TYPOLOGY OF COSTS AND BENEFITS
147
Ecorys et al. (2020) Support to the evaluation of Regulation (EU) No 347/2013 on guidelines for trans-
European energy infrastructure, Draft final report, p. 122
100
Action (a)
Broadened
scope for
regulated
assets
(smart
grids)
Direct costs
Administrative
burden (project
promoters):
participation in
regional group
meetings,
collection and
submission of
information
required for
network
planning,
monitoring and
reporting
Administrativ
e burden:
participation
in regional
group
meetings
(NRAs),
organisation
of regional
group
meetings,
monitoring
Indirect costs Potential
increase of
network tariffs
Potential
increase of
network
Potential
increase of
network
tariffs
Action (b)
Establish
ment of
integrated
offshore
developme
nt plans
Direct costs
Administrative
costs (mainly
TSOs /
ENTSOs):
participation in
regional group
meetings,
collection and
submission of
information
required for
network
planning
Administrativ
e burden:
participation
in regional
group
meetings
(NRAs,
ACER),
organisation
of regional
group
meetings,
monitoring
(Commission,
ACER)
Indirect costs Potential
increase of
network tariffs
Potential
increase of
network tariffs
Potential
increase of
network
tariffs
Action
(c)
Integrate
d
infrastruc
ture
plans
Direct costs Administrative
costs related to
the
coordinated
approach
(mainly TSOs,
DSOs and
ENTSOs):
data
collection,
participation
in meetings
Administrati
ve costs
related to the
increased
oversight for
the
Commission
and ACER
(between
EUR 80 000
and 150 000,
one
additional
FTE)
Indirect costs
101
Action
(d) One-
stop shop
per sea
basin for
offshore
renewabl
e projects
Direct costs Administra
tive costs
to establish
the one
stop shop
Indirect costs
Action e)
Inclusion
full
investme
nt costs
Direct costs Administrati
ve costs
related to the
strengthened
obligation
on NRAs
102
ANNEX 4: ANALYTICAL METHODS
In order to quantify the benefits stemming from the implementation of the current TEN-E
regulation, in the field of electricity and gas, from its entering into force until the full
implementation of the latest PCI list (4th
list), the Commission used the REKK model and
cross-checked the key outcomes with the internal METIS model run by JRC. Emphasis
was given on attaining comparable modelling output, and hence REKK and the JRC
worked closely to align to the extent possible the input assumptions feeding into their
models.
Tools used
REKK used, for this impact assessment two models, one specific for each sector, EEMM
(electricity) and EGMM (gas).
The EEMM is a partial equilibrium microeconomic model. It assumes fully liberalised
and perfectly competitive electricity markets. 44 markets are modelled, including almost
all members of ENTSO-E148
. Production and trade are constrained by the available
installed capacity of power plants and net transfer capacity (NTC) of cross-border
transmission lines. In the model one country is one node (with a few exceptions, e.g. it
models two markets in Denmark and Ukraine), thus no internal congestion is assumed.
The model has an hourly time step, modelling 90 representative hours with respect to
load, covering all four seasons and all daily variations in electricity demand. The model
used as main inputs for the 2030 the EUCO 32,32.5, the NTC from ENTSOs capacity
maps the PCIs data and for the current situation input from the TSOs, NRAs and reports
of industry organisations (such as EWEA and Solar Power Europe). For natural gas
prices, REKK used its own forecast, prepared by the EGMM model of REKK,
differentiated country by country and year by year.
The EGMM is a competitive, dynamic, multi-market equilibrium model that simulates
the operation of the wholesale natural gas market across Europe. It includes a supply-
demand representation of European countries, including gas storage and transportation
linkages. Large external markets, including Russia, Turkey, Libya, Algeria and LNG
exporters are represented exogenously with market prices, long-term supply contracts
and physical connections to Europe. The timeframe of the model covers 12 consecutive
months, starting in April. Market participants have perfect foresight over this period.
Dynamic connections between months are introduced by the operation of gas storages
and take-or-play constraints of long-term contracts. Given the input data, the model
calculates a dynamic competitive market equilibrium for the modelled countries, where
all arbitrage opportunities across time and space are therefore exhausted to the extent that
storage facilities, transportation, infrastructure, and contractual conditions permit. As a
result, the competitive equilibrium yields an efficient, welfare-maximizing outcome. The
model used as main inputs for the 2030 the EUCO 32,32.5, the NTC from ENTSOs
capacity maps the PCIs data and for the current situation mainly input from the TSOs,
and NRAs.
As mentioned above, the crosscheck of the main REKK results was performed using the
Commission METIS model run by JRC. The Metis model is a modelling tool that can
148
Cyprus and Malta are not modelled in EEMM.
103
quickly provide robust insights on complex energy related questions, focusing on the
short term operation of the energy system and markets.
In METIS, the European power system is modelled with an hourly temporal resolution.
The power plants are represented as fleets of similar technological characteristics. In
METIS, units of the same technology or using the same fuel in each zone are bundled
together into the same asset in a cluster model which simulates the dynamic constraints
and starting costs in a relaxed (LP) unit commitment, without using binary variables. The
gas system/market is modelled on a daily time step. The main parameters and constraints
describing the market/technological components concern: gas production, pipelines,
storages, LNG (both regasification and liquefaction facilities), underground gas storages,
gas demands. The main input data are the same as the ones used for in the REKK models.
Baseline cases
The assessment aimed to answer three questions: What did the TEN-E Regulation has
achieved until now?, targeting the benefits stemming from the PCIs already
commissioned; What did the TEN-E Regulation achieved overall?, covering therefore the
PCI already completed and the ones from the fourth PCI list; and What are the benefits of
the fourth PCI list?
In line with these questions, the REKK and the JRC has developed two baselines for year
2020 and 2030 from which they took out/added the relevant group of PCIs:
The Baseline serves as the basis for comparison: this scenario shows what would have
been the situation on the electricity markets of Europe without any PCI projects being
implemented. For 2020, the Baseline scenario includes the present situation without the
PCI projects – thus, interconnector capacities are lower than as of today, capacities of the
twelve already commissioned projects are deducted. Similarly, in 2030 the most likely
future outcome is included, but same capacities are deducted, and none of the projects
from the 4th
PCI list are assumed to be commissioned.
In the TEN-E baseline, the possible effect of the already commissioned PCI projects is
calculated. For 2020, the present situation is used – meaning the difference between the
Baseline and the TEN-E scenarios is exactly the commissioning of the existing PCIs. The
same applies to 2030 –REKK and the JRC took the most likely future market situation,
including the already commissioned PCIs, but did not include any project from the 4th
list.
In the Future baseline, the effect of the commissioning of all projects from the 4th
list are
modelled. This means, that the only relevant modelling year is 2030, as the first year of
commissioning from these projects is assumed to be 2021. For building up the Future
scenario in 2030 REKK and the JRC used the TEN-E scenario as a starting point, and
then included all projects from the 4th
list to see how they would affect market outcomes
in 2030. When results are compared to the TEN-E Scenario, then the effect of the PCIs
from the 4th
list can be quantified. While comparing Future and Baseline shows the effect
of all – already commissioned and to be commissioned in the future.
ANNEX 5: EVALUATION REPORT
Since its establishment in 2013, the Regulation on trans-European energy networks laid
down rules for the timely development and implementation of key energy infrastructure
projects that interconnect Member States, whilst contributing to market integration,
security of supply, competitiveness and further integration of renewables.
In March 2019, as part of the partial political agreement between the European
Parliament and the Council on the Connecting Europe Facility for the period 2021-2027,
the co-legislators agreed on the need to evaluate the effectiveness and policy coherence
of the Regulation 347/2013 on the guidelines for trans-European energy infrastructure
(TEN-E Regulation) by 31 December 2020149
. In December 2019 the European
Commission published the European Green Deal with an aim to include the climate
neutrality objective in 2050 into the proposed European Climate Law. The
communication of the European Commission (COM(2019) 640)1 (the European Green
Deal) explicitly refers to the need for a review of the TEN-E Regulation to ensure
consistency with climate neutrality objectives.
In view of the timeline for the evaluation and revision of the TEN-E Regulation, the
Commission opted for a “back-to-back evaluation and impact assessment”. The
evaluation of the TEN-E Regulation was carried out between January 2019 and
September 2020. The evaluation was supported by a study “Support to the evaluation of
Regulation (EU) No 347/2013 on guidelines for trans-European energy infrastructure”
commissioned to an external contractor which helped gather, quantify and assess
evidence drawn from a range of sources on the performance of the TEN-E instrument to
date. The evaluation assessed in a retrospective manner the extent to which the TEN-E
Regulation has performed so far in achieving its stated objectives, identifying factors that
helped or hindered their achievement. Specifically, it assessed the effectiveness of the
Regulation compared to a baseline (i.e. the situation without the Regulation), to appraise
whether or not it has had a significant impact and added value.
In short, the evaluation looked at:
• How and why the current TEN-E Regulation has worked well or not so well, and
which factors have helped or hampered the achievement of its objectives;
• The impact of the Regulation, particularly in terms of progress towards achieving
its objectives.
The “back to back” approach ensured that formative element are drawn from the
outcomes of the evaluation to conclude on the extent to which the Regulation will remain
fit-for-purpose and relevant in the future in view of the adopted or planned policy
initiatives (the climate target plan, the revision of the Energy Efficiency Directive, the
Renewable Energy Directive, and the gas package) which will accelerate the mid- and
long-term decarbonisation. The forward-looking elements will looked into how to ensure
that enabling energy infrastructure is in place to match the increased decarbonisation and
renewable energy deployment ambitions and indicate areas of intervention.
149
https://www.consilium.europa.eu/media/38507/st07207-re01-en19.pdf
http://www.europarl.europa.eu/doceo/document/TA-8-2019-0420_EN.pdf
105
In line with the scope and applicability of the TEN-E Regulation, the evaluation covers
all Member States. In terms of legal acts covered as part of the evaluation, it does not
specifically cover the European Union's funding through the Connecting Europe Facility
(CEF) although the evaluation questions seek to identify synergies and
complementarities with CEF. Due to its timing but also its wider scope, the evaluation
does not fully assess the coherence with the sustainable finance framework (taxonomy)
but rather indicate increasing incoherence with the current TEN-E Regulation and CEF
financial assistance. The work on two Delegated Acts is currently ongoing with a view to
establish by end of 2020 a list of environmentally sustainable economic activities on the
basis of technical screening criteria for climate change mitigation and adaptation.
Contrary to the scope of the TEN-E regulation which established a method for multi-
criteria project selection, the taxonomy Regulation classifies and qualifies economic
activities as environmentally sustainable for the purposes of establishing whether or not
associated investments are environmentally sustainable.
Five core evaluation criteria were applied to evaluate the performance of the TEN-E
Regulation: effectiveness, efficiency, relevance, coherence, and EU added value. Section
4 further describes the method for the evaluation, including the rationale and questions
underpinning each of the criteria.
1 BACKGROUND TO THE INTERVENTION
Energy infrastructure is crucial for reaching wider EU energy and climate goals, whilst
ensuring access to safe, reliable, affordable and sustainable energy for all Europeans.
The TEN-E Regulation is part of a larger regulatory framework adopted to tackle a
number of barriers to the implementation of European energy infrastructure and
integrated energy networks. In line with the energy policy objectives of the Treaty on the
Functioning of the European Union (TFEU), the TEN-E Regulation aims to ensure the
functioning of the internal energy market and security of supply in the Union, promote
energy efficiency and energy savings and support the development of new and renewable
forms of energy the interconnecting energy networks.
The TEN-E Regulation is based on Article 172 of the Treaty on the Functioning of the
European Union. According to Article 171(1), “the Union shall establish a series of
guidelines covering the objectives, priorities and broad lines of measures envisaged in the
sphere of trans-European networks; these guidelines shall identify projects of common
interest”. The goals of the Regulation are the following:
• To ensure the functioning of the internal energy market and security of supply in
the Union;
• To promote the development of new and renewable forms of energy, energy
efficiency, and energy savings; and
• To promote the interconnection of energy networks.
To achieve these objectives, the TEN-E defines infrastructure priority corridors and
priority thematic areas, lays down criteria for the identification of key energy
infrastructure projects and builds on regional cooperation to identify and select necessary
PCIs in Union-wide lists. The TEN-E Regulation sets out guidelines for streamlining the
permitting processes for PCIs as well as increases cooperation and transparency towards
the public and wider stakeholder community. Aside from accelerated permitting, PCIs
106
benefit from improved regulatory conditions, cost-allocation and eligibility for financial
support from the Connecting Europe Facility (CEF).
The intervention logic, presented in Figure 1, links the objectives of the TEN-E
Regulation and input/actions to its outputs, results and impacts. It also visualizes some of
the relevant external factors to this regulation.
Figure 1: Intervention logic of current TEN-E framework
The Regulation lays down rules for the timely development and interoperability of Trans-
European Energy networks, by providing the following inputs:
1. The identification of PCIs necessary to implement priority corridors and areas
falling under the energy infrastructure categories in electricity, gas, oil, smart grid
and CO2 (Chapter II of the Regulation). Specifically, the Regulation: sets out the
criteria which PCIs should meet, ensures the adoption every two years by the
Commission of a Union list of the proposed PCIs and ensures that a plan is in
place to implement the PCI as well as procedures to monitor progress of the
project.
2. Provisions to facilitate the timely implementation of PCIs by streamlining,
closely coordinating, accelerating permit granting processes, and enhancing
public participation (Chapter III). The Regulation assigns the highest national
priority status to the PCIs and requires that they are included in national network
development plans, requires Member States to designate a national competent
authority responsible for facilitating and coordinating the permit granting process
for PCIs, requires that the competent authority publishes a manual of procedures
Objectives Input Output Results/Outcomes Impacts
Streamline permit
granting
procedures &
increase public
acceptance and
involvement for
PCIs
Union list of PCIs
Framework to
promote efficient and
transparent national
permit granting
procedures, including
at least one public
consultation at
national level
Appropriate regulatory
incentives for PCIs
Timely
construction
of projects
which
interconnect
the energy
markets
across
Europe
Improved
sustainability
and meet
EU s energy
and climate
goals
Need analysis: Tackle key barriers to implementation of energy infrastructure
projects that better integrate energy networks
• Extensive time required for projects to acquire building permits
• Public opposition to projects
• Regulatory challenges involved in building projects across more than one
country (challenge of imbalanced costs and benefits across borders)
• Lack of commercial viability of some projects that were identified as
important for market integration or security of supply
Activities
Assessment and selection of PCIs by
Regional Groups
Monitoring
Set up 12 Regional Groups to assess
infrastructure needs and PCI
candidates against criteria
ENTSOs setup CBA
CBCA methodologies
MSs set up their own competent
authority/ one stop shop for
permitting
Selection criteria of PCIs to
implement priority corridors
and areas including
conditions for eligibility for
Union financial assistance
(i.e. CEF)
Provisions to facilitate the
timely implementation of PCIs
by streamlining, coordinating
more closely, accelerating
permit granting processes
and enhancing public
consultation
Providing rule and guidance for
CBCA and risk related
incentives for PCIs
Effectiveness
External factors
- Critical infrastructure
- MS pressures/ requirements on
project promoters
- Public opposition
Other EU policies
- CEF, EEPR, ESIF
- Clean Energy for all
Europeans
- Energy security packages
- The European Green Deal
Ensure
implementation of
PCIS by providing
market-based and
direct EU financial
support
PCIs
implemented in
a timely manner
Facilitate the
regulatory
treatment of PCIs
Increase in
electricity & gas
interconnection
(capacity and
use)
Reduced public
opposition
PCIs with CBCA
decision
Involvement of
stakeholders in
identification and
monitoring of PCIS
PCI status
reduces admin
costs for project
promoters
PCIs receiving
specific
incentives
Better
security of
supply
Improved
competition
within
markets that
keeps
energy
prices in
check
MSs/NRAs set up incentives to
address PCIs risks
MSs publish permitting procedure
manual, including public
participation routes
EU added value
Efficiency
Coherence
Relevance
Assign European Coordinators
107
for the permit granting process applicable to PCIs, requires the project promoter
to draw up and submit a concept for public participation to the competent
authority, and ensure the necessary public consultation is conducted; and sets out
a maximum time-limit of 3.5 years for the pre-application and permit-granting
procedure combined.
3. Providing rules and guidance for the cross-border allocation of costs and risk
related incentives for PCIs. The Regulation requires member States and National
Regulatory Authorities to set up incentives to address PCIs’ risks; establishes the
use of cost-benefit methodologies for PCIs for an energy system-wide analysis, in
line with the principles laid out in Annex V of the Regulation and consistent with
the rules and indicators set out in Annex IV; and ensures that PCIs benefit from
cross-border cost allocation (CBCA) decisions, which assist the sharing of project
costs among countries in line with their expected benefits.
The outputs of the Regulation are, therefore, closely linked to each set of activities
described above:
1. establishment of relevant cross-border projects within priority corridors and areas
and energy infrastructure categories;
2. a framework to promote efficient and transparent national permit granting
procedures;
3. appropriate regulatory incentives for PCIs and long-term signals to meet EU
priorities;
4. involvement of stakeholders in identification and monitoring of PCIs.
The overall outcome is the timely construction of PCIs, which interconnect the energy
markets across Europe. More specifically:
1. PCIs receive permits more rapidly ensuring they are timely implemented;
2. PCIs status reduces administrative costs for the project promoters;
3. There is an increase in electricity and gas interconnection (capacity and use);
4. There is an increased public participation;
5. PCIs receive specific incentives; and
6. PCIs could receive a cross-border cost allocation decision.
As section 3 will further detail, the TEN-E Regulation has been effective in accelerating
the refurbishment of the existing energy grid and in deploying new projects to achieve
the Union’s energy and climate policy objectives. Thanks to a process for identification
of infrastructure needs and selection of projects, the TEN-E Regulation has shifted the
focus from national priorities to a regional and cross-border approach thus ensuring that
infrastructure is built where it is most needed. TEN-E introduced regulatory tools to
speed up implementation by incentivising investments by addressing existing
asymmetries between the costs and benefits of projects and by providing targeted support
to selected projects as last-resort. Under the TEN-E Regulation, four Union lists of
Projects of Common Interest formally adopted in 12 Regional Groups were established,
108
allowing for the implementation of 40 PCIs to date with 75 more expected to be
implemented by 2022. The TEN-E Regulation ensured that projects with the greatest
contribution towards set criteria would benefit from the utmost cooperation and
transparency between key stakeholders on the ground.
The adoption of the Green Deal and its climate-neutrality target has triggered a paradigm
shift in Union energy and climate objectives. Together with a number of adjacent
priorities that support Union’s increased climate ambitions (identified in the intervention
logic), the Green Deal became of one the main drivers the evaluation and revision of the
TEN-E Regulation in view of its inconsistencies with the climate neutrality objective
mostly due to the priorities at the time of its enactment. The evaluation showed that the
inconsistencies of the TEN-E Regulation with the Green Deal are twofold: on one hand,
the scope of the energy infrastructure categories, criteria and the governance of the
selection process is not aligned with the Green Deal objectives and latest developments
in innovation and technologies. On the other, delays in the implementation of PCIs are
still observed, triggering as such the non-delivery of their intended benefits.
The methodology for evaluating the performance of the TEN-E Regulation has been
developed to fit the intervention logic. As further detailed in section 4 on Method, an
evaluation matrix comprising of a set of evaluation questions and sub-questions per each
evaluation criteria was used to guide the evaluation process and define the manner in
which questions will be answered and presented.
The evaluation baseline captures the point of comparison for the evaluation, i.e. had the
2013 TEN-E Regulation not been introduced (a business-as-usual scenario). The baseline
has been used in the assessment of the replies to the evaluation questions (primarily on
effectiveness and efficiency), and in the modelling, which further informs the
assessment. The baseline for this evaluation is largely based on the baseline scenario in
the 2011 Impact Assessment of the TEN-E regulation. The baseline consists of four
components: 1. permit granting procedures in Member States; 2. financing; 3.
administrative cost estimates; and 4. infrastructure assessment. The baseline from the
2011 Impact Assessment was used for the analysis of the permit granting procedures in
Member States, financing, and administrative cost estimates. For the infrastructure
assessment, a different baseline than the one in the 2011 Impact Assessment was
considered due to the changes in the market an technological landscape.
The evaluation draws on evidence from the stakeholder input to the extensive
consultations carried out in this respect, PCI portfolio and case study analysis and related
monitoring reports, modelling, the results of a series of topical studies on key elements of
the TEN-E Regulation, as well as conclusions and work stemming from dedicated
stakeholder Fora (e.g. Copenhagen Forum).
2 IMPLEMENTATION/STATE OF PLAY
This section outlines how the TEN-E Regulation was implemented to date. In particular,
four main activities are considered: the PCI process, permit granting and public
participation, regulatory treatment and financing.
109
The PCI process
Article 3 of the TEN-E Regulation also defines the process for the PCI selection. The
TEN-E Regulation distinguishes and targets specific projects that are identified as PCI
from an internal energy market perspective. The process of selection and implement of
PCIs involves various stakeholders, both at national and European level. Representatives
from national competent authorities (NCAs), national regulatory authorities
(NRAs)project promoters, including transmission system operators (TSOs), and their
European association and agencies (ENTSOs and ACER) are members of regional
groups established by the Regulation. The membership of each group is based on a
priority corridor or thematic areas and reflects the respective geographical coverage.
These regional groups facilitate the cooperation and coordination amongst the
stakeholders. They are responsible for the assessment of candidate projects that are
proposed by the project promoters, but also for monitoring the execution of PCIs, and for
making recommendations to facilitate their implementation. The final decision-making
powers are restricted to Member States and the Commission (the Decision-Making Body
or DMB). Furthermore, to foster high-level (international) political commitment, support
in reaching consensus on regional actions plans and promote a specific goal regarding
EU energy network integration, Member States can establish High Level Groups. These
groups aim to pursue a specific long-term strategy and their organisation is not outside
the scope of the Regulation.
The PCI selection process is based on the National Development Plans (NDPs) and the
Ten-Year National Development Plans in electricity and gas (TYNDPs) prepared by the
ENTSOs. To ensure consensus, the PCI process involves consultation with multiple
stakeholders within the regional groups and via a public consultation. Figure 5 illustrates
the PCI selection process and the roles of the various stakeholders in this process.
110
Figure 5: PCI selection process
To become eligible for the PCI status, a candidate project is required to meet the
following general criteria:
 the project is considered necessary for at least one of the infrastructure priority
corridors and thematic areas;
 the potential benefits of the project outweigh its cost, including in the longer
term;
 the project significantly involves EU Member States, indicated by: - involving at
least two Member States by directly crossing the border of two or more Member
States; - being located in one Member State and having a significant cross-border
impact; - crossing the border of at least one Member State and a European
Economic Area country.
In addition to those, there are specific criteria that apply to PCIs depending on their
infrastructure category.
Table 1: Specific PCI criteria per infrastructure category
Energy
infrastructure
category
Specific criteria
Electricity
Market integration
Sustainability
Security of supply
Gas
Market integration
Security of supply
Competition
Sustainability
Smart grids
Integration and involvement of network users with regard to
supply and demand
111
Energy
infrastructure
category
Specific criteria
Efficiency and interoperability in day-to-day network
operation
Network security, system control and quality of supply
Optimised planning of future cost-efficient network
investments
Market functioning and customer services
Involvement of users in the management of their energy
usage
Oil
Security of supply
Efficient and sustainable use of resources
Interoperability
CO2
Avoidance of carbon dioxide emissions while maintaining
security of energy supply
Increasing resilience and security of CO2 transport
Efficient use of resources and Minimising environmental
burden and risks
Source: Regulation (EU) No 347/2013 Article 4
The TEN-E Regulation requires that ENTSO-E and ENTSO-G draft a methodology for
the Cost Benefit Analysis (CBA methodology) to assess the projects included in the
TYNDPs for electricity and gas projects respectively. According to the Regulation, to be
eligible for the PCI status, gas and electricity transmission and storage projects shall be
part of the TYNDP. To become a PCI, the project must apply for it in line with the rules
and timeline of the PCI selection process. The interlinkage between the process for
establishing the PCI list and the TYNDP can be summarised as shown on Figure 3.
112
Figure 3: TYNDP and PCI list process
The TYNDP-related approach does not apply to carbon dioxide network, smart grid or
oil PCIs. For smart grids, an updated methodology was published by the Joint Research
Centre (JRC) in 2017.
The 1st list of PCIs was adopted in October 2013 and contained 248 projects. The 2nd,
3rd and 4th PCI lists contained 195, 173 and 149 projects, respectively. Excluding PCIs
that appeared in several lists, the lists comprise 437 unique projects.
Amongst Member States, Poland is most frequently represented in the 4th list with 18
PCIs listed, followed by Lithuania, Germany and Estonia with respectively 15, 12 and 12
PCIs. Outside of the EU, the United Kingdom is most frequently represented with 16
PCIs. Electricity projects are most frequently hosted by the UK (14 PCIs) followed by
Lithuania (12 PCIs), gas PCIs are most frequently hosted by Greece (6 PCIs), and Poland
is the most dominant host of oil projects (3 PCIs).
Permit granting and public participation
A key objective of the Regulation is to streamline the permit granting process, while
ensuring sufficient public participation.
The Regulation allocates a ‘priority status’ for a project, once selected for the PCI list.
PCIs are granted the status of the highest national significance possible in the relevant
Member State for consideration especially during permit granting processes. The TEN-
Regulation defines and sets out a variety of activities that contribute to the streamlining
of the permit granting process. Member States are required to designate a “one-stop
shop’ (NCA), which shall be responsible for facilitating and coordinating the permit
granting process for PCIs and which all Member States have established by 16 November
2013 at the latest. The NCA is the sole point of contact for the project promoter in the
process leading to a comprehensive decision for a given PCI, and coordinates the
submission of all relevant documents and information.
Member States are required to additionally implement a two-stage permitting process. It
consists of a pre-application procedure and a statutory permit granting procedure. It also
sets time limits for each stage. The pre-application procedure should take place within
113
one year and six months. The combined process should not take more than 3.5 years, but
can be extended by a maximum of nine months on a case-by-case basis.
The progress of PCI implementation is monitored every year by ACER and reported to
the Commission and regional groups. Additionally, NCAs from associated Member
States report to the regional group on permit granting delays.
Monitoring data, as shown in figure 4, indicates that permit granting procedures have
shortened since the entry into force of the TEN-E Regulation. Current the EU average of
4 and 3.1 years for electricity and gas projects, respectively show significant progress
compared to baseline national averages of up to 10 years in 2011. As a central element of
the TEN-E Regulation, the establishment of one-stop shops is appraised as an instrument
to reduce the complexity and duration of permitting procedures.
Figure 4: PCI implementation progress to date
Source: Underlying data of the ACER monitoring reports. No reliable data available for 2019 since the
question was not part of the monitoring format or it was limited to the cases where there was a difference
compared to 2018 only.
As section 5 will describe, the effectiveness of permit granting procedures strongly
depends on national implementation; experiences of project promoters vary substantially
because of national differences in the way TEN-E provisions have been implemented
(e.g. as regards the responsibilities of authorities in the permit granting process. The table
below outlines the permitting schemes as chosen by Member States to facilitate and
coordinate the permit granting process for PCIs.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 2016 2017 2018 2015 2016 2017 2018
Electricity Gas
Delayed
Rescheduled
On time
Ahead of schedule
114
Table 2: Overview of schemes adopted by Member States
Integrated Coordinated Collaborative
BE X
BG X
CY X
CZ X
DE X
DK X X X
EE X
EL X X
ES X
FI X
FR X
HR X
HU X
IE X
IT X
LT X
LU X
LV X
MT X
NL X
PL X
PT X
RO X
SI X X
SK X
SE X
UK X
Source: Milieu (2016) Analysis of the manuals of procedures for the permit granting process applicable to
projects of common interest prepared under Art.9 Regulation No 347/2013. Based on the stakeholder
consultation, the implemented permitting scheme in Portugal was updated to “integrated” and for
Slovenia – to “integrated” and “collaborative”.
In spite of the introduction of targeted provisions, longer permitting durations in the
implementation of key projects of common interest are still experienced.
The TEN-E Regulation sets out specific requirements on transparency and public
participation. The purpose of the requirements is to improve public engagement and to
increase public acceptance of the implementation of PCIs. Project promoters, Member
States, NCAs and other involved parties are required to comply with the requirements
before submitting the application. As one of the central challenges to energy
infrastructure projects in 2011 was the opposition from affected citizens, the TEN-E
Regulation introduced an additional public consultation during the permitting process to
ensure early consultation of local communities and stakeholders and ultimately improve
public acceptance of such projects. Other key transparency provisions include the
115
creation of a dedicated PCI website by project promoters that displays updated relevant
information about the project and the publication of a manual of procedures by NCAs
that groups all required permitting provisions.
The most recent data on the implementation of the transparency and participation
provisions indicated that Belgium, France and Latvia are the only Member States that
have adopted specific legislation related to the Regulation on permit granting and public
participation. A study by Milieu (2016) show that only four Member States apply the
obligation for project promoters to draw up public participation concepts and only eight
have held public participation procedures in addition to the one envisaged in the EIA150
.
Although in place, the information available on the dedicated PCI websites vary
considerably in terms of detail, scope and accuracy151
.
Regulatory treatment
The Regulation applies to the regulatory treatment of PCIs by setting out rules for
establishing methodologies for cost-benefit analysis, guidelines on cost allocations and
risk-related incentives.
When at least one Member State, affected by a PCI, estimates net negative impacts, it
raises an important barrier for the project promoter(s) to invest in that PCI. The
Regulation aims to eliminate this barrier and thereby facilitate investments. This is done
by incorporating decisions on the allocation of the costs of such projects across borders
by National Regulatory Authorities (NRAs) and by the Agency for the Cooperation of
Energy Regulators (ACER) if project promoters submit an investment request, including
a request for Cross-Border Cost Allocation (CBCA). This mechanism has also been
effective to varying extents. Currently 42 CBCA decisions were made, of which
respectively 37 and 30 were reported in ACER’s 2019 list of CBCA decisions and
ACER’s 2018 CBCA monitoring report. Two of the total of 42 CBCA decisions were
taken by ACER, where for the remaining 40 were coordinated decisions by NRAs.
ACER indicated in their latest summary report152
on the CBCA decisions that 70% of all
CBCA decisions (21 out of 30) concluded before March 2018 concerned projects where
the project was built on the territory of one country and the costs were allocated to that
same country only. Despite showing a strong decrease in in the latest period from 2018-
2020, a relatively large share of these PCIs in one country with one cost carrier remained
as of March 2020 (24 out of 42 cases). These PCIs mostly involved internal lines with
cross-border impact. Another 30% of CBCA decisions taken until March 2018 (9 out of
30) concerned projects with multiple Member States involved. For 5 out of 9 cross-
border PCIs with CBCA decisions, the territorial principle (each country pays the part of
the project on its territory) is relevant for the project crossing two countries without
150
Milieu et al. 2016. Analysis of the manuals of procedures for the permit granting process applicable to
projects of common interest prepared under Art.9 Regulation No 347/2013
151
Websites can be accessed through the PCI Interactive map, available at
https://ec.europa.eu/energy/infrastructure/transparency_platform/map-viewer/main.html
152
ACER (2018), Third Edition of the Agency's Summary Report on Cross-Border Cost Allocation
Decisions - Status update as of March 2018.
116
offshore sections. For 2 of these cases all involved countries were estimated to be net
beneficiaries, thus the territorial principle was applied to formalise the cost division and
to clarify on the costs to be covered by each country’s national system tariffs.
Financing
The TEN-E Regulation is based on a three-step logic:
1. As a principle, infrastructure should be paid for through congestion rents. If
costs are covered through congestion rents a project can be considered
sufficiently commercially viable and therefore no further provisions are
applicable;
2. If a network operator is not able to recover the costs of the network through
congestion rents, the Regulation establishes the principle that it should be paid
for by network users through tariffs for network access. The Cross-Border Cost
Allocation (CBCA) provision allows for a (re)allocation of project costs across
borders to Members States, where the project has a net positive impact;
3. Finally, if reallocation of costs through CBCA is still not sufficient and a project
remains commercially non-viable, PCIs can, under certain conditions, apply for
Union financial assistance in the form of grants for studies and grants for works.
The share of congestion revenue effectively spent on maintaining or increasing
interconnection capacity increased between 2011 and 2015 (from 18% to 40%)153
.
CEF has provided EUR 4.7 billion to PCIs for 149 actions. A large share of the funding
provided has been used for works, and electricity projects have received more grants than
gas projects. Smart grid and CO2 infrastructure – which represent smaller numbers of
PCIs that also are less mature than electricity or gas transmission projects – only account
for marginal shares of CEF grants provided. As indicated in the most recent CEF-Energy
Report154
, transmission infrastructure projects attract the largest share of funding.
3 METHOD
This evaluation was supported by a study “Support to the evaluation of Regulation (EU)
No 347/2013 on guidelines for trans-European energy infrastructure” commissioned to
an external contractor which helped gather, quantify and assess evidence drawn from a
range of sources on the performance of the TEN-E instrument to date.
To provide relevant evidence on the implementation of the TEN-E Regulation, a number
of methods were employed to collect primary and secondary data. The data collection
included desk research, portfolio analysis, case study analysis, modelling and expert and
stakeholder consultations. As mentioned under section 2, the data was collected from
literature research, stakeholder input to the extensive consultations carried out in this
respect (notably expert interviews, 4 webinars and 2 stakeholder surveys), PCI portfolio
and case study analysis and related monitoring reports and modelling.
153
Consolidated data is not available for 2016-2019
154
INEA (2020). Connecting Europe Facility Energy. Supported Actions – May 2020
117
The evaluation questions were drafted with a strong focus on how the ‘activities’ of the
TEN-E Regulation perform (as listed in the intervention logic) and how they contribute
to its output and objectives. Each question has been further ramified into a set of sub-
questions.
The evaluation matrix included each set of questions and their sub-questions, as well as
assessment criteria; indicators which inform the assessment, data sources and collection
methods, analysis and approaches and ability to answer the evaluation question and
limitations.
The evaluation questions and sub-questions per each evaluation criteria as used in the
evaluation are outlined in the table below.
The main (implementation) provisions of the TEN-E Regulation have been further
looked into more detail and a set of questions directly assessing their effectiveness has
been developed in order to gather specific evidence on i) the PCI selection process; ii)
permit granting and public participation; iii) monitoring and iv) regulatory incentives
and CBCA. The replies to this set of implementation questions have been analysed
together with the evidence under the effectiveness criteria.
In the process of data collection and analysis the several challenges and limitations were
identified. These are presented below, together with the impact they may have had on
the evaluation itself and the corresponding mitigation measures.
Issue or limitation Impact Mitigation measure
Limited information
available as part of the desk
research
Low The available information was gathered
against the evaluation matrix at an early stage
of the evaluation. Therefore, the gaps were
identified at earlier stages and missing topics
were included in the questionnaires for the
targeted survey and open public consultation
In addition, further gaps have been identified
and addressed as part of the interviewing
process.
Fragmented quantitative
information on specific PCI
technical data
Medium Desk research revealed that quantitative
information on PCIs is fragmented or
somewhat difficult to access. Specifically
combining monitoring data with CEF funding
and historical PCI data is problematic due to
inconsistencies in formats and a lack of
centralised accessibility. This is why special
attention to this information was paid when
drafting the questionnaires for the OPC and
targeted survey.
Meaningful cost estimates
to answer the evaluation
Medium The questionnaires for the targeted survey and
OPC were composed in such a way to address
118
questions on efficiency this issue and include questions on the
estimates of FTE’s and cost drivers for cost
items which are considered ‘high’ or ‘too high’
according to stakeholders. Further information
was requested in the interviews. Results were
triangulated between different types of
stakeholders.
Divergence from initially
planned distribution of
interviewees
Medium The differences in representation of types of
stakeholders in comparison to the initially
planned representation are taken into account
in the qualitative analysis and presented in a
way that reflects the share of interviews
conducted with the different stakeholder
categories.
Data on permitting schemes
is potentially outdated.
Current information is
dispersed and difficult to
access.
Medium The latest study on permitting schemes
adopted in Member States dates from 2016. As
such, NCAs were further contacted for clarity,
and additional information on the schemes
currently in place.
Data quality issues project
monitoring data
Low Project monitoring data from ACER was used
for the analysis of the portfolio of electricity
and gas projects. Several data quality issues
were identified, as a result not all data could be
used (data quality of recent years improved).
Monitoring data is only used when complete
and accurate.
Fragmented quantitative
information on specific PCI
technical data
Medium Desk research revealed that quantitative
information on PCIs is fragmented or
somewhat difficult to access. The available
and consistent data was filtered where possible
, checked against insights from stakeholder
interviews and complemented with ACER
monitoring data...
Lack of cost estimates to
answer all the evaluation
questions on efficiency
Medium A more qualitative assessment of
administrative costs was carried out, whilst
aiming at the provision of quantitative results
to the extent possible.
Modelling: not all benefits
can be quantified
Low In the modelling, socio-economic benefits are
quantified but estimates do not reflect all
benefits. This has been addressed by
explaining socio-economic benefits in the
119
annex with the modelling results.
4 ANALYSIS AND ANSWERS TO THE EVALUATION QUESTIONS
This section presents the answers to each set of evaluation questions per criterion in an
aggregated manner. The questions, as well as the findings are mentioned under each
subsection
Effectiveness
Three main questions have guided the assessment of the effectiveness of the TEN-E
Regulation, as presented below:
 How effective has the regulatory approach of the TEN-E Regulation been both in
terms of scope and main provisions in contributing to the goals of market
integration, security of supply, competitiveness and the climate and energy targets
for 2020?
 To what extent has the Regulation’ main provisions addressed the needs
identified in the Impact Assessment accompanying the Commission proposal in
2011?
 What unintended or unexpected positive and negative effects, if any, have been
produced by the TEN-E Regulation? (e.g. in terms of human health, use of
resources, and natural ecosystems)?
In terms of the overall goals, the TEN-E Regulation has effectively improved market
integration and competitiveness, as shown in the evidence on interconnection targets and
energy prices and their convergence across the EU and thus contributed to the overall
development towards achieving them. 42 PCIs have been commissioned to date and
contributed to this development by creating the interconnection capacities.
As a main contextual driver to the design of the TEN-E Regulation, security of supply
has also been improved, to which PCIs in electricity, gas and oil have strongly
contributed. For gas, the infrastructure and supply resilience has improved substantially
since 2013. Member States are almost exclusively compliant with the N-1 rule and the
infrastructure resilient to disruption scenarios. The focus on cross-border projects that
increase the interconnection is found to have been an effective contribution to these
goals. Modelling indicates strong socio-economic benefits in gas security of supply
arising from implemented PCIs (118 m€/yr in 2020 market situation, which was even
more substantial in a 2013 market situation scenario (193 m€/yr)). Security of supply of
electricity is increased through enhanced interconnectivity with 19 Member States
reaching or going beyond the 10% interconnection target for 2020. Modelling shows that
electricity PCIs commissioned already deliver substantial benefits that might even
increase in the future.
The organisation of PCI selection in Regional Groups under the coordination of the
Commission is found to be an important factor, as well as the approach to share costs
between Member States to enable projects with benefits across borders. The financing
support provided by CEF also contributed to this. 4.7 billion EUR in CEF co-financing
120
have been allocated to 149 actions in relation to 95 PCIs. The grants for studies helped
projects to reduce risks in the early stages while grants for works supported projects
addressing key bottlenecks.
Analysed data on TEN-E’s performance shows a contribution towards EU’s energy and
climate targets, albeit less significant than compared to the other internal market
objectives (market integration, security of supply, competitiveness) due to the historic
priorities of the policy and difficulty in devising a robust sustainability assessment of gas
PCIs155
. Electricity interconnection PCIs are key elements for the integration of
renewable energy sources into the European market. Although quantitative data on the
effect of the TEN-E Regulation in this field is more limited, the modelling shows a
reduction of CO2 emissions of 2804 kilotons across EU (or 0.4% decrease) for the year
2020 compared to the baseline resulting from the implementation of electricity
interconnection PCIs. Quantified impact of gas PCIs on CO2 reduction is rather
negligible. A positive contribution has been qualitatively described during the
consultation by TSOs, NCAs Eastern Europe.
The regulation addressed the needs identified in the 2011 Impact Assessment, as regards
the lengthy and ineffective permit granting procedures, regulatory challenges for cross-
border projects and difficulties in financing such large infrastructure projects. The
specific objectives of reducing permit duration and complexity, advancing the regulatory
framework and improving the financing conditions of energy infrastructure projects in a
cross-border context have overall been improved since the Regulation entered into force
in 2013. However, the positive picture at the level of overall improvement also faces
challenges in the specific implementation of the main provisions.
As already indicated under section 3, the duration of permit granting processes in the
Member States has shortened compared to the baseline situation. Looking at the overall
155
For the calculation of sustainability benefits, the information provided by candidate projects in their
project fiches includes CO2 emissions and benefits deriving from fuel switch, used as input in the CBA
methodology. However, the current underlying assumption in the CBA is that all gas projects would
automatically show only positive benefits towards CO2 mitigation, with no negative impact (such as
possible increase in CO2 emissions). By only using CO2 savings from fuel-switches from coal to gas
without carrying out a detailed analysis of the different situations in the individual countries, other possible
sustainability benefits remain invisible and unquantifiable, hampering the robustness of the results of the
assessment of such benefits. This was also acknowledged by the Agency for the Cooperation of Energy
Regulators (ACER) in its Opinion No 19/2019 of the European Union of 25 September 2019 on the draft
regional lists of proposed gas projects of common interest 2019. In this opinion, ACER notes that ‘(28) the
contribution of the PCI candidate projects to sustainability in general and to meeting the climate change
policy goals of the European Union in particular, is not quite clear. ACER believes that the preliminary
assessment provided by ENTSOG, which assigned a positive sustainability benefit to each and every
candidate project, is tenable only under the specific assumptions that gas will be a substitute of more
polluting fuels in the European Union’s primary energy mix, and also that the total volume of consumed
gas will be within a range that ensures that overall greenhouse gas emissions resulting from gas use will
stay below the European Union’s policy targets. Therefore, the lack of detailed data and consistency, did
not allow to properly calculate the sustainability benefits.
121
picture, monitoring reports indicate an average duration of 4 years for electricity PCIs
and 3.1 years for gas PCIs.
Figure 5: Duration of the permit granting process for electricity PCIs
Source: adapted from ACER 2019 (Consolidated Progress Report).
Figure 6: Duration of the expected permit granting process for gas PCIs
Source: adapted from ACER 2019 (Consolidated Progress Report).
The permitting process constitutes one of the main causes for delays for both electricity
and gas PCIs. For instance, 25% of electricity PCIs were reported as delayed in the 2019
ACER report. Of these, 46% encountered delays specifically during the permit granting
process. These numbers are similar to those provided in the 2018 report but slightly
lower than those in the 2017 report, suggesting a slight improvement. For gas PCIs, the
picture looks similar - 12 PCIs have been delayed (i.e. 28% of gas PCIs), of which 7
(58%) report the permitting stage as the cause. These results are similar to those reported
in 2018.
22
25
13
11
3
6
2 3 3 2
5
0
5
10
15
20
25
Number
of
projects
122
Figure 7: Reasons for electricity and gas PCI delays
However, longer permitting durations are still observed, including PCIs needing up to 9
years before obtaining the permit according to ACER’s latest progress report, which
indicates a high difference in permit granting duration between individual projects. The
finding of differing permitting durations is strongly supported by the results of the
stakeholder consultation which indicate that the effectiveness of permit granting
procedures strongly depends on national implementation. Experiences of project
promoters vary substantially because of differences in applying TEN-E permitting
requirements such as the responsibilities of authorities in the permit granting process.
Project characteristics have a substantial influence on the requirements of the permitting
process. The nature of PCIs as large projects with cross-border impacts creates strong
needs for impact assessment and complex planning documentation according to project
promoters. In section 3 we have outlined the permitting schemes as chosen by Member
States to facilitate and coordinate the permit granting process for PCIs.
In terms of the effectiveness of the permitting scheme employed, the 2016 ACER
progress report156 estimated the duration of permit granting per scheme, which is shown
for electricity PCIs in the figure below. This report found that coordinated schemes had
the shortest duration for permit granting, followed by a similar duration for integrated,
collaborative and multiple schemes157. The table also shows that coordinated schemes
were compliant with the 3.5-year time limit, whereas the other types of schemes resulted
in durations of the permitting stage slightly above the limit established in Art. 10(2).
156
ACER (2016). Consolidated report on the progress of electricity and gas
projects of common interest for the year 2015.
157
Sample size for integrated scheme is too small to provide a robust indication
of the duration (ACER 2016).
123
Table 3: Distribution of permitting schemes for electricity PCIs and expected
duration of permit granting depending on the scheme
Source: ACER 2016, Milieu 2016.
However, the evaluation indicated that the underlying reasons for delays fall outside the
direct scope of the TEN-E Regulation and cannot be addressed by the Regulation
specifically. While continuously complex national procedures are one cause for this,
environmental procedures of PCIs and public opposition causing lengthy court cases
against the projects are other reasons for extended permitting times. However, in this
case, it is worth highlighting the procedural dimension of environmental obligation as
opposed to issues that relate to the substantial provision of the EU environmental
legislation. These environmental procedures that were found as reasons for delay are
often linked to the need for re-assessment of the project due to its re-routing. The
evaluation based on stakeholder input showed that the positive aspects of the projects’
compliance with the environmental acquis has been highlighted as mitigating possible
environmental and biodiversity impact. This in turn, substantiates the need for early
public consultations in timely implementation of any necessary re-assessment and
adjustment of projects. At the same time, the delays caused by lengthy court cases do
show that the provisions on public participation have increased and ensured opportunities
for the public to be involved in the permitting stages of a project, but have not been
effective in reducing public opposition to many PCIs.
As regards the effectiveness of the TEN-E Regulation provisions for cross-border cost
allocation (CBCA), the evaluation showed varying extents as already referred to under
section 3.
There are three ways through which CBCA decisions can support investment decisions:
• By allocating overall project costs to specifically compensate net negative impact
for at least one involved party, reducing the barrier to invest for these specific
parties;
• By providing clarity on the acceptance of the relevant costs to be covered by
national system tariffs in each concerned Member State; and
• By Providing access to (additional) financial support through CEF grants for
works.
While the approach taken to share costs between Member States in relation to benefits is
largely appraised, the details of the mechanism like time and data requirements as well as
its complexity reduce its attractiveness. Therefore, CBCAs prove to be effective in some
Permitting scheme
Number of Member States
applying the scheme (in
2016)
Number of PCIs (in 2016)
Average expected duration of
permit granting (years, in
2016)
Integrated 1 4 3.8
Coordinated 9 24 2.8
Collaborative 15 47 3.6
Multiple schemes 2 21 3.7
124
cases while a question on the valuation of the mechanism remains as it is a step to an
application for CEF grants. The complexity of obtaining data, the additional time until an
investment decision can be made and the lack of unambiguous results to base the
decision on are factors reducing the satisfaction of stakeholders with the process. At the
same time, the concept is appreciated in enabling the understanding of the benefits of a
project.
The evaluation showed that CBCAs are beneficial in some cases but less effective in
others. CBCA processes are often triggered to obtain access to CEF funding and are
regularly concluded with no costs allocated across borders. The analysis of the most
recent ACER data158
on CBCA decisions (triangulated with data on the CEF funding)
show that these are rarely used to provide additional clarity on the acceptance of the
relevant costs to be covered by national system tariffs in concerned Member States. 70%
of all CBCA decisions (21 out of 30) taken until March 2018 concerned projects where
the project was built on the territory of one country and the costs were allocated to that
same country only. Despite showing a strong decrease in in the latest period from 2018-
2020, still a relatively large share of these PCIs in one country with one cost carrier
remained as of March 2020 (24 out of 42 cases), potentially anticipating CEF-E grants
and not necessarily seeking a decision on cost allocation.
Moreover, the results showed that CBCA decisions are rarely used to reallocate costs to
compensate net negative impact for at least one involved party, reducing the barrier to
invest for these specific parties. With the exception of four cases in 2014 (all gas PCIs),
none of the CBCA decisions allocated costs to non-hosting countries. This indicates that
almost half of all cases (20 out of 42) involve situations where CBCA decisions did not
provide compensation of net negative impact for the hosting country through allocation
of overall project costs. Since these projects were internal project with benefits for the
one involved party, it can be concluded that for 48% of all cases the only intention for
project promoters to have requested a CBCA decision was to gain access to CEF
funding.
Ineffectiveness of the CBCA process can result in projects that are not realised due to a
lack of funding or may lead to the ‘disproportionate’ use of EU funding where
insufficient consideration was given to funding from tariffs in Member States. Due to its
ineffectiveness, project promoters, NRAs and ACER consider CBCAs as an
administrative burden with, in many cases, little to no direct benefits159
.
The availability of CEF funding has had the most significant influence on the financing
of energy infrastructure projects addressing the third need as identified in the 2011
impact assessment. The funding support offered in the form of grants by the CEF has
158
ACER (2018), Third Edition of the Agency's Summary Report on Cross-Border Cost Allocation
Decisions - Status update as of March 2018.
159
Also confirmed by Roland Berger (2016). Cost-Effective Financing Structures for Mature Projects of
Common Interest (PCIs) in Energy and Trinomics et al. (2018)
125
been found important for improving the financing conditions for PCIs160
. Public grants
are described to enable private investment in energy infrastructure by absorbing risks and
therefore effectively advancing PCIs. By providing support in early stages, the grants
offered for studies contribute to de-risk project development. This, on the one hand,
helped to improve project realisation according to project promoters and national
authorities, and also contributed to attracting investors. The visibility of the project due to
its PCI label and the political support that has been experienced by many project
promoters also supports the attractiveness of PCIs to investors. CEF grants for works can
also support projects that would not be economically viable otherwise and prevent high
increases in tariffs. The additional mechanism of risk-based incentives has been rarely
used161
mostly due to the assumptions from project promoters that NRA do not see
higher risks for PCIs or that the regulatory framework allows coping with the risks. As
such, I it has not had an effect to improve the financing situation of PCIs so far.
As regards selection criteria, selected PCI projects demonstrated to help fulfilling the
current objectives of the TEN-E Regulation as it was conceived in 2013. The evaluation
indicates that sustainability benefits were realised to a lesser extent than the other
benefits mostly due to the difficulty in devising a robust methodology for assessment of
sustainability impacts of gas projects. Some of the current selection criteria might be too
restrictive for the inclusion of projects at DSO level, in particular: the cross-border
impact criteria, and the 10 kV voltage threshold and 20% RES origin for smart grids. A
more flexible definition of the cross-border impact may allow to include relevant projects
in one Member State with significant and quantifiable benefits in other Member States
(or outermost regions) with regards to the objectives of the TEN-E regulation.
The electricity and gas network planning exercises are eminently related to the PCI
selection process. Energy infrastructure needs are identified in the network planning
process and potential projects addressing those needs must be evaluated according to the
general objectives of the TEN-E Regulation (security of supply, market integration,
competition and sustainability). A cost-benefit analysis methodology must be developed
by the ENTSOs to assess the projects they shall include in the TYNDP. This CBA is also
the basis to evaluate the candidate projects for PCI. In the network planning process, the
models of the electricity and gas systems are currently independent, not allowing
sufficient consideration of interdependencies between systems. However, the ENTSOs
are currently developing an interlinked model with view to develop in the future the
network planning process to a “system of systems” approach, including all energy
vectors and demand sectors. CBA methodologies are not aligned between electricity and
gas, which does not allow a fair comparison between electricity and gas projects, since
they can potentially compete to address system needs.
The evaluation brought forward a series of insights that relate to the governance of the
network planning exercise. The main finding concerns the lack of adequacy of roles of
160
Roland Berger (2016). Cost-Effective Financing Structures for Mature Projects of Common Interest
(PCIs) in Energy.
161
ACER reports indicate that two requests for such incentives have been made for electricity and four for
gas PCIs. In four cases overall (one electricity, three gas), risk-based incentives have been granted
126
the different agents in the PCI process. The role of the ENTSOs has been found as
conflicting with their interests as project promoters. Whilst the evaluation acknowledged
that the ENTSOs, as TSO operators, enjoy the necessary expertise and access to system
and planning data, a higher degree of stakeholder consultation and validation of ENTSOs
underlying planning assumptions (in scenarios and modelling) and CBA methodologies
developed may be needed to ensure an energy integrated system approach, where all
energy carriers’ interdependencies can be captured when evaluating the benefits of
projects.
Whilst certain stakeholders indicated that the biennial periodicity of the PCI lists is
unnecessarily burdensome and potentially carrying risks for investors in case of loss of
the PCI label, the evaluation has not found conclusive data to support the claims. There is
no evidence that the specificities of their business models in the case of smart grids and
CO2 infrastructure categories would qualify them for a streamlined reassessment in the
PCI process and serve as a derogation from the biennial process. Moreover, twos-speed
PCI processes for different types of infrastructure categories has been found
unmanageable and not serving the scope of the Regulation.
The evaluation concluded that priority corridors and thematic areas need to be updated to
address future challenges and incorporate new types of projects. As such, new categories
could be considered such as cross-sectoral projects, joint gas-electricity-hydrogen
corridors, sector coupling projects, smart gas grid projects, hydrogen, clean gases,
digitalization, distribution projects, energy storage, hybrid wind offshore, hybrid
solutions, electric priority corridor to South Mediterranean/North Africa, decarbonisation
of islands, smart sector integration, electrification of heating and cooling systems,
peripheral countries, sector integration technologies and solutions, renewable heating and
cooling infrastructures. On the other spectrum, electricity highways and oil priority
corridor have been appraised as non-effective.
As for the effectiveness of reporting and monitoring, the evaluation found that ACER’s
annual monitoring report could be done biennially with every PCI list by only focusing
on relevant changes and tackling inefficiencies. The transparency platform and the PCI
interaction map are positively valued.
Efficiency
Two main questions have guided the assessment of the efficiency of the TEN-E
Regulation, as presented below:
 To what extent are the costs resulting from the implementation of the TEN-E
Regulation proportionate to the benefits that have been achieved? What are the
major sources of inefficiencies?
 To what extent do the different types of costs resulting from the implementation
of the TEN-E Regulation vary based on the approach taken to implement the
legislation (while achieving the same results)? Which approach was most
efficient?
Although lack of sufficient data impeded the full and harmonised quantification of all the
benefits and costs, it is likely that benefits of the Regulation outweigh the costs. Benefits
include socio-economic net benefits and market efficiency. The analysis of effectiveness
127
shows that socio-economic net benefits were realised through an increase in security of
supply, competition and integration of markets and to a lesser extent sustainability.
Modelling shows that net benefits of electricity PCIs increase in scenarios with a higher
CO2 price, which in turn shows these projects have benefits in the context of the Green
Deal. The market efficiency benefits refer to benefits that improve information
availability, increase cost savings, and ensure that a wider range of products or services
are provided. The Regulation has resulted in improved transparency. The evidence on the
extent to which the Regulation resulted in improved processes and timely construction of
projects is, however, mixed and it is strongly linked to the various performance of the
different provisions due to national implementation.
The main cost drivers are the PCI selection process and monitoring, the permitting
process, stakeholder consultation and costs associated with decisions on CBCA and
regulatory incentives. In general, stakeholders view the costs associated with the
Regulation to be justified. Opportunities to improve the efficiency of the Regulation are
limited but there is potential to reduce the administrative burden for project promoters in
the CBCA process, the PCI application process and monitoring. CBCA decisions are
considered too burdensome when they are mainly used as a stepping stone for access to
CEF grants. Costs for re-application of a project for a new PCI lists and monitoring costs
are considered too high by some stakeholders mainly because data requests are
considered inefficient. The total impact on costs of any changes to the CBCA process and
application/monitoring processes is limited compared to the total benefits and costs of the
Regulation and changes can have a negative impact on other objectives of the
Regulation.
Relevance
Three main questions have guided the assessment of the relevance of the TEN-E
Regulation, as presented below:
• To what extent do the objectives of the TEN-E Regulation still respond to the
needs of the EU in relation to energy infrastructure?
• To what extent are the 12 priority corridors still relevant? Do they address current
and arising challenges for TEN-E networks (e.g. sector coupling, hydrogen)?
• To what extent are the provisions of the TEN-E Regulation able to respond to
new or emerging issues such as the energy and climate targets for 2030, the EU
long-term decarbonisation commitment towards carbon neutrality, the energy
efficiency first principle, and EU readiness for the digital age?
The Paris Agreement and the European Green Deal involve a significant transformation
of the current energy infrastructures into a fully carbon-neutral energy integrated system
by 2050. While the initial objectives of the TEN-E Regulation -security of supply, market
integration, competition and sustainability- are still relevant, the changes needed in the
way we develop energy infrastructure claim for a rebalance of the objectives in order to
fulfil the decarbonisation targets and be aligned with the climate-neutrality objectives.
Along the pathway towards a decarbonised economy in 2050, energy infrastructure needs
will gradually evolve as emerging technologies are deployed and the sectors gradually
128
interlink and switch to sustainable sources. There must be a realistic planning of the
network from its current state to the targets in 2050. In the analysis performed based on
desk review and the stakeholder’s consultation, many emerging technologies were
identified to be necessary in the future energy infrastructure. The following technologies
are currently not specifically addressed by the TEN-E regulation: decarbonisation of gas
– hydrogen, green gas infrastructures, retrofitting of existing gas networks, bidirectional
gas flow projects, energy system integration – power-to-gas, smart system integration,
gas smart grids, digitalization, electric vehicle charging infrastructures, decarbonisation –
carbon storage, RES deployment and integration – hybrid offshore wind, meshed wind
hubs.
In view of increasing its relevance, sustainability will need to be prioritised amongst the
objectives of the TEN-E Regulation. In view of the necessary growing shares of
intermittent renewable energy generation, their integration whilst ensuring security of
supply is becoming increasingly more relevant. Moreover, further alignment of
sustainability aspects of energy infrastructure projects would have to be explored with
the sustainable finance framework, once completed. The flexibility needs of the system
can also be addressed by energy system integration, potentially an additional objective
per se in the regulation.
Some TEN-E provisions do not facilitate the deployment of emerging technologies that
are necessary in the context of the European Green Deal and which will inevitably gain
predominance in the future energy infrastructure investments in Europe in the next
decades. The methodologies developed by the ENTSOs, including scenario development,
modelling and CBA assessment, as the basis of the PCI selection process, are currently
undergoing major changes towards coordinated multi-sectorial planning and smart sector
coordination approach. The methodologies need to be adapted to include all new
emerging technologies and have a holistic view of the energy system. Some PCI
selection criteria may hinder deployment of emerging technologies. In particular, smart
grid projects, according to Annex IV.1.e of the Regulation, have a voltage threshold of
10 kV that leaves out essential installations of these projects. Additionally, the 20%
requirement of RES generations in the network can limit the deployment of smart grids
in regions with lower penetration of RES capacity. The permit granting process, as
conceived by the TEN-E regulation, seems to be only effective for large transmission
infrastructure projects. Concepts such as the one-stop-shop and provisions in Article 10
related to the duration and implementation of the permit granting process cannot be
adequately applied to smart grid projects, as it has been confirmed by all smart grid
project promoters who took part in the stakeholder consultation.
Coherence
Four main questions have guided the assessment of the coherence of the TEN-E
Regulation, as presented below:
• Three main questions have guided the assessment of the coherence of the TEN-E
Regulation, as presented below:
• Are the measures set out within the TEN-E Regulation mutually reinforcing or
are there any overlaps, inconsistencies, or incoherencies (when read in isolation)?
129
• How does the legislation interact with other EU/ national/ international initiatives
(e.g. actions in the field of environment, single market, climate action) which
have similar objectives?
• How well does the legislation fit with and complement other EU policies (e.g.
Regional Policy, Research and Innovation, Environment) but also other elements
of EU energy policy (e.g. internal market design, renewable energy framework,
energy efficiency first principle, Union energy and climate targets for 2030, the
EU long-term decarbonisation commitment, European Green Deal)?
Evidence obtained during the evaluation process identified limited concerns around the
internal coherence of the TEN-E Regulation although a number of points have been
identified concerning the implementation of certain elements such as insufficient
flexibility to adapt to rapidly evolving policy areas, potential conflicts on legal drafting
around cost allocation, insufficient precision on the definition of ‘maturity’ and limited
clarity on the process for the Commission’s publication of TYNDP Guideline updates.
The TEN-E Regulation is largely consistent with the legislative and policy environment
that was in place at the time of its introduction. However, the current TEN-E is not
consistent with the current legislative and policy environment, which has been triggered
by the various changes under the Clean Energy Package. Inconsistencies include
“mechanistic” examples (such as alignment with renewable energy and interconnector
targets), but also more nuanced examples such as PCI selection which is not currently
aligned with the intended policy goals behind the Clean Energy Package (such as greater
roles for DNOs).
The TEN-E Regulation requires substantial revision to bring the Regulation into line with
the priorities within the European Green Deal, and to bring greater synergies with other
sectoral instruments such as the TEN-T Regulation to drive decarbonisation by fostering
a more cross-sectoral approach. Evaluation findings as well as evidence drawn from
stakeholder consultations strongly support an ambitious, long-term approach when
redefining the scope of the TEN-E Regulation.
Some inconsistencies with national-level legal frameworks were identified. This seems
mainly related to national-level implementation and compliance in a limited number of
member states which have reported difficulties in their national-level legal frameworks as
opposed to a systemic issue with the TEN-E Regulation.
EU added value
The evaluation concluded that the TEN-E Regulation has provided added value
compared to what could have been achieved at national or regional level. The benefits of
the TEN-E Regulation, already referred to under the assessment of effectiveness and
efficiency, backed by input from stakeholders confirmed the added value arising from an
increase in security of supply, more competitive markets and more interconnected energy
networks.
The implementation of over 40 key energy infrastructure projects since its enactment
helped most Member States reach the 10% interconnection target for 2020 and achieve a
130
well-interconnected and shock-resilient gas grid. As such, the EU energy market is more
integrated and competitive than it was in 2013 and the Union’s energy security improved.
Access to targeted financing under CEF enabled the implementation of 95 PCIs which
have had otherwise difficulties in accessing financing under market rules.
Various stakeholders confirmed the added value of the TEN-E Regulation, pointing to
the importance of regional cooperation in implementing cross-border projects,
transparency regulatory certainty and access to financing.
Figure 8: The EU added value of the TEN-E Regulation as indicated by
stakeholders
The TEN-E Regulation fosters the development of cross-border energy infrastructure in
the EU. Thus, it promoted cooperation among Member States, which might not have
occurred without the coordinated action at the EU level. The common approach of
benchmarking projects to one another were instrumental in enabling cooperation and
transparency. In addition, national and regional level legislation covering cross-border
cooperation in the EU assists projects that have cross-border relevance.
5 CONCLUSIONS
Since 2013, energy interconnections have increased across the EU as a result of the
implementation of the TEN-E Regulation and PCIs in all regions. Increased
interconnection effectively improved the integration of Member States’ networks, which
in turned made the EU energy market more integrated and competitive than it was before
the application of the TEN-E Regulation. Wholesale prices for electricity decreased and
88%
75%
60%
54%
52%
35%
32%
20%
15%
4%
Access to financing (e.g. CEF)
Regional cooperation
Certain projects could not have
been implemented otherwise
Increased transparency
Cooperation gains
Improved regulatory certainty
Increased acceptance of
energy infrastructure projects
Greater speed and/or effectiveness
of delivery of projects
Enhanced compliance with
environmental requirements
Other
131
converged in almost all Member States. Gas prices also converged. An increase in
security of gas supply has been achieved substantially since 2013 through new
interconnections and LNG terminals. PCIs have demonstrated to help fulfilling the
current objectives of the TEN-E Regulation as it was conceived in 2013. However, the do
not reflect the renewed climate ambitions and the climate neutrality objective nor the
latest technological developments. This progress should be taken into account in the
infrastructure categories covered by the Regulation, the PCI selection criteria as well as
the priority corridors and thematic areas.
The PCI identification and selection process within the Regional Groups has been found
effective in improving cooperation and enabling decisions on cross-border projects on the
basis of a regional and European approach. The TYNDP process has proven effective as
a first step for the identification of PCIs. However, while the ENTSOs and TSOs have an
important role to play in the process, there is a need for more inclusiveness and scrutiny
of the main inputs and assumptions to enhance trust in the process.
The cross-border cost allocation mechanism is an important enabler for project
implementation. However, in many cases the cross-border cost allocation did not result
reducing the financing gap of the project, as intended.
While permitting procedures have been shortened, long permitting procedures persist in
some cases. However, the underlying reasons are mainly related to national
implementation and outside the scope of the TEN-E Regulation.
CEF financial assistance granted to 95 projects were an effective enable of their
implementation. Grants for studies helped projects to reduce risks in the early stages of
development while grants for works supported projects addressing key bottlenecks that
market finance could not sufficiently address.
The evaluation found that the benefits of the Regulation outweigh the costs proving its
efficiency. TEN-E Regulation brought socio-economic benefits through an increase in
security of supply and more integrated and competitive energy markets. The Regulation
also contributed to improved information availability, coordination and transparency.
The initial objectives of the TEN-E Regulation -security of supply, market integration,
competition and sustainability- remain relevant. However, the increased climate
ambitions under the Paris Agreement and the European Green Deal call for a rebalancing
of the objectives in order to fulfil the decarbonisation targets and contribute to climate-
neutrality.
The evaluation showed limited evidence as to concerns around the internal coherence of
the TEN-E Regulation, other than potential mechanistic changes and a lack of flexibility
in adapting to rapidly evolving policy areas.
The TEN-E Regulation delivered results which could have not otherwise been achieved
by action at Member State level, proving EU added value.
132
ANNEX 6: PCIS AND CEF FINANCIAL ASSISTANCE
Projects of common interest (completed):
PCI number Regional
group/
sematic
area
Name of the PCI
1.1.1 NSOG 1.1.1 Interconnection between Gezelle (BE) and the vicinity of
Richborough (UK)
1.1.2 NSOG 1.1.2 Internal line between the vicinity of Richborough and
Canterbury (UK)
1.1.3 NSOG 1.1.3 Internal line between Dungeness to Sellindge and
Sellindge to Canterbury (UK)
1.3.2 NSOG 1.3.2 Internal line between Niebüll and Brunsbüttel (DE)
1.4.2 NSOG 1.4.2 Internal line between Audorf and Hamburg/Nord (DE)
1.4.3 NSOG 1.4.3 Internal line between Hamburg/Nord and Dollern (DE)
1.5 NSOG Denmark — Netherlands interconnection between Endrup (DK)
and Eemshaven (NL) [currently known as “COBRAcable”]
1.7.3 NSOG 1.7.3 Interconnection between Coquelles (FR) and Folkestone
(UK) [currently known as "ElecLink"]
2.2.2 NSI West
Electricity
2.2.2 Internal line between Lixhe and Herderen (BE)
2.2.3 NSI West
Electricity
2.2.3 New substation in Zutendaal (BE)
2.3.1 NSI West
Electricity
2.3.1 Coordinated installation and operation of a phase-shift
transformer in Schifflange(LU)
2.5.1 NSI West
Electricity
2.5.1 Interconnection between Grande Ile (FR) and Piossasco
(IT) [currently known as “Savoie-Piemont” project]
2.5.2 NSI West
Electricity
2.5.2 Internal line between Trino and Lacchiarella (IT)
2.6 NSI West
Electricity
PCI Spain internal line between Santa Llogaia and Bescanó
(ES) to increase capacity of the
interconnection between Bescanó (ES) and Baixas (FR)
133
2.8 NSI West
Electricity
Coordinated installation and operation of a phase-shift
transformer in Arkale (ES) to increase capacity of the
interconnection between Argia (FR) and Arkale (ES)
2.12 NSI West
Electricity
Germany — Netherlands interconnection between Niederrhein
(DE) and Doetinchem (NL)
2.16.2 NSI West
Electricity
2.16.2 Internal line between Pedralva and Vila Fria B (PT)
2.24 NSI West
Electricity
Internal line between Horta-Mercator (BE)
2.25.1 NSI West
Electricity
2.25.1 Internal lines Mudejar — Morella (ES) and Mezquite-
Morella (ES), including a substation in Mudejar (ES)
2.25.2 NSI West
Electricity
2.25.2 Internal line Morella-La Plana (ES)
3.1.3 NSI East
Electricity
3.1.3 Internal line between St. Peter and Ernsthofen (AT)
3.11.5 NSI East
Electricity
3.11.5 Internal line between Mirovka and Cebin (CZ)
3.13 NSI East
Electricity
Internal line in Germany between Halle/Saale and Schweinfurt
to increase capacity in the North-South Corridor East
3.15.1 NSI East
Electricity
3.15.1 Interconnection between Vierraden (DE) and Krajnik
(PL)
3.15.2 NSI East
Electricity
3.15.2 Installation of phase shifting transformers on the
interconnection lines between Krajnik (PL) — Vierraden (DE)
and coordinated operation with the PST on the interconnector
Mikułowa (PL) — Hagenwerder (DE)
3.19.1 NSI East
Electricity
3.19.1 Interconnection between Villanova (IT) and Lastva (ME)
3.22.5 NSI East
Electricity
3.22.5 Interconnection between Villanova (IT) and Lastva (ME)
4.1 BEMIP
Electricity
Denmark — Germany interconnection between Ishøj/
Bjæverskov (DK) and Bentwisch (DE) via offshore windparks
Kriegers Flak (DK) and Baltic 1 and 2 (DE) [currently known as
"Kriegers Flak Combined Grid Solution"]
4.4.1 BEMIP
Electricity
4.4.1 Internal line between Ventspils, Tume and Imanta (LV)
134
4.5.1 BEMIP
Electricity
4.5.1 LT part of interconnection between Alytus (LT) and
LT/PL border
4.5.5 BEMIP
Electricity
4.5.5 Internal line between Kruonis and Alytus (LT)
5.2 NSI West
Gas
PCI Twinning of Southwest Scotland onshore system between
Cluden and Brighouse Bay.
(United Kingdom)
5.7.1 NSI West
Gas
5.7.1 Val de Saône pipeline between Etrez and Voisines (FR)
5.7.2 NSI West
Gas
5.7.2 Gascogne-Midi pipeline (FR)
5.11 NSI West
Gas
Reverse flow interconnection between Italy and Switzerland at
Passo Gries interconnection point
5.13 NSI West
Gas
PCI New interconnection between Pitgam (France) and
Maldegem (Belgium)
5.14 NSI West
Gas
PCI Reinforcement of the French network from South to North
on the Arc de Dierrey pipeline
between Cuvilly, Dierrey and Voisines (France)
5.16 NSI West
Gas
PCI Extension of the Zeebrugge LNG terminal.
6.3 NSI East
Gas
PCI Slovakia – Hungary Gas Interconnection between Vel’ké
Zlievce (SK) – Balassagyarmat
border (SK/HU ) - Vecsés (HU)
6.5.5 NSI East
Gas
6.5.5 "Compressor station 1" at the Croatian gas transmission
system
8.1.1 BEMIP
Gas
8.1.1 Interconnector between Estonia and Finland
"Balticconnector",
8.2.3 BEMIP
Gas
8.2.3 Capacity enhancement of Klaipeda-Kiemenai pipeline in
Lithuania
Additional information on on-going PCIs and their status of implementation can be found
on the PCI Transparency Platform:
https://ec.europa.eu/energy/infrastructure/transparency_platform/map-viewer/main.html.
135
More details concerning PCIs included on the current 4th
PCI list can be found in the
technical document published alongside the 4th
PCI list:
https://ec.europa.eu/energy/sites/ener/files/technical_document_4th_pci_list.pdf.
Projects of common interest and CEF financial assistance
The status of project of common interest is awarded to projects that provide highest
European added value and that contribute the most to the implementation of the strategic
energy infrastructure priority corridors and areas. The majority of the PCIs are expected
to be commercially viable and financed through network tariffs. CEF support is
exceptional because most CEF funding for works is considered as ‘last resort option’ for
the financing of PCIs. A three-step logic applies to investments in PCIs. First, the market
should have the priority to invest. Second, if investments are not made by the market,
regulatory solutions should be explored, if necessary the relevant regulatory framework
should be adjusted, and the correct application of the relevant regulatory framework
should be ensured. Third, where the first two steps are not sufficient to deliver the
necessary investments in projects of common interest, Union financial assistance could
be granted if the project of common interest fulfils the applicable eligibility criteria
CEF support may be awarded to those PCIs which are not viable under the existing
regulatory framework and market conditions and provide significant externalities (such
as security of supply, innovation and solidarity). CEF promotes cooperation between
countries to develop and implement energy interconnection PCIs that otherwise would
not happen. This is especially the case for cross-border projects located in countries with
smaller population sizes or in a more remote location, where energy tariffs would need to
be increased substantially to cover the investment needs.
The selection process for CEF funding is independent from the selection process for PCI
status. PCI status is a pre-condition for applying for CEF (with exception of the new
window for cross-border renewable projects) and some elements of the PCI selection
process such as the project specific CBA and the cross-border cost allocation decision are
part of the CEF evaluation process. However, the selection process for CEF is based on
an evaluation with external experts against award criteria as set out in the relevant work
programme and call for proposals. CEF was subject to separate evaluation and impact
assessment in preparation of CEF proposals for the MFF2021-2027.
Since 2014, CEF has provided financing to 149 actions of which 114 (EUR 519 million)
for studies and 35 (EUR 4.2 billion) for works. Of total budget of EUR 4.7 billion, EUR
1.5 billion were allocated to gas projects and EUR 2.8 billion to electricity projects. So
far, around one fifth of all PCIs have received CEF financial assistance for studies and/or
works. This is illustrated in the below figures.
136
Figures 1 and 2: CEF financial assistance per sector (201-2020)
137
ANNEX 7: ADDITIONAL DISCARDED OPTIONS
 Breaking the link between the CBCA and CEF financing
Different stakeholder groups mentioned that the requirement to submit a CBCA decision
should no longer be mandatory for obtaining CEF financial assistance for works as it was
perceived as an unnecessary burden. ACER considers that the CBCA could still be a
mandatory step before a CEF application if the project has benefits widely spread
between many Member States, but not in case CEF grants would be requested for
affordability reasons. In such case, ACER considers that a simple confirmation from the
national NRA would suffice.
However, this option was expressed by stakeholders wishing to have easier access to
CEF financing, and does not take into account the aim and the limited nature of EU
funds. As mentioned in the Preamble of the CEF Regulation, CEF financing is a last
resort measure and projects should be realised primarily on the basis of the regulatory
environment and, secondly, seek financing from the market. The CBCA decision ensures
that the regulatory path has been explored for the projects which may by itself alone
ensure the realisation of the projects.
Moreover, the CBCA decisions ensure that possible CEF beneficiaries will be developed
under a stable regulatory regime leading to their successful realization. This is necessary
before the projects apply for any CEF financing. Furthermore, the CBCA decision
ensures that the project CBA and its results have been checked and coordinated with
TSOs and NRAs in Member States where the project shows benefits. This helps to make
the data reliable also for the purposes of the evaluation of a possible CEF financial
application. Therefore, the CBCA decisions are necessary to have been obtained before
any project applies for Union financing from CEF Energy.
 Conditional CBCA decisions
A series of stakeholders, particularly NRAs and ACER, mentioned that it is very difficult
to assess the investment requests submitted by the project promoters and decide in a
definitive manner as regards cross-border cost allocation and the inclusion of the
investment costs of the project in the tariffs. This is due to that fact that they do not know
what amount of Union financing the project will receive, if any. Therefore, they propose
to introduce the possibility for CBCA decisions to be drafted as conditional decisions
that can be amended, adapted or revoked altogether after the results of the request for
CEF financing.
This is already happening as some CBCA decisions were prepared considering the
possible aspects of the CEF financing. However, conditional CBCA decisions pose a
risk for the allocation of Union financing as the projects might ultimately not be realised
if the NRAs change their mind or consider the financing awarded too low. This creates
regulatory instability for the projects rendering them completely dependent on a certain
percentage of Union financing and unable to seek resources on the financial market. This
goes against the principle that CEF financing is a last resort option. CBCA decisions
need to be final in order to provide sufficient legal and economic clarity and certainty on
138
the investment conditions and expected costs to be borne for the project promoters and
Member States.
 Easing environmental and location approvals for PCIs
When providing input on the permitting procedures in the TEN-E Regulation a series of
project promoters mentioned that the permitting of PCIs will not be accelerated while
they are required to obtain the same environmental and location permits at the same
standards with other similar projects that are not PCIs. They, therefore, request that some
of the requirements for environmental and location permitting are removed or eased for
PCIs.
However, NGOs, citizens and local communities point out that public acceptance is
closely linked to their effect on the environment and climate impact. Easing the
requirements for such permits is both outside the scope of the TEN-E Regulation and
would not ensure that these projects duly comply with environmental requirements and
the conditions for establishing the optimal location. This could also create public
opposition and, ultimately, delay the permitting process.
The TEN-E Regulation already provides for the streamlining of the environmental
assessment procedures and for ensuring the coherent application of environmental
assessment procedures required under Union law for PCIs. The Commission issued non-
binding guidance162
to support Member States in defining adequate legislative and non-
legislative measures to this end and they had the obligation to assess, on the basis of the
non-binding guidance, what measures to take.
162
https://ec.europa.eu/environment/eia/pdf/PCI_guidance.pdf
139
ANNEX 8: INTRODUCTION OF A MANDATORY SUSTAINABILITY CRITERION
Under the current TEN-E framework, the gas and electricity PCI candidates must
contribute to at least one of the following specific criteria: market integration, security of
supply, competition (only for gas) and sustainability.
Options B2.1 and B.2.2 provide for the upgrade of the sustainability criterion from an
optional in the current TEN-E framework to a mandatory criterion. This change will
result in automatic inclusion of the sustainability criteria in the PCIs assessment
methodology and will as such affect the ranking of the candidate PCI projects. The actual
impact of the mandatory sustainability criterion on the final ranking will depend on the
methodologies used in the assessment process. These methodologies are developed for
each PCI selection process considering inter alia data availability and the needs identified
for each region in the Regional Groups as under the current framework. The full
assessment methodology of the last PCI selection process is publicly available on EC
CIRCABC platform163
.
The Commission seeks to have the same methodologies across the RGs within each
category of infrastructure e.g. one methodology for all the electricity RGs and one for all
the gas RGs. In this process the initial draft of the methodologies are developed within
the framework of the Cooperation Platform, which consists of representatives of the
European Commission (DG Energy), the Agency for the Cooperation of the Energy
Regulators (ACER) and the European Network of Transmission System Operators
(ENTSOs). The Cooperation Platform provides technical support to the work of the
Regional Groups. The final assessment methodologies to be used for the ranking of the
candidate PCI projects must be validated by the RGs members (Member States, National
Regulators, ENTSOs and the Commission), in line with the roles and responsibility each
party has in the process.
163
Electricity 4th
PCI assessment methodology: https://circabc.europa.eu/ui/group/3ba59f7e-2e01-46d0-9683-
a72b39b6decf/library/c1b40471-8605-45c3-8540-04451ed31094?p=1&n=10&sort=modified_DESC
Gas 4th
PCI assessment methodology: https://circabc.europa.eu/ui/group/3ba59f7e-2e01-46d0-9683-
a72b39b6decf/library/563f3273-e6a7-4d2f-b157-76a6514cf4ee?p=1&n=10&sort=modified_DESC
140
ANNEX 9: ASSESSMENT OF ADDITIONAL POLICY OPTIONS
This Annex sets out additional policy options of technical nature which relate to
permitting and public participation (C) and Regulation (D) as follows:
C) Permitting and public participation
C.1.2. Accelerating the permitting process
C.2 Public participation
C.2.0 Business as usual
C.2.1 Increasing the transparency of PCIs
D) Regulatory treatment
D.1.2 Possibility for smart grids projects to obtain a CBCA
D.1.3 Clarifying CBCA provisions
D.1.4 Updating investment incentives
These options are explained in more detail below followed by a short assessment of their
potential impacts.
Permitting
Option C.1.1: Accelerating the permitting process:
This option would include the following sub-options:
a) Clarifying the applicable procedure for projects falling between legal regimes
The transitional provisions regarding the permitting process meaning that all PCIs can
benefit from maximum time-limit of 3.5 years and from the one-stop shop would be
removed. Moreover, any permits already obtained would remain valid and be integrated
in the procedure. The provisions on 'priority status', where such status exists in national
law, would apply to all PCIs regardless of when they started permitting.
b) Acceleration of permit granting
The permitting provisions and the two permitting phases would have enough built in
flexibility to cater also for the acceleration of the permitting process for projects that do
not require all the permits of large infrastructure projects such as smart grids projects
which often do not require an EIA or a building permit.
The outcome of a completed permitting process under the TEN-E Regulation is the
issuance of a comprehensive decision164
for the project. Member States would have to
164
According to Article 2(2) of the TEN-E Regulation, the comprehensive decision is defined as follows:
the decision or set of decisions taken by a Member State authority or authorities not including courts or
tribunals, that determines whether or not a project promoter is to be granted authorisation to build the
141
ensure that any additional requirements or legislative amendments introduced during the
permit granting process would not affect the length of the permitting process started
before the amendments of the legislation. In view of ensuring a consistent application,
the revised TEN-E Regulation would also adapt the definition of the comprehensive
decision to clarify that the issuing of this decision means that the project is ready to begin
procurement procedures and construction in the respective Member States. This would
ensure that no additional requirements are added on top of and outside the permitting
process.
c) Making procedures accessible cross-border
Competent authorities would be obliged to coordinate and find synergies with
neighbouring countries in developing their manual of procedures and in the permit
granting procedures of individual PCIs without exceeding the 3.5 years time-limit. In
addition, the competent authorities would have to make available, as much as possible,
the manuals in all languages of the neighbouring Member States.
Assessment:
Amending key provisions aimed at accelerating the permitting process in its current set-
up would allow keeping the necessary balance between the rule of law in the Member
States and their sovereignty and the acceleration of the implementation of PCIs.
Permitting is a process that is to a large extent national or even local in nature.
The environmental assessment of PCIs is unaffected by the permitting provisions of the
TEN-E Regulation because this is out of the scope of the Regulation.
The suggested amendments in this option entail a better coordination between competent
authorities for projects crossing the border of more Member States as well as a
facilitation of the permitting process cross-border. This coordination will allow also a
better coordination of the assessment of the environmental impacts of the projects
leading to improved measures to tackle any environmental concerns that may be cross-
cutting issues in more Member States.
Permit granting procedures have shortened for PCIs compared to the pre-TEN-E
situation. The average duration is 4 years for electricity and 3.1 years for gas PCIs
compared to durations of more than 6 years in some Member States prior to the entry into
force of the TEN-E Regulation. The introduction of a one-stop shop provides a good
approach to reducing the complexity of the permitting process, but the effectiveness
depends strongly on the national implementation and existing permitting requirements in
the Member States.
As regards electricity projects, delays in project implementation have two direct
consequences for the EU achieving its carbon reduction targets: the missing grid capacity
energy infrastructure to realise a project without prejudice to any decision taken in the context of an
administrative appeal procedure.
142
hinders the further growth and integration of RES, while the resulting grid congestion
must be resolved by expensive and CO2 intensive redispatch measures.
The longer and more complicated the permitting process of a PCI is, the higher the costs
are incurred by the project promoter and the national competent authorities. Currently, an
estimated 0.5 FTE per year is given for the administrative costs for reporting and
compliance to the PCI monitoring procedure. The stakeholder consultation concluded
that the permitting process and the organisation of stakeholder consultation are amongst
the main cost drivers that provide unacceptable costs for project promoters. However, the
high administrative burden of the permitting process is considered not to be due to TEN-
E, but rather relate to issues on a national level, although three TSOs specifically pointed
out that the requirements of the Regulation add another bureaucratic layer on top of the
national system.
An accelerated permitting process decreases costs for both project promoters and
competent authorities. An accelerated permitting process also allows for a faster
implementation of the project therefore bringing forward the benefits identified in the
CBA. This will have a significant economic impact on regional energy markets, if not,
even a European wide impact. The economic impact could be determined on the basis of
the CBAs of the projects impacted by the accelerated procedures. No data is available at
the moment for calculating fully the impact, but the example described in rthe assessment
of option C.1.1. remains valid.
The permitting process and the provisions regarding public participation have a dual
social impact. On the one hand, society and citizens benefit from the implementation of
PCIs which increase competition, security of supply and market integration. On the other
hand, the construction of large infrastructure projects affect local communities by
changing the landscape, affecting tourist areas, affecting crops etc.
In a similar manner as the economic impact, an accelerated permitting process also
allows for a faster implementation of the project therefore bringing forward the benefits
to society identified in the CBA.
Public participation
Option C.2.0: Business as usual
Under the current provisions of the TEN-E Regulation, the project promoter or
competent authority is obliged to establish and regularly update the projects website with
relevant information about the PCI under its competence.
Option C.2.1: Increasing the transparency of PCIs
This option would introduce an obligation on the project promoters, as the owner of the
information regarding the implementation of the PCIs to publish and update dedicated
webpages in all languages of the Member States crossed or impacted by the PCIs. This
will affect their subsequent applications to become PCIs as the powers of the Regional
Groups as regards the monitoring of the implementation of PCIs are increased (see the
REFIT option of adding a criteria for the PCI selection process in this regard). The
143
minimum information to be included in the project websites would continue to be listed
in an annex of the TEN-E Regulation.
Stakeholder views: Stakeholder generally agreed that the transparency and participation
provisions introduced for PCIs are perceived to have increased public awareness of PCIs
and trust in the process. All communication tools employed by project promoters during
PCI implementation (project websites, information leaflets, meetings to discuss PCIs and
provision of information in writing) were considered useful. More specifically,
stakeholders considered PCI websites as important for ensuring transparency.
Assessment:
Public participation
Option C.2.0: Business as usual
Opting for business as usual would indicate that current provisions on transparency and
participation would still apply with no further scrutiny nor monitoring discretion of the
Regional Groups. Only 14% of the respondents to the open public consultation consider
that current TEN-E provisions triggered an improvement in the transparency of the
planning and building process of any PCIs in comparison to other energy infrastructure
projects. Most respondents (54%) could not answer if such improvements existed, whilst
28% of the respondents (company/business organisations, EU citizens, NGOs)
considered that there is no improvement, or there is an improvement only to a small
extent.
Options C.2.1 Increasing the transparency of PCIs
The implementation of key PCIs can be faced with opposition during the permit granting
process from local communities, landowners and citizens living in the proximity of
installations and routing of PCIs.
Article 9 and Annex VI of the TEN-E Regulation introduced the obligation for project
promoters to conduct at least one public consultation to inform stakeholders and help to
identify the most suitable location or routing for the project. The provisions further called
on project promoters to establish and regularly update a website with relevant
information regarding project’s consultation planning, status of the implementation
progress and contact details in view of conveying comments and possible objections.
Open access to information such as the economic and social benefits, costs or
environmental impact of projects and early consultation of those affected was sought to
address concerns and increase acceptance of the PCIs.
Whilst the majority of stakeholders’ confirmed the increased awareness of the projects
thanks to the provisions introduced by the Regulation, they did not consider that it would
necessarily lead to public acceptance. It was also reported that the websites of some PCIs
provide limited or outdated information and are often unclear whether or to which extent
the input from the local community was taken into account. While the consulting the
public is considered to be an important and necessary tool, there is a considerable room
for improvement in order to ensure the transparency and legitimacy of the process.
144
By increasing oversight of the obligation to ensure transparency of PCIs through
monitoring within the Regional Groups, the project promoters are incentivized to provide
open access to updated and transparent information on the key aspects of PCI
implementation.
Recent studies165166
found an important connection between the early involvement of the
public in energy infrastructure planning and lower opposition to projects because of an
improved understanding of the infrastructure needs. Transparent and accessible
information about the need for new energy infrastructure at a European grid level can
contribute to reducing public opposition167
.
In their third report on “Public engagement and acceptance in the planning and
implementation of European electricity interconnectors”168
the Commission Expert
Group on electricity interconnection targets found that early engagement could turn
opposition into an opportunity for transparency and information over costs and benefits
of different alternatives. Coupled with a two-way dialogue on what technical solutions
can be accepted at the local level and promoter's flexibility for adjustments, stakeholder
participation can be turned into an active process delivering better and more accepted
project. Best practices show that full transparency and involvement of local communities,
activists and non-governmental associations deliver collaborative solutions on the ground
that mitigate the environmental impacts of projects.
Opposition from local communities affected by PCIs hinders the delivery of their
intended economic and market efficiency benefits to society.
The results of the evaluation confirmed stakeholders’ opinion that the transparency and
public participation provisions of the Regulation proved to be a valuable instrument for
building connections with local communities and potentially affected groups and
increased the opportunities for the public to be informed and participate in the PCI
permitting process. Increased transparency of decision-making processes coupled with
meaningful consultations create new opportunities for stakeholder engagement that
carefully consider and address opinions, concerns and needs of citizens and impacted
communities. Administrative burden
The policy option would not add to the existing administrative burden associated with the
TEN-E compliance for project promoters, estimated at 1.5 FTE based on the available
information from the evaluation and stakeholder contributions.
165
Ecorys et al. (2019), Do current regulatory frameworks in the EU support innovation and security of
supply in electricity and gas infrastructure?
166
Scope et al. (2020) Innovative actions and strategies to boost public awareness, trust and acceptance of
trans-European energy infrastructure projects. Draft Revised Interim Report. Provided by DG ENER.
167
Trinomics (2018). Evaluation of the TEN-E Regulation and Assessing the Impacts of Alternative Policy
Scenarios. Final Report.
168
https://ec.europa.eu/energy/sites/ener/files/documents/3rd_report_on_public_acceptance_b5.pdf
145
As a general note, the majority of stakeholders consider the cost associated with the
organisation of public participation activities as acceptable.
Regulation
Option D.1.2: Possibility for smart grids projects to obtain a CBCA
This option would introduce the possibility to obtain a CBCA for smart grids projects.
Such a provision was supported by stakeholders as it would help smart grid projects that
encounter issues with splitting costs across borders.
Assessment:
Option D.1.2: Possibility for smart grids projects to obtain a CBCA
This option will benefit smart grids projects that may have an issue in splitting costs
across borders and where this would be necessary. However, due to the nature of such
projects, there are not many smart grids projects that will encounter this issue and might
require a CBCA, therefore the impact of the option is not so high overall. The option will
enable and accelerate the implementation of some smart grids projects, but there are no
data to assess how many these would be. The option, nevertheless, could be easily
implemented and does not bring any costs or administrative burden, being therefore a no
regret option.
Option D.1.3. Clarifying CBCA provisions
This option aims at the clarification and clarification of the CBCA procedure with the
aim of ensuring consistency between CBCA decision and their more extensive use. The
following elements are proposed to be implemented:
i. Clarify the notions that are currently either not defined in the TEN-E Regulation
or that have led to differences in interpretation169
,
ii. Require that the project promoters use the same scenario for their CBA part of
investment request as the one used in the PCI selection process and that they update the
CBA with the latest developments regarding the project.
iii. Moreover, in the context of the offshore renewable energy development, the need
to coordinate the CBCA for the infrastructure projects with the financing, market and
political arrangements of the generation projects was discussed extensively by
stakeholders as well as Member States. In order to address this, the Commission could
issue a binding guidance in the form of an implementing regulation on how the CBCA
169
Clarify the procedure to be followed for submitting the investment request and requirements, maturity,
“concerned NRA”, “significant net positive impact”, “The national regulatory authorities may decide to
allocate only part of the costs, or may decide to allocate costs among a package of several projects of
common interest.”; “relevant NRA”, the content and minimum information that the CBCA decision needs
to contain.
146
process could be coordinated with the development of the generation projects. As part of
this guidance, the Commission could also include detailed rules as regards the CBCA
procedure in general (similar as the current ACER Guidelines). This would end the
discussion on the selective application of these Guidelines, which are currently not
legally binding.
Assessment:
Environmental impacts
CBCA procedure enables the implementation of PCIs, which have benefits across-
borders. In principle, clarifying the CBCA provisions should not have direct
environmental impacts.
Economic and financial impacts
The clarification of the provisions regarding the CBCA procedure will enable a more
extensive and enhanced use of the CBCA procedure for allocating costs across borders.
This will enable the swifter implementation of projects, which will bring benefits sooner.
The impact of a Commission guidance on how the CBCA process could be coordinated
with the development of the generation projects in an offshore context that would include
also detailed rules as regards the CBCA procedure in general (similar as the current
ACER Guidelines) is two-fold. One type of impact refers to bringing clarity and
simplifying the CBCA procedure by making binding certain rules that have been
selectively applied so far. The second type of impact regards the clarification of the
complex process for the development of offshore hybrid assets which comprise
interconnectors and generation parks connected to such interconnectors. While the assets
themselves are subject to different types of legal regimes and manner of functioning, all
their afferent regulatory, financial and market aspects are deeply interrelated. Therefore,
clarity is necessary on how to deal with overlapping benefits and costs for the two types
of assets in order to ensure the creation of a net benefit for the various involved parties
and to advance their development. The elaboration and issuing of the guidance brings
administrative burden for the Commission, but helps ease considerably the burden on
project promoters, RES generation developers and Member States, while also helping to
reach the offshore RES potential of the EU.
Social impacts
The CBCA will enable the realization of PCIs and, in turn, the benefits of such projects
as identified in the CBA. This would also be taken into account for possible CEF
financial assistance. The full extent of such benefits cannot be estimated as there are no
147
data available, however, the example of costs of delay, as described above in the
assessment of Option C.1.1, remains a good indication.170
Administrative burden
According to the stakeholder consultation, the costs for NRAs as a result of TEN-E are
low the main cost driver is the CBCA process. For most NRAs less than 1 FTE is
estimated to be currently involved171
.
This option increases the administrative burden for project promoters as they will have to
update their CBA, but decreases the administrative burden for NRAs who will have more
straightforward procedures to follow.
Option D.1.4. Updating investment incentives
In order to increase the impact of the investment incentives provisions and make them
more operational, in particular for offshore wind related infrastructure projects, a specific
reference could be included in the legislation mentioning hybrid offshore infrastructure,
(which is likely to incur the highest risks, compared to the radial connection or internal
lines) as high risk projects. In addition, an obligation for NRAs to update their manual on
investment incentives and include a specific chapter for offshore assets could be inserted
(minimum requirements for such a manual could be included in an Annex to the revised
TEN-E) as well as an obligation to update the manual as regards OPEX intensive
projects.
Assessment:
A stable regulatory environment created for a project with full regulatory coverage is a
pre-requisite172
for any project in order for it to have explored both market based
financing solutions and regulatory solutions. The use of investment incentives is very
relevant in this context as they could assist with the adjustment of the regulatory
framework necessary for the development of certain higher risk projects.
170
The CBCA enables the timely implementation of PCIs and hence avoids delays in project
implementation. The benefits of a PCI are therefore realised earlier.
171
TEN-E Evaluation Report, page 116
172
The CEF Regulation provides that: “First, the market should have the priority to invest. Second, if
investments are not made by the market, regulatory solutions should be explored, if necessary the relevant
regulatory framework should be adjusted, and the correct application of the relevant regulatory framework
should be ensured. Third, where the first two steps are not sufficient to deliver the necessary investment in
projects of common interest, Union financial assistance could be granted if the project of common interest
fulfils the applicable eligibility criteria”
148
ANNEX 10: REFIT (SIMPLIFICATION AND IMPROVED EFFICIENCY)
In order to simplify and improve the efficiency of the TEN-E Regulation the following
measures have been identified to reduce compliance and regulatory costs.
a) Reduced reporting obligations
Reporting and monitoring serve to identify and tackle delays in the implementation of
PCIs. Monitoring also allows the identification of the projects that are stalling without
justified reasons and the projects do not comply with EU law or in relation to which false
information was provided. At the same time, monitoring and reporting serves to ensure
transparency of the projects’ concept and development by also allowing the Commission
maintained Transparency Platform to be regularly updated.
However, some stakeholders were critical of the monitoring and reporting mechanism
under the TEN-E Regulation. On the one hand NGOs and the public mentioned that there
is not enough transparency because the Transparency Platform is not always up to date
regarding the status of the PCIs and PCI websites sometimes do not exist, are not updated
or do not contain all the information required by the TEN-E Regulation. On the other
hand, project promoters and competent authorities mentioned that the reporting
obligations are too burdensome, as they have to report annually, maintain their websites
continuously updated, but also answer constant requests for information from the
Commission or ACER.
While annual reporting by project promoters needs to be maintained to achieve the
required transparency standards and allow the Regional Groups to tackle quickly any
implementation issues that the projects may encounter, the annual report of the
competent authorities could be transformed into input or additional information into the
report of the project promoters. In practice, the project promoters would draft their
report, submit it to the relevant competent authorities in the Member States where the
project is located. The competent authorities, would then add, without the possibility to
amend, any relevant information they hold as regards the on the progress or delays in the
implementation of the PCI and the reasons for such delays. The competent authorities
would then transmit the report at the same time to ACER, the Regional Group and
Commission.
The Commission can use the information in the report to update the Transparency
Platform. The Transparency Platform would also be regularly updated throughout the
year by retrieving information from the project websites which (in line with the Option
C.2.1 regarding public participation) the project promoters would be obliged to keep
continuously updated. The Transparency Platform could also have a feature that allows
retrieving information on the status of the project at a certain point in time. This will
allow the possibility to compare and assess the progress of the projects.
Pursuing this measure would reduce costs and administrative burden for the project
promoters, but in particular for competent authorities would not need to submit a separate
report. The cost saving cannot be estimated as the relevant data are not available, but it is
a recurrent cost saving.
149
b) Reduced monitoring by ACER to once every two years
According to the TEN-E Regulation, on the basis of the monitoring reports that the
project promoters submit every year to ACER, it has to issue a monitoring report
evaluating the progress achieved and make, where appropriate, recommendations on how
to overcome the delays and difficulties encountered. However, these monitoring reports
are used only once every two years with the occasion of the elaboration of the Union list
of PCIs for evaluating their progress since the last Union list. PCIs that have not
progressed and cannot objectively justify the lack of progress may not be included in the
next Union list. Therefore, to simplify the reporting by ACER, their report could be
issued once every two years, just in time for the Regional Groups, to take it into account
for their assessment of the new PCI candidates173
. Since ACER’s report is actually used
only once every two years, this option could help simplify the monitoring obligations
without any costs and without affecting the projects’ implementation. Moreover,
pursuing this measure would reduce costs and administrative burden for ACER, for the
members of the Regional Groups and the Commission. The cost saving has been
estimated at 0.4 FTE per year.
c) Stronger role of monitoring and reporting obligations in the PCI selection
process
In order to ensure that projects are developing according to their implementation plan
without any undue delays and in full compliance with national and EU law and that
project promoters duly abide by their reporting and transparency obligations174
these
elements could be included as a selection criterion in the TEN-E Regulation to be applied
for the subsequent PCI lists where the projects apply. Abiding by reporting and
transparency obligations and the progress of the project from one Union list to the next
could be added as one of the additional criteria that each Regional Group has to give
consideration to (under Article 4(4) of the TEN-E Regulation).
This option does not have any budgetary or administrative implications, but aids in the
implementation in practice of the measures described under b) and c) above which do
have administrative and budgetary implications. In addition, this option allows a
thorough monitoring by the Regional Groups as to how projects implement EU law
provisions, in particular environmental law and public procurement, therefore avoiding
any breaches and public opposition.
d) Pre-consultation to become optional
The principles for public participation set out in the Regulation constitute minimum
requirements to ensure early engagement with local communities and stakeholders
affected by the construction of a PCI and include a pre-consultation of relevant
stakeholders. In practice, the obligation to consult ahead of the launch of permitting
procedure may be adding to existing national procedures.
173
This option corresponds to the input of ACER to the stakeholder consultation.
174
Including their obligation to maintain a constantly updated website with all necessary data.
150
This is confirmed by the results of the consultation, where a large proportion of survey
respondents (46%) agreed that one public consultation is sufficient for increasing
transparency and participation. This opinion was particularly popular among TSOs,
industry representatives and NCAs. A fifth of the respondents, primarily comprised of
civil society representatives and energy producers, disagreed with this opinion. It is
noteworthy to add that several respondents explained that the public consultation
provision under the Regulation was, in their opinion, redundant as the national legal
frameworks of their Member States as well as the public participation requirements of the
environmental impact assessments carried out in the permitting process already made
public consultations obligatory. As such, this provision was seen by some as adding to
the complexity of the permit granting procedure as shown on below
To address this and avoid that two or more consultations are required for the purposes of
informing stakeholders about the project at an early stage, identifying the most suitable
location or trajectory and the relevant issues to be addressed in the application file, it is
suggest to make the pre-consultation optional if it is already covered by the national rules
under the same or higher standards as in the TEN-E Regulation. However, the project
promoter should be obliged to take into account the opinions expressed in the
consultation and demonstrate how it has done so. The cost savings which would occur
mainly with project promoters cannot be estimated as the relevant data are not available,
but it is a recurrent cost saving.
e) Simplified inclusion in TYNDP for existing PCIs
An electricity or gas candidate project can apply for the inclusion in the Union list only
if is included in the latest available TYNDPs, developed biennially by the ENTSOs.
Therefore, a project promoter, must submit or resubmit (in case it already is included in
the PCI list) every two years its project to both TYNDP and PCI processes. While the
submission process for candidate projects for the PCI selection process was already
simplified by having all the necessary data for the PCI process being delivered to the
Commission directly by the ENTSOs, there is scope for further simplification for the
TYNDP process.
In contrast to the PCI selection process, which is run by the Commission, the TYNDP
processes are run by the ENTSOs, which set administrative and technical criteria for
inclusion of projects in the TYNDPs. This process requires a significant amount of data
and legal proofs175
. Considering that existing PCI projects already delivered the
necessary proofs in the previous TYNDP processes, an automatic inclusion in the
subsequent TYNDPs for such projects, as long as their administrative and technical data
did not significantly change, is recommended. This would reduce the burden on the
project promoters and also on the ENTSOs having in mind that around 56% of 2018
TYNDP electricity projects became part of the 4th
PCI list. The cost savings which would
175
ENTSO-E : https://tyndp.entsoe.eu/promoters-corner
ENTSOG: https://www.entsog.eu/sites/default/files/2019-
05/TYNDP%202020_Practical_Implementation_Document_20190502_0.pdf
151
occur mainly with project promoters cannot be estimated as the relevant data are not
available, but it is a recurrent cost saving.