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Massive investment at efficient cost in energy infrastructure is needed in Europe to deliver on the energy transition. Every two years, ACER provides a non-binding opinion on the draft grid plans (called Ten-Year Network Development Plans or TYNDPs) proposed by the network operators.
In its just-published Opinions on the latest draft plans, ACER finds that the electricity and gas 2020 plans (developed by ENTSO-E and ENTSOG respectively) do not sufficiently contribute to the efficient market due to several shortcomings.
In ACER’s view:
- The TYNDP core building blocks (the stakeholder consultations, the methodologies and their application) need to be improved.
- Too many conventional gas projects - close to €75 billion – are proposed by network operators and not all are assessed by ENTSOG.
- A number of shortcomings could be remedied by EU legislators in the current TEN-E reforms by strengthening the independent assessment of projects and the regulatory oversight of network operators. ACER has previously pointed to risks of lack of neutrality of the two European Networks of Transmission System Operators (ENTSOs) and the need for step changes in TEN-E governance to avoid conflict of interests while ensuring transparency.
Too many conventional gas projects
ACER regrets that the draft gas plan includes so many conventional gas projects - close to €75 billion - in view of the lack of market appetite for developing additional transmission capacities and Europe’s decarbonisation objectives. Less than half of these are assessed by ENTSOG in the TYNDP framework. Despite ongoing efforts, the TYNDP framework still fails to properly assess the contribution of gas projects to sustainability.
TYNDPs’ core building blocks need to be improved
The core building blocks of TYNDPs such as grid development scenarios, infrastructure needs identification and cost-benefit analysis (CBA) need to be improved. There are also shortcomings in public consultations on key elements of the methodologies for the assessment of the energy projects being proposed by network operators.
Shortcomings could be remedied by improving the TEN-E Regulation
The EU framework for energy infrastructure needs to be robust for cost-efficient cross-border projects which are best for the energy transition.
ACER believes that the shortcomings of the TYNDP process can be remedied by improving the TEN-E investment framework in line with the European Green Deal. To this end, regulators (ACER and CEER) issued two position papers, one in March 2021 and one in June 2020 on how to improve the European Commission’s legislative proposals on the revision of TEN-E Regulation.
ACER has called on the European co-legislators to consider the regulators’ proposals as a solution to promote a neutral technical assessment of infrastructure projects in line with the European Green Deal, avoiding risks of unjustified costs to European consumers.
For example, currently the Transmission System Operators (TSOs), through the European Network of Transmission System Operators (ENTSOs), develop the scenarios to assess projects in different futures. TSOs can be perceived as biased towards favouring more infrastructure than may be needed. The neutrality of scenarios and the credibility of the TYNDP process can thus be compromised. To safeguard neutrality, regulators have proposed the introduction of ACER framework guidelines for TYNDP scenarios for the ENTSOs to follow.
Europe’s energy regulators point to the need for strengthened regulatory scrutiny over the ENTSO’s to safeguard the public interest, for ACER to be given the powers to approve the methodologies for the Cost-Benefit Analysis (CBAs) which are used to assess projects and to issue binding guidelines to the ENTSOs for the TYNDP development.
What’s in the ACER Opinions on the draft 2020 TYNDPs?
ACER’s Opinions identify what’s done well and the shortcomings. For the electricity TYNDP, ACER welcomes a number of improvements for instance in the so-called Inclusion Guidelines, the data collection process, the needs identification, and the transparency of the CBA assessment. For the gas TYNDP, ACER welcomes a number of improvements for instance in the publication of project fiches, a new visualisation tool, and the increased focus on Energy Transition aspects.
ACER identifies four key shortcomings for the electricity TYNDP and four for gas. For example, delays of scenario development process and a lack of data release compromised the integrity of the draft electricity 2020 TYNDP. There were, among other issues, shortcomings in the applied methodologies in gas. ACER encourages the ENTSOs to address the remaining shortcomings and stands ready to provide guidance or clarifications where needed.
ACER’s Opinions include recommendations to the ENTSOs for the finalisation of the draft TYNDPs, as well as for improvement of the future TYNDPs to achieve more efficient network planning to serve Europe’s consumers and its decarbonisation goals.
Summary information on the TYNDP process, and on the key shortcomings and the ACER recommendations on the draft 2020 TYNDP for electricity and for gas is on the ACER website.
For access directly to the detailed ACER Opinions, see:
- ACER Opinion on the European Network of Transmission System Operators for Gas (ENTSOG) draft gas TYNDP 2020,
- and two Opinions on the European Network of Transmission System Operators for Electricity (ENTSO-E) TYNDP 2020, one on methodological aspects of the electricity TYNDP 2020 and one on the TYNDP projects.
ACER has advised the European Commission, the European Parliament and Council of its Opinions on the ENTSO-E and the ENTSOG draft 2020 network development plans.
