Cross-Regional Group meeting Electricity

Transcription

1 Cross-Regional Group meeting Electricity June 2017 European Commission DG

2 Agenda 27 June 2017 Part 1: Cross-Regional Group meeting addressing horizontal matters relevant to all electricity priority corridors - open to stakeholders 10:00-12:30 Preparation of the 3rd PCI list Update by ACER on NRA assessment Presentation and discussion on a draft methodology for the assessment of candidate projects Outcomes of the public consultation on the candidate projects for the 3rd PCI list - electricity Update on process and timing of the PCI identification process 12:30-13:45 Lunch Break

3 Agenda 27 June 2017 Part 2: Regional Group meetings addressing matters specific to each electricity priority corridor Regional Group members only 13:45-15:15 Regional Group NSOG Presentation and discussion of preliminary outcomes of application of the assessment methodology to PCI candidates in the NSOG priority corridor 15:15-15:30 Coffee break 15:30-17:30 Regional Group BEMIP Presentation and discussion of preliminary outcomes of application of the assessment methodology to PCI candidates in the BEMIP priority corridor

4 Agenda 28 June 2017 Regional Group meetings addressing matters specific to each electricity priority corridor 10:00 12:30 Regional Group NSI West Presentation and discussion of preliminary outcomes of application of the assessment methodology to PCI candidates in the NSI West priority corridor 12:30-13:30 Lunch break 13:30-16:00 Regional Group NSI East Presentation and discussion of preliminary outcomes of application of the assessment methodology to PCI candidates in the NSI East priority corridor

5 Proposal for a methodology for the assessment of candidate PCIs

6 General principles Assessment on the basis of the criteria in the TEN-E Regulation Projects must meet general and specific criteria Declustering of benefits if TYNDP cluster is different from PCI candidate Transmission and storage projects assessed separately

7 Elements of assessment Candidate projects Address a need? Have cross-border impact? Potential benefits outweigh cost?

8 Needs: Is the project necessary for at least one of the corridors? Needs per corridor have been identified by the Regional Groups in December 2016 Individual project presentations used to assess if projects address a need (done)

9 Cross border aspects (transmission) The project needs to: Involve at least 2 Member States, and/or Be on the territory of 1 Member State and have a significant cross border impact Cross the border of at least one Member State and an EEA country

10 Cross border aspects (storage) The project needs to: provide at least 225 MW installed capacity have a storage capacity that allows a net annual electricity generation of 250 Gigawatthours/year

11 Benefits Market integration, competition and system flexibility Sustainability, through estimating the amount of generation capacity from RES which is 4. connected and transmitted due to the project Security of supply, interoperability and secure system operation, notably through

12 Use of TYNDP visions or scenarios For monetised benefits, the indicators from TYNDP visions 3 and 4 will be used The assumptions underlaying these visions are the closest to the assumptions underlaying the EU 2030 policy scenario

13 Main assumptions of the EUCO30 scenario Designed to meet all 2030 targets proposed by the European Commission At least 40% GHG emissions (incl. split ETS/Non-ETS) At least 27% RES At least 30% energy efficiency Main policies and incentives additional to Reference: Revised EU ETS: Increase of ETS linear factor to 2.2% for Renewables policies: Phase out of direct support schemes post-2020 National policies reflected by renewables values applied in electricity, heating & cooling and transport sectors. Residential and services sector: Transport Existing policies (e.g. EPBD, art. 7 of EED) are continued and/or strengthened; Need for national policies reflected by the use of EE values CO 2 standard for cars and vans strengthened post-2020 efficiency improvements for heavy goods vehicles Transport demand management policies

14 Comparison with ENTSO-E visions Summary table on a qualitative approach to compare the EUCO30 results and ENTSO-E visions No perfect match but Visions 3 and 4 deemed closer Category Criteria Evolution in EUCO30 scenario Slowest Progress - V1 Constrained Progress - V2 National Green Transition - V3 European Green Revolution - V4 Climate action driven by Macroeconomic trends Economic conditions Electric and hybrid vehicules Transport Gas vehicules and shipping Demand flexibility Electric heat pumps Residential/commercial Hybrid heat pump efficiency Merit order Nuclear Storage Power Wind Solar CCS Adequacy Electricity Demand Adequacy EU ETS / High CO2 price Moderate to High Growth Very High Growth High Growth Very High Growth High Growth Vey High Growth Vey High Growth High Growth Gas before Coal Stable Moderate growth Very High Growth Very High Growth Vey High Growth High Surplus Capacity Increase High-Back-up Matches exactly Does not match, but close Does not match

15 Benefits Market integration, competition and system flexibility, notably through: a. Impact on grid transfer capability b. Contribution to achieving interconnection capacity of 10% installed production capacity c. Impact on the system-wide generation and transmission cost and the evolution and convergence of market prices d. Impact on demand-supply balancing and network operations of internal bottlenecks within Member States.

16 How to measure benefits (transmission) Market integration Monetised: TYNDP indicator for SEW TYNDP indicator for losses corresponds to a+c (previous slide) Non- monetised: 1. Contribution to achieving 10% target. Corresponds to b. Relevant for BG, CY, DE, ES, FR, IE, IT, PL, PT, RO, UK 2. Contribution to addressing loop-flows. Corresponds to d. Relevant for DE, PL, CZ (cf needs assessment)

17 How to measure benefits (transmission) Sustainability, through estimating the amount of generation capacity from RES which is connected and transmitted due to the project Monetised: The benefit is fully captured by the TYNDP indicator for SEW

18 How to measure benefits (transmission) Security of supply, interoperability and secure system operation, notably through a. Impact of loss of load expectations (generation and transmission adequacy) b. Where, applicable, impact on independent and reliable control of system operation and services

19 Security of supply How to measure benefits (transmission) Monetised: improvement of 1. the adequacy margin, 2. system flexibility, 3. system stability, 4. independent and reliable control of system operation and services 1-3 are measured through benefits reported by project promoters (see also next slides) 4 is measured through benefit of avoided potential black-out

20 Monetised benefits not part of TYNDP - transmission Besides the TYNDP monetised benefits, project promoters were invited to report the following benefits: - Increase of reliability - Additional adequacy margin - Reductions of costs for ancillary services - Reduction of RES curtailments (inside market zones) - Reduction of non-co2 emissions

21 Additional monetised benefits (2) Increase of reliability Using the EENS index Additional adequacy margins Two methods used: 1) capacity remuneration approach; 2) relation to MW of spare capacity that doesn t need to be installed Reduction of costs for ancillary services : (IT, UK regulatory framework) Reduction of costs for non-co2 emissions: (IT regulatory framework)

22 Additional monetised benefits (3) What has not been considered SEW and Losses benefits calculated differently than TYNDP 2016 Differential between social cost of carbon and CO2 price Disproportionate monetisation coefficients Data not supported by evidence

23 Additional monetised benefits (storage) 1. Storage benefits are not fully captured by the TYNDP 2. Number of apparent inconsistencies in the TYNDP data Promoters were invited to provide data 1. to capture missing benefits, 2. to correct possible errors

24 Monetised benefits (storage) more detailed information on losses per TYNDP scenario generation cost savings capacity utilisation of storage assets expected variation in Loss of Load Expectation (LOLE)

25 Costs The total cost of the project was calculated taking into account CAPEX and OPEX CAPEX: from TYNDP 2016, or submitted by the promoter (if PCI candidate projects does not match TYNDP cluster) - considered to be spent on the year of commissioning and discounted to 2017 value OPEX: annual figures provided by promoter. Where not available: lifecycle costs of 22% of CAPEX for OHL, and 30% for cables

26 Aggregation of monetised and nonmonetised benefits transmission (1) Monetised benefits (MB): Step 1: NPV of monetised benefits = average of NPV of benefits in scenarios 3 and 4 Step 2: Ratio between NPV of monetised benefits and of costs is normalised to a scale 1-10

27 Normalisation of monetised benefits (MB) Benefit/cost Normalised value B/C < 0,25 1 0,25 <= B/C < 0,50 2 0,50 <= B/C < 0,75 3 0,75 <= B/C < 1,00 4 1,00 <= B/C < 1,50 5 1,50 <= B/C < 2,00 6 2,00 <= B/C < 2,50 7 2,50 <= B/C < 3,00 8 3,00 <= B/C < 4,00 9 4,00 >= B/C 10

28 Non-monetised benefits (NMB) Assigned on the basis of contribution to criteria: 10 points for investments contributing to increasing the interconnection capacities of BG, CY, DE, ES, FR, IE, IT, PL, PT, RO, UK; 10 points for investments in CZ, DE, PL, contributing to the removal of infrastructure bottlenecks which cause l oop flows.

29 Arriving at an aggregated score MB are given a multiplying weighting factor of 0.7 NMB are given a multiplying weighting factor of 0.3 PCI score = 0.7 * MB score *NMB score The PCIs candidates are ranked per priority corridor according to their aggregated score

30 Aggregated score for storage projects TYNDP figures, corrected and supplemented by project promoter's input economic indicator for annual benefits: SEW+savings on ancillary services -/- losses Discounting: 25 years, except ion-battery storage (20 years) Ranking based on monestised benefit/cost ratio

31 Overall process of the PCI identification process (update)

32 The process 1. Identification of problems and needs by the Regional Groups; 2. Submission of candidate PCIs with the required accompanying information by project promoters; 3. 'Eligibility' check of the candidate PCIs; 4. Start of the assessment process by the Regional Groups; 5. Check by the NRAs of the consistent application of the criteria, CBA methodology and evaluation of cross-border relevance; 6. Public consultation of candidate PCIs 7. Preparation of the draft regional lists; 8. Member States may express opinions on projects not on their territory but impacting them. These will accompany the request for ACER's opinion. 9. Opinion of ACER on the draft regional lists, in particular on the consistent application of the criteria and cost benefit analysis across regions; 10. Member States to confirm support for projects on their territory 11. Adoption of the final regional lists by the decision-making body of the Regional Groups; 12. Adoption of the Union list of PCIs on the basis of the regional lists (in the form of a delegated act amending the TEN-E Regulation) 32

33 Next steps 'Working level' decision making body 13 July 2017 (invitations have been sent) ACER Opinion (July-October) Member State may present opinion on projects not on their territory but impacting them (before 13 July) Member State expression of support for projects on their territory (inform before 13 July) High level decision making body mid-october

34 Thank you for your attention