Meeting of NSOG Electricity Regional Groups Preparation of the 3rd PCI list - Identification of Infrastructure Needs Brussels, 27 October 2016

Agenda 1. Presentation of the meeting objectives; recapitulation of the problem → infrastructure need → project approach (European Commission) 2. Views on energy system specific problems in the Corridor: 2.1. ENTSO on behalf of project promoters; 2.2. ACER and National Regulatory Authorities; 2.3. Stakeholders; 2.4. Authorities of the Member States 3. Discussion and elaboration of a list of problems in the Corridor (All participants) 4. Discussion on infrastructure needed to address the identified problems in the Corridor (All participants) – if time allows 5. AOB

1. Objectives Hear and compare views of RG Members and Stakeholders on energy system problems Endeavour to reach a common understanding of problems in the Corridor A first attempt to establish if a PCI-type transmission could be a solution to some problems –> infrastructure needs Ultimately: (a) more detailed definition of Priority Corridor (b) where significant impacts still possible

1. problem → infrastructure need → project Symptom of a problem: Suboptimal situation of energy system Is it a problem? Yes, if deficiency/nuisance is significant Problem: Significant deficiency, bottleneck of energy system A. Relevant for PCI context? -> Fits Priority Corridor? -> if yes, likely to get on list B. Can other solution than transmission address the problem better -> not on the list Need: If a PCI type infrastructure could be an adequate solution to address a given problem

1. Stay in the remit of the Corridor Northern Seas Offshore grid Corridors defined in Annex I Geographical description Functions / objectives of each corridor Are all problems still relevant? What more do we know about specific problems in the Corridor / parts of the Corridor? offshore electricity grid development and the related interconnectors in the Northern Seas to transport electricity from renewable offshore energy sources to centres of consumption and storage and to increase cross-border electricity exchange

1. Projects of Common Interest Not any electricity asset (high/extra high-voltage; storages connected to transmission etc.) – Annex II Cross-border relevance Significant contribution to Market Integration, Competition, System Flexibility, Sustainability or Security of Supply

An example problem–>need–>project COMPARISON OF AVERAGE WHOLESALE BASELOAD ELECTRICITY PRICES, Q2 2016 From a problem to a need Existence of price differential Is it a problem? If high difference, likely yes – symptom of a bottleneck/ deficiency in market integration [HOW HIGH?] In line with the objective of a Priority Corridor? Could infrastructure remedy the problem? If yes, there may be a need Are there PCI candidates to address this need?

Ultimately defining the needs Needs in terms of relevant criteria, such as of security of supply, market integration, system flexibility, interoperability, competition, or sustainability that are due to infrastructure shortcomings and that prevent the implementation of a given priority corridor or thematic area.

2. Views on energy system specific problems in the Corridor 2.1. ENTSO on behalf of project promoters 2.2. ACER (and National Regulatory Authorities not in ACER presentation) 2.3. Stakeholders 2.4. Authorities of the Member States

3. Discussion and elaboration of a list of problems in the Corridor 1. Overview table of contributions / positions 2. Discussion, reactions and completion of the table

3. Discussion and elaboration of a list of problems in the Corridor What happens next? 1. List of problems on CIRCABC – MSs to react within 10 working days if something missing 2. Regulators (ACER), promoters (through ENTSO-E) and RG leaders working together to collect evidence confirming an infrastructure need for each the problems -> list of needs 3. Proposed list of needs in CIRCABC by end November 4. Cross-regional electricity RG and Cross-regional gas RG meetings in the 2nd or 3rd week of December -> objective: approve the lists; launch of PCI call

Cross-regional mtg G/E Objective: Agreement on process Dividing assignments Draft list of problems RG and Cross-regional mtgs Objective: Agreement on problems and corresponding infrastructure needs per Region Gas RG mtg Objective: Grouping of PCI candidates [if needed] RG mtgs (2 per RG) Objective: Assessment of PCI candidates in the framework of what Region needs RG mtg Objective: Technical level DMB – agree Regional lists Use of Project Portals of ENTSOs to collect PCI candidates submissions – under consideration

AOB 

Backup

4. Discussion on infrastructure needed to address the identified problems in the Corridor (if time allows) 1. Can the problem be quantified? What magnitude? 2. What evidence that a PCI type infrastructure could be an adequate solution to address a given problem? 3. Which problems need to be looked into in more detail?

Electricity Priority Corridors Northern Seas Offshore grid North-South interconnections Western EU offshore electricity grid development and the related interconnectors in the Northern Seas to transport electricity from renewable offshore energy sources to centres of consumption and storage and to increase cross-border electricity exchange interconnections between MSs notably to integrate electricity from renewable energy sources and reinforce internal grid infrastructures to foster market integration in the region + Electricity highways and smart grids North-South interconnections CEE BEMIP Electricity interconnections between MSs and reinforcing internal grid, to end isolation of the Baltic States and to foster market integration inter alia by integration of renewable energy in the region interconnections and internal lines to complete the internal market and integrate generation from renewable energy sources 16