TYNDP 2018 : process, scenarios and European needs identified [PCI 2019] Meeting of TEN-E cross - electricity Regional Group Dimitrios Chaniotis ENTSO-E

1 2 3 4 TYNDP 2018 Package : content and development steps TYNDP 2018 Scenarios 3 System needs 4 CBA

1 2 3 4 TYNDP 2018 Package : content and development steps TYNDP 2018 Scenarios 3 System needs 4 CBA

Operational decisions Assessments addressed in different time-frames TYNDP MAF Seasonal RSCs‘ Week ahead Long term Mid term Short term >10 years 10 years 5 years 1 year 6 months 1 week Investment decisions Policy decisions Operational decisions REAL TIME UNCERTAINTY INCREASES

The TYNDP process

TYNDP 2018: DELIVERABLES Approved by the European Commission Page 6

1 2 3 4 TYNDP 2018 Package : content and development steps TYNDP 2018 Scenarios 3 System needs 4 CBA

Scenario framework Previous TYNDP scenarios followed differing approaches…

Scenario framework Stakeholder input helped define the framework as a combination of approaches, leading to the best of both worlds Stakeholders agree as uncertainty increases, several scenarios are necessary in the longer term Equally short term dynamics like fuel prices are also captured in the merit order switch in 2025.

Scenario framework Stakeholders agree as uncertainty increases, several scenarios are necessary in the longer term Equally short term dynamics like fuel prices are also captured in the merit order switch in 2025.

Scenario Building Data Collection Validation Optimisation Electricity Market Studies Data collection builds on national processes e.g. FES Results

Global Climate Action Global emissions trading scheme Large scale development of renewable resources. Low Carbon technologies. High economic growth & Energy Efficiency Electric and gas vehicles displace oil in the private transport sector Gas helps the decarbonisation of the shipping and heavy good transport sectors Power-to-gas commercially available. Bio- methane Electric and hybrid heat pump technology help to decarbonise heating P2G Electricity demand has increased but Economic growth means people invest in high efficiency domestic products. Bio methane is developed as a non-intermittent renewable and Power to gas is a commercially viable energy storage technology. We see development in smart cities and demand side response – which allow customers to move demand to lower priced hours.

Sustainable Transition National focus on climate change, driven by ETS and national subsidies Steady growth of renewable resources Moderate economic growth Gas sees significant growth in the shipping and transport sectors Electrification of heating and transport sees stable development Strong development in Bio-methane but none in Power-to-gas Heat pump technology most common in new buildings There is moderate economic growth, where society want to support and participate in climate change action Gas will be the prominent source used for heating although heat pumps will be fitted into new dwellings

Distributed Generation ‘Prosumer’ lead climate action, helped by strong EU Policies and an efficient ETS. Storage drives climate action Decentralised growth of renewable resources High economic growth Smart cities enabled with electricity storage and demand response Decarbonisation of transport driven by electric vehicles Hybrid heat pumps offer consumer choice and flexibility P2G Storyline is based on significant leaps in small scale generation. Climate action is driven by Storage technology (both residentially and commercially), strong EU policies and an efficient Emissions Trading Scheme Advances in solar. As solar yields are higher in Southern Europe, investments are likely to be higher in these regions, in comparison to Northern Europe. There is high economic growth and with major advances in batteries, "prosumers" can balance their own electricity consumption within a day. Gas is significant in the Shipping and Heavy good whereas electrification is seen in residential and commercial transport, lower battery prices increases demand for EV’s. Power-to-gas technologies become commercially viable for use as energy storage. HP and HHP are a significant technologies in heating sector. Investment in hybrid heat pumps as they allow the ‘prosumer’ to choose which source of energy to meet their heating needs. District heating CHP also represent an alternative solution for residential districts.

Key indicators Transport Heating Power Renewable Gases Message (oral): Cooperation between electricity and gas are captured thanks to joint development between ENTSOs – in an improved way compared to previous exercises

European Commission EUCO 30 EUCO30 is a core policy scenario produced by the European Commission The scenario models the achievement of the 2030 climate and energy targets as agreed by the European Council in 2014, but including an energy efficiency target of 30% The ENTSOs both welcome this new collaboration with the European Commission and further cooperation Mention potential difference EUCO scenario is a policy scenario created by the European commission Scenario meeting the 2030 climate and energy targets agreed by EC in 2014 and includes an energy efficiency target of 30% s?

1 2 3 4 TYNDP 2018 Package : content and development steps TYNDP 2018 Scenarios 3 System needs 4 CBA

4 main studies 2040 optimal grid analysis 2030 market boundaries reinforcement NEW No action 2030 2040 All projects 2030 System operability – dynamic stability analysis NEW NEW

European – regional – country reports for different audiences Boundary market reinforcement 2030 No action to all projects (2030 – 40) 2040 optimal grid study System operability Number of documents Number of pages Target audience Pan European System Needs Report 1 50 All X Regional Investment Plans 6 100 Regulators, TSOs, specialized audience PCI Corridors Insight Reports 4 40 Country System Needs Factsheet (not part of TYNDP package) 30 12

2030 boundary market reinforcements What are boundaries? A group of borders between market nodes. Identified in TYNDP 2016, confirmed in TYNDP 2018. They correspond to the main locks to electricity exchanges across Europe Why boundaries, not borders? To show systemic flows likely to happen whatever scenario materialises, and whatever the initial set up of the electricity system.

Starting point: 2020 interconnection capacity on the boundary 2030 boundary market reinforcements How much money is saved annually on Europeans wholesale electricity market compared to 2020 grid 3 scenarios Starting point: 2020 interconnection capacity on the boundary Total capacity at the boundary (all capacities outside of the boundary remain fixed at TYNDP ref grid level)

2040 optimal grid analysis Why 2040? Large share of the energy transition will have materialized. Preparation for this time horizon should start now. Projects to be commissioned by 2030 will live most of their lives in scenarios closer to the 2040 ones Never done before What did we look at? Capacity increases across Europe justified by market, security of supply or RES integration considerations, beyond the projects of the TYNDP 2016 reference grid Why borders, not boundaries? To show how after 2030 needs are addressed, further developments will still be needed and should be explored. Result does not show the “most optimal setup” (impossible in such distant timeframe), but proves one set up which would provide benefits to the system

2040 optimal grid analysis

Other analysis System operability – dynamic stability analysis System services are expected to form a major part of system costs in the future, possibly beoming more important than wholesale electricity markets. TYNDP 2018 for the first time estimates the situation in future scenarios. Further studies needed to assess the scale and costs of the solutions that will be needed. No action 2030 2040 All projects 2030 What would happen in terms of security of supply, RES integration and market integration if we stopped all projects beyond those under construction? What would happen if we implemented all the TYNDP projects (including competing or redundant projects)? Interconnection targets Interconnection targets indicators proposed by the Expert Group were computed with both 2020 and reference grid for all 2030 scenarios

1 2 3 4 TYNDP 2018 Package : content and development steps TYNDP 2018 Scenarios 3 System needs 4 CBA

Overview of CBA indicators

Overview of CBA indicators Approach Reference grid A B C D Put one IN at a Time (PINT) Take One Out at a Time (TOOT) Indicators Multi-criteria approach Single European Modeling team guarantees consistency of results across Europe Commercially available tools All indicators tested for all 2030 scenarios, using 3 sets of climate conditions

Reference grid: Declared commissioning date =< 2030 Commissioned and Under construction and Planned projects able to prove by a written acknowledgement by a competent body that application to the permitting phase has started (similar to the pre-application phase defined for PCIs defined in TEN-E) Under construction and to be commissioned by 2020 Reference Grid transmission projects Non reference grid transmission projects Future projects >2030 All storage projects No CBA unless requested TOOT PINT Light PINT = no network studies

Climate years The clustering was done for 3 clusters. The graph shows the average values of the cluster. The input data are, for each year, for each region: the difference between the value and the average of all years. For the graph, the data are aggregated by type. Storyline for cluster 1 : high load, dry in Scandinavia and low wind Storyline for cluster 2 : medium load, normal in Scandinavia and high wind Storyline for cluster 3 : low load, wet in Scandinavia and high wind

B6/B7/B8: Security of supply 2nd CBA methodology introduces a new indicator structure for security of supply Old security of supply-related indicators: B1: security of supply B6: technical resilience B7: robustness/flexibility

Variation in CO2 emissions RES integration Variation in CO2 emissions Improvements development of concepts for monetising the additional value B5. Variation in losses Changes since CBA 1 Mandatory monetization of losses Calculation of losses should be representative for pan- European system

2nd CBA guideline – Storage projects Storage is a main part of CBA Principle: no discrimination between storage and transmission Changes since CBA 1 Storage is moved from annex to chapter Improved consistency in computation of storage/transmission System flexibility indicator: ‘tailor- made’ computation for storage projects

Beyond the CBA High RES and efficient gas share lead to decreasing wholesale prices, increase gap between what the CBA measures and reality of system costs and benefits Missing benefits not captured by the current 2nd CBA guideline A.1 Reductions of costs for ancillary services A.2 Reduction of emissions (non-CO2) Missing benefits not covered by the current 2nd CBA guideline applying to transmission projects only B.1 Synchronisation with Continental Europe (for Baltic States) B.2 Avoidance of the renewal/replacement costs of infrastructure Missing benefits not adequately covered by TYNDP 2018 implementation of the current 2nd CBA guideline applying to transmission and/or storage projects C.1 Reduction of necessary reserve for re-dispatch power plants

Beyond the CBA - 2 Approaches exist which could not be included in the CBA (for timing or methodological reasons) Contribution to the removal of infrastructure bottlenecks which are caused by loop flows or transit flows (transmission only) B6 indicator: Security of Supply - Adequacy to meet demand Monetarisation of B7 indicator: Security of Supply – System Flexibility