Projects of Common Interest 2018 - 2019 Meeting of TEN-E NSOG and BEMIP[21 Jan.] Meeting of TEN-E NSI EAST and NSI WEST[22 Jan.] Regional Group on electricity 21-22 January 2019 DG ENER, Networks & Regional Initiatives https://webcast.ec.europa.eu/pci-regional-groups-electicity-meeting-21-01-2019 https://webcast.ec.europa.eu/pci-regional-groups-electicity-meeting-22-01-19

Agenda Welcome and general introduction   Welcome and general introduction Member States’ short presentations on their specific country needs [the MSs who had no intervention in the previous meeting] Identification of system needs per region –Methodology presentation Lunch break Discussion on the methodology and on setting significant thresholds for the needs evaluation criteria Conclusions Next steps

Member States’ short presentations on specific country needs [the MSs who had no intervention in the previous meeting]

Needs in the PCI process

Why are we doing this? In its motion for a resolution B8-0136/2018 on the Union list of projects of common interest (2017/2990(DEA)), the European Parliament called for a “process of identifying and selecting Projects of Common Interest” that is “transparent as possible, based on independent data”. The Court of Auditors asked for “a comprehensive assessment of EU- level infrastructure needs is necessary to inform the decisions about development of the internal energy market and security of energy supply and other EU policy commitments for which the energy sector plays an important role, especially those relating to climate action.” This view has also been expressed by different stakeholders involved in the previous PCI process.

TYNDP is a solid first step in a process that gives us an order of magnitude of the system needs. Therefore the needs identification exercise builds on the TYNDP findings and delivers the necessary input for rendering the Union list of Projects of Common Interest fit for purpose. PCIs are of “Common Interest” and reflects specific objectives of the Energy Union with defined targets and timeframe. Therefore we need to apply a critical assessment in order to select only those projects that are key to achieving Energy Union’s objectives and require Union’s commitment and support.

A methodology for the regional needs identification

Principle The PCI needs identification is to reflect the objectives of Regulation 347/2013, along the three energy pillars of the Energy Union: market integration, security of supply and sustainability; The Regional Groups are to use the same methodology for the needs identification; The thresholds used to frame the needs are to be by default (as long as no strong reasoning is presented) identical along all the Regional Groups The timeframe to be considered for the PCI needs analysis is to be 2030 in line with the EU 2030 targets;

Use of indicators and thresholds Indicators framing Consistent: Indicators must be based on consistently defined and calculated data available for all relevant countries Meaningful: An indicator/threshold that results in all countries or no country being impacted is not well defined Fit for purpose: Within the PCI process indicators and thresholds are used to identify critical European needs/problems Use of indicators and thresholds

Indicators Market integration Security of supply Sustainability Yearly average of the absolute hourly marginal cost spreads at the borders Security of supply Adequacy Significant changes in generation protfolio Residual Load Ramp Sustainability Renewables curtailment

Market integration 𝐘𝐞𝐚𝐫𝐥𝐲 𝐚𝐯𝒈. 𝐦𝐚𝐠𝐢𝐧𝐚𝐥 𝐩𝐫𝐢𝐜𝐞 𝐝𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐜𝐞𝐬 𝐢𝐧 𝟐𝟎𝟑𝟎 𝐜𝐨𝐮𝐧𝐭𝐫𝐲 𝐀−𝐜𝐨𝐮𝐧𝐭𝐫𝐲 𝐁 Where: country A and B are interconnected countries Threshold options: upper X % of the marginal price difference a value higher than X € MWh

Security of supply (SoS) - I Measured by: Loss of load expectation [LOLE] Source of data: ENTSO-E Mid-term Adequacy Forecast [MAF], scenario for 2025, sever conditions Threshold: [hour] threshold for LOLE

Security of supply (SoS) –II   𝐑𝐄𝐒 𝒊𝒏𝒔𝒕𝒂𝒍𝒍𝒆𝒅𝟐𝟎𝟑𝟎−𝐑𝐄𝐒 𝐢𝐧𝐬𝐭𝐚𝐥𝐥𝐞𝐝 𝟐𝟎𝟐𝟎 𝐑𝐄𝐒 𝐢𝐧𝐬𝐭𝐚𝐥𝐥𝐞𝐝 𝟐𝟎𝟐𝟎 ∗𝟏𝟎𝟎>𝐗 [%] 𝑨𝑵𝑫/𝑶𝑹 𝐂𝐨𝐧𝐯𝐞𝐧𝐭𝐢𝐨𝐧𝐚𝐥 𝒊𝒏𝒔𝒕𝒂𝒍𝒍𝒆𝒅𝟐𝟎𝟑𝟎−𝐂𝐨𝐧𝐯𝐞𝐧𝐭𝐢𝐨𝐧𝐚𝐥 𝐢𝐧𝐬𝐭𝐚𝐥𝐥𝐞𝐝 𝟐𝟎𝟐𝟎 𝐂𝐨𝐧𝐯𝐞𝐧𝐭𝐢𝐨𝐧𝐚𝐥 𝐢𝐧𝐬𝐭𝐚𝐥𝐥𝐞𝐝 𝟐𝟎𝟐𝟎 ∗𝟏𝟎𝟎<−𝐗 % Threshold: [%] threshold for RES increase and conventional decrease above resp. below which the need becomes relevant for the region.

Security of supply (SoS) - III National ramping reserves requirements Ramping support to the synchronous area Threshold: For this indicator no threshold is necessary. The countries impacted by this need are directly extracted from the ENTSO-E TYNDP data.

Sustainability RES curtaiment 2030 GWh year RES production 2030 GWh year ∗100>X% Threshold: [%] threshold above which the need becomes relevant for the region.

Needs identification - next steps The methodology once prepared within the Cooperation Platform will be circulated to the RGs members for comments – expected mid-December Step 1 Draft methodology RGs written comments & discussion and threshold setting in the RGs meeting expected January 2019 Step 2 Comments & thresholds discussion Methodology update and implementation- expected in written during January and February Step 3 Methodology implementation Validation of the regional needs – expected March meeting Step 4 Final RG needs We are here √

Next steps

Assessment methodology for the benefits of electricity storage projects for the PCI process