ENTSO-E Postion: Transmission Infrastructure Investments are Critical to Achieving 2030 EU Energy Objectives

(PresseBox) ( Brussels, )
ENTSO-E has published its position on the EU's policy framework for climate and energy in the period from 2020 to 2030. ENTSO-E welcomes the debate to define a stable, clear and coherent 2030 energy policy framework. Early agreement on the 2030 framework will facilitate Europe's transmission system operators' (TSOs) planning, investment and operation of the power grid.

Carbon reduction and renewable energy source integration objectives will only be achieved if the right infrastructure is in place on time. In this context, ENTSO-E agrees with the importance the European Council places on infrastructure development for 2030 (21 March 2104) and with the conclusions of the informal Energy Council in Athens (16 May 2014).

Setting Infrastructure Targets

When setting interconnection objectives, policy makers need to ensure that interconnection targets are adequate to the needs of the pan-European system, and to the regional needs and regional system characteristics.

Driving the implementation of a single minimum percentage target (such as the 10% 2002 target for 2020) can be a suitable way forward for weakly interconnected regions. However, for most of Europe, differentiated targets based on analyses of costs, benefits, trading flows and other criteria are much more meaningful, due to the significant differences in geography and power system characteristics.

The European tool where such analyses are performed is ENTSO-E's Ten-Year Network Development Plan (TYNDP). Underpinned by system adequacy analyses, the biennial TYNDP applies continuously improved methodologies to assess investments against cost efficiency and overall contribution to Europe's energy and climate policy objectives.

The Council's direction provides additional impetus for ENTSO-E to develop the best possible ten-year plans. ENTSO-E's 2014 TYNDP is planned for public consultation in July 2014 and can already support the Commission's work towards interconnection objectives.

Meeting Infrastructure Challenges: Permitting and Financing of Investments

Interconnection objectives will only be achieved if the required infrastructure is also built. Today, TSOs still struggle to build already agreed infrastructure projects due to failures in permitting and public acceptance. For this reason, the EC and Member States should redouble their efforts to develop appropriate solutions to support the realisation of prioritised grid investments and to further address the challenge of permitting constraints.

The recent informal Energy Council specifically addressed the challenge of financing the required infrastructure projects. ENTSO-E shares this concern, and wishes to emphasise that TSOs are facing significant capital requirements.

The projects identified through ENTSO-E's TYNDPs (over 100 million euros) only represent a subset of the entire investment challenge for TSOs, as existing infrastructure ages and is replaced. To ensure these investments can be financed, national regulatory frameworks must be stable and sufficiently consistent to attract investors and improve TSOs' ability to raise funds on international markets.

Network Codes and Market Development

The EU's 2030 energy and climate policy framework also relies on the smooth adoption of the network codes. Today, the delays to the codes pushes back the date for Internal Energy Market operations, and the common rules for connection and for enhancing the security and resilience of the network.

Related Links

ENTSO-E's full position on the EU's policy framework for climate and energy in the period from 2020 to 2030
EU 2030 Policy Framework for Climate and Energy
Council Conclusions of 20-21 March 2014
European Parliament Report on a 2030 Framework
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