Cost-Benefit Analysis
A harmonised EU-wide methodology for cost benefit analysis
The Regulation on guidelines for trans-European energy infrastructure ('TEN-E Regulation') foresees the development of a harmonised EU-wide methodology for cost benefit analysis (CBA) of projects included in the future Ten Year Network Development Plans (TYNDP), and for selecting the Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs) at European level.
The Regulation also foresees the use of this methodology for deciding on the cost allocation of cross-border infrastructure projects (CBCA). The CBA methodology is developed and improved over time by ENTSO-E and is approved by the European Commission.
Cost-Benefit Analysis
What's the role of ACER?
Whenever an updated CBA methodology is proposed by ENTSO-E, ACER provides an opinion on it to ENTSO-E.
Cost-Benefit Analysis
What does ACER say?
In its latest Opinion, ACER notes improvements, which include:
- the assessment of hybrid offshore projects (i.e. grid projects that serve a dual purpose, to connect offshore generation and interconnect two bidding zones);
- the definition of the reference grid; and
- the assessment of projects’ commissioning dates and the commissioning year of projects involving multiple investments.
However, important shortcomings are also identified, such as the need to extend the analysis of security of supply by considering future extreme weather events, to simplify the assessment of hybrid offshore projects, to foresee the identification of beneficiaries and cost bearers at national level, and the lack of concrete methodologies for the assessment of ancillary services’ benefits.
ACER urges ENTSO-E to adapt the draft CBA Guideline in line with the considerations included in its Opinion before submitting it to the European Commission for approval.