Improving Network Access in Europe’s Periphery

Panos Coroyannakis

CPMR Energy Working Group

“Energy for the Periphery”

Pamplona 5-6 October 2006

Some of our partners

Access to the network

The European Dimension– Trans European Networks

The National/regional Dimension– EU legislation– National framework– The role of TSO– The role of the regulator

Trans European Networks-TEN

Serving European Energy Markets Connecting Renewable Energy

Sources– EU needs renewables to meet its

Kyoto obligations. But RES are found in remote areas and need to be connected to the grid not only at national, but at EU level.

Reinforcing Security of Supply Integrating the new member states

TEN conditions

(1) Transnational(2) Strengthen European grid(s)

– Improve available transfer capacity– Improve network stability– Improve competition

(3) Best value for money– Finite amount of € available– Priority list

TEN Transmission priorities in NW

TEN Transmission priorities in SW

TEN Transmission priorities in SE

Financing TEN

2007-2013~ €28 billion needed for gas &

electricity infrastructure projects~ 2/3 of it within EU EU support from TEN budget: small

1996-2001: 123 million € for 53 projects ~25 million € annual TEN-energy budget~2 million € average TEN support, mostly

for feasibility studies

Other sources of financing TEN

Structural funds:

1996-2001: 2 billion € for GR, P, Es, Ir

EIB: 1996-2001 3 billion € in loans

The rest has to come from

transmission tariffs

Networks & Access: EU legislation

EXISTING Electricity Directive 96/92/EC Electricity Directive 2003/54/EC The Florence ProcessPROPOSED Directive on Security of Electricity

Supply and Infrastructure Investment

Directive 2003/54/EC

Preamble para(22) ……… Member States should have the possibility, in the interests of environmental protection and the promotion of infant new technologies, of tendering for new capacity on the basis of published criteria. New capacity includes renewables and combined heat and power (CHP).

Directive 2003/54/EC

Art. 3 (7). Member States shall implement appropriate measures to achieve the objectives of social and economic cohesion, environmental protection, ………. Such measures may include, in particular, the provision of adequate economic incentives, using, where appropriate, all existing national and Community tools, for the maintenance and construction of the necessary network infrastructure, including interconnection capacity.

EU priorities in RES & RUE

From 6% to 12% of total energy mix by 2010

21% of RES in electricity generation by 2010

1% annual improvement in EE to 2015 Kyoto Protocol commitments Buildings directive Biofuels directive etc.

National framework

Generation investment (investors) Infrastructure investment (TSO) Transmission tariff (regulator) Siting permit(s) – EIAs

– for generation– for transmission

The transmission issue

EC advocates a stronger “interventionist” approach in dealing with transmission infrastructure investments

Sea route or land route, major challenges:– Environmental

– Financial/investment

– Tariff/regulatory

The role of TSO

Transmission system planning Investments in transmission infrastructure as

part of their Regulated Asset Base (RAB) approved by the regulator

Transmission system operation Transmission tariffs approved by the

regulator

The role of the regulator

Approves and encourages transmission investments as part of RAB

Influences transmission tariffs philosophy and approves methodology & T-tariffs

Approves feed-in tariffs for RES Plays a major role in bringing RES to major

electricity markets

Environmental considerations

Short term– Habitat Directive – Natura & other designations– Birds Directive – preservation of species

Long term– Global warming/climate change– Permanent damage?

Conflicts - Balances

European vs National priority

Global vs local impact

Habitat vs climate change

Dominant position of TSO

The role of regulator is instrumental

In Summary

TEN support limitedEU framework favourable (a necessary but not a sufficient condition)National/regional TSO dominantRole of regulator instrumentalConflicting environmental objectives

(short versus long term) a serious obstacle