Cost-benefit analysis for European grid development projects of common interest

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Europe’s transmission operator association ENTSO-E has published a guideline and methodology for a harmonized European energy system-wide cost-benefit analysis for grid projects of common interest (PCI) and other development transmission projects.

The methodology, which covers network and market modelling, is based on extensive stakeholder consultation and input. It is now submitted to member states, the European Commission and ACER for opinion, prior to submission for final approval by the Commission.

The ENTSO-E CBA identifies two cost elements – total project expenditure and the environmental and social impacts – and seven benefit indicators – improved security of supply, socio-economic welfare, RES integration, losses in the transmission grid, CO2 emissions, technical resilience/system safety, and flexibility. However, as not all of these can be faithfully monetized, a combined cost-benefit and multi-criteria framework is proposed, allowing for the best available information on the full range of indicators required by the Regulation, while monetizing as far as possible.

Following final approval of the CBA methodology by the EC, ENTSO-E will apply it for the preparation of future releases of its Ten-Year Network Development Plans (TYNDP).

The first list of 248 energy infrastructure projects of common interest was released last month, including up to 140 projects in the field of electricity transmission and storage.

For more on the cost-benefit analysis methodology click HERE

The gas transmission operators’ association ENTSOG last week published the CBA methodology for gas infrastructure projects of common interest.

For an update on ENTSO-E’s activities to develop Europe’s transmission network see Smart Energy International Issue 3 2013 p 84.