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Improving Network Access in Europe’s Periphery

This text discusses the challenges and priorities in improving network access in Europe's periphery, including the role of trans-European networks, financing options, EU legislation, and environmental considerations.

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Improving Network Access in Europe’s Periphery

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  1. Improving Network Access in Europe’s Periphery Panos Coroyannakis CPMR Energy Working Group “Energy for the Periphery” Pamplona 5-6 October 2006

  2. Some of our partners

  3. 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

  4. 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

  5. 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

  6. TEN Transmission priorities in NW

  7. TEN Transmission priorities in SW

  8. TEN Transmission priorities in SE

  9. 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

  10. 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

  11. Networks & Access: EU legislation EXISTING • Electricity Directive 96/92/EC • Electricity Directive 2003/54/EC • The Florence Process PROPOSED • Directive on Security of Electricity Supply and Infrastructure Investment

  12. 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).

  13. 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.

  14. 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.

  15. National framework • Generation investment (investors) • Infrastructure investment (TSO) • Transmission tariff (regulator) • Siting permit(s) – EIAs • for generation • for transmission

  16. 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

  17. 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

  18. 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

  19. Environmental considerations • Short term • Habitat Directive – Natura & other designations • Birds Directive – preservation of species • Long term • Global warming/climate change • Permanent damage?

  20. Conflicts - Balances • European vs National priority • Global vs local impact • Habitat vs climate change • Dominant position of TSO • The role of regulator is instrumental

  21. In Summary • TEN support limited • EU framework favourable (a necessary but not a sufficient condition) • National/regional TSO dominant • Role of regulator instrumental • Conflicting environmental objectives (short versus long term) a serious obstacle

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