Projects of Common Interest 2018 - 2019

1. Projects of Common Interest 2018 - 2019 Meeting of TEN-E NSI EAST 6 March 2019 DG ENER, Networks & Regional Initiatives https://webcast.ec.europa.eu/pci-regional-group-electricity-meeting-06-03-19

2. Agenda • 1. Welcome and general introduction • 2. Identification of system needs per region methodology • 3. Regional needs identification and validation • 4. First insight in the PCI assessment methodology • 5.Conclusions • 6. Next steps

3. Identification of system needs per region methodology [Presentation on the draft final methodology for the identification of system needs that can be addressed through infrastructure in the context of the identification of PCI projects for the 4th PCI-list: purpose, use of indicators and proposed thresholds for indicators]

4. Needs identification process We are here Written comment received from: AT [TSO, MS]; DE [TSOs]; DK [MS]; ES [MS, TSO]; FR [NRA,MS, TSO]; IT [NRA,TSO]; LV [MS]; NO [MS]; NGO [RGI]; non-TSO Promoters [Aquind, Iland, Greenconnector]; PL [MS]; PT [TSO]; SI [TSO]; SK [TSO]; UK [TSO, MS]

5. Principle

6. Indicators framing Meaningful: An indicator/threshold that results in all countries or no country being impacted is not well defined Fit for purpose: Within the PCI process indicators and thresholds are used to identify critical European needs/problems Use of indicators and thresholds Consistent: Indicators must be based on consistently defined and calculated data available for all relevant countries

7. Indicators

8. Market integration Where: country A and B are interconnected countries Need identification steps: Identify all the relevant borders and compare the cost spreads at the borders between those countries in 2030 For each of the TEN-E region separately- select the countries in the upper 30 percentile [threshold] of the price difference. Analyse the results in corroboration with the Member States input and the overall regional discussion.

9. Security of supply (SoS) - Adequacy Measured by: Loss of load expectation [LOLE] Source of data: ENTSO-E Mid-term Adequacy Forecast [MAF], scenario for 2025, sever conditions Need identification steps: Extract the LOLE data, from ENTSO-E 2018 Mid-term adequacy Forecast report, for each of the EU Member States. Apply to the collected LOLE data, a threshold of 3h. This threshold is common for all the TEN-E priority corridors. Analyse the results in corroboration with the Member States input and the overall regional discussion.

10. Security of supply (SoS) – Significant changes in generation portfolio RES capacity increase Conventional capacity decrease Where: RES variable = wind, solar, tidal and run of river and Conventional = coal, lignite, nuclear, biomass, gas and oil Need identification steps: Compute the formulas above for each of the EU Member State. Apply the threshold of 50% [for RES increase] and -30% [decrease of conventional generation]. This threshold is common for all the TEN-E regional groups. Analyse the results in corroboration with the Member States input and the overall regional discussion.

11. Security of supply (SoS) -Residual Load Ramp Need identification steps: Derive for each of the EU Member State the ramp curves. Identify the affected countries. For this indicator no threshold is necessary. Analyse the results in corroboration with the Member States input and the overall regional discussion.

12. Sustainability – RES curtailment Need identification steps: Compute the formulas above for each of the EU Member State. Apply the threshold of 2% to identify the countries which are most impacted by the RES curtailment. This threshold is common for all the TEN-E regional groups. Analyse the results in corroboration with the Member States input and the overall regional discussion.

13. Baltic synchronization • Estonia, Latvia and Lithuania are the only Member States within continental Europe part the European Union whose electricity networks are still not operated in a synchronous mode within the continental European system. • This need is representative only for the Regional Group BEMIP and will only be used for this region.

14. Regional needs NSI EASTidentification and validation • [In this part of the meeting we will: • identify which market, security of supply or sustainability problems/bottlenecks/needs are having a significant impact on the countries in the TEN-E priority corridor • consider which of the needs identified in the previous step are to be included in the agreed list of needs for the TEN-E priority corridor (based on impact and relevance for each region) • validate the methodology for the identification of system needs that can be addressed through infrastructure • agree the list of system needs that can be addressed by infrastructure in the TEN-E priority corridor.]

15. Italyelectricitysystemneeds • Significant price difference, esp. atNorth Italian border • SOS changes in generation portfolio: coalphase-out 2035 • RESintegration: a challenge duetogrowing RES production • Significant price difference, esp. in relationto AT and SI • SOSadequacy • SOS ramps Outcome of the needs methodology NeedsidentifiedbyMember States

16. Germany – needs • Price difference • SOS – significant changes in generation portfolio DG only • SOS – ramps • RES curtailments • Price difference • SOS – significant changes in generation portfolio • RES curtailments • + Internal bottlenecks Outcome of the needs methodology Member State identified need

17. Poland needs • Changes in generation portfolio (decommissioning thermal power plants, diversification in generation with a higher RES penetration) • Adequacy, confirmed by the Mid-Term Adequacy Forecast 2018 • Challenge in meeting flexibility needs • Loop flows • Price differentials • - SOS – significant changes in generation portfolio • - SOS: Adequacy • - SOS - Residual load ramps • Market integration Outcomes of the needs methodology Needs identified by the Member State

18. CzechRepublicelectricitysystemneeds • SOS ramps: challenge in meeting flexibility needs • SOSchanges in generation portfolio: Decommissioning of old hard coal power plants • SOS flexibility: Increase system flexibility and stability • RES integration incl.from distribution system • Internal bottleneckscausingcongestion andloop flows Outcome of the needs methodology NeedsidentifiedbyMember States

19. Slovakiaelectricitysystemneeds • Differencesin wholesale prices (congestions with HU) • SOS adequacy: needsduetochanges in generation • SOS changes in generation portfolio: changesin generation mix (futurenuclear plants) • Integration of distributed intermittent RES production into distribution system • Internal bottleneckscausingcongestion andloop flows • SOS changes in generation portfolio • SOS ramps: challenge in meeting flexibility needs NeedsidentifiedbyMember States Outcome of the needs methodology

20. Austriaelectricitysystemneeds • SOS-changes in generation portfolio- RES integration (100% RSS by 2030) • SOS flexibility: need forstorage • Internalbottlenecks • Price difference • SOS ramps: challenge in meeting flexibility needs Outcome of the needs methodology NeedsidentifiedbyMember States

21. Bulgariaelectricitysystemneeds • Price difference • SOS ramps: challenge in meeting flexibility needs • Electricity wholesale prices difference at borders • Rehabilitation and modernization of the internal network • New sources of flexibility • Integration of increasing share of installed RES Needs identified by Member States Outcome of the needs methodology

22. Croatiaelectricitysystemneeds • SOS changes in generation portfolio • Market integration Outcome of the needs methodology Needs identified by Member States

23. Cypruselectricitysystemneeds • Price difference • SOS adequacy • End energy isolation • Integration of increasing share of installed RES Outcome of the needs methodology Needs identified by Member States

24. Greeceelectricitysystemneeds • Price difference • SoS adequacy • SOS ramps: challenge in meeting flexibility needs • System flexibility and adequacy improvement (due to RES increase and fossil fuel plants decommissioning) • Interconnection of Non-interconnected islands • Sufficient storage to avoid curtailment Needs identified by Member States Outcome of the needs methodology

25. Hungaryelectricitysystemneeds • High price differentials • SOS significant changes in generation portfolio • SOS ramps • Price differentials with neighbouring countries • Integration of increasing share of installed RES • RES curtailment • System flexibility issues Outcome of the needs methodology Needs identified by Member States

26. Romaniaelectricitysystemneeds • System adequacy improvement (due to RES and lignite plants decommissioning) • Price differentials with neighbouring countries • Integration of increasing share of installed RES • System flexibility issues Outcome of the needs methodology Needs identified by Member States • High price differentials • SOS significant changes in generation portfolio • SOS ramps • RES curtailment

27. Sloveniaelectricitysystemneeds • High price differentials • Price differentials with neighbouring countries • Integration of increasing share of installed RES • System flexibility issues • reinforcement of internal grid (energy transits are expected to double by2030) Needs identified by Member States Outcome of the needs methodology

28. List of regional needs - NSI East

29. First insight in the PCI assessment methodology [Introductory presentation and discussion on the next step in the PCI process: methodology for the assessment of candidate PCI projects; update on the ongoing study on storage benefits (Navigant consultancy)]

30. Principles

31. PCI technical requirements -I

32. PCI technical requirements -II

33. Criteria for candidate PCIs – art. 4

34. Criteria for candidate PCIs – art. 4

35. Prioritization

36. PCIs assessment steps 02 01 Analyse the candidate PCIs Develop Methodology 03 Prioritize the candidate PCIs

37. Methodology development • end March’ 19: RGs members will receive the draft methodology for comments • End April/early May’ 19: considering the Rgs comments the EC [within the Cooperation Platform frame] will update the methodology and which will be circulated to the RGs -> final PCI assessment methodology

38. Candidate projects -scrutiny • 11-12 April meeting: • Project promoters will present their projects and justify how their project satisfies the Regional needs, explain the project status and any delays in the project implementation • NRAs will present their point of view on all the candidate PCI project which are to be implemented in their respective MS. • Stakeholders: outcomes of the public consultation + direct participation in the meeting • EC[INEA]: view on the projects situation (progress, delays)

39. Reminder: Overview of roles & responsibilities

40. Candidate projects - prioritization • May’ 19 – application of the PCI assessment methodology. The resulting projects ranking will delivered only to the RGs members [in line with the TEN-E Regulation ] • after mid-May – RGs meetings to validate the draft regional lists

41. Assessment methodology for the benefits of electricity storage projects for the PCI process

42. Next steps

43. Overall process – Next steps 11-12 April