Improving Network Access in Europes Periphery

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Improving Network Access in Europes Periphery

Panos Coroyannakis
CPMR Energy Working Group Energy for the
Periphery Pamplona 5-6 October 2006
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Some of our partners
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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

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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

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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

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TEN Transmission priorities in NW
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TEN Transmission priorities in SW
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TEN Transmission priorities in SE
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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

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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

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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

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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).

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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.

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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.

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National framework

• Generation investment (investors)
• Infrastructure investment (TSO)
• Transmission tariff (regulator)
• Siting permit(s) EIAs
• for generation
• for transmission

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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

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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

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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

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Environmental considerations

• Short term
• Habitat Directive Natura other designations
• Birds Directive preservation of species
• Long term
• Global warming/climate change
• Permanent damage?

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Conflicts - Balances

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

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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