13 february 2007 brussels
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Electricity Infrastructure Workshop Shaun Kent, co-chair Electricity Regional Initiative TF. 13 February 2007, Brussels. Overview – Cross border infrastructure. Cross border interconnection capacity needed e.g. : Develop effective internal market Security of Supply

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13 February 2007, Brussels

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13 february 2007 brussels

Electricity Infrastructure Workshop

Shaun Kent, co-chair Electricity Regional Initiative TF

13 February 2007, Brussels


Overview cross border infrastructure

Overview – Cross border infrastructure

  • Cross border interconnection capacity needed e.g. :

    • Develop effective internal market

    • Security of Supply

    • Broaden scope for achieving environmental targets

  • Emphasised since e.g. :

    • Barcelona Council 2002 10% target

    • Commission Strategy paper March 2003

    • ERGEG June 2005 consultation paper “The Creation of Regional Electricity Markets”

    • “Priority Interconnection Plan”

  • Hence ERGEG Consultation Paper October 2006:

    • Description and analysis of current methods / regimes

    • Particular focus on cross border elements

    • Two broad themes – Building and Construction Authorisations and Permissions, Regulatory Framework


Process for identification and provision

Process for identification and provision

  • Transmission project triggered by one or more :

    • Obligation on TSO to plan, build, operate according to operating and security standards

    • TSO seeking to improve market functioning

    • Private party profit opportunity – ‘Merchant’ line

    • Other – environmental, reaction to transmission user request

  • Infrastructure builder seeks necessary building and construction authorisations and permissions

  • Investment financed

    • TSO – ‘regulatory contract’

    • Private party – access fees / sale of long term right

  • Infrastructure built

  • Revenues collected


Ergeg survey of present practice

ERGEG survey of present practice

  • ERGEG survey of practice in 21 countries :

    • Regulatory framework, including operating and security standards

    • Planning

    • Operation and Maintenance

    • Financing

    • Building and Construction : Authorisation and Permissions

    • Technical, safety and quality standards

  • + ‘case studies’

  • ETSO input


Findings bcap

Findings - BCAP

  • Clear that BCAPs major issue

  • Average time to project realisation 5 – 7 years in many countries

  • Worst case scenarios up to 10 years

  • Numerous different setting and approval bodies

  • Range of criteria :

    • Economic / competition

    • Engineering

    • Environmental

    • Local

    • Health

    • International obligations

  • Compounded in cross border settings


Findings bcap1

Findings - BCAP

  • ETSO paper

    • Veto powers of the Regions

    • Effect of local authorities

    • Number of bodies in charge of permissions and/or Environment assessment

  • Laws / some country specifics :

    • Italy legislative initiative 2003

    • Germay Infrastructure Planning Acceleration Law 2006/07

    • UK – Energy review


Findings case studies

Findings - Case studies


Findings regulatory framework

Findings – Regulatory Framework

  • Provision of transmission infrastructure generally driven by national requirement on TSO to meet standards

  • National ‘regulatory contract’ generally exists

  • Few requirements in ‘cross border’ sense, hence :

    • Cost and risk allocation

    • Few obligations to plan / operate in cross border sense

  • ITC mechanism helps in principle

  • Points to need for cross border obligations and competences for (at least) regulators, TSOs


First recommendations bcap

First Recommendations - BCAP

  • Demands immediate attention

  • Naturally recognize need for proper expression of national and local concerns

  • ERGEG first observations :

    • Need for clear criteria, transparent guidelines, timelines and deadlines and appeals processes

    • National regulators / ERGEG can provide helpful independent view concerning market impact ?

    • Necessary and helpful to reconcile in some manner wider economic and security of supply against costs at local level


First recommendations regulatory framework

First Recommendations – Regulatory Framework

  • ERGEG broadly arguing for cross border approach, requiring :

    • Overarching operating and security standards

    • Obligation on TSOs to meet them

    • Joint role for TSOs, subject to regulatory oversight

    • Joint role for Regulators, to mandate TSO (cross border) cost recovery, enforce standards

  • Clarity regarding treatment of ‘Merchant’ lines, particularly ‘exemptions’ regime

  • Views invited


Next steps

Next steps

  • Consultation closed 1 December 2006

  • 13 Responses received

  • Broadly supportive of ERGEG initial recommendations concerning BCAPs

  • Broader range views concerning framework

  • Presently anticipate ERGEG Conclusions paper to be published March 2007


13 february 2007 brussels

Thank you

Shaun Kent

[email protected]


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