Projects of Common Interest 2018 - 2019

1. Projects of Common Interest 2018 - 2019 Meeting of TEN-E RG BEMIP and RG NSI WEST Meeting of TEN-E NSI EAST and SGC Regional Group on gas 5-6 February 2019 DG ENER, Networks & Regional Initiatives https://webcast.ec.europa.eu/pci-gas-meeting-regional-group-nsi-west-bemip-05-02-19 https://webcast.ec.europa.eu/pci-gas-meeting-regional-group-nsi-east-sgc-06-02-19

2. Agenda • Welcome and general introduction • Member States’ short presentations on their specific country needs [the MSs who had no intervention in the previous meeting] • Identification of system needs per region –Methodology presentation Lunch break • Discussion on the methodology and on setting significant thresholds for the needs evaluation criteria • Conclusions • Next steps

3. Member States’ short presentations on specific country needs [the MSs who had no intervention in the previous meeting]

4. Needs in the PCI process

5. Why are we doing this? In its motion for a resolution B8-0136/2018 on the Union list of projects of common interest (2017/2990(DEA)), the European Parliament called for a “process of identifying and selecting Projects of Common Interest” that is “transparent as possible, based on independent data”. The Court of Auditors asked for “a comprehensive assessment of EU- level infrastructure needs is necessary to inform the decisions about development of the internal energy market and security of energy supply and other EU policy commitments for which the energy sector plays an important role, especially those relating to climate action.” This view has also been expressed by different stakeholders involved in the previous PCI process.

6. TYNDP is a solid first step in a process that gives us an order of magnitude of the system needs. Therefore the needs identification exercise builds on the TYNDP findings and delivers the necessary input for rendering the Union list of Projects of Common Interest fit for purpose. • PCIs are of “Common Interest” and reflects specific objectives of the Energy Union with defined targets and timeframe. • Therefore we need to apply a critical assessment in order to select only those projects that are key to achieving Energy Union’s objectives and require Union’s commitment and support.

7. A methodology for the regional needs identification

8. Principles

9. 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

10. Indicators

11. Indicators • Wholesale market price difference this need can be identified e.g. by looking at the available [2017-2018] average yearly gas wholesale prices in each of the EU member states. • The threshold in this case could be: - X [%] increase compared to the lowest average annual wholesale price in EU member states or - upper X [%] of the wholesale price.

12. Indicators • The curtailed demand [CD] is the demand that cannot be satisfied in a given area due to: • climatic stress conditions • supply stress conditionsdue to specific route disruptions (Ukraine transit, Belarus transit, Baltic States and Finland imports, Algeria route). • Threshold: • Set which disruption route is relevant for the region (e.g. Ukraine transit, Belarus transit, Baltic States and Finland imports, Algeria route) • Set a [%] threshold of curtailed demand [CD] above which the region has security of supply problems.

13. Indicators The Single Largest Infrastructure Disruption measures the [%] of demand in a specific country that risks being curtailed in case of the disruption of a country single largest infrastructure. • Threshold: • Set a [%] threshold of curtailed demand [CD] above which the region has security of supply problems

14. Indicators Supply source access [SSA]: The Supply Source Access indicator (SSA) measures the number of supply sources an area can access. The ability of an area to access a given source is measured through a supply source diversification metric. SSA provides the aggregate view across all supply sources. Threshold: • Set a [%] minimum threshold above which a country can be considered having access to a source and • Set a [number] minimum threshold (in terms of number of supply sources) to which a country needs to have access to.

15. Indicators Supply source dependence [SSD] identifies countries showing a strong dependence to a specific supply source [RU, NO and LNG] and allows identifying cases where this dependence is related to an infrastructure bottleneck (physical dependence). Threshold: • set a [%] threshold for SSD below which the need becomes relevant for the region.

16. Indicators • Increase market diversification [MaD]: • This need is quantified through the LNG and Interconnection Capacity Diversification indicator [LICD]. It measures the diversification of paths that a gas can flow through and how balanced the different entries are. This is necessary to ensure competition and arbitrage between countries. Threshold: • set a [number] threshold for LICD above which the need becomes relevant for the region.

17. Indicators Other elementswhich may signal infrastructure gap are: • Physical isolation • Access to a new [currently not accessed by European Union members] source Threshold: • No threshold is necessary for these needs, they are self-evident

18. Needs identification - next steps We are here √

19. Next steps