S.3.1. The Energy Infrastructure Regulation

D.3.1. The Energy Infrastructure Regulation

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ENTSO-E releases future systems need analysis, a critical piece for the TYNDP 2018

Monday, February 5, 2018

In its scrutiny, ENTSO-E determines that there will be a need for increased transmission capacity both to make the system work in 2040 and to meet the EU’s climate targets

ENTSO-E released the first pan-European analysis of the future system investment needs.  The analysis consists of six Regional Investment Plans and a Report called “Europe Power System 2040: completing the map”.  The Report and the six Regional Plans, that represent the second stage of the TYNDP 2018, offer an assessment of pan-European and regional network needs and consider where grid projects are needed.

The Report and Plans also present how to complement the power system maps by 2040 in the most efficient way. Concretely, they assess where transmission capacity should increase, and by how much, by taking into account policy and environmental objectives. They also “shed some light on increasing challenges in terms of real-time system management in the 2040 electricity landscape”.

ENTSO-E concludes a.o. that there increased transmission capacity will be needed both for the system to work in 2040 and to meet the EU’s climate targets. The interconnection projects currently under development, as identified in the TYNDP 2016, will need to be complemented by new entries responding to the system’s needs in future editions of the TYNDP. To deliver the new necessary levels of interconnections, a high level of internal reinforcements of the grid will also be necessary for most EU countries.

According to ENTSO-E, a lack of new investments by 2040 would hinder the development of the integrated energy market and would lead to a lack of competitiveness. In turn, this would increase prices on electricity markets leading to higher bills for consumers. By 2040, the “No Grid” extra bill (€43 billion a year in the average case) would be largely above the expected cost of the construction of the new grid (€150 billion).

The Report also states that, by 2040, the operation of the grid in real time will become more difficult due to the large flows of electricity travelling across Europe, and to the replacement of large generators by non-controllable, distributed RES. System operators will need new solutions to ensure frequency and voltage stability, leading to new responsibilities for market participants. According to ENTSO-E, these challenges “not only require technological solutions, but also a higher level of regulatory and policy coordination, as well as innovation in market design to increase flexibility in the system”.

The Report and Plans will be subject to Public Consultation until 28 February 2018, while the final 2018 TYNDP list is scheduled to be released later this year.