2.2ACER Opinion and Recommendations

The full ACER Opinion on the draft ­TYNDP 2020 can be found on the ACER website3, the following section will provide responses in the same order as the Conclusions of the Opinion.

2.2.1 Recognition of improvements

The ACER Opinion included the following recognition of improvements achieved in the process, methodology and outcome of the draft ­TYNDP 2020 in comparison to ­TYNDP 2018:

  • A better presentation of the ­TYNDP via a dedicated website and visualization tools which allow for interactive access to the main ­TYNDP features.
  • The implementation of a common ENTSO-E and ­ENTSOG process for the development of scenarios for the ­TYNDP 2020 and the preparation of a stand- alone “scenario report” following the practice initiated for the ­TYNDP 2018.
  • The provision of a window of opportunity for NRAs to check input data for the submitted ­TYNDP candidate projects at an early stage, in August 2019.
  • The publication of the PS-CBA Project Fiches, and the provision in spreadsheet format of the projects’ results and the results related to CO₂ and other externalities’ savings.
  • The increased focus of the ­TYNDP on Energy Transition aspects and better alignment with the Green Deal decarbonisation goals.
  • The ongoing efforts to implement a better approach to measuring the contribution of gas infrastructure projects to sustainability.
  • The introduction of the “existing infrastructure level”, which reflects today’s gas infrastructure, in order to assess possible infrastructure gaps.
  • The introduction of a mandatory requirement for promoters to submit information related to projects triggered by the incremental capacity process.

2.2.2 Short-term Recommendations

ACER Opinion provides for a number of short-term recommendations listed in table 2.1, in the order they appear in ACER ­opinion. The ­TYNDP topic to which these recommendations refer to are also indicated in the table 2.1.

Below, handling of ACER recommendations is indicated per related ­TYNDP topic.

ACER short-term recommendationsRelated ­TYNDP topicParagraph in which the recommendation is handled
The comments and remarks of NRAs on the ­TYNDP 2020 projects, as contained in Annex I to this Opinion.Additional section in the final ­TYNDP2.2.2.3
The publication of a summary document indicating how feedback from the public consultation and from ACER’s Opinion are taken into account for the final ­TYNDP 2020
and will be considered in future ­TYNDPs.
Additional section in the final ­TYNDPFeedback chapter
Including the Economic Performance Indicators in the Project Specific CBA assessments results.Project assessment2.2.2.2
Classifying and labelling the ET projects (In addition to the detailed categories for ET projects available in the draft ­TYNDP 2020) into two main categories, i. e. project pertaining to the supply/gas production side projects (in principle competitive activities) and network related investments to enable injection of decarbonised and low carbon gases in the network, providing further sub-labels where appropriate.Project assessment2.2.2.2
Verifying and publishing all projects included in the draft ­TYNDP which have been commissioned as of end of 2020.Infrastructure projects2.2.2.1 + Annex A

Table 2.1: Short-term ACER recommendations.

2.2.2.1 Infrastructure projects

Projects commissioned since draft ­TYNDP

Data collection for projects is a long and very important process for ­ENTSOG as it is a fundamental prerequisite to the modelling and simulations. The input data are the basis for the network assessment and data are collected early in the process of ­TYNDP.

For ­TYNDP 2020, the data collection process ended in Q3 2019.

The existing infrastructure level, representing the minimum infrastructure development used in ­TYNDP 2020 system needs assessment includes all existing infrastructures as of 1st January 2019 as well as submitted projects having their commissioning date not later than 31 December 2019.

By the date of publication of the ­TYNDP, a number of projects submitted for the assessment were actually commissioned.

Updated list of all ­TYNDP 2020 projects commissioned before the publication of the Final ­TYNDP 2020 has been included in an updated version of ­TYNDP 2020 Annex A.2 (Project Tables) availablein the download section.

2.2.2.2 Project assessment

CBA indicators

In line with the European Commission Opinion on ­ENTSOG 2nd CBA Methodology, the assessment carried out by ­ENTSOG for ­TYNDP 2020 and previous editions, is a Multi-Criteria Assessment that ­includes qualitative, quantitative, and monetised benefits.

Despite the supposed simplicity in comparing monetary benefits against costs, monetisation is not a trivial exercise and not all benefits can be monetised. Monetary benefits are uncertain and hard to capture while costs represent more certain information.

Additionally, monetization depends on assumptions and inputs as well as market behaviour.

For those reasons, the publication of the Economic Performance Indicators (EPI) might lead to wrong interpretation of results, encouraging the readers of the Project Fiche to give more emphasis only to monetised benefits while disregarding other benefits (e. g. supply dependence reduction).

However, for projects applying to the PCI selection process through ­ENTSOG Project Portal, and for which ­ENTSOG as run PS-CBAs, project promoters, when submitting their projects to the PCI selection process, have to accept that all the PS-CBAs related information (including monetary benefits) can be shared with the European Commission and ACER, upon their request.

Classifying and labelling the ETR projects

­ENTSOG ­TYNDP 2020 ETR projects have been divided in 9 categories (please refer to Annex A column “Project Type”). When these categories were not fully applicable, additional information was provided in the column “Project Description”.

The categories displayed in ­TYNDP 2020 Annex A reflect the information collected during ­TYNDP 2020 project collection. An ex-post categorisation in the Final ­TYNDP 2020 version may result in conflict with the currently available information.

ENTSOG has already started working on a more ­detailed and refined project categorisation to be ­applied to ­TYNDP 2022 projects.

2.2.2.3 NRA Comments on the ­TYNDP 2020 projects

Already during ­TYNDP 2020 Project Collection process, ACER and NRAs were provided with the project data collected for their review and feedback. Promoters were informed on the informal preliminary comments provided by ACER and NRAs and could amend the information provided during the project data collection if deemed necessary. Therefore, Draft ­TYNDP 2020 Annex A already includes the NRAs feedback whenever considered by promoters.

Other information, such as the maturity of a project, is derived by ­ENTSOG based on the information submitted by the project promoters and after having applied specific rules as defined in ­ENTSOG CBA Methodology and in ­TYNDP 2020 Annex D.1 (Methodology).

As part of its Opinion, ACER offered national regulatory authorities (NRAs) to provide comments on the projects submitted to ­TYNDP 2020. These comments are available as an annex to ACER Opinion4 and provide an additional information on projects, in addition to the promoter information collected as part of ­TYNDP Annex A.

The comments from the NRAs in particular reflect recent project information and, in many cases, own NRAs views on projects benefits. In some cases, NRAs identified incorrect data.

Some project data have been updated after ­TYNDP 2020 project collection, and on some occasion reflected in national NDPs. Such updates are not included in the Final ­TYNDP 2020, to ensure consistency between the project information used to perform the ­TYNDP assessment, and the project information published. In this context, NRAs input on recent project information represents a valuable additional information for stakeholders not to be lost even if not included in the Final version of ­TYNDP 2020.

In cases where NRAs refer to the actual merit of the project, it must be noted that ­TYNDP is based on transparent and consulted rules (including the approved 2nd CBA Methodology) for project inclusion and assessment, ensuring a non-discriminatory process and prevention of conflict of interest.

2.2.3 Medium-term and long-term Recommendations

Table 2.2 illustrates the medium and long-term ACER Opinion recommendation and the ­TYNDP (or ­ENTSOG) processes where are or can be tackled.

The below section addressed the medium-term and long-term recommendations of ACER Opinion.

ACER long-term recommendations (TYNDP20)Related ­TYNDP / ENTSOG process
Implementing ACER’s recommendations regarding scenarios, as provided in its Opinion No 6 / 2020.TYNDP Scenario Report
Planning of future ­TYNDP processesTYNDP process
Increasing stakeholders’ engagement in the processTYNDP process
Improve the CBA MethodologyCBA methodology
CBA project assessment for all projectsTYNDP / Project assessment
Encourage promoters to provide more information on costsTYNDP process
Consider the level of utilisation, and contractual and physical congestion for assessing the need for additional infrastructureTYNDP / System assessment
Consistent and interlinked electricity and gas networks and market modelTYNDP Scenario Report / System assessment
Identification of the location for the power-to-gas installations (together with ­ENTSO-E)TYNDP Scenario Report
Develop metrics to identify unrealistic projects/projects with low market interest.TYNDP / Practical Implementation Document
Assessment of necessary adaptations of gas infrastructure to inject RES and decarbonised gases, and related costsTYNDP / Project assessment
Develop ways for analysing and addressing methane emissionsTYNDP / Project assessment

Table 2.2: Medium and long-term ACER recommendations.

2.2.3.1 Scenarios, timing, and consultation of next ­TYNDP

­TYNDP Scenarios

ENTSOG, together with ­ENTSO-E, has already implemented a number of recommendations of the opinion 6/2020 in the ­TYNDP 2020 scenario building process and will consider further recommendations in the Scenario report itself.

Improving the planning of the future ­TYNDP processes and stakeholders’ engagement

ACER recommends to better plan the future ­TYNDP processes in order to make sure that the official submission of the draft ­TYNDP for the Agency’s opinion contains also the information regarding the consultation process, as required by Articles 9(2) and 10 of Regulation 715/2009.

­ENTSOG is constantly working on improving the ­TYNDP process and its synchronisation with the PCI selection process. At the same time, it is important to underline that the implementation in each new ­TYNDP of new elements from stakeholders (including ACER’s) have an inevitable impact on the timeline extension and its uncertainty. Several interactions with stakeholders and their delays in response have an impact on the timeline but the priority for ­ENTSOG is to ensure that all stakeholders have an opportunity to contribute and provide their feedback.

For ­TYNDP 2022, and in line with ACER recommendation, ­ENTSOG intends to plan for the process in line with Articles 9(2) and 10 of Regulation 715/2009, and to publish the draft ­TYNDP mid-2022.

2.2.3.2 CBA Methodology and sustainability assessment

­ENTSOG is constantly working in improving indicators in view of each ­TYNDP application of its CBA Methodology.

Improving the implementation of the CBA 2.0 methodology

Compared to ­TYNDP 2018, ­ENTSOG has further worked on the sustainability indicators by including a new allocation method (in line with European Commission study “Measuring the contribution of gas infrastructure projects to sustainability as defined in the ­TEN-E Regulation5” performed by Artelys and Trinomics) as well as by including the consideration of other externalities than CO₂ emissions.

Requiring CBA projects assessments for all the ­TYNDP projects instead of PCI applicants only

In line with Regulation (EU) 347/2013 ­ENTSOG runs project-specific cost-benefit analysis (PS-CBA) only for projects having declared their intention to apply during ­TYNDP project collection. This does not replace the actual PCI application organised by the European Commission and under its responsibility. While Regulation (EU) 347/2013 states that only projects “having reached a sufficient degree of maturity” should receive a PS-CBA, ­ENTSOG, assessing any project indicating its intention to apply for the following PCI selection process independently on their “maturity” level already assesses a broader scope of projects and it ensures a fair treatment to any of the PCI candidate. Such approach is also welcomed by the European Commission in its Opinion on the 2nd CBA Methodology.

Providing project cost information irrespective of their intention to apply for PCI status

ENTSOG support and encourages maximum level of transparency from promoters. At the same time ­ENTSOG must respect the request for confidentiality for projects not applying for PCI selection process. Additionally, there is no problem of same footing comparability since those projects do not receive a project-specific cost-benefit analysis.

Analysing the level of utilisation and contractual and physical congestion of interconnection points, as an essential parameter to be taken into account when analysing the need for additional gas infrastructure, in order to avoid the risk of stranded or inefficient investments.

From ­TYNDP 2018, ­ENTSOG already considers long-term capacity booking contracts. These contracts, if signed before the time-horizon considered for the assessment, basically represent a given for the user, and therefore sunk cost that are not expected to impact on its short-term use of the capacity. Their inclusion, and until their expiration, allows to take into account in the ­TYNDP and infrastructure gaps identification the expected minimum level of utilisation of existing infrastructures. In the long-term, however, with these contracts expiring, gas could flow through any possible route.

Consideration of the long-term capacity booking contracts and minimum supply potentials was continued for ­TYNDP 2020, to reproduce the most realistic use of the infrastructure.

With regards to long-term supply contracts, those are already included, at European level, in the “minimum” defined for each supply source potential. The different supply sources minimums are based on public available literature, exchanges between ­ENTSOG and the main suppliers as well as on the stakeholder’s feedback received during dedicated workshops.

Consideration of physical congestion is already embedded in the way the many ­TYNDP 2020 indicators are calculated: a physical bottleneck will identify an infrastructure need. Flows resulting from ­ENTSOG simulations are one of the possible solutions that the simulation tool might provide. The level of utilisation of existing infrastructure and submitted projects might differ from one simulation to another, depending on the underlying assumptions. To assess situations where existing infrastructure is prioritised, ­ENTSOG runs sensitivity on the value of the tariffs assumed for the projects. In the same way, the sustainability indicator computed for ­TYNDP 2020 considers, in the allocation of benefits to projects, that existing infrastructure are always prioritised.

Please consult Annex D.1 for more information.

2.2.3.3 Interlinked assessment with electricity network planning

Implementing improvements leading to the development of a consistent and interlinked electricity and gas networks and market model

After the publication of the focus study on the interlinkages between gas and electricity infrastructure and projects, ­ENTSOG, with ­ENTSO-E, have further improved their joint scenario building exercise and have worked on a pilot project to test and develop a screening methodology to identify future projects requiring a joint system assessment both on the gas and electricity side. This document is available on ­ENTSOG and ENTSO-E websites.

Identification, jointly with the electricity ­TYNDP, of the suitable locations for power-to-gas installations in the system needs analysis.

In the scenario building process, the identification of suitable locations for power-to-gas installations is based on available RES, demand for hydrogen and transport capacity (electricity lines and hydrogen grid). The model will, depending on the beforementioned parameters, then decide where to place the power-to-gas installations in the most cost-efficient way. The optimal distribution of power-to-gas installation depends on the scenarios and aims at limiting the need for additional infrastructure in the subsequent assessment. Indeed, power-to-gas installations are not covered by the current ­­­TEN-E regulation and therefore, are not part of the system need analysis but part of the ­ENTSOG and ­ENTSO-E scenario building process.

2.2.3.4 Align the number of conventional gas projects with needs and market interest

Include in Final ­TYNDP a section on preliminary information on the status of the incremental ­capacity process initiated in 2019 (non-binding phase)

As part of each ­TYNDP edition, ­ENTSOG includes in the Infrastructure Report a section on the incremental capacity process. ­ENTSOG is currently preparing the data collection for the 2019 Incremental Capacity process monitoring report which will provide a full overview and the results of the 2019 incremental cycle. After the annual yearly auctions on 5 July 2021 the economic tests can be performed which will determine if any incremental capacity projects will be initiated as a result of the 2019 cycle.

Develop metrics to identify unrealistic projects/projects with low market interest.

TYNDP 2018 and ­TYNDP 2020 have collected information on projects triggered by market demand indication as part of the incremental capacity process. ­TYNDP 2018 and ­TYNDP 2020 already include a section dedicated to the incremental capacity process. Such section provides information on the projects triggered by this process and on the results of the final binding demand indications. For more details, please consult section 7 of ­TYNDP 2020 Infrastructure Report). Based on the status of the incremental capacity process at the time of the (draft) ­TYNDP publication, ­TYNDPs could include projects triggered by indication of non-binding demand indications.

Projects related to the incremental capacity process represent only a limited number of the overall submitted projects. ­TYNDP scope is in fact to collect project initiatives that could address not only market needs but also security of supply and sustainability needs. This process has been proven effective in the past, with the current gas infrastructure and the gas projects expected to be commissioned no later than in year 2025 already achieving most of the aims of the European internal energy market. With some exceptions in specific areas (for more details please consult ­ENTSOG ­TYNDP 2020 System Assessment Report).

While, for future ­TYNDP editions, the introduction of additional criteria in the project guidelines can help in further filtering submitted projects, the exclusion by default of projects not supported by market needs could have a negative impact on the development of gas projects still needed to mitigate the remaining European infrastructure gaps.

2.2.3.5 Network adaptations for decarbonised gases, methane emissions

Considering focusing more on the necessary adaptations of the gas infrastructure to enable the injection of higher shares of renewable and de-carbonised gases

For the first time, ­ENTSOG introduced the Energy Transition (ETR) project category in ­TYNDP 2020. This category represented ca. 25 % of the total number of projects and was welcomed by stakeholders confirming the relevance of the choice made by ­ENTSOG on its own initiative.

In the next ­TYNDP editions ­ENTSOG will work to further refine the list and the categories of ­TYNDP 2020 ETR projects, included for the first time in its ­TYNDP 2020 edition.

ENTSOG will also adapt the ­TYNDP assessment approach to new project categories, with particular focus on hydrogen-related projects.