Making TEN-E Regulation Compatible with the Green Deal: Eligibility, Selection, and Cost Allocation for PCIs

The European Green Deal calls for a revision of the TEN-Regulation (Regulation (EU) No 347/2013). In this Policy Paper, we assess the experience with the implementation of the TEN-E Regulation and how it can be revised to align it with the new full decarbonisation objective. The TEN-E Regulation defined several categories of projects that can obtain the PCI status: electricity, gas, smart grids,
oil, and CO2 networks. First, oil networks can be excluded, while the role of gas networks is more debatable. Gas pipelines need to support pursuit of the decarbonisation goal. Second, power-to-X technologies, electric vehicle charging stations and (smart) gas distribution grids can be added to the scope. The TEN-E Regulation attempted to make the selection of strategically important EU energy infrastructure more objective. We offer three recommendations in this regard. First, to make the TYDNP an integrated exercise over all energy vectors using an open source model. Second, to make the scenarios used in the TYNDPs subject to the approval of the European Commission. Third, to reallocate the approval decision for (harmonised) CBA methodologies from the European Commission to ACER. The TEN-E Regulation introduced a CBCA procedure. Also, CEF-E funding to support PCIs was made available. We offer two recommendations in this regard. First, CBCA decisions should become more ambitious than the minimum standard recommended by ACER in 2015. All jurisdictions involved should end up with similar benefit-to-cost ratios to increase commitment. Second, affordability should be the only award criterion that is linked to CEF-E funding. This award criterion shall complement two eligibility conditions: 1/ the project is strategic to reach the EU decarbonisation goal; and 2/ the project is regulated.