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EU Commission provides guidance on collaborative investment frameworks for offshore energy projects

The European Commission published a guidance document outlining ways in which investment frameworks for cross-border offshore grid and renewable projects can be organised most efficiently.

It will support EU countries, national regulatory authorities and system operators in their discussions on cost-sharing agreements for achieving EU countries’ regional offshore renewable targets.

The guidelines are foreseen under the TEN-E Regulation and also follow on from the EU Action Plan for Grids last November in which the Commission stressed the importance of collaborative investment frameworks to realise the EU’s political ambitions on offshore renewables, signalling the need for guidance to support the process.

“Europe needs offshore renewables and grids. They will lower our dependence on foreign gas, increase our security of supply thanks to hybrid interconnectors, support our economic competitiveness and be a pillar of the energy transition. Making this happen requires developing collaborative investment frameworks between Member States, ensuring an equitable distribution of costs,” said Commissioner Kadri Simson, unveiling the Guidance at the 10th edition of the Energy Infrastructure Forum in Copenhagen.

Taking into consideration the offshore network development needs, the document recommends that EU countries and regulatory authorities discuss principles for collaboration – including on costs – already at the stage of identifying the network needs in order to accelerate the emergence of new cross-border projects. They also call on ENTSO-E to further develop effective modelling tools to better account for EU countries’ needs for information relevant to kickstart such exchanges.

The Commission Guidance offers certain parameters to ensure cost-benefit analyses, cost sharing and allocation activities are based on fair principles and sound technical calculations. This should be done first at the level of sea basin recalling that ENTSO-E will now work on the application of the Guidance for their Offshore Network Development Plans – for publication in 1 year’s time. And then it is up to EU countries and National Regulatory Authorities, supported by TSOs, to take decisions on final cost allocations at project level in order to secure the necessary investment.

The Offshore Renewable Energy Strategy and the EU Action Plan for Grids made clear the importance of offshore renewable generation potential and the need for cross-border hybrid interconnector projects as well as radials. They also highlighted particularities of these projects, such as the extension of the benefits they bring beyond the countries hosting them, providing benefits also for the wider neighbouring region.

The strategy and the guidance stated that offshore electricity networks will be composed of radial and hybrid transmission infrastructure projects, which will subsequently evolve into meshed grids. Hybrid interconnector projects that interconnect countries while connecting offshore renewables present particularities that should be reflected in cost-sharing discussions. Increasing electricity transport infrastructure from coastal regions towards demand centres will also be necessary to unblock a larger number of offshore wind projects. The regional distribution of benefits and interdependency between infrastructure projects pose challenges in agreeing on the appropriate sharing of costs across borders.

The TEN-E Regulation requires the Commission to develop guidance for cost-benefit analysis and cost sharing for the deployment of the sea basin offshore network development plans as will be carried out by ENTSO-E to the 5 priority offshore grid corridors as specified in the TEN-E Regulation: North Seas offshore grids corridor, Baltic Energy Market Interconnection Plan offshore grids, South and West offshore grids, South and East offshore grids and Atlantic offshore grids.

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