ACER adopts a decision on the allocation of costs for the Gas Interconnection project between Poland and Lithuania

Today ACER has adopted its first CBCA decision on a PCI, the Gas interconnection Poland Lithuania (GIPL). Preliminarily, the Agency concludes that the overall economic benefits delivered by GIPL to the involved countries are twice as high as its costs. However by country, Poland is a net cost bearer while Lithuania, Latvia and Estonia are net benefiting countries. Therefore Poland will be compensated after the commissioning of the project with €85.8 million, of which €54.9 million will be paid by Lithuania, €29.4 million by Latvia and €1.5 million by Estonia. In order to expand Europe’s energy infrastructure to support the market integration and the penetration of renewable-based generation, the EU adopted last year a Regulation on guidelines for Trans-European Energy Infrastructure and identified a list of 248 key projects, the so-called Projects of Common Interest (PCIs). Among other tasks attributed to ACER in this domain, the Agency decides on Cross-Border Cost-Allocation (CBCA) for a given PCI when the National Energy Regulators (NRAs) in the concerned Member States are unable to reach an agreement.   ACER Director, Alberto Pototschnig, said: "Today ACER adopts its first Cross-Border Cost-Allocation decision and by doing so, facilitates the implementation of a key project to connect the Baltic States to the Union wholesale gas market”. The ACER decision defines the cross-border allocation of the costs among the Member States concerned (Poland, Lithuania, Latvia, and Estonia) and the way in which the costs of the investments are reflected in the tariffs in these countries. It includes compensation payments to Poland, in pursuit of a fair distribution of the costs and benefits of the project within its area of impact. The contributions will help bridging the financial gap of the project, along with possible funding from other sources. In order to issue the decision, ACER reviewed the identified impacts of the project (including on network tariffs), the cost-benefit analysis, and the regional and Union-wide effects of the project, and the results of its consultation with the Project Promoters, the NRAs and Transmission System Operators in the concerned Member States.   The decision has been sent to the parties involved and a non-confidential version will be published here in due course, upon becoming available.   Find out more in ACER press release.