ACER calls for key improvements in ENTSO-E’s draft electricity 10-year network development plan (TYNDP) for more efficient network planning

Electricity pylon infrastructure

ACER calls for key improvements in ENTSO-E’s draft electricity 10-year network development plan (TYNDP) for more efficient network planning

What is it about?

Europe requires significant investment in energy infrastructure that is cost-efficient to successfully achieve the energy transition. Every two years, the European grid operators submit their Ten-Year Network Development Plan (or TYNDP) to ACER. Today, ACER identifies, in its two opinions, improvements and shortcomings of the 2022 draft electricity TYNDP developed by the European Network of Transmission System Operators for Electricity (ENTSO-E):

What is the TYNDP?

The main objectives of the TYNDP are to:

  • Identify investment gaps (including cross border capacities);
  • Contribute to a sufficient and non-discriminatory level of cross-border interconnections, effective competition and efficient functioning of the market;
  • Ensure a greater transparency of the European electricity transmission network.

The TYNDP also provides essential and comprehensive information for the selection of projects of common interest (PCIs).

What are ACER’s main findings?

In ACER’s opinion, the draft electricity TYNDP 2022 does not sufficiently contribute to the efficient and secure functioning of the electricity market.

While the 2022 draft electricity TYNDP shows certain improvements…

ACER acknowledges the resource intensiveness and complexity of the TYNDP process and welcomes a number of improvements in the 2022 draft electricity TYNDP, for instance in the:

  • Inclusion Guidelines;
  • Consultation on the Implementation Guidelines;
  • Needs identification; and
  • Increased transparency of the cost benefit analysis (CBA) assessment.

…ACER also finds shortcomings

ACER finds that the plan does not sufficiently contribute to the efficient and secure functioning of the electricity market, especially compared to previous TYNDPs, mainly due to five shortcomings:

  • Insufficient and untimely consultations on the main methodological elements of the TYNDP package (i.e. the scenarios methodology, the needs methodology and the implementation of the CBA methodology).
  • Delays in the draft TYNDP delivery, resulting in outdated data and delays in the PCI selection processes.
  • Insufficient scope of the CBA analysis, focusing on the 2030 study year, and mainly on one scenario.  
  • The starting grid (used as a starting point for the calculation of infrastructure needs) and the reference grids (used as counterfactual in the TYNDP CBA for the calculation of the project benefits) are not fully in line with the criteria set by ENTSO-E.
  • Inconsistent data regarding the transfer capabilities.

In addition, ACER was not able to assess whether the system’s resilience to climate change impacts is addressed in the draft electricity TYNDP 2022.

What does ACER recommend for future electricity TYNDPs?

ACER proposes several recommendations to ENTSO-E to serve European consumers and Europe’s decarbonisation and sector integration ambitions.

For the 2022 final Electricity TYNDP, ACER recommends ENTSO-E to:

  • Make all relevant inputs accessible in a clear and straightforward format as part of the 2022 final electricity TYNDP publication.
  • Provide transparency on how the investment costs for the needs identification were derived by distinguishing between internal reinforcements and overall project costs.
  • Publish for each cross-zonal boundary and each flow direction the transfer capacities of the current grid, starting grid (for the purpose of needs identification) and of the reference grid for 2030 and for 2040.
  • Use the 10,000 EUR/MWh Value of Lost Load (VoLL) where no specific data is available.
  • Explain how an assessment of resilience, if any, was carried out in the 2022 final electricity TYNDP (potentially including improvements for future TYNDPs).
  • Review and eliminate the project-specific inconsistencies reported in ACER Opinion on electricity projects and consider the differences identified by national regulators between the NDPs and the 2022 draft electricity TYNDP.

For the 2024 electricity TYNDP and beyond, ACER recommends ENTSO-E to, inter alia:

  • Restructure the TYNDP development process in order to complete it by December of the TYNDP year (considering also ACER’s opinion).
  • Conduct a substantial consultation of the important methodological elements and parameters considered in the various deliverables of the TYNDP early enough in the process to have the capability to consider stakeholders’ comments.
  • Calculate the benefits of projects according to all the joint scenarios developed by ENTSOs, and for all relevant time horizons to ensure adequate consideration of uncertainty.
  • Base the modelling of the grid on an appropriate starting grid (for the needs exercise) and reference grids (for the CBA assessments) by including only the projects which strictly comply with the rules set in the respective implementation guidelines.
  • Calculate the additional transfer capabilities of each project (and not leave this task to the promoters themselves), perform the calculations with more granularity (e.g. calculate at least seasonal NTCs) and improve their transparency.
  • Consider the impact of the 70% interconnection capacity availability targets where relevant in the modelling of the power system for the development of the TYNDP.
  • Enhance the consistency between the NDPs and the EU TYNDP by implementing the measures recommended in the ACER Opinion on electricity projects.

Access the ACER opinions:

ACER Opinion 03/2023 on the methodological aspects of the ENTSO-E TYNDP 2022.

ACER Opinion 04/2023 on electricity projects in the draft ENTSO-E TYNDP 2022 and in the National Development Plans (NDPs).