Italy-Montenegro

The Italy-Montenegro interconnection project includes a new HVDC subsea cable between Villanova (Italy) and Lastva (Montenegro) and the DC converter stations.The HVDC link between Italy and Balkansis correlated with the Transbalkan Corridor (projects 146 and 227) and the Mid Continental East Corridor (project 144).

Classification Mid-term Project Boundary Italy - Montenegro PCI label 3.19.1 Promoted by CGES;TERNA

Investments GTC Evolution Investment Contribution Substation Substation Present Commissioning since Description Evolution Driver ID 1 2 Status Date TYNDP 2014 New 1200MW HVDC interconnection line Villanova Lastva Under Investment 70 between Italy and 100% 2019 Works in progress. Montenegro (IT) (ME) Construction on time

The commissioning date 400 kV AC substation for has been updated to be connection of the HVDC coherent with the new Montenegro - Italy and Lastva Under schedule of the activities 624 100% 2016 Rescheduled supply of coastal (ME) Construction also considering that the network in Montenegro construction phase of the substation started in mid 2014

Additional Information

PCI information: https://www.terna.it/it-it/sistemaelettrico/pianodisviluppodellarete/progettidiinteressecomune.aspx

Link to the last release of the Italian National Development Plan: http://www.terna.it/it-it/sistemaelettrico/pianodisviluppodellarete/pianidisviluppo.aspx Investment needs

The project will allow to have a link between the Italian peninsula and the South East Europe in order to help the most efficient use of generation capacity located in Eastern countries; to enable possible mutual support of Italian and Balkan power systems and to contribute the RES integration, as the solar generation in Italy, in the European interconnected system by improving cross border exchanges.

Project Cost Benefit Analysis

This project has been assessed by ENTSO-E in line with the Cost Benefit Analysis methodology, approved by the EC in February 2015.

The indicators B6/B7 reflect particular technical system aspects of projects based on a summation of qualitative performance indicators, in line with the CBA methodology; these cannot be used as a proxy for the security of supply indicator.

The assessment of losses variations induced by the projects improved in the TYNDP 2016 compared to the TYNDP 2014 with a comprehensive all year round computations on a wide-area model capturing all relevant flows.

The results must however be considered with caution and not totally reliable due to their very high sensitivity to assumptions regarding the detailed location of generation which are not secured. General CBA Indicators Delta GTC contribution (2020) [MW] ME-IT : 1200 IT - ME: 1200 Delta GTC contribution (2030) [MW] ME-IT : 1200 IT - ME: 1200 Capex Costs 2015 (m€) 1246 ±65 Source: Project Promoter

The estimated costs include:

Item 70 (New 1200MW HVDC interconnection line between Italy and Cost explanation Montenegro)

Item 624 (SS 400/110 kV Lastva)

S1 Negligible or less than 15km S2 Negligible or less than 15km B6 + B7 +

Scenario specific CBA indicators EP2020 Vision 1 Vision 2 Vision 3 Vision 4

B1 SoS (MWh/yr) N/A N/A N/A N/A N/A B2 SEW (MEuros/yr) 130 ±20 140 ±50 150 ±50 140 ±40 60 ±40 B3 RES integration (GWh/yr) 50 ±10 <10 <10 1650 ±400 350 ±190 B4 Losses (GWh/yr) 325 ±25 400 ±40 400 ±40 125 ±25 -50 ±25 B4 Losses (Meuros/yr) 14 ±1 21 ±3 18 ±2 7 ±2 -4 ±2 B5 CO2 Emissions (kT/year) 1400 ±170 2800 ±1600 1400 ±500 -600 ±500 -600 ±200

The project has been assessed according to the TOOT approach in both market and network analysis.

The project’s SEW accounts for saving in generation fuel and operating costs. The project could also enable savings avoiding investments in generation capacity, in particular for projects connecting electric peninsulas. The aspect has not been considered in the CBA methodology

Complementary information about the border on Vision 1 Vision 2 Vision 3 Vision 4 which the project is located Average marginal cost difference in the reference case 6.79 6.88 10.05 5.23 [€/MWh] Standard deviation marginal cost difference in the 10.48 9.48 23.07 16.51 reference case [€/MWh] Reduction of marginal cost difference due to all mid-term 16.41 18.77 5.08 3.79 and long-term projects [€/MWh]