Interim Report
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INTERIM REPORT for the project Technical support to the Energy Community and its Secretariat to assess the candidate Projects of Energy Community Interest (PECI) and candidate Projects for Mutual Interest (PMI) in electricity, gas and oil infrastructure, and in smart grids development, in line with the EU Regulation 347/2013 as adapted for the Energy Community 14.04.2016. CONTACT: Borbála Takácsné Tóth REKK Phone: +36 1 482 7074 E-mail: [email protected] AUTHORS: Authors: Regional Centre for Energy Policy Research (REKK) Péter Kaderják, Péter Kotek, András Mezősi, László Szabó, Borbála Takácsné Tóth DNV GL Dr. Daniel Grote, Martin Paletar MANU: Team: Acad. Gligor Kanevce, Acad. Jordan Pop-Jordanov, Acad. Ljupco Kocarev, Prof. Dr. Natasa Markovska, Prof. Dr. Mirko Todorovski, MSc. Eng Aleksandar Dedinec, MSc. Eng. Aleksandra Dedinec, MSc. Eng. Verica Taseska Commissioned by: Energy Community Secretariat Am Hof 4, 5th floor A-1010 Vienna, Austria TABLE OF CONTENTS 1. Introduction ........................................................................................................................ 8 1.1. Study Background ....................................................................................................... 9 1.2. Main steps of project assessment ................................................................................. 9 1.3. Outputs and Deliverables ........................................................................................... 10 2. Overview of Submitted Projects and their Eligibility ...................................................... 11 2.1. General Overview of Submitted Projects .................................................................. 11 2.2. Applied Approach for Eligibility Check and Data Verification ................................ 13 2.2.1. Eligibility Check ................................................................................................ 14 2.2.2. Data Verification ................................................................................................ 16 2.3. Electricity Infrastructure Projects .............................................................................. 17 2.3.1. Eligibility of Electricity Infrastructure Projects ................................................. 17 2.3.2. Data Verification for Electricity Infrastructure Projects .................................... 18 2.3.3. Project Clustering of Electricity Infrastructure Projects .................................... 22 2.4. Natural Gas Infrastructure Projects ........................................................................... 22 2.4.1. Eligibility of Natural Gas Projects ..................................................................... 22 2.4.2. Data Verification for Natural Gas Infrastructure Projects.................................. 23 2.4.3. Project Clustering of Natural Gas Infrastructure Projects .................................. 28 2.5. Smart Grid Projects ................................................................................................... 28 3.1. Oil Projects ................................................................................................................ 29 3.2. List of Eligible Projects as they will be modelled ..................................................... 30 4. Project Assessment Methodology .................................................................................... 33 4.1. General Approach ...................................................................................................... 33 4.2. Assessment Criteria ................................................................................................... 34 4.3. Economic Cost-Benefit Analysis ............................................................................... 38 4.3.1. Cost-Benefit Analysis for Electricity Transmission Projects ............................. 42 4.3.2. Cost-Benefit Analysis for Gas Projects .............................................................. 45 4.4. Multi-criteria assessment ........................................................................................... 48 4.4.1. Assessment Indicators and Scoring .................................................................... 49 4.4.2. Determination of Weights .................................................................................. 54 4.4.3. Calculation of Total Scores and Final Ranking ................................................. 55 4.5. Robustness check and sensitivity .............................................................................. 57 4.6. Methodology for the evaluation of projects in the oil infrastructure ......................... 57 5. Next steps ......................................................................................................................... 58 Annex 1: Submitted projects .................................................................................................... 59 Annex 2: Description of models ............................................................................................... 63 European Electricity Market Model ..................................................................................... 63 Electricity Network Model ................................................................................................... 65 European Gas Market Model ............................................................................................... 69 Annex 3: Input data used for the Energy Community modelling ............................................ 71 European Electricity Market Model ..................................................................................... 71 European Gas Market Model ............................................................................................... 73 LIST OF FIGURES Figure 1. Workflow of the project ............................................................................................ 10 Figure 2. Location of submitted electricity projects ................................................................ 12 Figure 3. Location of submitted gas projects ........................................................................... 12 Figure 4. Location of the submitted oil project ........................................................................ 13 Figure 5. Pre-assessment phase of project evaluation .............................................................. 14 Figure 6. General steps performed to verify project data ......................................................... 17 Figure 7. Approved project assessment criteria ....................................................................... 35 Figure 8. NPV calculations within the CBA framework ......................................................... 40 Figure 9. PINT and TOOT approach ....................................................................................... 42 Figure 10. Calculation method of project related aggregate economic welfare change .......... 47 Figure 11. Overview on multi-criteria assessment methodology for electricity ...................... 56 Figure 12. Overview on multi-criteria assessment methodology for natural gas ..................... 56 Figure 13. Modelled countries in the EEMM .......................................................................... 63 LIST OF TABLES Table 1. Overview of the submitted projects ........................................................................... 11 Table 2. Eligibility check for submitted electricity projects .................................................... 18 Table 3. Indicators for Unit Investment Costs for overhead lines (total cost per line length, €/Km) ....................................................................................................................................... 20 Table 4. Indicators for Unit Investment Costs for Substations by ratings (€/MVA) ............... 20 Table 5. Verification of project data for submitted electricity projects (strikethrough projects are not eligible) ......................................................................................................................... 21 Table 6. Eligibility check for submitted natural gas projects ................................................... 23 Table 7. Verification of project data for submitted natural gas projects .................................. 25 Table 8. 2015 indexed unit investment cost of transmission pipelines commissioned in 2014 (average values) ........................................................................................................................ 26 Table 9. Indication of mutual interest (as of 25.04.2016) ........................................................ 27 Table 10. Eligibility criteria assessed for submitted projects under the category of Smart Grids .................................................................................................................................................. 29 Table 11. Eligibility check for submitted oil project ............................................................... 30 Table 12. List of eligible electricity projects to be modelled and evaluated (strikethrough projects are not eligible) ........................................................................................................... 31 Table 13. List of eligible gas projects to be modelled and evaluated ...................................... 32 Table 14. Scores assigned to different project development phases .......................................