Vehicles powered by natural
gas emit 20–30% less carbon
dioxide than vehicles powered
by petrol.
COST-BENEFIT ANALYSIS METHODOLOGY
Regulation (EC) 347 / 2013 came into effect in May 2013.
This legislation will expand the role of TYNDP so that it effec-
tively serves as a gateway to the selection process for for Pro-
jects of Common Interest (PCI). It also requires that ENTSOG
develops a Cost-Benefit Analysis (CBA) methodology to be
used at different stages of the PCI process.
This regulation presents a challenging task to ENTSOG with the
requirement of developing – in just six months time – a detailed
CBA methodology to be used by the association and project
promoters alike. The role of these CBAs is to measure the im-
pact of infrastructure projects on the basis of security of supply,
competition, sustainability and market integration. At the same
time, the methodology should identify the impacted countries
and compare the project impact with its cost.
This 6-month deadline is equivalent to one-third of the frame-
work guidelines and network code process for a similar deliver-
able. ENTSOG has therefore anticipated this task as much as
possible by analysing existing practices and consulting with
stakeholders before the legislation comes into effect.
Since May 2013, ENTSOG has organised two public consulta-
tions, two Stakeholder Joint Working Sessions, many bilateral
meetings with institutions such as the European Investment
Bank (EIB), and a joint workshop with ENTSO-E targeting the
Member States and National Regulatory Authorities (NRAs).
Along this process, stakeholders have backed the following
main elements proposed by ENTSOG:
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Dual structure methodology:
–– Energy System-Wide (ESW) CBA to be carried out by
ENTSOG as part of TYNDP and serving as the basis for
individual project assessments
–– Project-Specific CBAs to be carried out by each project
promoter in order to capture the marginal impact of his
project and to compare it to the associated cost
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Combined approach capturing project impact through:
–– Quantitative analysis based on indicators reflecting
criteria set by regulators
–– Monetization of main project benefits
–– Qualitative analysis commenting and developing the
previous steps
As the Regulation stipulates, the methodology developed by
ENTSOG aims to inform the selection of PCIs by Regional
Groups and to support the later stages of the process such as
cross-border cost allocation. It is not intended as a means of
ranking projects and particular attention is given to identifying
how sensitive the results are to inputs.
Moreover, the availability and the meaningfulness
of the data are among the main challenges for
2014. ENTSOG has drawn attention to this point
so that stakeholders and institutions can help with
these matters. The unavailability of certain data
could force ENTSOG to downscale the methodol-
ogy in order to ensure its applicability.
ENTSOG published the methodologies for ESW
CBA and project-specific CBA on 15 November,
one day ahead of the regulatory deadline. Prior to
adaptation by ENTSOG, these methodologies
must be assessed by ACER, the European Com-
mission and Member States by May 2014.
Image courtesy of Gasum
ENTSOG Annual Report 2013 |
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