ACER published today its fourth consolidated annual report on the progress of Projects of Common Interest (PCIs) for trans-European Energy Infrastructure in electricity and gas. The report examines how the projects on the third EU list of PCIs (adopted in November 2017) evolved, covering the -month period from January 2017 to January 2018.
A total of 20 electricity and gas PCIs, out of those which were already on the previous PCI lists, advanced their status during the monitored period. At this time, the largest number of PCIs are in the stage of permitting. However, despite the advancement in status of a considerable number of projects, the commissioning dates for almost half of the PCIs have again been shifted by one or two years into the future compared to the dates foreseen in previously reported schedules, adding up to the accumulated delays that are repeatedly noted in the Agency’s annual PCI monitoring reports.
In gas, seven PCIs with unchanged scope registered a setback or “reverse progress”, i.e. they are currently in a less advanced status than before. The Agency finds that such a “reverse progress” of projects with unchanged scope is difficult to explain.
For 16 electricity and 10 gas PCIs, no works or activities were reported to have been carried out during 2017. The Agency strongly encourages Regional Groups thoroughly to examine, in the context of the up-coming PCI selection process, the merits of those PCI candidates for which no evidence of implementation efforts can be observed during the time of their presence in the PCI list.
The investment costs, as reported by the promoters, amount to €49.3 billion in 2018 values for electricity PCIs and €43.7 billion for gas PCIs. The cost tag is actually even higher, since the expected life-cycle costs of the projects also have to be considered. The total amount spent by 2017 since the establishment of the first PCI list in October 2013 was €5.8 billion for electricity PCIs and €9.65 billion for gas PCIs, representing only 11.8% of the overall PCIs budget for electricity and 22.1% for gas. This reveals that the pace to meet the indicated implementation schedules is insufficient, since around half of the overall projects’ budget should be incurred in the coming 4-5 years.
Given some significant discrepancies of project budgets, the Regional Groups should take action to ensure the incorporation of the PCI monitoring results into the next PCI selection in order to help ensure a more realistic cost estimate of future PCIs.
Regarding the forecasted benefits of the electricity projects, the overall cost-benefit ratio for transmission PCIs was found to exceed 1.5. Although this ratio has increased compared to 2017, this is seemingly due to the more optimistic Ten Year National Development Plan (TYNDP) scenarios used for the PCI selection 2017, and not due to an efficiency increase. Also, for 18 transmission PCIs it was found that the considered monetised benefits do not outweigh their total expected costs.
The assessment of the benefits of the gas PCIs faced serious difficulties and the Agency lacked comprehensive monetised benefits data for gas projects, as it was only reported for six of those. The Agency recommends ENTSOG to foresee in the CBA methodology ways and means that would allow project promoters to assess the value of the lifecycle costs and the benefits of the PCIs. The Agency recommends project promoters to evaluate the costs and the benefits of their projects from the inception of the project and to track the progress of the costs and benefits over the entire project cycle.
The report is available here.