Towards a decarbonised and climate-resilient EU energy infrastructure: recommendations on an energy system-wide cost-benefit analysis

Energy supply and use represent 77 % of the EU’s total greenhouse gas emissions. It is therefore critical that the EU’s energy network development supports the transition towards renewable-based and efficient energy systems while avoiding further lock-ins into fossil infrastructure. It should also safeguard the resilience of the EU’s energy infrastructure to the unavoidable impacts of climate change.

Regulation (EU) 2022/869 of the European Parliament and of the Council of 30 May 2022 on Trans-European Networks for Energy (TEN-E) invites the European Scientific Advisory Board on Climate Change to provide an advice on methodologies for a harmonised energy system-wide cost-benefit analysis at EU level. This second set of recommendations follows on from initial Advisory Board recommendations on scenario guidelines published in November 2022.

Key recommendations

The Advisory Board found that the ten-year network development plan (TYNDP) process does not sufficiently address the transformational changes and rapid reductions in greenhouse gas emissions necessary to achieve the EU’s climate neutrality and climate resilience targets by 2050. This observation pertains to the entire TYNDP process, in particular the scenario development, system needs assessment and cost-benefit analysis (CBA), and the subsequent selection of Projects of Common Interest (PCI) and Projects of Mutual Interest (PMI).

To address this weakness, the Advisory Board recommends that priority be systematically given to full decarbonisation, energy efficiency, and infrastructure resilience, in particular through rapid and wide-spread electrification combined with demand-side flexibility. This requires the European Networks of Transmission System Operators for Electricity and for Gas (ENTSO-E and ENTSO-G), the European Commission, and the European Union Agency for the Cooperation of Energy Regulators (ACER) to enhance:

1. integration of their work within and across TYNDP cycles,
2. consistency between the CBA methodologies,
3. transparency of tools and processes,
4. respective capacities and capabilities.

As regards CBA methodologies for energy infrastructure projects developed under article 11 of the TEN-E regulation, the Advisory Board recommends that these:

1. adequately account for all relevant greenhouse gas emissions,
2. assess climate adaptation costs, benefits, and measures,
3. apply appropriate scenarios and sensitivities,
4. ensure granular net-present value assessment,
5. take into account project implementation feasibility and social aspects,
6. capture expected benefits of renewable energy integration, and
7. adequately assess multi-sectorial dynamics to identify the most beneficial solutions.

The Advisory Board advises ENTSO-E, ENTSO-G, ACER, and the European Commission to follow immediately these recommendations in their work relevant to the TYNDP and PCI/PMI processes, including the cost-benefit analysis (CBA) methodology, to help the EU deliver on its climate neutrality target by 2050.

The Advisory Board’s recommendations and accompanying letter to ENTSO-E, ENTSO-G, ACER, and the European Commission can be found here.

The European Scientific Advisory Board on Climate Change

The European Scientific Advisory Board on Climate Change is an independent body providing the EU with scientific knowledge, expertise and advice relating to climate change. The Advisory Board evaluates policies and identifies actions and opportunities to successfully achieve the EU’s climate targets. It was established in 2021 by the European Climate Law and consists of 15 independent senior scientific experts covering a broad range of relevant disciplines.

Further information on the Advisory Board, its composition and its 2023 work programme is available here.

Contact: secretariat.advisoryboard@esabcc.europa.eu