Regulation on Cost Benefit Analysis (CBA) methodology for the Italian transmission network development plan

Year

2017

Organisation

Italian Regulatory Authority for Energy and Water (AEEGSI)

Description

AEEGSI conducted a series of public consultations and workshops leading to an improved CBA for new grid infrastructure projects. It became a national regulation and was already applied to Italy’s Network Development Plan (NDP) in 2017.  

 

Highlights:

  • CBA methodology with 7 monetised benefit categories (as opposed to ENTSO-E’s last CBA of 2 monetised benefits)
  • Application of improved CBA methodology on the 2017 national NDP
  • Alignment with EU level work of ENTSO-E, ACER, EC and other stakeholders of ENTSO-E’s Ten-Year Network Development Plan (TYNDP)  

 

Scope:

While currently the new CBA is applied in Italy, the intention is to discuss its key elements with other TSOs and National Regulatory Authorities (NRAs) in order to foster CBA improvements across Europe.  

 

Main information:

NDPs contribute significantly to the efficient and effective development of new grid infrastructure. They have become a useful tool to ensure a transparent process and give an overview of expected future scenarios, grid investment needs and their impact on society (routing, costs and benefits). Within NDPs, transmission grid investments are commonly selected based on a techno-economic analysis, including assessing their costs and benefits, and comparing them to alternative solutions. These CBA methodologies are increasingly crucial to better identify high-value projects – with regard to both TSO-internal decisions and the NRA’s evaluation.  

AEEGSI facilitated the participation of Italian stakeholders and governed a process that led to the further improvement of current CBA approaches. Through the addition of more monetised benefit categories, further clarity on new grid infrastructure needs can be achieved. Positive impacts and benefits for citizens are easily visible and comparable. They can be better communicated and improve stakeholders’ understanding of the value of proposed infrastructure projects.  

 

Additional information:

AEEGSI coordinated a stakeholder process, which included Terna, RSE (Italian energy research centre), and energy sector stakeholders (utilities, distribution system operators, and their respective associations). The process also took practices of and discussions with ENTSO-E, ACER, other NRAs and the EC into due account.