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Remarks by Commissioner Simson on the Commission's proposal for a revised TEN-E Regulation at the European Parliament's ITRE Committee meeting

Met dank overgenomen van Europese Commissie (EC), gepubliceerd op dinsdag 15 december 2020.

Good Afternoon, Dear Christian,

Dear Vice-Chairs,

Dear Members of the ITRE Committee,

I am very glad to present today the proposal for a revision of the Regulation on the Trans European Network for Energy.

I promised one year ago, in front of your committee, that I will present a revised proposal by the end of 2020. Today, I honour this promise, at the end of an intense year of work for the EU energy policy.

Last week, the European Council has agreed to increase the EU emission reduction target at 55% by 2030. Today, I wish to highlight how our proposal for a new and more modern TEN-E framework will help us deliver this increased target and the Green Deal climate neutrality objective.

I am not presenting today just a simple recast of the existing 2013 Regulation. This new Regulation has the ambition to set out a forward-looking framework for delivering an infrastructure network fit for Europe's future energy system.

The current TEN-E framework has been very important for our Single energy market and Energy Union. It has helped to advance energy interconnections across the EU. It has made our energy markets more secure, better integrated and more competitive. And it has made our energy systems more sustainable by enabling the integration of growing shares of renewables.

But our policy objectives have changed with the Green Deal. And also, our energy landscape is changing fast. New trends like increased electrification, energy system integration, decarbonisation of gas and digitalisation are shaping future infrastructure needs.

From now to 2030, we estimate that investments in electricity grids will have to double, compared to the last decade, reaching more than 50 billion euro per year.

For offshore grids alone, we need more than 530 billion of investments by 2050. Our hydrogen strategy estimates that investments of around 65 billion euro would be needed by 2030.

Therefore, it is time to re-design our TEN-E Regulation so that it helps deliver the investments we need in future-proof cross-border infrastructure.

Allow me to outline the main changes we propose.

First, the Green Deal objectives clearly underpin all aspects of our proposal. We propose that our climate targets for 2030 and 2050 become the guiding principles for our future infrastructure framework.

We introduce a mandatory sustainability criterion for positive contribution to all candidate PCI projects under each infrastructure category.

Furthermore, PCI project promotors will have to report on each project's compliance with environmental legislation and with the do not harm principle.

Second, the proposal reviews and modernises the categories of infrastructure supported.

We place the focus on further facilitating the deployment of the electricity infrastructure. This means continued focus on the traditional electricity transmission and storage projects but also new provisions to boost offshore electricity and smart electricity grids.

In line with the Offshore Renewable Energy Strategy, the revised TEN-E regulation looks at the development of large-scale offshore renewable energy and the needed grids.

Offshore grids are identified as priority corridors with a view to facilitating a coordinated long-term integrated offshore and onshore grid planning.

Member States around the same sea basin will have to set out long-term commitments for offshore generation deployment and put together integrated offshore network development plans.

We also propose to streamline the permitting process for cross-border offshore transmission infrastructure by introducing a one-stop shop per sea basin.

By 2030, we expect our electricity use to rapidly increase and be largely based on renewables. This will make smart and digital grid management indispensable. We have thus adapted the criteria for selecting smart electricity grids to manage the needs of the future.

Without any doubt, one of the most debated issues in the context of this revision concerns gas. Today, natural gas covers about one fourth of our energy needs. While natural gas will play a role in the energy transition in the upcoming decade, as recognised by the European Council, the sector needs to start decarbonising.

The closer we move to our climate neutrality target, the more natural gas will be replaced by renewables and low-carbon gases, in particular biogas and hydrogen.

The TEN-E Regulation has delivered a secure and well-interconnected natural gas grid in Europe. Once the on-going projects are completed, all Member States will have access to a diversified range of supplies, including the LNG global market, ensuring secure and competitive gas supplies for consumers.

The Commission therefore no longer sees the need to continue policy support for cross-border natural gas projects. We therefore propose to exclude natural gas infrastructure from the future TEN-E policy.

Instead, the focus is on promoting the uptake of renewable and low-carbon gases and hydrogen in particular.

The Commission proposes to include dedicated cross-border hydrogen networks in the scope of the TEN-E Regulation, covering both repurposing of existing assets for exclusive hydrogen transport and building new assets for hydrogen. Let me be very clear here - these hydrogen pipelines will thereafter only carry hydrogen. No natural gas will flow in these pipelines.

Those provisions reflect the Commission's Hydrogen Strategy, and its emphasis on renewable hydrogen. However, the Strategy sees a role for low-carbon hydrogen to rapidly reduce CO2 emissions of existing hydrogen production when renewable hydrogen still scales up.

This preference for renewable hydrogen is reflected in the selection criteria. At the time of assessment, renewable hydrogen projects will receive extra points and thus, will rank higher in the PCI list.

To further boost the uptake of renewable hydrogen, we are proposing the creation of a new specific PCI category for electrolyser facilities of cross-border relevance. While such projects would have no access to funding from the Connecting Europe Facility, large size electrolysers above 100 Megawatt can benefit from coordinated planning and simplified permitting processes.

Finally, we propose a new PCI category for smart clean gas grids targeting the network upgrades necessary for the integration of renewable and low-carbon gases from the local distribution to transmission level.

Again, let me be very clear here, this category does not mean support to natural gas pipelines. It means allowing for reverse flow of clean gases from the distribution network to the transmission network.

Lastly, the regulation will continue support for the CO2 transport infrastructure. However, the new Regulation will no longer include oil pipelines.

The proposed revision also includes important changes in infrastructure planning and its governance. So far, we have treated infrastructure in gas and in electricity as separate and we have entrusted the sector associations, ENTSO-E and ENTSO-G with a key role in defining future infrastructure needs.

In line with our energy system integration strategy, we propose an updated, cross-sectoral and forward-looking infrastructure planning.

First, the new TEN-E will create an infrastructure planning model based on infrastructure needs and scenarios that are fully in line with the latest Union decarbonisation targets and take due consideration of the energy efficiency first principle.

Therefore, we propose to have the Ten-Year-National-Development Plans and the infrastructure gap analysis prepared in a cross-sectoral and holistic manner through strong collaboration between the electricity and gas ENTSOs.

Second, to respond to the need for balanced governance set-up for the grid planning, the revised TEN-E adjusts the roles of the key actors involved in the development of the Ten-Year-National-Development Plans and the joint cross-sector scenarios.

First, we have proposed an increased stakeholder participation. Second, we will reinforce the role of ACER to ensure that these exercises fully reflect the agreed policy objectives and targets and third, we strengthen the Commission's oversight.

Under the new rules, the Commission is empowered to scrutinise and approve major steps in the planning process, in particular regarding scenarios development that define the infrastructure needs.

Stakeholders representing all parts of society - industry, NGOs, but also DSOs representatives - will now be involved in all steps of the planning process: scenario development, the identification of system needs and the projects assessment.

I believe this new approach is balanced, can enhance trust in the process and address any possible conflicts of interest.

Finally, the revised TEN-E Regulation has new provisions on the permitting process to help accelerate the implementation of necessary PCIs.

The existing TEN-E policy has been successful in shortening the permit granting processes already. The average time for project completion has gone down from 10 years to about 4 years today. Yet, evidence shows that some projects continue to be delayed by administrative procedures.

The new TEN-E now clarifies the permitting regimes applicable to all PCIs, where available, treats all appeals as urgent procedures under national law and avoids duplications between national and EU obligations for public consultations.

At the same time, it requires project promoters to increase transparency in communication about the project.

Finally, the new TEN-E extends its scope to include Projects of mutual interest between a Member State and a third country, when a regulatory alignment exists, to support the external dimension of our Green Deal, in particular towards our neighbourhood.

These projects will need to contribute to the Union's overall energy and climate objectives in terms of security of supply and decarbonisation.

These are the elements I wanted to set out.

Through these changes, I trust the revised TEN-E framework can enable the grid investments needed for a green recovery and for delivering our climate ambitions under the European Green Deal.

I am looking forward to hearing your views and answering your questions.


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