Revised TEN-E Regulation - future financing of European energy infrastructure

Background

The primary driver behind the revision of the TEN-E Regulation is to align the regulation with the new European Green Deal. The European Green Deal aims to transform the EU into a fair and prosperous society with a modern, resource-efficient and competitive economy. The TEN-E Regulation is seen as a central instrument for the further development of an internal energy market and its revision is necessary to aid in achieving the objectives of the European Green Deal. The objectives of the TEN-E Regulation remain largely valid, yet the current framework in the TEN-E Regulation does not fully reflect the expected changes to the energy system as a result of new political contexts and, in particular, the updated green targets for 2030 and carbon-neutrality target for 2050.

The current type and scale of the cross-border infrastructure developments that the current TEN-E Regulation has brought about does not cover all of the infrastructure categories necessary for the energy transition, nor does it sufficiently reflect current, and future, technological developments. The TEN-E Regulation in its current form is not fit for purpose for achieving carbon-neutrality. The current framework is too inflexible to adapt to changing EU policies, such as the European Green Deal, and there is a need to ensure that the new decarbonisation and carbon-neutrality targets will be met.

Projects of common interest (PCIs) are a key feature of the TEN-E Regulation and continue to be in the revised version. PCIs are key cross-border infrastructure projects that connect energy systems across the EU. PCIs must adhere to a set of criteria that includes: having a significant impact on energy markets; boosting competition on energy markets; ensuring energy security in the EU and contributing to the EU’s climate goals. The selection criteria for PCIs have been updated in the revised TEN-E Regulation (see below).

To enable the TEN-E Regulation to be suitable for the energy transition, the revised regulation will aim at:

• “enabling the identification of the cross-border projects and investments across the EU and with its neighbouring countries that are necessary for the energy transition and achievement of the climate targets;
• improving infrastructure planning for energy system integration and offshore grids;
• shortening permitting procedures for PCIs to avoid delays in projects that facilitate the energy transition; and
• ensuring the appropriate use of cost sharing tools and regulatory incentives.”

The revised TEN-E Regulation aims to address the problems surrounding delays to the implementation of PCIs and access to financing for cross-border infrastructure projects. The new regulation is also aimed to ‘future proof’ the regulation and allow scope to capture future developments. The future framework will retain the existing system of regional groups in the selection process to further specify and adjust the new elements of technologies and future developments against the priorities of new policies and technological context, while still being able to review and consider the regional context.

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