Technical support to the Energy Community and its Secretariat to assess the candidate Projects of Energy Community Interest (PECI) and candidate Projects for Mutual Interest (PMI) in electricity, gas and oil infrastructure, and in smart grids development,Uploaded: 1 of September, 2016

A Consortium of REKK and DNV GL developed a project assessment methodology and evaluated the investment projects submitted as PECI/PMI candidates to the Energy Community in the field of electricity, gas, oil infrastructure and smart grids for the second lsit of PECI in 2016. (The first PECI list was adopted in 2013, background study on the methodology and project assessment can be downloaded from the Energy Community website)
The methodology developed by REKK and DNV GL includes two phases: a pre-assessment phase and an assessment phase.
In the pre-assessment phase the eligibility of the proposed projects has been checked and the submitted project data have been verified. After the conduction of these pre-assessment steps, 31 projects (12 electricity infrastructure, 18 gas infrastructure and 1 oil) have been recognised as eligible projects to be evaluated in the project assessment.
In the assessment phase we applied an integrated approach consisting of an economic Cost-Benefit Analysis (CBA) and a multi-criteria assessment (MCA). The economic CBA systematically compares the benefits with the costs arising over the life span of an investment project to all relevant groups of stakeholders within the region of the Energy Community and neighbouring EU countries. The net benefits for electricity infrastructure projects are calculated within electricity network and market models (EEMM); for natural gas infrastructure projects net benefits are identified within a gas market model (EGMM).
Since not all possible benefits can be quantified and monetized, additional criteria have been selected as a complement to the economic CBA within a multi criteria approach. These additional criteria include enhancement of competition, improvement of system adequacy/reliability and progress in implementation. For each of these criteria we have defined indices and a scoring system that measure the fulfilment of each criterion by each investment project on a scale between 1 (minimum) and 5 (maximum). Weights of the selected criteria have been set using the Analytic Hierarchy Process (AHP) technique. By multiplying the score for each criterion with the weight of each criterion a total score has been calculated for each project based on which a ranking of all eligible projects – separate for electricity infrastructure and gas infrastructure – has been conducted. The ranking provides a basis for the identification and selection of Projects of Energy Community Interest (PECI) / Projects of Mutual Interest (PMI) for the preliminary list. Final decision on the list will be taken by the Ministerial Council.
Applying the above assessment methodology, 30 projects have been assessed in the areas of electricity infrastructure and gas infrastructure. The cost benefit analysis revealed that about half of the projects (6 in electricity and 10 in gas) have positive social NPV for the Energy Community. Detailed report on the assessment of projects has been published on the Energy Community website following the The Ministerial Council decision on the list of projects of Energy Community interest late 2016.