In this webinar Leonardo Meeus (Part-time Professor Florence School of Regulation and Scientific coordinator THINK project) presents the THINK report on Cost Benefit Analysis in the context of the Energy Infrastructure Package. Leonardo explains the relevance of the CBA method in this package as well as the aim to develop a single CBA method to assess benefits and costs of Electricity Projects of Common Interest (CPIs).

1. www.florence-school.eu
Florence
School
of
Regulation
Cost
Benefit
Analysis
(CBA)
in
the
context
of
the
Energy
Infrastructure
Package
Florence
School
of
Regula0on
April
30,
2013,
Florence
Leonardo
Meeus

2. www.#lorence-­‐school.eu
2
Webinar
outline
Importance
of
CBA
in
the
package
Towards
a
single
CBA
method
for
electricity
Q&A

3. www.#lorence-­‐school.eu
ExisAng
EU
policy
New
EU
policy
“Projects
of
Common
Interest”
• CBA
will
be
used
to
select
PCIs
3
Importance
of
CBA
in
the
package
Focus
on
priority
projects

4. www.#lorence-­‐school.eu
ExisAng
EU
policy
New
EU
policy
4
Importance
of
CBA
in
the
package
Enhanced
“10-­‐Year
Network
Development
Plan”
• Will
use
the
CBA
method
developed
for
PCI
selec0on
Indica0ve
planning

5. www.#lorence-­‐school.eu
ExisAng
EU
policy
New
EU
policy
• European
Coordinators
• Na0onal
one
stop
shops,
and
deadlines
for
permit
gran0ng
• Cost
alloca0on
procedure
– Using
the
results
of
the
CBA
5
European
Coordinators
Importance
of
CBA
in
the
package
Accelerate
priority
projects

6. www.#lorence-­‐school.eu
ExisAng
EU
policy
New
EU
policy
6
Importance
of
CBA
in
the
package
Grants
for
feasibility
studies
Innova0ve
financial
instruments,
one
stop
shop
for
EU
funding

7. www.#lorence-­‐school.eu
7
Webinar
outline
Importance
of
CBA
in
the
package
Towards
a
single
CBA
method
for
electricity
Q&A

8. www.#lorence-­‐school.eu
8
Towards
a
single
CBA
method
for
electricity
Official
process

9. www.#lorence-­‐school.eu
9
Towards
a
single
CBA
method
for
electricity
ProacAve
steps

10. www.#lorence-­‐school.eu
Towards
a
single
CBA
method
for
electricity
THINK
report
1. Scope
of
the
analysis
– Project
defini0on
– Baseline
defini0on
– Effect
mapping
– Distribu0onal
effects
2. Calcula0on
of
net
benefit
– Mone0za0on
– Inter-­‐temporal
discoun0ng
of
costs
and
benefits
– Uncertainty

11. www.#lorence-­‐school.eu
Towards
a
single
CBA
method
for
electricity
THINK
report
OF

12. www.#lorence-­‐school.eu
Towards
a
single
CBA
method
for
electricity
Poll
to
know
what
you
think
• A)
Mone0ze
all
relevant
effects
• B)
Mul0-­‐criteria
analysis
12

13. www.#lorence-­‐school.eu
Towards
a
single
CBA
method
for
electricity
MoneAze
all
relevant
effects
13
EXTERNALITIES
MACROECONOMIC
EFFECTS
POWER
SYSTEM

14. www.#lorence-­‐school.eu
14
Towards
a
single
CBA
method
for
electricity
MulA-­‐criteria
analysis
Source:
ENTSO-­‐E
(2012)

15. www.#lorence-­‐school.eu
15
Towards
a
single
CBA
method
for
electricity
Implicit
versus
explicit
moneAzaAon
Mone0zed
net
benefit
Indicators
Mone0zed
net
benefit
PCI
1
PCI
2

16. www.#lorence-­‐school.eu
Scope of the analysis
• (1)
project
interac0on
must
be
taken
into
account
in
the
project
and
baseline
defini0on
• (2)
data
consistency
and
quality
should
be
ensured
• (3)
the
conven0onal
0me
horizon
is
20-­‐25
years
• (4)
CBA
should
concentrate
on
a
reduced
list
of
effects
and
those
should
be
moneAzed
• (5)
distribu0onal
concerns
should
not
be
addressed
in
the
calcula0on
of
net
benefits
Calculation net benefit
• (6)
infrastructure
costs
need
to
be
disaggregated
• (7)
the
model
used
to
mone0ze
the
produc0on
cost
savings
and
gross
consumer
surplus
needs
to
be
explicitly
stated
• (8)
a
common
discount
factor
should
be
used
for
all
projects
• (9)
a
stochas0c
approach
consistent
with
the
Energy
Roadmap
2050
should
be
used
to
address
uncertainty
Ranking projects
• (10)
the
ranking
should
be
primarily
based
on
the
moneAzed
net
benefit
Towards
a
single
CBA
method
for
electricity
THINK
recommendaAons

17. www.#lorence-­‐school.eu
17
Webinar
outline
Importance
of
CBA
in
the
package
Towards
a
single
CBA
method
for
electricity
Q&A

18. www.#lorence-­‐school.eu
Thank
you
very
much
for
your
aYenAon
leonardo.meeus@eui.eu;
hYp://think.eui.eu
18
THINK
reports
(published
2011
-­‐
2013)
1)
Public
Support
of
RD&D
2)
Smart
Ci0es
3)
Energy
Roadmap
for
2050
4)
Public
Budget
of
EU
Member
States
5)
Offshore
Grids
6)
Transmission
Grid
Tarifica0on
7)
Building
refurbishment
8)
Electricity
Storage
9)
EU
technology
policy
for
2050
10)
CBA
for
infrastructure
package
Ongoing
(to
be
published
in
June)
11)
Demand
response
12)
Role
of
DSOs