# EUR-Lex - 52011PC0658 - EN

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# 52011PC0658

**Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on guidelines for trans-European energy infrastructure and repealing Decision No 1364/2006/EC /* COM/2011/0658 final - 2011/0300 (COD) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

Grounds for and objectives of the
proposal

Major efforts are needed to modernise and
expand Europe's energy infrastructure and to interconnect networks across
borders to meet the Union's core energy policy objectives of competitiveness,
sustainability and security of supply.

The Commission's Communication on energy
infrastructure priorities for 2020 and beyond[1],
adopted on 17 November 2010, therefore called for a new EU energy
infrastructure policy to coordinate and optimise network development on a
continental scale. It confirmed in particular the necessity to overhaul the
existing Trans-European Networks for Energy (TEN-E) policy and financing
framework.

Such a new policy is crucial to ensure that
solidarity between Member States will become operational, that the internal
energy market is completed and isolated regions are linked, that alternative
supply or transmission routes and sources of energy will materialise and that
renewables will develop and compete with traditional sources, as highlighted by
the 4th of February 2011 European Council.

On 29 June 2011, the Commission adopted the
Communication "A Budget for Europe 2020" on the next multi-annual
financial framework (2014-2020)[2],
which proposes the creation of a Connecting Europe Facility to promote the
completion of priority energy, transport and digital infrastructures with a
single fund of EUR 40 billion, out of which EUR 9.1 billion are dedicated to
energy[3].

The present proposal lays down rules for
the timely development and interoperability of trans-European energy networks
in order to achieve the energy policy objectives of the Treaty on the
Functioning of the European Union to ensure the functioning of the internal
energy market, to ensure security of supply in the Union, to promote energy
efficiency and the development of new and renewable forms of energy, and to
promote the interconnection of energy networks.

More specifically, this Regulation aims at the full integration of the internal energy market,
including by ensuring that no Member State is isolated from the European
network, contributes to sustainable development and
protection of the environment by enabling the Union to achieve its targets of a
20% reduction of greenhouse gas emissions[4],
20% increase in energy efficiency and 20% of renewable energy in final energy
consumption by 2020, while ensuring security of supply and solidarity among
Member States.

By pursuing these objectives, this proposal
contributes to smart, sustainable and inclusive growth and brings forward
benefits for the entire European Union in terms of competitiveness and
economic, social and territorial cohesion.

To this effect, this initiative identifies,
for the period up to 2020 and beyond, a limited number of trans-European
priority corridors and areas covering electricity and gas networks as well as
oil and carbon dioxide transport infrastructure, for which European Union action
is most warranted. It then aims at implementing these priorities by:

–
streamlining permit granting procedures to
significantly reduce their duration for projects of common interest and
increase public participation and acceptance for the implementation of such
projects;

–
facilitating the regulatory treatment of
projects of common interest in electricity and gas by allocating costs
depending on the benefits provided and ensuring allowed returns are in line
with risks incurred;

–
ensuring implementation of projects of common
interest by providing necessary market-based and direct EU financial support. In this latter regard, the proposal provides the basis for
eligibility of projects of common interest for EU financial assistance under
the "Connecting Europe Facility", which is subject to a separate
legislative proposal.

The proposal is a
strategic priority in the Commission Work Programme for 2011.

General context

The challenge of interconnecting and
adapting our energy infrastructure to the new needs is significant, urgent, and
concerns all energy sectors.

Electricity networks must be upgraded and
modernised to meet increasing electricity demand due to a major shift in the
overall energy value chain and mix. The grids must also be urgently extended
and upgraded, including through electricity highways, to foster market
integration and maintain the existing levels of system's security, but
especially to transport and balance electricity generated from renewable
sources, which is expected to more than double in the period 2007-2020. At the
same time, reaching the EU's 2020 energy efficiency and renewable energy
targets will not be possible without more innovation and intelligence in the
networks at both transmission and distribution level, in particular through
information and communication technologies.

Natural gas will continue, provided its
supply is secure, to play a key role in the EU's energy mix in the coming
decades and will gain importance as the back-up fuel for variable electricity
generation. In the medium term depleting indigenous conventional natural
gas resources call for additional, diversified imports. Gas networks face
additional flexibility requirements in the system, the need for bi-directional
pipelines, enhanced storage capacities and flexible supply, including liquefied
(LNG) and compressed natural gas (CNG).

Given the role of oil in the energy mix of
the coming decades, maintaining uninterrupted crude-oil supplies to land-locked
EU countries in Central-Eastern Europe, currently dependent on limited supply
routes, is of strategic importance.

Finally, carbon capture and storage (CCS)
technologies would reduce carbon dioxide emissions on a large scale while
allowing the use of fossil fuels, which will remain an important source for
electricity generation over the next decades. The future development of a
cross-border network for carbon dioxide transport requires steps to be taken
now for European level infrastructure planning and development.

In its report to the June 2011 Energy
Council[5],
the Commission has estimated total investment needs in energy infrastructures
of European importance up to 2020 at about EUR 200 billion:

–
About EUR 140 billion for high voltage electricity
transmission systems, both onshore and offshore, storage, and smart grid
applications at transmission and distribution level;

–
About EUR 70 billion for high pressure gas
transmission pipelines (coming into the EU and between EU Member states),
storage, liquefied/compressed natural gas (LNG/CNG) terminals and reverse flow
infrastructure;

–
About EUR 2.5 billion for carbon dioxide transport infrastructure.

Investment volumes for the period from 2011
up to 2020 will increase by 30% for gas and up to 100% for electricity compared
to current levels. This investment challenge and urgency clearly distinguishes
energy infrastructures from infrastructures in other sectors, as energy networks
are a precondition for reaching the 2020 energy and climate targets and the
longer term climate objectives.

The main identified obstacles, which will
under business-as-usual assumptions prevent these investments from taking place
or delay them far beyond the 2020 deadline, are problems related to permit
granting (lengthy and ineffective permit granting procedures, along with public
opposition), regulation (framework not geared towards delivering European
infrastructure priorities) and financing (limited financing capacities of
operators, lack of adapted funding instruments and sufficient support).

Existing provisions

The TEN-E framework has been developed and
shaped in the 1990’s through the successive TEN-E Guidelines and the
corresponding financing Regulation. The 2006 Guidelines for Trans-European
Energy Networks[6]
listed about 550 projects eligible for Community support, classifying them in
the following three categories: projects of European interest (42 in total);
priority projects and projects of common interest. These projects cover only
electricity and gas infrastructure. The report on the implementation of the
TEN-E framework in the period 2007-2009[7],
published in April 2010, concluded that while making a positive contribution to
selected projects by giving them political visibility, the policy lacks focus,
flexibility and a top-down approach to fill identified infrastructure gaps.

The TEN financing Regulation[8], adopted on 20 June 2007, sets
out the conditions for co-funding of TEN-E projects, with a budget for the
period 2007-2013 of EUR 155 million. The TEN-E Programme's financial resources
and set-up have however proven to be inadequate in light of the paradigm shift
to a low carbon energy system and hence the major evolution and investments needed
in energy infrastructures in the coming years (limited budget, no risk
mitigation instruments, no funding outside the EU, insufficient synergies with
other EU funds).

Set up in the context
of the economic and financial crisis, the European Energy Programme for
Recovery[9] has, for the first time, allocated significant one-off amounts (about
EUR 3.85 billion) to a limited number of eligible projects in the domain of
electricity and gas infrastructures, off-shore wind and CCS demonstration
projects.

Consistency with other EU policies and
objectives

This initiative is
anchored in the Europe 2020 Strategy for smart,
sustainable and inclusive growth[10], which put energy infrastructures at the forefront as part
of the flagship initiative "Resource efficient Europe". It underlined
the need to urgently upgrade Europe's networks towards a European "smart
supergrid", interconnecting them at the continental level, in particular
to integrate renewable energy sources. The priorities identified and the measures
proposed in this initiative with regard to permit granting, regulation and
financing are fully in line with these objectives.

The proposal aims at
replacing the existing TEN-E Guidelines and forms a logical package with the
“Connecting Europe Facility” (CEF) developed in view of replacing the current
TEN financing Regulation.

This initiative is also
a vital contribution to the cost-effective achievement of the two binding
targets of 20% of renewables and 20%[11] of greenhouse gas emission reductions by 2020 and aims to
be in line with the pathway set out in the Commission’s Communication on a
Roadmap for moving to a competitive low-carbon economy in 2050 and the EU's
long term objective of an 80-95% reduction in greenhouse gas emissions by 2050
compared to 1990 levels[12].

In accordance with
Article 11 TFEU, the proposal integrates the existing environmental protection
requirements in the context of energy infrastructure.

2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS

Consultation, data collection and use
of expertise

This proposal was developed on the basis of
a broad range of contributions from Member States and interested parties
provided on various occasions (high-level conferences, workshops, surveys),
including two public consultations on permit granting and on the use of project
bonds for infrastructure projects[13].
The impacts of the various policy options proposed were analysed in two impact
assessments carried out in 2010 and 2011 using the results of various models
and numerous studies, of which three were specifically commissioned to address
investment needs, permit granting and financing issues. Both impact assessments
addressed the economic, social and environmental impacts of the options, taking
into account the subsidiarity and proportionality principles.

Impact assessment

The first impact assessment (IA) in 2010
focused on the scope of the new initiative in terms of energy sectors covered,
its design in terms of identifying priorities and selecting projects of common
interest, the form of regional coordination and cooperation and general
principles with regard to permit granting.

Based on this first analysis, the 2011 IA analyses
in much more detail policy options in the fields of permit granting and public
consultation, regulation and financing that should apply to projects of common
interest selected for implementation of the previously identified
infrastructure priorities. For each of the various obstacles identified, it
assesses available, effective and cost-efficient solutions.

Permit granting and public
consultation

The analysis compares three options: establishment
of a regime of common interest; rules on the organisation and duration of the
permit granting process, notably a "full one-stop shop" and a time
limit; a combination of the two previous options.

As regards the measures related to the
Habitats Directive, the impact on the local flora and fauna of the regime of
common European interest is expected to be relevant for only a very small subset
of projects of common interest identified as possibly in conflict with
Natura2000 areas, which are, however, crucial for the achievement of energy and
climate policy objectives.

The overall impact of the last policy
option is considered to be the most positive of all, as it would lead to the
on-time completion of almost all the needed projects of common interest by
2020, provided appropriate measures on regulation and financing are in place.
Environmental impacts, social impacts on employment and economic impacts on GDP
are expected to be stronger under this policy option as all projects of common
interest would be completed, while administrative cost savings would be
significant.

Regulatory issues

The analysis compares three options:
cross-border cost allocation; investment incentives; a combination of the two
previous options.

The analysis shows that both an ex ante
cross-border cost allocation mechanism and incentives commensurate with the
risks incurred by the operator are necessary to ensure implementation of
projects of common interest facing challenges with regard to their viability.
Their overall economic, social and environmental impact is large and positive.

Financing

For the purpose of assessing the full range
of possible measures with regard to infrastructure development, the analysis also
addresses four financing options, even if their translation in policy measures
will take place in the CEF: use of risk sharing instruments (including project
bonds and guarantees); use of risk capital instruments (including equity
participations); use of grant support for project studies and construction; a
combination of grants, risk sharing and risk capital instruments.

The overall impact of the last policy
option is the most positive, as it cumulate the positive impacts of the
individual options and provide a flexible toolbox of market-based instruments and
direct financial support, leading to synergies and efficiency gains by offering
the most cost-effective solution for specific project risks. This policy option
also reflects the measures proposed under the Connecting Europe Facility.

3.           LEGAL ELEMENTS OF THE PROPOSAL

Summary of proposed action

The proposed Regulation grants priority to
12 strategic trans-European energy infrastructure corridors and areas. It sets
rules to identify, within a set of defined energy infrastructure categories, projects
of common interest (PCIs), which are necessary to implement these priorities.
To this end, it establishes a selection process based on regional expert groups
and an advisory role for the Agency for the Cooperation of Energy Regulators
(ACER) in electricity and gas, the final decision, to be updated every two
years, on a Union-wide list of projects of common interest being taken by the
Commission. The regional expert groups and the Agency for the Cooperation of
Energy are entrusted with the monitoring and evaluation of the implementation
of PCIs. The Commission may nominate European coordinators for PCIs facing
difficulties.

The proposal establishes a regime of common
interest for PCIs, giving particular responsibilities to one national competent
authority within each Member State to coordinate and oversee the permit
granting process for PCIs, setting minimum standards for transparency and
public participation and fixing the maximum allowed duration of the permit
granting process. The proposal also clarifies that PCIs can be implemented
under certain conditions for reasons of "overriding public interest"
as defined in Directives 92/43/EC and 2000/60/EC. These measures are
proportionate as they aim at a minimum alignment of national administrative
procedures necessary to facilitate the implementation of – mostly cross-border
– PCIs. Member States are free to design their specific internal procedures in
line with their national legal systems in order to comply with the requirements
of this Regulation.

The proposed Regulation provides a
methodology and a process for the elaboration of a harmonised energy
system-wide cost-benefit analysis for PCIs in electricity and gas. On the basis
of this methodology, it gives responsibility to national regulatory authorities
and ACER to allocate costs across-border for PCIs in these sectors according to
the benefits in the Member States directly or indirectly concerned by these
PCIs. National regulatory authorities are also requested to grant appropriate incentives through tariffs for the implementation of
PCIs facing higher risks for justified reasons.

Finally, the Regulation determines the conditions for eligibility of PCIs to Union financial assistance
under the Connecting Europe Facility, for both studies (accessible to all PCIs
except those in the oil sector) and works (accessible to all PCIs in the smart
grids and carbon dioxide sector, and to PCIs in electricity and gas fulfilling
certain conditions, notably having obtained a cross-border cost allocation
decision).

Legal basis

The proposal is based on Article 172 of the
Treaty on the Functioning of the European Union. According to Article 171(1), “the
Union shall establish a series of guidelines covering the objectives,
priorities and broad lines of measures envisaged in the sphere of
trans-European networks; these guidelines shall identify projects of common
interest”. Article 172 specifies that the guidelines and other measures
referred to in Article 171(1) shall be adopted under co-decision procedure.

Subsidiarity principle

The subsidiarity principle applies to this proposal
insofar as energy policy does not fall under the exclusive competence of the
Union. Energy transmission infrastructure has Trans-European or at least
cross-border nature or impacts. Member State level regulation is not suited and
individual national administrations have no competence to deal with these
infrastructures as a whole. From an economic perspective, energy network
developments can best be achieved when planned with a European perspective,
encompassing both EU and Member State action while respecting their respective
competences. The proposed Regulation therefore respects the subsidiarity
principle.

Proportionality principle and choice
of legal instrument

The proposal does not go beyond what is
necessary to achieve the objectives pursued, given the energy and climate
policy objectives agreed at Union level and the obstacles to develop adequate
energy infrastructures. The instrument chosen is a Regulation,
which has direct application and is binding in its entirety. Such a measure is
necessary to ensure timely implementation of the energy infrastructure
priorities by 2020.

In particular, the establishment of a permit
granting framework with competent authorities at national level and clear time
limits, within which the permit granting process can be carried out according
to national specificities, is proportional to the objective of accelerating the
permit granting process.

4.           BUDGETARY IMPLICATION

All budgetary implications of this proposal
are dealt with under the legislative financial statement of the Proposal for a
Regulation establishing the Connecting Europe Facility.

5.           OPTIONAL ELEMENTS

Repeal of existing legislation

Adoption of the proposal will lead to
repeal of Decision 1364/2006/EC as of 1 January 2014. However, this will not
affect the granting, continuation or modification of financial aid awarded by
the Commission on the basis of calls for proposals launched under the existing
TEN financing Regulation for projects targeted by this Decision, or for TEN-E
projects benefiting from support through structural funds.

European Economic Area (EEA)

The Proposal concerns an EEA matter and
should therefore be applicable to it.

2011/0300 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

on guidelines for trans-European energy
infrastructure and repealing Decision No 1364/2006/EC

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 172 thereof,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national parliaments,

Having regard to the opinion of the
European Economic and Social Committee[14],

Having regard to the opinion of the
Committee of the Regions[15],

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)
On 26 March 2010, the European Council agreed to
the Commission's proposal to launch a new strategy "Europe 2020". One
of the priorities of the Europe 2020 strategy[16]
is sustainable growth to be achieved by promoting a more resource efficient,
greener and more competitive economy. The strategy put
energy infrastructures at the forefront as part of the flagship initiative
"Resource efficient Europe", by underlining the need to urgently
upgrade Europe's networks, interconnecting them at the continental level, in
particular to integrate renewable energy sources.

(2)
Communication from the Commission entitled
"Energy infrastructure priorities for 2020 and beyond – A Blueprint for an
integrated European energy network"[17],
followed by the Transport, Telecommunications and Energy Council conclusions of
28 February 2011 and the European Parliament resolution of 6 July 2011, called
for a new energy infrastructure policy to optimise network development at
European level for the period up to 2020 and beyond, in
order to allow the Union to meet its core energy policy objectives of
competitiveness, sustainability and security of supply.

(3)
The European Council of 4 February 2011
underlined the need to modernise and expand Europe's energy infrastructure and
to interconnect networks across borders, in order to make solidarity between
Member States operational, to provide for alternative supply or transit routes
and sources of energy and develop renewable energy sources in competition with
traditional sources. It insisted that no EU Member State should remain isolated
from the European gas and electricity networks after 2015 or see its energy
security jeopardized by lack of the appropriate connections.

(4)
Decision No 1364/2006/EC of the European
Parliament and of the Council of 6 September 2006 lays down guidelines for
trans-European energy networks[18].
These Guidelines (TEN-E) have as objectives to support the completion of the Union
internal energy market while encouraging the rational production,
transportation, distribution and use of energy resources, to reduce the
isolation of less-favoured and island regions, to secure and diversify the Union's
energy supplies also through co-operation with third countries, and to
contribute to sustainable development and protection of the environment.

(5)
Evaluation of the current TEN-E framework has
clearly shown that this policy, while making a positive contribution to
selected projects by giving them political visibility, lacks vision, focus, and
flexibility to fill identified infrastructure gaps.

(6)
Accelerating the refurbishment of existing and
deployment of new energy infrastructure is vital to achieve the Union's energy
and climate policy objectives, consisting in completing the internal market in
energy, guaranteeing security of supply, notably for gas and oil, reducing
greenhouse gas emissions by 20%[19],
increasing the share of renewable energy in the final energy consumption to 20%[20] and achieving a 20% increase
in energy efficiency by 2020. At the same time, the Union has to prepare its
infrastructure for further decarbonisation of its energy system in the longer
term towards 2050.

(7)
Despite its legal existence as defined in Directives
2009/72/EC of the European Parliament and of the Council of 13 July 2009
concerning common rules for the internal market in electricity[21] and 2009/73/EC of the European
Parliament and of the Council of 13 July 2009 concerning common rules for the
internal market in natural gas [22],
the internal market in energy remains fragmented due to insufficient
interconnections between national energy networks. Union-wide
integrated networks however are vital for ensuring a competitive and well
functioning integrated market for promoting growth, employment and sustainable
development.

(8)
The Union's energy
infrastructure should be upgraded in order to prevent and increase its
resilience to natural or man-made disasters, adverse effects of climate change and threats to
its security, notably concerning European critical infrastructures as
set out in Council Directive 2008/114/EC of 8 December 2008 on the
identification and designation of European critical infrastructures and the
assessment of the need to improve their protection[23].

(9)
The importance of smart grids in achieving the
Union's energy policy objectives has been acknowledged in Communication from
the Commission to the European Parliament, the Council, the European Economic
and Social Committee and the Committee of the Regions "Smart grids: from
innovation to deployment"[24].

(10)
Communication from the Commission "The EU Energy Policy: Engaging with
Partners beyond Our Borders"[25]
underlined the need for the Union to include the promotion of energy
infrastructure development in its external relations with a view to supporting
the socio-economic development beyond the Union borders. The Union should
facilitate infrastructure projects linking the Union's energy networks with
third country networks, in particular in neighbouring countries and in
countries, with which the Union has established specific energy cooperation.

(11)
The investment needs up to
2020 in electricity and gas transmission infrastructures of European relevance
have been estimated at about EUR 200 billion. The significant
increase in investment volumes compared to past trends and the urgency to
implement the energy infrastructure priorities requires a new approach in the
way energy infrastructures, and notably those of cross-border nature, are
regulated and financed.

(12)
The Commission Staff Working
Paper to the Transport, Telecommunications and Energy Council of 10 June 2011
"Energy infrastructure investment needs and financing requirements"[26] stressed that
approximately half of the total investments needed for the decade up to 2020
are at risk of not being delivered at all or not in time due to obstacles
related to permit granting, regulation and financing.

(13)
This Regulation lays down rules for the timely
development and interoperability of trans-European energy networks in order to
achieve the Treaty's energy policy objectives to ensure the functioning of the
internal energy market and security of supply in the Union, to promote energy
efficiency and energy saving and the development of new and renewable forms of
energy, and to promote the interconnection of energy networks. By pursuing
these objectives, this proposal contributes to smart, sustainable and inclusive
growth and brings benefits to the entire Union in terms of competitiveness and
economic, social and territorial cohesion.

(14)
The Commission has
identified, following close consultations with all Member States and stakeholders,
12 strategic trans-European energy infrastructure priorities, whose implementation
by 2020 is essential for the achievement of the Union's energy and climate
policy objectives. These priorities cover different geographic regions or
thematic areas in the field of electricity transmission and storage, gas
transmission, storage and liquefied or compressed natural gas infrastructure,
carbon dioxide transport and oil infrastructure.

(15)
The identification of
projects of common interest should be based on common, transparent and
objective criteria in view of their contribution to the energy policy
objectives. For electricity and gas, proposed projects should be part of the
latest available ten-year network development plan. This plan should notably
take account of the conclusions of the 4 February European Council with regard
to the need to integrate peripheral energy markets.

(16)
In view of complying with
article 172 of the Treaty on the Functioning of the European Union, regional
groups should be established for the purpose of proposing projects of common
interest that will be approved by Member States. In order to ensure broad
consensus, these regional groups should ensure close cooperation between Member
States, national regulatory authorities, project promoters and relevant
stakeholders. The cooperation should rely as much as possible on existing regional cooperation structures of national regulatory
authorities and transmission system operators and other structures established
by the Member States and the Commission.

(17)
The Union-wide list of
projects of common interest should be limited to projects which contribute the
most to the implementation of the strategic energy infrastructure priority
corridors and areas. This requires the decision on the list to be taken by the
Commission, while respecting the right of the Member States to approve projects
of common interest related to their territory. According to analysis carried
out in the accompanying impact assessment, the number of such projects is
estimated at some 100 in the field of electricity and 50 in the field of gas.

(18)
Projects of common interest
should be implemented as quickly as possible and should be closely monitored
and evaluated, while keeping the administrative burden for projects promoters
to a minimum. The Commission should nominate European coordinators for projects
facing particular difficulties.

(19)
Authorisation procedures should not lead to
administrative burdens which are disproportionate to the size or complexity of
a project, nor create barriers to the development of the trans-European
networks and market access. The European Council of 19 February 2009
highlighted the need to identify and remove barriers to investment, including
by means of streamlining of planning and consultation procedures. These
conclusions were reinforced by the European Council of 4 February 2011 which
again underlined the importance to streamline and improve authorisation
procedures while respecting national competences.

(20)
Projects of common interest should be given
"priority status" at national level to ensure rapid administrative
treatment. Projects of common interest shall be considered by competent
authorities as being in public interest. Authorisation should be given to
projects which have an adverse impact on the environment, for reasons of
overriding public interest, when all the conditions provided for under
Directives 92/43/EC and 2000/60/EC are met.

(21)
The establishment of a single competent
authority at national level integrating or coordinating all permit granting
procedures ("one-stop shop") should reduce complexity, increase
efficiency and transparency and help enhance
cooperation among Member States.

(22)
Despite the existence of established standards
for the participation of the public in environmental decision-making
procedures, additional measures are needed to ensure highest possible standards
of transparency and public participation for all relevant issues in the permit
granting process for projects of common interest.

(23)
The correct and coordinated implementation of
Council Directive 85/337/EC as amended and of the Aarhus and Espoo Conventions
should ensure the harmonisation of the main principles for the assessment of
environmental effects, including in a cross-border context. Member States
should coordinate their assessments for projects of common interest, and
provide for joint assessments, where possible.

(24)
Given the urgency to develop energy
infrastructures, the simplification of permit granting procedures must be
accompanied by a clear deadline for the decision to be taken by the respective competent
authorities regarding the construction of the project. This time limit should
stimulate a more efficient definition and handling of procedures, and should
under no circumstances compromise on the high standards for the protection of
the environment and public participation.

(25)
This Regulation, in particular the provisions on
permit granting, public participation and implementation of projects of common
interest, should apply without prejudice to international and Union legislation,
including provisions to protect the environment and human health, and provisions
adopted under the Common Fisheries and Maritime Policy.

(26)
The assessment of the costs and benefits of an
infrastructure project on the basis of a harmonised methodology for energy
system-wide analysis, in the framework of the ten-year network development
plans prepared by the European Networks of Transmission System Operators
according to Regulation (EC) No 714/2009 of the European Parliament and of the
Council of 13 July 2009 on conditions for access to the network for
cross-border exchanges in electricity[27]
and Regulation (EC) No 715/2009 of the European Parliament and of the Council
of 13 July 2009 on conditions for access to the natural gas transmission
networks[28],
and reviewed by the Agency on the Cooperation of Energy Regulators according to
Regulation (EC) No 713/2009 of the European Parliament and of the Council of 13
July 2009 establishing an Agency for the Cooperation of Energy Regulators[29], should be the basis for the
discussion on the appropriate allocation of costs.

(27)
In an increasingly integrated
internal energy market, clear and transparent rules for cost allocation across
borders are necessary in order to accelerate investment in cross-border
infrastructure. The European Council of 4 February 2011
recalled the importance to promote a regulatory framework attractive to
investment in networks, with tariffs set at levels
consistent with financing needs and the appropriate cost allocation for
cross-border investments, while enhancing competition and competitiveness,
notably of European industry, and taking account of the impact on consumers.

(28)
The existing internal energy market legislation
requires that tariffs for access to gas and electricity networks shall provide
appropriate incentives for investment. When applying the internal energy market
legislation, national regulatory authorities should ensure that incentives for
projects of common interest, including long-term incentives, are commensurate
with the level of specific risk of the project. This applies notably in
electricity to innovative transmission technologies to allow for large scale
integration of renewable energy, of distributed energy resources or of demand
response in interconnected networks, and to gas transmission infrastructure
offering advanced capacity or additional flexibility to the market to allow for short-term trading or back-up supply in case of supply
disruptions.

(29)
The European Energy Programme for Recovery
(EEPR)[30]
has demonstrated the added value of leveraging private funding through
significant Union financial aid to allow implementation of projects of European
significance. The European Council of 4 February 2011
recognised that some energy infrastructure projects may require limited public
finance to leverage private funding. In the light of the economic and financial
crisis and budgetary constraints, targeted support, through grants and
financial instruments, should be developed under the next multi-annual
financial framework, which will attract new investors into the energy
infrastructure priority corridors and areas, while keeping the budgetary
contribution of the Union to a minimum.

(30)
Projects of common interest in the fields of
electricity, gas and carbon dioxide should be eligible to receive Union
financial assistance for studies and, under certain conditions, for works under
the proposed Regulation for a Connecting Europe Facility (CEF Regulation),
either in the form of grants or in the form of innovative financial
instruments. This will ensure tailor-made support can be provided to those
projects of common interest which are not viable under the existing regulatory
framework and market conditions. Such financial assistance should ensure the
necessary synergies with funding from instruments under other Union policies.
In particular, the Connecting Europe Facility will finance energy infrastructure
of European relevance, while Structural Funds will finance smart energy
distribution networks of local or regional importance. The two sources of funding
will thereby complement each other.

(31)
Decision No 1364/2006/EC should therefore be
repealed.

(32)
Since the objective of this Regulation, namely
the development and interoperability of trans-European energy networks and
connection to such networks, cannot be sufficiently achieved by the Member
States and can therefore be better achieved at Union level, the Union may adopt
measures, in accordance with the principle of subsidiarity as set out in
Article 5 of the Treaty on the European Union. In accordance with the principle
of proportionality, as set out in that Article, this Regulation does not go
beyond what is necessary in order to achieve that objective.

HAVE ADOPTED THIS REGULATION:

CHAPTER I – GENERAL PROVISIONS

Article 1
Subject matter and scope

1.           This Regulation lays down
guidelines for the timely development and interoperability of priority
corridors and areas of trans-European energy infrastructure set out in Annex I.

2.           In particular, this
Regulation:

(a)
lays down rules to identify projects of common
interest necessary to implement these priority corridors and areas and falling
under the energy infrastructure categories in electricity, gas, oil, and carbon
dioxide set out in Annex II;

(b)
facilitates the timely implementation of
projects of common interest by accelerating permit granting and enhancing
public participation;

(c)
provides rules for cross-border allocation of
costs and risk-related incentives for projects of common interest;

(d)
determines conditions for eligibility of
projects of common interest for Union financial assistance under [Regulation of
the European Parliament and the Council establishing the Connecting Europe
Facility].

Article 2
Definitions

For the purpose of this Regulation, in
addition to the definitions provided for in Directives 2009/28/EC, 2009/72/EC
and 2009/73/EC, Regulations (EC) No 713/2009, (EC) No 714/2009, and (EC) No
715/2009, the following definitions shall apply:

1.           'energy infrastructure'
means any physical equipment designed to allow transmission and distribution of
electricity or gas, transportation of oil or carbon dioxide, or storage of
electricity or gas, which is located within the Union or linking the Union and
one or more third countries;

2.           'comprehensive decision'
means the decision taken by a competent authority to grant or refuse authorisation
to build the energy infrastructure relating to a project, without prejudice to
any subsequent decisions taken in the context of granting access to property,
or administrative or judicial appeal procedures thereafter;

3.           'project' means one or
several lines, pipelines, facilities, equipments, installations and related
infrastructure categories as set out in Annex II, aiming at building new energy
infrastructure or reinforcing or refurbishing existing energy infrastructure;

4.           'project of common
interest' means a project, which is necessary to implement the energy
infrastructure priority corridors and areas set out in Annex I;

5.           'project
promoter' means:

(a)
transmission system operator or distribution
system operator or other operator or investor developing a project of common
interest; or

(b)
if there are several transmission system
operators, distribution system operators, other operators, investors, or any
group thereof, the entity with legal personality under the applicable national
law, which has been designated by contractual arrangement between them and
which has the capacity to undertake legal obligations and assume financial
liability on behalf of the parties to the contractual arrangement.

CHAPTER II – PROJECTS OF COMMON INTEREST

Article 3
Identification of projects of common interest

1.           The Commission shall
establish a Union-wide list of projects of common interest. The list shall be
reviewed and updated as necessary every two years. The first list shall be
adopted by 31 July 2013 at the latest.

2.           For the purpose of
identifying projects of common interest, the Commission shall establish a
Regional Group ("Group") as defined in section 1 of Annex III based
on each priority corridor and area and their respective geographical coverage
as set out in Annex I.

3.           Each
Group shall draw up its proposed list of projects of common interest according
to the process set out in section 2 of Annex III, according to the contribution
of each project to implementing the energy infrastructure priority corridors and areas set out in Annex
I and according to their fulfilment of the criteria set out in Article 4. Each
individual proposal for a project shall require the approval of the Member
State(s), to the territory of which the project relates.

4.           For electricity and gas
projects falling under the categories set out in points
1 and 2 of Annex II, each Group shall, at the latest
six months before the adoption date of the Union-wide list referred to in
paragraph 1, submit its proposed list of projects of common interest to the
Agency for the Cooperation of Energy Regulators ("Agency").

For oil and carbon dioxide transport projects falling under the categories set out in points 3 and 4 of Annex II, each Group shall, at the latest six months before the adoption date
of the Union-wide list referred to in paragraph 1, submit its proposed list of
projects of common interest to the Commission.

5.           For electricity and gas
projects falling under the categories set out in points
1 and 2 of Annex II, the Agency shall submit, within two months from the date of receipt of the proposed lists of projects of common
interest set out in the first subparagraph of paragraph 4, an opinion to the Commission on the proposed lists of projects of
common interest, in particular taking into account the consistent application
of the criteria set out in Article 4 across the Groups, and the results of the
analysis carried out by the ENTSOs for Electricity and Gas in accordance with
point 2.6 of Annex III.

6.           For oil and carbon dioxide
transport projects falling under the categories set out in points 3 and 4 of
Annex II, the Commission shall evaluate the application of the criteria set out
in Article 4. For carbon dioxide projects falling under
the category set out in point 4 of Annex II, the Commission shall also take
into account the potential for future extension to include additional Member
States.

7.           Following the Commission
decision for adoption referred to in paragraph 1, projects
of common interest shall become an integral part of the relevant regional investment plans pursuant Article 12 of
Regulations (EC) No 714/2009 and (EC) No 715/2009 and of
the relevant national ten-year network development plans pursuant Article 22 of
Directives 72/2009/EC and 73/2009/EC and other national infrastructure plans
concerned, as appropriate. The projects shall be conferred the highest possible
priority within each of these plans.

Article 4
Criteria for projects of common interest

1.           Projects of common
interest shall meet the following general criteria:

(a)
the project is necessary for the implementation
of the energy infrastructure priority
corridors and areas set out in Annex I; and

(b)
the project displays economic, social and
environmental viability; and

(c)
the project involves at least two Member States,
either by directly crossing the border of one or more Member States or by being
located on the territory of one Member State and having a significant
cross-border impact as set out in point 1 of Annex IV;

2.           In addition, the following
specific criteria shall apply to projects of common interest falling under
specific energy infrastructure categories:

(a)
concerning electricity transmission and storage
projects falling under the categories set out in points 1(a) to (d) of Annex
II, the project shall contribute significantly to at least one of the following
specific criteria:

–
market integration, competition and system
flexibility;

–
sustainability, inter alia through transmission
of renewable generation to major consumption centres and storage sites;

–
interoperability and secure system operation;

(b)
concerning gas projects falling under the
categories set out in point 2 of Annex II, the project shall contribute
significantly to at least one of the following specific criteria:

–
market integration, interoperability and system
flexibility;

–
security of supply, inter alia through
diversification of supply sources, supplying counterparts and routes;

–
competition, inter alia through diversification
of supply sources, supplying counterparts and routes;

–
sustainability;

(c)
concerning electricity smart grid projects
falling under the category set out in point 1(e) of Annex II, the project shall
contribute significantly to the following specific functions:

–
integration and involvement of network users
with new technical requirements with regard to their electricity supply and
demand;

–
efficiency and interoperability of electricity
transmission and distribution in day-to-day network operation;

–
network security, system control and quality of
supply;

–
optimised planning of future cost-efficient network
investments;

–
market functioning and customer services;

–
involvement of users in the management of their
energy usage;

(d)
concerning oil transport projects falling under
the categories set out in point 3 of Annex II, the project shall contribute
significantly to the following three specific criteria:

–
security of supply reducing single supply source
or route dependency;

–
efficient and sustainable use of resources through
mitigation of environmental risks;

–
interoperability;

(e)
concerning carbon dioxide transport projects
falling under the categories set out in point 4 of Annex II, the project shall
contribute significantly to the following three specific criteria:

–
avoidance of carbon dioxide emissions at low
cost while maintaining security of energy supply;

–
increase the resilience and security of carbon
dioxide transport;

–
efficient use of resources, by enabling the
connection of multiple CO2 sources and storage sites via common
infrastructure and minimising environmental burden and risks.

3.           Concerning projects
falling under the categories set out in points 1 to 3 of Annex II, the criteria
listed in this Article shall be assessed in accordance with the indicators set
out in points 2 to 5 of Annex IV.

4.           When ranking projects
contributing to the implementation of the same priority, due consideration
shall also be given to the urgency of each proposed project in order to meet the
energy policy targets of market integration and competition, sustainability and
security of supply, the number of Member States affected by each project, and
its complementarity with regard to other proposed projects. For projects falling under the category set out in point 1(e) of Annex II, due
consideration shall also be given to the number of users affected by the
project, the annual energy consumption and the share of generation from non
dispatchable resources in the area covered by these users.

Article 5
Implementation and monitoring

1.           Project promoters shall
implement projects of common interest according to an implementation plan
including a timetable for feasibility and design studies, regulatory approval,
construction and commissioning, and the permit granting schedule referred to in
Article 11(3). Transmission system operators,
distribution system operators or other operators shall operate projects of
common interest in their area.

2.           The Agency and the Groups
shall monitor the progress achieved in implementing the projects of common
interest. The Groups may request additional information
provided in accordance with paragraphs 3, 4 and 5, verify the provided
information on site and convene meetings with the relevant parties. The Groups may also request the Agency to
take measures to facilitate the implementation of projects of common interest.

3.           By the 31 March of each
year following the year of selection as project of common interest pursuant to
Article 4, project promoters shall submit an annual
report, for each project falling under the categories set out in points 1 and 2
of Annex II, to the Agency or, for projects falling under the categories set
out in points 3 and 4 of Annex II, to the respective Group. This report shall
detail:

(a)
the progress achieved for the development,
construction and commissioning of the project, notably with regard to permit
granting and consultation procedures;

(b)
where relevant, delays compared to the
implementation plan and other difficulties encountered.

4.           Within three months of the
receipt of the annual reports, the Agency shall submit to the Groups a
consolidated report for the projects of common interest falling under the
categories set out in points 1 and 2 of Annex II, evaluating the progress
achieved and proposing, where appropriate, measures to overcome the delays and
difficulties encountered. The evaluation shall also include, in accordance with
the provisions of Article 6(8) and (9) of Regulation (EC) No 713/2009, the consistent
implementation of the Union-wide network development plans with regard to the energy
infrastructure priority corridors and areas set out in Annex I.

5.           Each year, the concerned
competent authorities referred to in Article 9 shall, at the meeting following receipt
of the annual reports referred to in paragraph 3, report to the respective
Group on the status and, where relevant, delays in the implementation of
projects of common interest located on their respective territory.

6.           If the commissioning of a project
of common interest is delayed by more than two years compared to the
implementation plan without sufficient justification:

(a)
The project promoter of that project shall
accept investments by one or several other operators or investors to implement the
project. The system operator, in whose area the investment is located, shall
provide the implementing operator(s) or investor(s) with all information needed
to realise the investment, shall connect new assets to the transmission network
and shall generally make its best efforts to facilitate the implementation of
the investment and the secure, reliable and efficient operation and maintenance
of the project of common interest.

(b)
the Commission may launch a call for proposals open
to any project promoter to build the project according to an agreed timeline.

7.           A
project of common interest may be removed from the Union-wide list of projects
of common interest according to the procedure set in the second sentence of Article 3(1) if:

(a)
The energy system-wide cost-benefit analysis
carried out by the ENTSOs in accordance with point 6 of Annex III does not
yield a positive result for the project;

(b)
The project is no longer included in the ten-year
network development plan;

(c)
The inclusion in the list referred to in paragraph
1 of Article 3 was based on
incorrect information which was a determining factor for the decision;

(d)
The project does not comply with existing Union
legislation.

Projects, which are withdrawn from the
Union-wide list, lose all rights and obligations arising from this Regulation
for projects of common interest. This article shall be without prejudice to any
Union financing paid to the project prior to the withdrawal decision.

Article 6
European coordinators

1.           When a project of common
interest encounters significant implementation difficulties, the Commission may
designate a European coordinator for a period of up to one year renewable twice.

2.           The European coordinator
shall fulfil the following tasks:

(a)
promote the project(s), for which he or she has
been designated European coordinator and the cross-border dialogue between the
project promoters and all concerned stakeholders;

(b)
assist all parties as necessary in consulting
concerned stakeholders and obtaining necessary permits for the project(s);

(c)
ensure that appropriate support and strategic
direction by the Member States concerned are provided for the preparation and
implementation of the project(s);

(d)
submit every year a report to the Commission on
the progress of the project(s) and on any difficulties and obstacles which are
likely to significantly delay the commissioning date of the project(s). The Commission
shall transmit the report to the concerned Groups and the European Parliament.

3.           The European coordinator
shall be chosen on the basis of his or her experience with regard to the
specific tasks assigned to him or her for the concerned project(s).

4.           The
decision designating the European coordinator shall specify the terms of
reference detailing the duration of the mandate, the specific tasks and
corresponding deadlines and the methodology to be followed. The coordination effort shall be proportionate to the complexity
and estimated costs of the project(s).

5.           The Member States
concerned shall cooperate with the European coordinator in his/her execution of
the tasks referred to in paragraph 2 and 4.

CHAPTER III – Permit granting and public participation

Article 7
Regime of common interest

1.           For the purpose of accelerating
permit granting procedures and enhancing public participation, the provisions
of this Chapter shall be applicable to all projects of common interest.

Article 8
‘Priority status’ of projects of common interest

1.           Projects of common
interest shall be allocated the status of the highest national significance
possible and be treated as such in permit granting procedures, where and in the
manner such treatment is provided for in national legislation applicable to the
corresponding type of energy infrastructure.

2.           The adoption of the
Union-wide list of projects of common interest shall establish the public
interest and necessity of these projects within the Member States concerned and
shall be acknowledged as such by all parties concerned.

3.           For the purpose of
ensuring efficient administrative processing of the files related to projects
of common interest, project promoters and all authorities concerned shall ensure
that the most preferential treatment possible is given to these files as
regards the resources allocated.

4.           With the objective of
meeting the time limits set out in Article 11 and reducing the administrative burden
for the completion of projects of common interest, Member States shall, within
nine months from the entry into force of this Regulation, take measures to
streamline the environmental assessment procedures. These measures shall be
without prejudice to obligations resulting from Union legislation.

The Commission shall, within three months of
the entry into force of this Regulation, issue guidance to support Member
States in defining adequate measures and to ensure the coherent application of environmental
assessment procedures required under EU legislation for projects of common
interest.

5.           With
regard to the environmental impacts addressed in Article 6(4) of
Directive 92/43/EC and Article 4(7) of Directive 2000/60/EC, projects of common interest shall be considered as being of
public interest, and may be considered as being of "overriding public
interest", provided that all the conditions foreseen in these Directives
are fulfilled.

Should the opinion of the Commission be
required in accordance with Directive 92/43/EC, the Commission and the competent authority pursuant to Article 9, shall ensure that the
decision with regard to the "overriding public interest" of a project
is taken within the time limit pursuant to paragraph 1 of Article 11.

Article 9
Organisation of the permit granting process

1.           Within six months of the
entry into force of this Regulation, each Member State shall designate one national
competent authority which shall be responsible for facilitating and
coordinating the permit granting process for projects of common interest and
for the implementation of the relevant tasks of the permit granting process as
defined in this Chapter.

2.           The competent authority
shall issue, without prejudice to relevant requirements under Union and
international legislation, the comprehensive decision within the time limit
referred to in Article 11(1) according to one of the following
schemes:

(a)
integrated scheme: the comprehensive decision
issued by the competent authority is the sole legally binding decision
resulting from the statutory permit granting procedure. Where other authorities
are concerned by the project, these may, in accordance with national
legislation, give their opinion as input to the procedure, which shall be taken
into account by the competent authority.

(b)
coordinated scheme: The comprehensive decision
may encompass multiple individual legally binding decisions issued by the
Competent Authority and other authorities concerned. The competent authority
shall establish, on a case-by-case basis, a reasonable time limit within which
the individual decisions must be issued. The competent authority may take an
individual decision on behalf of another national authority concerned, if the
decision by that authority is not delivered within the time limit and if the
delay cannot be adequately justified. The competent authority may overrule an
individual decision of another national authority, if it considers that the
decision is not sufficiently substantiated with regard to the underlying
evidence presented by the authority concerned. The competent authority shall
ensure that the relevant requirements under international and Union legislation
are respected and must duly justify its decision.

3.           If a project of common
interest requires decisions to be taken in two or more Member States, the respective
competent authorities shall take all necessary steps for efficient and
effective cooperation and coordination among themselves, including compliance
with the Espoo Convention and the provisions referred to in 11(3). Member
States shall endeavour to provide for joint procedures, particularly with
regard to the assessment of environmental impacts.

4.           Member States shall
endeavour to ensure that appeals challenging the substantive or procedural
legality of a comprehensive decision are handled in the most efficient way
possible.

Article 10
Transparency and public participation

1.           To increase transparency
for all stakeholders concerned, the competent authority shall, within nine
months of the entry into force of this Regulation, publish a manual of
procedures for the permit granting process applicable to projects of common
interest. The manual shall be updated as necessary and made available to the
public. The manual shall at least include the information specified in point 1
of Annex VI.

2.           Without prejudice to any
requirements under the Aarhus and Espoo Conventions and relevant Union
legislation, all parties involved in the permit granting process shall follow
the principles for public participation set out in point 2 of Annex VI.

3.           The project promoter
shall, within three months of the start of the permit granting process pursuant
to paragraph 1(a) of Article
11, elaborate and submit
a concept for public participation to the competent authority. The competent
authority shall request modifications or approve the concept for public
participation within one month. The concept shall at least include the
information specified in point 3 of Annex VI.

4.           At least one public
consultation shall be carried out by the project promoter, or, where this is
laid down by national legislation, by the competent authority, before
submission of the application file to the competent authority pursuant to
paragraph 1(a) of Article
11. The public
consultation shall inform stakeholders referred to in point 2(a) of Annex VI
about the project at an early stage and identify the most suitable location or
trajectory and the relevant issues to be addressed in the application file. The
minimum modalities of this public consultation are specified in point 4 of Annex
VI. A report summarising the results of activities related to the participation
of the public prior to the submission of the application file shall be prepared
by the project promoter and submitted together with the application file to the
competent authority, which shall take due account of these results when taking
the comprehensive decision.

5.           For projects crossing the
border of two or more Member States, the public consultations pursuant to
paragraph 4 in each of the Member States concerned shall take place within a
delay of no more than two months from the start date of the first public
consultation in one of these Member States.

6.           For projects likely to
have significant adverse cross-border impacts in one or more neighbouring
Member States, where Article 7 of Directive 85/337/EEC and the Espoo Convention
are applicable, the relevant information shall be made available to the
competent authority of the neighbouring Member State(s). The competent
authority of the neighbouring Member State(s) shall indicate whether it wishes
to participate in the relevant public consultation procedures.

7.           The project promoter, or,
where national legislation so provides, the competent authority, shall
establish and regularly update a project website to publish relevant
information about the project, which shall be linked to the Commission website
and which shall satisfy the requirements specified in point 5 of Annex VI. Commercially sensitive information shall be kept confidential.

Project promoters shall, in addition, publish
relevant information by other appropriate information means, to which the
public has open access.

Article 11
Duration and implementation of the permit granting process

1.           The duration of the permit
granting process shall consist of two phases and shall not exceed a period of
three years:

(a)
the pre-application procedure, covering the
period between the start of the permit granting process and the acceptance of
the submitted application file by the competent authority, shall not exceed two
years.

For the purpose of establishing the start of
the permit granting process, the project promoter(s) shall notify the project
to the competent authority of the Member State(s) concerned in written form,
and shall include a reasonably detailed outline of the project. No later than
two weeks following the receipt of the notification, the competent authority
shall accept or, if it considers the project as not mature enough to enter the
permit granting process, refuse the notification in written form. In case of a
refusal, the competent authority shall justify its decision. The date of
signature of the acceptance of the notification by the competent authority
shall serve as the start of the permit granting process. Where two or more
Member States are concerned, the acceptance of the notification by the last
competent authority concerned shall serve as the date of the start of the
permit granting process.

(b)
The statutory permit granting procedure,
covering the period from the acceptance of the submitted application file until
the competent authority takes a comprehensive decision, shall not exceed one
year. Member States may set an earlier date for the time-limit if considered
appropriate.

2.           Within one month of the
start of the permit granting process, pursuant to paragraph 1(a), the competent
authority shall identify, in close cooperation with the other authorities
concerned, the scope of material and level of detail of information to be
submitted by the project promoter, as part of the application file, to apply
for the comprehensive decision. The checklist referred to in point 1(e) of
Annex VI shall serve as a basis for this identification. At least one meeting
between the competent authority and the project promoter, and, if considered
appropriate by the competent authority, other authorities and stakeholders concerned
shall take place to this aim. A detailed application outline, which shall
include the results of this meeting, shall be transmitted to the project
promoter and be made available to the public no later than one month after the meeting.

3.           Within three months of the start of the permit granting process
pursuant to paragraph 1(a), the competent authority shall elaborate, in close
cooperation with the project promoter and other authorities concerned and
taking into account the results of the activities carried out under paragraph 2,
a detailed schedule for the permit granting process, identifying at minimum
the following:

(a)
the decisions and opinions to be obtained;

(b)
the authorities, stakeholders, and the public
likely to be concerned;

(c)
the individual stages of the procedure and their
duration;

(d)
major milestones to be accomplished and their
deadlines in view of the comprehensive decision to be taken,;

(e)
the resources planned by the authorities and
possible additional resource needs.

For projects crossing the border between two or
more Member States, the competent authorities of the Member States concerned
shall align their timetables and elaborate a joint schedule.

4.           The project promoter shall
ensure the completeness and adequate quality of the application file and seek
the competent authority's opinion on this as early as possible during the
pre-application procedure. The project promoter shall cooperate with the
competent authority to meet deadlines and comply with the detailed schedule as
defined in paragraph 3.

5.           Within one month of the
receipt of the application file, the competent authority shall, if necessary,
make further requests regarding missing information to be submitted by the
project promoter, which may only address subjects identified in the detailed
application outline. Within one month of the receipt of the complete
application file, the competent authority shall accept the application in
written form. Subsequently, requests for additional information may only be
made if these are justified by new circumstances and duly explained by the
competent authority.

6.           In the event of an expiry
of the time-limit for the comprehensive decision, the competent authority shall
present to the competent Group the measures taken or to be taken to conclude
the permit granting process with the least possible delay. The Group may
request the competent authority to report regularly on progress achieved in
this regard.

7.           The time limits in the
above provisions shall be without prejudice to obligations arising from
international and Union legislation.

CHAPTER IV – Regulatory treatment

Article 12
Energy system wide cost-benefit analysis

1.           Within one month of the
entry into force of this Regulation, the ENTSO for Electricity and the ENTSO
for Gas shall submit to the Agency and the Commission their respective
methodology, including on network and market modelling, for a harmonised energy
system-wide cost-benefit analysis at Union-wide level for projects of common
interest falling under the categories set out in points 1(a) to (d) and 2 of
Annex II. The methodology shall be elaborated in line with the principles laid
down in Annex V.

2.           Within three months of the
day of receipt of the methodology, the Agency, after formally consulting the
organisations representing all relevant stakeholders, shall provide an opinion
to the Commission on the methodology.

3.           Within three months of the
receipt of the opinion of the Agency, the Commission shall deliver an opinion
on the methodology.

4.           Within three months of the
day of receipt of the Commission's opinion, the ENTSO for Electricity and the
ENTSO for Gas shall adapt their methodology accordingly and submit it to the
Commission for approval.

5.           Within two weeks of the
approval by the Commission, the ENTSO for Electricity and the ENTSO for Gas
shall publish the methodology on their websites. They shall transmit the
corresponding input data sets as defined in point 1 of Annex V and other
relevant network, load flow and market data in a sufficiently accurate form
according to national legislations and relevant confidentiality agreements to
the Commission and the Agency, upon request. The data shall be valid at the
date of the request. The Commission and the Agency shall ensure the
confidential treatment of the data received, by themselves and by any party carrying
out analytical work for them on the basis of those data.

6.           The methodology shall be
updated and improved regularly by following the procedure laid down in
paragraphs 1 to 5. The Agency, after formally consulting the organisations
representing all relevant stakeholders and the Commission, may request such
updates and improvements with due justification and timescales.

7.           The methodology shall be
applied to the cost-benefit analysis under all subsequent ten-year network
development plans for electricity or gas developed by the ENTSOs for
Electricity or Gas pursuant Article 8 of Regulation (EC) 714/2009 and Regulation
(EC) 715/2009.

8.           By 31 December 2016, the
ENTSO for Electricity and the ENTSO for Gas shall jointly submit to the
Commission and the Agency common electricity and gas market and network model
including both electricity and gas transmission and storage, covering the
priority corridors and areas designated in Annex I and elaborated in line with
the principles laid down in Annex V. After approval of this model by the
Commission according to the procedure set out in paragraphs 2 to 4, it shall be
included in the methodology.

Article 13
Enabling investments with cross-border impacts

1.           The investment costs
related to a project of common interest falling under the categories set out in
points 1(a) to (d) and 2 of Annex II shall be borne by the transmission system
operator(s) of the Member State(s) to which the project provides a net positive
impact, and be paid for by network users through tariffs for network access.

The provisions of this Article shall not apply
to projects of common interest having received an exemption pursuant Article 36
of Directive 2009/73/EC or Article 17 of Regulation
(EC) 714/2009.

2.           National regulatory
authorities shall take into account actual costs incurred by a transmission system
operator or other project promoter as a result of the
investments and cross-border allocation of corresponding costs referred to in
paragraph 3 when fixing
or approving tariffs in accordance with Article 37(1)(a) of Directive
2009/72/EC and Article 41(1)(a) of Directive 2009/73/EC, insofar as these costs
correspond to those of an efficient and structurally comparable operator.

3.           Without prejudice to
investments in projects of common interest by mutual agreement between the
transmission system operators concerned, national regulatory authorities shall
jointly approve investments and decide on the cross-border allocation of
corresponding costs for projects of common interest or packages thereof as well
as the inclusion of investment costs in the transmission tariffs.

4.           The promoter(s) of a
project of common interest falling under the categories set out in points 1(a) to (d) and 2 of Annex II shall keep all
concerned national regulatory authorities regularly informed of the progress of
that project and the identification of costs and impacts associated with it. As soon as a project of common interest selected pursuant to Article 3 and falling
under the categories set out in points 1(a) to (d) and 2 of Annex II has reached sufficient maturity, the project promoter shall submit an
investment request including a cross-border cost allocation, to the relevant national
regulatory authorities, accompanied by the following:

(a)
a cost-benefit analysis on the basis of the
methodology elaborated pursuant to Article 12; and

(b)
a business plan evaluating the financial
viability of the project, including the chosen financing solution, and, for
projects of common interest falling under the category
referred to in point 2 of Annex I, the results of
market testing.

If a project is promoted by several operators
or investors, they shall submit their request jointly.

For projects contained in the first Union-wide
list of projects of common interest, project promoters shall submit their
request by 30 September 2013.

A copy of each investment request shall be
transmitted for information without delay by the national regulatory
authorities to the Agency on receipt.

The national regulatory authorities and the
Agency shall preserve the confidentiality of commercially sensitive
information.

5.           Within six months of the
date on which the last request was received by the last of the national
regulatory authorities concerned, the national regulatory authorities shall,
after consultation of the project promoter(s) concerned, take a joint decision
on the allocation of investment costs to be borne by each system operator for that project, as well as
their inclusion in network tariffs. The national regulatory authorities may
decide to allocate only part of the costs or to allocate costs among a package
of several projects of common interest.

In deciding to allocate costs across borders,
the economic, social and environmental costs and benefits of the project(s) in
the Member States concerned and the possible need for financial support shall
be taken into account.

The decision shall be notified, without delay,
by the national regulatory authorities to the Agency, together with all the
relevant information with respect to the decision. In particular, the
information shall contain detailed reasons on the basis of which costs were
allocated among Member States, such as the following:

(a)
an evaluation of the identified impacts,
including concerning network tariffs, on each of the concerned Member States;

(b)
an evaluation of the business plan referred to
in paragraph 4(b);

(c)
regional or Union-wide positive externalities,
which the project would generate;

(d)
the result of the consultation of the project
promoter(s) concerned.

The allocation decision shall be published.

6.           Where the national
regulatory authorities concerned have not reached an agreement on the investment
request within six months of the date on which the request was received by the
last of the national regulatory authorities concerned, they shall inform the
Agency without delay.

In this case or upon a joint request from the
national regulatory authorities concerned, the decision on the investment
request including cross-border cost allocation referred to in paragraph 4 as well
as the way the cost of the investments are reflected in the tariffs shall be
taken by the Agency within three months of the date of referral to the Agency.

Before taking such a decision, the Agency shall
consult the national regulatory authorities concerned and the project
promoter(s). The three-month period referred to in the second subparagraph may
be extended by an additional period of two months where further information is
sought by the Agency. That additional period shall begin on the day following
receipt of the complete information.

The allocation decision shall be published.

7.           A copy of all decisions,
together with all the relevant information with respect to each decision, shall
be notified, without delay, by the Agency to the Commission. That information
may be submitted in aggregate form. The Commission shall preserve the
confidentiality of commercially sensitive information.

8.           This cost allocation shall
not affect the right of transmission system operators to apply and national
regulatory authorities to approve charges for access to networks in accordance
with Article 32 of Directive 2009/72/EC and of Directive 2009/73/EC, Article 14
of Regulation (EC) No 714/2009, and Article 13 of Regulation (EC) No 715/2009.

Article 14
Incentives

1.           Where a project promoter
incurs higher risks for the development, construction, operation or maintenance
of a project of common interest falling under the
categories set out in points 1 and 2 of Annex II, except for hydro-pumped
electricity storage projects, compared to the risks
normally incurred by a comparable infrastructure project, and where such risks
are not covered under an exemption pursuant to Article
36 of Directive 2009/73/EC or Article 17 of Regulation
(EC) No 714/2009, national regulatory authorities shall ensure that appropriate
incentives are granted to that project when applying Article 37(8) of Directive
2009/72/EC, Article 41(8) of Directive 2009/73/EC, Article 14 of Regulation (EC) No 714/2009, and Article 13 of Regulation
(EC) No 715/2009.

2.           The decision of the
national regulatory authorities for granting such incentives shall consider the
results of the cost-benefit analysis on the basis of the methodology elaborated
pursuant to Article 12 and in
particular the regional or Union-wide positive externalities generated by the
project. The national regulatory authorities shall further analyse the specific
risks incurred by the project promoter(s), the risk mitigation measures taken
and the justification of this risk profile in view of the net positive impact
provided by the project, when compared to a lower-risk alternative. Eligible
risks shall notably include risks related to new transmission technologies,
both onshore and offshore, risks related to under-recovery of costs and development
risks.

3.           The incentive granted by
the decision shall take account of the specific nature of the risk incurred and
cover:

(a)
rules for anticipatory investment; or

(b)
rules for recognition of efficiently incurred
costs before commissioning of the project; or

(c)
rules for providing additional return on the
capital invested for the project; or

(d)
any other measure deemed necessary and
appropriate.

4.           By 31 December 2013, the
Agency shall issue guidance in accordance with Article 7(2) of Regulation (EC) No 713/2009:

(a)
regarding the incentives referred to in
paragraph 1 on the basis of a benchmarking of best practice by national
regulatory authorities;

(b)
regarding a common methodology to evaluate the
incurred higher risks of investments in electricity and gas transmission
projects.

5.           By 31 July 2013, each
national regulatory authority shall publish its methodology and the criteria
used to evaluate investments in electricity and gas transmission projects and
the higher risks incurred by them.

6.           The Commission may issue
guidelines regarding the incentives laid down in this Article in accordance
with Article 18(1) to (3) of Regulation (EC) No 714/2009 and Article 23 (1) of Regulation (EC)
No 715/2009.

CHAPTER V – Financing

Article 15
Eligibility of projects for Union financial assistance

1.           Projects of common
interest falling under the categories set out in points
1, 2 and 4 of Annex II are eligible for Union financial
support in the form of grants for studies and financial instruments in
accordance with the provisions of [Regulation of the
European Parliament and the Council establishing the Connecting Europe
Facility].

2.           Projects of common
interest falling under the categories set out in points
1(a) to (d) and 2 of Annex II, except for hydro-pumped electricity storage
projects, shall be also eligible for Union financial
support in the form of grants for works in accordance with the provisions of [Regulation of the European Parliament and the Council establishing
the Connecting Europe Facility], if they are carried
out according to the procedure referred to in paragraph 6(b) of Article 5 or if they fulfil the following
criteria:

(a)
the project specific cost-benefit analysis
pursuant to paragraph 4(a) of Article 13 provides evidence concerning the existence of significant positive
externalities, such as security of supply, solidarity or innovation; and

(b)
the project is commercially not viable according
to the business plan and other assessments carried out, notably by possible
investors or creditors. The decision on incentives and its justification
referred to in paragraph 3 of Article 14 shall be taken into account when
assessing the project's commercial viability; and

(c)
the project has received a cross-border cost
allocation decision pursuant to Article 13 or, for projects having received an exemption pursuant to Article 36 of Directive
2009/73/EC or Article 17 of Regulation (EC) No 714/2009, an opinion from the
competent national regulatory authorities and the Agency on the commercial
viability of the project.

3.           Projects of common
interest falling under the categories set out in points
1(e) and 4 of Annex II shall be also eligible for Union
financial support in the form of grants for works in accordance with the
provisions of [Regulation of the European Parliament
and the Council establishing the Connecting Europe Facility], if the concerned project promoters can clearly demonstrate the
significant positive externalities generated by the projects and their lack of
commercial viability.

CHAPTER VI – Final provisions

Article 16
Reporting and evaluation

Not later than 2017, the Commission shall publish a report on the implementation of
projects of common interest. This report shall provide an evaluation of:

(a)
the progress achieved for the development,
construction and commissioning of projects of common interest selected pursuant
Article 3, and, where relevant,
delays in implementation and other difficulties encountered;

(b)
the funds engaged and disbursed by the Union for
projects of common interest in accordance with the
provisions of [Regulation of the European Parliament
and the Council establishing the Connecting Europe Facility], compared to the
total value of funded projects of common interest;

(c)
concerning the electricity and gas sectors, the
evolution of the interconnection level between Member States, the corresponding
evolution of energy prices, as well as the number of network system failure
events, their causes and related economic cost;

(d)
concerning permit granting and public
participation:

–
the average and maximum total duration of
authorisation procedures for projects of common interest, including the
duration of each step of the authorisation procedure, compared to the timing
foreseen by the initial major milestones referred to in Article 11(3);

–
the level of opposition faced by projects of
common interest (notably number of written objections during the public
consultation process, number of legal recourse actions);

(e)
concerning regulatory treatment:

–
the number of projects of common interest having
been granted a cross-border cost allocation decision pursuant to Article 13;

–
the number and type of projects of common
interest having received specific incentives pursuant to Article 14;

Article 17
Information and publicity

The Commission shall establish an
infrastructure transparency platform easily accessible to the general public.
This platform shall contain the following information:

(a)
general, regularly updated information,
including geographic information, for each project of common interest;

(b)
the implementation plan for each project of
common interest;

(c)
the main results of the cost-benefit analysis on the basis of the methodology elaborated pursuant Article 12 for the projects of common
interest concerned, except for any commercially sensitive information.

Article 18
Transitional provisions

This Regulation shall not affect the
granting, continuation or modification of financial aid awarded by the
Commission on the basis of calls for proposals launched under Regulation (EC)
No 680/2007 of the European Parliament and of the Council[31] to projects listed in Annexes
I and III to Decision 1364/2006/EC or in view of the targets, based on the
relevant categories of expenditure for TEN-E, as defined in Council Regulation
(EC) No 1083/2006[32].

Article 19
Repeal

Decision 1364/2006/EC is hereby repealed
from 1 January 2014. No rights shall arise under this Regulation for projects
listed in Annexes I and III to Decision 1364/2006/EC.

Article 20
Entry into force

This Regulation shall enter into force on
the twentieth day following that of its publication in the Official Journal
of the European Union.

It shall apply from 1 January 2013.

This Regulation shall be binding
in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament                       For
the Council

The President                                                 The
President

ANNEX I

ENERGY
INFRASTRUCTURE PRIORITY CORRIDORS AND AREAS

This Regulation shall apply to the
following trans-European energy infrastructure priority corridors and areas:

1.
Priority electricity corridors

(1)
Northern Seas offshore grid (“NSOG”): integrated offshore electricity grid in the North Sea, the Irish
Sea, the English Channel, the Baltic Sea and neighbouring waters to transport
electricity from renewable offshore energy sources to centres of consumption
and storage and to increase cross-border electricity exchange.

Member States concerned: Belgium, Denmark,
France, Germany, Ireland, Luxemburg, the Netherlands, Sweden, the United
Kingdom;

(2)
North-South electricity interconnections in
Western Europe (“NSI West Electricity”):
interconnections between Member States of the region and with Mediterranean
third countries, notably to integrate electricity from renewable energy
sources.

Member States concerned: Belgium, France,
Germany, Ireland, Italy, Luxembourg, Netherlands, Malta, Portugal, Spain, the
United Kingdom;

(3)
North-South electricity interconnections in
Central Eastern and South Eastern Europe ("NSI East Electricity"): interconnections and internal lines in North-South and East-West
directions to complete the internal market and integrate generation from
renewable energy sources.

Member States concerned: Austria, Bulgaria,
Czech Republic, Cyprus, Germany, Greece, Hungary, Italy, Poland, Romania,
Slovakia, Slovenia;

(4)
Baltic Energy Market Interconnection Plan in electricity
("BEMIP Electricity"): interconnections
between Member States in the Baltic region and reinforcing internal grid
infrastructures accordingly, to end isolation of the Baltic States and to
foster market integration in the region;

Member States concerned: Denmark, Estonia,
Finland, Germany, Latvia, Lithuania, Poland, Sweden.

2.
Priority gas corridors

(5)
North-South gas interconnections in Western
Europe ("NSI West Gas"): interconnection
capacities for North-South gas flows in Western Europe to further diversify
routes of supply and increase short-term gas deliverability.

Member States concerned: Belgium, France,
Germany, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Spain,
the United Kingdom;

(6)
North-South gas interconnections in Central
Eastern and South Eastern Europe ("NSI East Gas"): regional gas connections between the Baltic Sea region, the Adriatic
and Aegean Seas and the Black Sea, notably to enhance diversification and
security of gas supply;

Member States concerned: Austria, Bulgaria, Cyprus,
Czech Republic, Germany, Greece, Hungary, Italy, Poland, Romania, Slovakia, Slovenia;

(7)
Southern Gas Corridor ("SGC"): transmission of gas from the Caspian Basin, Central Asia, the Middle
East and the Eastern Mediterranean Basin to the Union to enhance
diversification of gas supply.

Member States concerned: Austria, Bulgaria, Czech
Republic, Cyprus, France, Germany, Hungary, Greece, Italy, Poland, Romania,
Slovakia, Slovenia;

(8)
Baltic Energy Market Interconnection Plan in gas
("BEMIP Gas"): infrastructure to end the
isolation of the three Baltic States and Finland and their single supplier
dependency and to increase diversification of supplies in the Baltic Sea
region;

Member States concerned: Denmark, Estonia,
Finland, Germany, Latvia, Lithuania, Poland, Sweden.

3.
Priority oil corridor

(9)
Oil supply connections in Central Eastern
Europe ("OSC"): interoperability of the
oil pipeline network in Central Eastern Europe to increase security of supply
and reduce environmental risks.

Member States concerned: Austria, Czech
Republic, Germany, Hungary, Poland, Slovakia.

4.
Priority thematic areas

(10)
Smart grids deployment: adoption of smart grid technologies across the Union to efficiently
integrate the behaviour and actions of all users connected to the electricity
network, in particular the generation of large amounts of electricity from
renewable or distributed energy sources and demand response by consumers;

Member States concerned: all;

(11)
Electricity highways: first electricity highways by 2020, in view of building an
electricity highways system across the Union;

Member States concerned: all;

(12)
Cross-border carbon dioxide network: development of carbon dioxide transport infrastructure between
Member States and with neighbouring third countries in view of the deployment
of carbon dioxide capture and storage.

Member States concerned: all.

ANNEX II

ENERGY
INFRASTRUCTURE CATEGORIES

The energy infrastructure categories to be
developed in order to implement the energy infrastructure priorities listed in
Annex I are the following:

(1)
concerning electricity:

(a)
high-voltage overhead transmission lines, if
they have been designed for a voltage of 220 kV or more, and underground and
submarine transmission cables, if they have been designed for a voltage of 150
kV or more;

(b)
concerning in particular electricity highways;
any physical equipment designed to allow transport of electricity on the high
and extra-high voltage level, in view of connecting large amounts of
electricity generation or storage located in one or several Member States or
third countries with large-scale electricity consumption in one or several
other Member States;

(c)
electricity storage facilities used for storing
electricity on a permanent or temporary basis in above-ground or underground
infrastructure or geological sites, provided they are directly connected to
high-voltage transmission lines designed for a voltage of 110 kV or more;

(d)
any equipment or installation essential for the
systems defined in (a) to (c) to operate safely, securely and efficiently,
including protection, monitoring and control systems at all voltage levels;

(e)
any equipment or installation, both at
transmission and medium voltage distribution level, aiming at two-way digital
communication, real-time or close to real-time, interactive and intelligent
monitoring and management of electricity generation, transmission, distribution
and consumption within an electricity network in view of developing a network
efficiently integrating the behaviour and actions of all users connected to it
– generators, consumers and those that do both – in order to ensure an
economically efficient, sustainable electricity system with low losses and high
quality and security of supply and safety;

(2)
concerning gas:

(a)
transmission pipelines for the transport of
natural gas and bio gas that form part of a network which mainly contains
high-pressure pipelines, excluding high-pressure pipelines used for upstream or
local distribution of natural gas,

(b)
underground storage facilities connected to the
above-mentioned high-pressure gas pipelines,

(c)
reception, storage and regasification or
decompression facilities for liquefied natural gas (LNG) or compressed natural
gas (CNG);

(d)
any equipment or installation essential for the
system to operate safely, securely and efficiently or to enable bi-directional
capacity;

(3)
concerning oil:

(a)
pipelines used to transport crude oil;

(b)
pumping stations and storage facilities
necessary for the operation of crude oil pipelines;

(c)
any equipment or installation essential for the
system in question to operate properly, securely and efficiently, including
protection, monitoring and control systems and reverse-flow devices;

(4)
concerning carbon dioxide:

(a)
dedicated pipelines, other than upstream
pipeline network, used to transport anthropogenic carbon dioxide from more than
one source, i.e. industrial installations (including power plants) that produce
carbon dioxide gas from combustion or other chemical reactions involving fossil
or non-fossil carbon-containing compounds, for the purpose of permanent
geological storage of carbon dioxide pursuant to Directive 2009/31/EC;

(b)
facilities for liquefaction and buffer storage
of carbon dioxide in view of its further transportation. This does not include
infrastructure within a geological formation used for the permanent geological
storage of carbon dioxide pursuant to Directive 2009/31/EC and associated
surface and injection facilities.

(c)
any equipment or installation essential for the system
in question to operate properly, securely and efficiently, including
protection, monitoring and control systems

ANNEX III

REGIONAL
IDENTIFICATION OF PROJECTS OF COMMON INTEREST

1.
Rules for regional Groups

(1)
For electricity projects falling under the categories
set out in point 1 of Annex II, each Group shall be composed of representatives
of the Member States, national regulatory authorities, transmission system
operators following their obligation to cooperate on a regional level in
accordance with Article 6 of Directive 2009/72/EC and Article 12 of Regulation
(EC) No 714/2009 and project promoters concerned by each of the relevant
priorities designated in Annex I, as well as the Commission, the Agency and the
ENTSO for Electricity.

For gas projects falling under the categories
set out in point 2 of Annex II, each Group shall be composed of representatives
of the Member States, national regulatory authorities, transmission system
operators following their obligation to cooperate on a regional level in accordance
with Article 7 of Directive 2009/73/EC and Article 12 of Regulation (EC) No
715/2009 and project promoters concerned by each of the relevant priorities
designated in Annex 1, as well as the Commission, the Agency and the ENTSO for
Gas.

For oil and carbon dioxide transport projects
falling under the categories referred to in Annex II(3) and (4), each Group
shall be composed of the representatives of the Member States, project
promoters concerned by each of the relevant priorities designated in Annex 1
and the Commission.

(2)
Each Group shall organise its workload in line
with regional cooperation efforts pursuant Article 6 of Directive 2009/72/EC,
Article 7 of Directive 2009/73/EC, Article 12 of Regulation (EC) No 714/2009,
and Article 12 of Regulation (EC) No 715/2009 and other existing regional
cooperation structures.

(3)
Each Group shall invite, as appropriate in view
of implementing the relevant priority designated in Annex I, representatives of
national administrations, of regulatory authorities, project promoters, and
transmission system operators from EU candidate countries and potential
candidates, the member countries of the European Economic Area and the European
Free Trade Association, representatives from the Energy
Community institutions and bodies, countries covered by
the European Neighbourhood policy and countries, with which the Union has
established specific energy cooperation.

(4)
Each Group shall consult the organisations
representing relevant stakeholders, including producers, distribution system
operators, suppliers, consumers, and, for the tasks set out in paragraph 2 of Article 5, organisations for environmental
protection. The Group may organise hearings or consultations, where relevant
for the accomplishments of it tasks.

2.
Process for regional identification

(1)
Each project promoter shall submit an
application for selection as project of common interest to the members of the
respective Group, including an assessment of its project(s) with regard to the
contribution to implementing the priorities set out in Annex I, the fulfilment
of the relevant criteria defined in Article 6, and any other relevant
information for the evaluation of the project.

(2)
All recipients shall preserve the
confidentiality of commercially sensitive information.

(3)
Proposed electricity transmission and storage
projects falling under the categories set out in point 1(a) to (d) of Annex II
shall be part of the latest available ten-year network development plan for
electricity, developed by the ENTSO for Electricity pursuant Article 8 of
Regulation (EC) 714/2009.

(4)
For all Union-wide lists of projects of common
interest adopted after 1 August 2013, proposed gas transmission and storage
projects falling under the categories set out in point 2 of Annex II shall be
part of the latest available ten-year network development plan for gas,
developed by the ENTSO for Gas pursuant Article 8 of Regulation (EC) 715/2009.

(5)
Proposed carbon dioxide transport projects
falling under the category set out in point 4 of Annex II shall be presented as
part of a plan, developed by more than two Member States, for the development
of cross-border carbon dioxide transport and storage infrastructure, to be
presented by the Member States concerned or entities designated by those Member
States to the Commission.

(6)
When evaluating proposed electricity and gas projects falling under the categories set out in points 1(a) to (d)
and 2 of Annex II, each Group shall, without prejudice
to the provisions of point 4, take account of the analysis made, in accordance with the provisions in paragraph 7 of
Article 12, for proposed electricity and gas projects falling
under the categories set out in points 1(a) to (d) and 2 of Annex II in the latest available ten-year network
development plan for gas and electricity, developed by the ENTSOs for
Electricity and Gas pursuant Article 8 of Regulations (EC) 714/2009 and (EC)
715/2009.

ANNEX IV

RULES
AND INDICATORS CONCERNING CRITERIA FOR PROJECTS OF COMMON INTEREST

(1)
A project with significant cross-border impact is
a project on the territory of a Member State, which fulfils the following
conditions:

(a)
for electricity transmission, the project changes
the grid transfer capacity at the border of that Member State with one or
several other Member States or at any other relevant
cross-section of the same transmission corridor by at
least 500 Megawatt compared to the situation without commissioning of the
project;

(b)
for electricity storage, the project provides
storage capacity allowing a net annual electricity generation of at least 500
Gigawatt-hours;

(c)
for gas transmission, the project concerns
investment in reverse flow capacities or changes the capability to transmit gas
across the border(s) of the concerned Member State by at least 10% compared to
the situation prior to the commissioning of the project;

(d)
for gas storage or liquefied/compressed natural
gas, the project aims at supplying directly or indirectly at least two Member
States or at fulfilling the infrastructure standard (N-1 rule) at regional
level in accordance with Article 6(3) of Regulation (EU) No 994/2010;

(e)
for smart grids, the project is designed for equipments
and installations at high-voltage and medium-voltage level designed for a
voltage of 10kV or more. It involves transmission and distribution system operators
from at least two Member States, which cover at least 100,000 users that
generate or consume electricity or do both in a consumption area of at least 300
Gigawatthours/year, of which at least 20% originate from non dispatchable
resources.

(2)
Concerning projects falling under the categories
set out in points 1(a) to (d) of Annex II, the criteria listed in Article 4 shall be
measured as follows:

(a)
Market integration, competition and system
flexibility shall be measured in line with the analysis made in the latest
available ten-year network development plan in electricity, notably by:

–
calculating, for cross-border projects, the
impact on the grid transfer capability in both power flow directions, measured
in terms of amount of power (in megawatt), or, for projects with significant
cross-border impact, the impact on grid transfer capability at borders between
relevant Member States, between relevant Member States and third countries or
within relevant Member States and on demand-supply balancing and network
operations in relevant Member States;

–
assessing the impact, for the area of analysis
as defined in point 10 of Annex V, in terms of energy system-wide generation
and transmission costs and evolution of market prices provided by a project
under different planning scenarios, notably taking into account the variations
induced on the merit order.

(b)
Transmission of renewable energy generation to
major consumption centres and storage sites shall be measured in line with the
analysis made in the latest available ten-year network development plan in
electricity, notably by:

–
for electricity transmission, by estimating the
amount of generation capacity from renewable energy sources (by technology, in
megawatts), which is connected and transmitted due to the project, compared to
the amount of planned total generation capacity from these types of renewable
energy sources in the concerned Member State in 2020 according to the national
renewable energy action plans as defined in Article 4 of Directive 2009/28/EC.

–
for electricity storage, by comparing new
capacity provided by the project with total existing capacity for the same
storage technology in the area of analysis as defined in point 10 of Annex V.

(c)
Interoperability and secure system operation
shall be measured in line with the analysis made in the latest available
ten-year network development plan in electricity, notably by assessing the
impact of the project on the loss of load expectation for the area of analysis
as defined in point 10 of Annex V in terms of generation and transmission
adequacy for a set of characteristic load periods, taking into account expected
changes in climate-related extreme weather events and their impact on
infrastructure resilience.

The total expenditure for the project over its
technical lifecycle shall be taken into account when calculating these
indicators.

(3)
Concerning projects falling under the categories
set out in point 2 of Annex II, the criteria listed in Article 4 shall be
measured as follows:

(a)
Market integration and interoperability shall be
measured by calculating the additional value of the project to the integration
of market areas and price convergence, to the overall flexibility of the
system, including the capacity level offered for reverse flows under various
scenarios.

(b)
Competition shall be measured on the basis of
diversification, including the facilitation of access to indigenous sources of
supply, taking successively into account diversification of sources,
counterparts and routes and the impact of new capacity on the HHI index
calculated at capacity level for the area of analysis as defined in point 10 of
Annex V.

(c)
Security of gas supply shall be measured by
calculating the additional value of the project to the short and long-term resilience
of the system and to enhancing the remaining flexibility of the system to cope
with supply disruptions under various scenarios, as well as the additional
capacity provided by the project measured in relation to the infrastructure
standard (N-1 rule) at regional level in accordance with Article 6(3) of
Regulation (EU) No 994/2010.

(d)
Sustainability shall be measured as the
contribution of a project to reduce emissions, to support the back-up of
renewable electricity generation or power-to-gas and biogas transportation,
taking into account expected changes in climatic conditions.

(4)
Concerning projects falling under the category
set out in point 1(e) of Annex II, each function listed in Article 4 shall be
evaluated against the following criteria:

(a)
Level of sustainability: This criterion shall be
measured by assessing the reduction of greenhouse gas emissions, and the
environmental impact of electricity grid infrastructure;

(b)
Capacity of transmission and distribution grids
to connect and bring electricity from and to users: This criterion shall be
measured by estimating the installed capacity of distributed energy resources
in distribution networks, the allowable maximum injection of electricity
without congestion risks in transmission networks, and the energy not withdrawn
from renewable sources due to congestion or security risks;

(c)
Network connectivity and access to all
categories of network users: This criterion shall be evaluated by assessing the
methods adopted to calculate charges and tariffs, as well as their structure,
for generators, consumers and those that do both, and the operational
flexibility provided for dynamic balancing of electricity in the network;

(d)
Security and quality of supply: This criterion
shall be evaluated by assessing the ratio of reliably available generation
capacity and peak demand, the share of electricity generated from renewable
sources, the stability of the electricity system, the duration and frequency of
interruptions per customer, including climate related disruptions, and the voltage
quality performance;

(e)
Efficiency and service quality in electricity
supply and grid operation: This criterion shall be estimated by assessing the
level of losses in transmission and in distribution networks, the ratio between
minimum and maximum electricity demand within a defined time period, the demand
side participation in electricity markets and in energy efficiency measures,
the percentage utilisation (i.e. average loading) of electricity network components,
the availability of network components (related to planned and unplanned
maintenance) and its impact on network performances, and the actual
availability of network capacity with respect to its standard value;

(f)
Contribution to cross-border electricity markets
by load-flow control to alleviate loop-flows and increase interconnection
capacities: This criterion shall be estimated by assessing the ratio between
interconnection capacity of a Member State and its electricity demand, the
exploitation of interconnection capacities, and the congestion rents across
interconnections.

(5)
Concerning oil transport projects falling under
the categories set out in point 3 of Annex II, the criteria listed in Article 4 shall be
measured as follows:

(a)
Security of oil supply shall be measured by
assessing the additional value of the new capacity offered by a project for the
short and long-term resilience of the system and the remaining flexibility of
the system to cope with supply disruptions under various scenarios.

(b)
Interoperability shall be measured by assessing
to what extent the project improves the operation of the oil network, in
particular by providing the possibility of reverse flows.

(c)
Efficient and sustainable use of resources shall
be evaluated by assessing the extent to which the project makes use of already
existing infrastructure and contributes to minimising environmental and climate
change burden and risks.

ANNEX V

ENERGY
SYSTEM-WIDE COST-BENEFIT ANALYSIS

The methodology for a harmonised energy
system-wide cost-benefit analysis for projects of common interest shall satisfy
the following principles laid down in this Annex.

(1)
The methodology shall be based on a common input
data set representing the Union's electricity and gas systems in the years n+5,
n+10, n+15, and n+20, where n is the year in which the analysis is performed.
This data set shall comprise at least:

(a)
In electricity: scenarios for demand, generation
capacities by fuel type (biomass, geothermal, hydro, gas, nuclear, oil, solid
fuels, wind, solar photovoltaic, concentrated solar, other renewable
technologies)and their geographical location, fuel prices (including biomass,
coal, gas and oil), carbon dioxide prices, the composition of the transmission
and, if relevant, the distribution network, and its evolution, taking into
account all new significant generation (including capacity equipped for
capturing carbon dioxide), storage and transmission projects for which a final
investment decision has been taken and that are due to be commissioned by the end
of year n+5;

(b)
In gas: scenarios for demand, imports, fuel prices
(including coal, gas and oil), carbon dioxide prices, the composition of the transmission
network and its evolution, taking into account all new projects for which a
final investment decision has been taken and that are due to be commissioned by
the end of year n+5;

(2)
The data set shall reflect Union and national
legislations in force at the date of analysis. The data sets used for
electricity and gas respectively shall be compatible, notably with regard to
assumptions on prices and volumes in each market. The data set shall be
elaborated after formally consulting Member States and the organisations
representing all relevant stakeholders. The Commission and the Agency shall
ensure access to the required commercial data from third parties when
applicable.

(3)
The methodology shall give guidance for the
development and use of network and market modelling necessary for the cost-
benefit analysis.

(4)
The cost-benefit analysis shall be based on a
harmonised evaluation of costs and benefits for the different categories of
projects analysed and cover at least the period of time referred to in point 1.

(5)
The cost-benefit analysis shall at least take
into account the following costs: capital expenditure, operational and
maintenance expenditure over the technical lifecycle of the project and
decommissioning and waste management costs, where relevant. The methodology
shall give guidance on discount rates to be used for the calculations.

(6)
For electricity transmission and storage, the
cost-benefit analysis shall at least take into account the impacts on the
indicators defined in Annex III. In line with the methods applied for the
elaboration of the latest available ten-year network development plan in
electricity, it shall in addition notably take into account the impacts of the
project on the following:

(a)
Competition in terms of market power of different
operators and the convergence of prices between different Member States;

(b)
Costs of electricity generation, transmission
and distribution, including the costs for power plant self consumption and
those related to greenhouse gas emissions and transmission losses over the
technical lifecycle of the project;

(c)
Future costs for new generation and transmission
investment over the technical lifecycle of the project;

(d)
Operational flexibility, including optimisation
of regulating power and ancillary services;

(e)
System resilience, including disaster and climate
resilience, and system security, notably for European critical infrastructures
as defined in Directive 2008/114/EC.

(7)
For gas, the cost-benefit analysis shall at
least take into account the results of market testing, such as open seasons, the
impacts on the indicators defined in Annex III and the following impacts:

(a)
Competition in terms of market power of different
operators and the convergence of prices between different Member States;

(b)
System resilience, including disaster and climate
resilience, and system security, notably for European critical infrastructures
as defined in Directive 2008/114/EC;

(c)
Probability and quantity of energy not being
supplied and increase in security and quality of supply;

(d)
Contribution to the integration of different gas
market areas,

(a)
Flexibility of and congestion in the gas network.

(8)
For smart grids, the cost-benefit analysis shall
take into account the impacts on the indicators defined in Annex III.

(9)
The detailed method used to take into account
the indicators referred to in points 6 to 8 shall be elaborated after formally
consulting the organisations representing all relevant stakeholders.

(10)
The methodology shall define an area of analysis
for the cost-benefit analysis of each individual project and for the analysis
at regional or Union-wide level. The area for the analysis of an individual
project shall cover all Member States and third countries, on whose territory
the project shall be built, all directly neighbouring Member States and all
other Member States significantly impacted by the project.

(11)
The methodology shall define the analysis to be
carried out, based on the relevant input data set, by calculating the results
of the objective function with and without each project. The analysis shall
identify the Member States on which the project has net positive impacts
(beneficiaries) and those Member States on which the project has a net negative
impact (cost bearers). Each cost-benefit analysis shall include sensitivity
analyses concerning the input data set, the commissioning date of different
projects in the same area of analysis and other relevant parameters.

(12)
Transmission and distribution system operators shall
exchange the information necessary for the elaboration of the methodology,
including the relevant network and market modelling. Any transmission or
distribution system operator collecting information on behalf of other transmission
or distribution system operators shall give back to the participating transmission
and distribution system operators the results of the collection of data. For the common electricity and gas market and network model set out
in paragraph 8 of Article 12,
the input data set referred to in point 1 shall cover the years n+10, n+20 and n+30 and the model shall allow
for a full assessment of economic, social and environmental impacts, notably
including external costs such as those related to
greenhouse gas and conventional air pollutant emissions or security of supply.

ANNEX VI

GUIDELINES
FOR TRANSPARENCY AND PUBLIC PARTICIPATION

(1)
The manual of procedures shall at least specify:

(a)
the relevant legislation upon which decisions and
opinions are based for the different types of relevant projects of common
interest, including environmental legislation;

(b)
the relevant decisions and opinions to be obtained;

(c)
the names and contact details of the Competent
Authority, other authorities and major stakeholders concerned;

(d)
the work flow, outlining each stage in the process,
including an indicative time frame;

(e)
information about the scope, structure and level
of detail of documents to be submitted with the application for decisions, including
a checklist;

(f)
the stages and means for the general public to
participate in the process.

(2)
To increase public participation in the permit
granting process, the following principles shall be applied:

(a)
The stakeholders affected by a project of common
interest, including relevant authorities, landowners and citizens living in the
vicinity of the project, the general public and their associations,
organisations or groups, shall be extensively informed and consulted at an
early stage and in an open and transparent manner. Where relevant, the competent
authority shall actively support the activities undertaken by the project
promoter.

(b)
Competent authorities shall ensure that public
consultation procedures for projects of common interest are concentrated where
possible. Each public consultation shall cover all subject matters relevant to
the particular stage of the procedure, and one subject matter relevant to the
particular stage of the procedure shall not be addressed in more than one
public consultation. The subject matters addressed by a public consultation shall
be clearly indicated in the notification of the public consultation.

(c)
Comments and objections shall be admissible from
the beginning of the public consultation until the expiry of the deadline only.

(3)
The concept for public participation shall at
least include information about:

(a)
the stakeholders concerned and addressed;

(b)
the measures envisaged;

(c)
the timeline;

(d)
the human resources allocated to the respective
tasks.

(4)
In the context of the public consultation to be
carried out before submission of the application file, the relevant parties
shall at least:

(a)
publish an information leaflet of no more than
15 pages, giving, in a clear and concise manner, an overview of the purpose and
preliminary timetable of the project, at least three alternative routes
considered, expected impacts, including of cross-border nature, and possible
mitigation measures;

(b)
inform all stakeholders affected about the
project through the website referred to in Article 10(7) and other appropriate information
means;

(c)
invite in written form relevant affected
stakeholders to dedicated meetings, during which concerns shall be discussed.

(5)
The project website shall make available as a
minimum the following:

(a)
a non-technical and regularly updated summary of
no more than 50 pages reflecting the current status of the project and clearly
indicating, in case of updates, changes to previous versions;

(b)
the project and public consultation planning,
clearly indicating dates and locations for public consultations and hearings;

(c)
contact details in view of obtaining the full
set of application documents;

(d)
contact details in view of conveying comments and
objections during public consultations;

(e)
the manual of procedures pursuant Article 10(1).

[1]               COM(2010)677

[2]               COM(2011)
500/I final and COM(2011) 500/II final (Policy Fiches)

[3]               All amounts in 2011 prices

[4]               30% if the conditions are right

[5]               SEC(2011)755

[6]               Decision
No 1364/2006/EC

[7]               COM(2010)203
and SEC(2010)505

[8]               Regulation
(EC) No 680/2007

[9]               Regulation
(EC) No 663/2009

[10]             COM(2010)
2020

[11]             30% if the conditions are right

[12]             COM(2011)
112 in combination with SEC(2011)288

[13]             See
section 1.2.1 of the accompanying impact assessment.

[14]             OJ C , , p. .

[15]             OJ C , , p. .

[16]             COM(2010) 2020

[17]             COM(2010) 677

[18]             OJ L 262, 22.9.2006, p. 1.

[19]             30% if the conditions are right

[20]             Directive 2009/28/EC of the European Parliament and of
the Council of 23 April 2009 on the promotion of the use of energy from
renewable sources, OJ L 140, 5.6.2009, p. 16.

[21]             OJ L 211, 14.8.2009, p.55.

[22]             OJ L 211, 14.8.2009p.94.

[23]             OJ L 345, 23.12.2008, p. 75

[24]             COM(2011) 202 final

[25]             COM (2011) 539

[26]             SEC(2011)755

[27]             OJ L 211, 14.8.2009, p.15

[28]             OJ L 211, 14.8.2009, p.36

[29]             OJ L 211, 14.8.2009, p.1

[30]             OJ L 200, 31.7.2009, p.31

[31]             OJ L 162, 22.6.2007, p. 1.

[32]             OJ L 210, 31.7.2006, p. 25.