Commission staff working document - Accompanying document to the Proposal for a Council Regulation concerning the notification to the Commission of investment projects into energy infrastructure within the European Community and repealing Regulation (EC) No 736/96 - Summary of the impact assessment {COM(2009) 361} {SEC(2009) 971}
Date: 2009-07-16
Institutions: European Commission
Subjects: EU action, data processing, energy distribution, energy policy, exchange of information, industrial infrastructure, investment, investment project, report

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 16.7.2009 
SEC(2009) 972 final 

COMMISSION STAFF WORKING DOCUMENT 

Accompanying document to the 

Proposal for a 

COUNCIL REGULATION 

concerning the notification to the Commission of investment projects into energy 
infrastructure within the European Community  
and repealing Regulation (EC) No 736/96 

SUMMARY OF THE IMPACT ASSESSMENT 

{COM(2009) 361} 
{SEC(2009) 971} 

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1. 

PROBLEM DEFINITION 

1.1.  What is the problem? 

The  problem  that  requires  action  is  the  lack  of  consistent  data  and 
information  on  investment  projects  (in  their  different  phases)  and  the  related 
shortcomings. Data, whatever source, is not always complete, reliable or fit for 
the  required  analysis:  for  example,  EUROSTAT  data  deals  with  past 
developments  while  prospective  data/information  is  necessary  for  investment 
projects.  Council  Regulation  (EC)  No  736/96  should  in  principle  allow  a 
monitoring  of  investment  projects  at  EU  level.  The  Commission  shall  be 
notified  once  a  year  of  major  investment  projects  or  major  decisions  affecting 
investment  projects  in  the  petroleum,  natural  gas  and  electricity  sectors. 
However,  this  Regulation  is  no  longer  consistently  enforced  nor  adapted  to 
today’s energy challenges. No other horizontal instrument at EU level exists. 

Without appropriate data, the Commission is not in a position to: 

–  analyze the likely evolution of EU energy infrastructure, detect any potential 

gaps and anticipate future energy supply;  

–  evaluate EU energy policy and support policy-making with official data; 

–  promote transparency on the likely evolution of the EU energy system. 

Data reporting (i.e. notification of information) and monitoring (i.e. analysis) of 
investment  projects  and  the  evolution  of  the  EU  energy  system  are  considered 
important in particular in this period of time. While significant investment into 
EU  energy  infrastructure  is  crucial,  there  is  a  high  degree  of  uncertainty  - 
increased by the current economic and financial crisis - related to the realisation 
of  investment  projects.  As  mentioned  in  the  Second  Strategic  Energy  Review 
adopted by the Commission in 2008, these investments are required to respond 
to future energy demand, to foster the transition to a low carbon energy future 
and to ensure greater energy security in case of a crisis as well as the effective 
functioning of the internal market. 

1.2.  Who is most affected and why is public intervention necessary? 

EU  institutions  lack  relevant/consistent  data  on  the  development  of  energy 
infrastructure in the EU to assess the strategic supply/demand balance. Industry 
is potentially affected by insufficient transparency on the likely evolution of the 
EU energy system. 

2. 

ANALYSIS OF SUBSIDIARITY 

EU institutions have decided new policies and set up a regulatory framework in 
which  economic  operators  have  to  make  investment  decisions.  Data  reporting 
and monitoring (i.e. analysis) of data on the progress of investment projects are 
necessary.  As  the  EU/regional  dimension  and  EU  policies  are  more  and  more 

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predominant  and  given  that  energy  sectors  are  more  and  more  interrelated  and 
integrated, national or sector – specific information risks to become insufficient. 

3. 

OBJECTIVES OF THE EU INITIATIVE 

The  general  objectives  of  the  revision  of  Council  Regulation  (EC)  No  736/96 
are  to  build  an  effective  and  efficient  reporting  and  monitoring  tool,  i.e.  to 
collect appropriate data on investment into EU energy infrastructure and to set 
up  a  mechanism  for  sharing  the  resulting  analysis  with  Member  States  and 
stakeholders.  

4. 

POLICY OPTIONS 

Four options have been considered: 

–  Option  0  –  Status  quo  -  Monitoring  of  the  evolution  of  energy 
infrastructure  on  the  basis  of  exiting  reporting  requirements:  Under 
option  0,  data  and  information  on  investment  projects  into  EU  energy 
infrastructure  would  be  either  provided  through  existing  EU  reporting 
mechanisms and / or purchased by the Commission. 

–  Option  1  –  Repeal  of  Council  Regulation  (EC)  No  736/96:  Compared  to 
the status quo, this option consists in repealing Council Regulation (EC) No 
736/96  given  the  poor  implementation  of  this  Regulation  and  its  growing 
inability to capture the new EU energy system. Assuming that in the longer 
run markets would balance supply and demand regular monitoring would be 
replaced by studies that could be conducted on a case by case basis if specific 
policy  decisions  would  require  an  analysis  of  energy  related  investment 
projects.  

–  Option  2  –  Monitoring  of  the  evolution  of  energy  infrastructure  with  a 
complementary  reporting:  An  improved  and  updated  reporting  tool  is 
devised: data requirements reflect the evolution of the EU energy system and 
requirements for quality of data are reinforced. The reporting obligations are 
aligned with recent legislative developments (e.g. reporting every two years, 
monitoring  under  the  third  internal  market  package)  and  are  simplified: 
Member  States  may  be  exempted  from  reporting  under  this  Regulation  if 
equivalent  data  is  provided  by  other  means  (e.g.  under  existing  specific 
legislation)  and  companies  may  also  be  relieved  to  notify  information  if 
Member States decide and provide the required info via other means. On top 
of  reporting,  provision  is  made  for  analysis  of  the  data  by  the  Commission 
and for a possible transparency of data collected, except for the commercially 
sensitive ones. 

–  Option 3 – Monitoring of the evolution of energy infrastructure with new 
and fully-fledged reporting requirements: The difference with option 2 is 
that option 3 sets a fully-fledged integrated reporting and monitoring system. 
Member States are obliged to notify and validate all requested information to 

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the  Commission,  irrespective  of  other  existing  notification  mechanisms  or 
monitoring mechanisms developed at EU level. 

5. 

ASSESSMENT OF IMPACTS 

An  improved  and  strengthened  reporting  system  will  increase  data  availability 
and  the  quality  of  data  and  information  notified  to  the  Commission  on  a  short 
term basis. Regular analysis of the situation and increased transparency will be 
possible.  In  a  medium  to  long  term  perspective,  the  elaboration  of  an  EU 
consistent  approach  and  overview  of  the  likely  evolution  of  the  EU  energy 
system,  based  on  accurate  and  appropriate  information,  is  generally  valued  by 
investors,  in  particular  if  it  reveals  obstacles  to  investment  projects  such  as 
undue  authorisation  procedures  or  lack  of  credit.  With  better  information,  the 
Commission could promote best practices. 

Policy  options  2  and  3  are  considered  more  relevant.  They  provide  a  useful 
framework  for  discussion  between  public  authorities  and  stakeholders  in  the 
analysis  of  future  trends  and  investment  projects  and  encountered  investment 
barriers. 

The  maximum  administrative  cost  (for  companies,  27  Member  States  and  the 
Commission  included)  for  a  full  reporting  induced  by  a  revised  Council 
Regulation (EC) No 736/96 is estimated at about half a million €. However, this 
maximum  cost  will  not  be  actually  incurred  as  some  data  will  have  to  be 
collected by Member States, at any rate due to other legal requirements. 

6. 

COMPARISON OF OPTIONS 

Against the criteria of efficiency, effectiveness and coherence, option 2 presents 
the  most  favourable  outcome  of  the  options  considered  and  best  reaches  the 
objectives  set  for  the  revision  of  Council  Regulation  (EC)  No  736/96.  It 
provides  an  integrated  and  updated  framework  combining  reporting  and 
monitoring at EU level. It gives the possibility to use validated data, which will 
improve acceptability of data and allow for comparison. As it takes into account 
the existing reporting which is of possible interest, it avoids duplicating existing 
work  and  minimizes  the  administrative  burden  imposed  on  Industry  and 
Member States. It is a proportionate option. 

7. 

MONITORING AND EVALUATION 

The impact of the new reporting and monitoring mechanism will be observed on 
the  basis  of  the  number  of  Member  States  complying  with  the  reporting 
obligation  and  of  the  quality,  completeness,  appropriateness  of  data  collected. 
Participation  of  stakeholders  and  of  interested  entities  in  the  monitoring 
mechanism  (interest  in  analytical  reports,  participation  in  meetings…)  and  the 
use  of  its  results  by  EU  institutions  and  other  interested  parties  will  also  be 
monitored.  

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