Guidance for project promoters and regulators for the cross-border cost allocation of projects of common interest.
Date: 2014-02-05
Institutions: European University Institute
Subjects: cross-border cooperation, energy cooperation, energy grid, energy policy, project of common interest, trans-European network

ISSN 1977-3919

Guidance for Project Promoters 
and Regulators for the  
Cross-Border Cost Allocation  
of Projects of Common Interest
Authors: Leonardo Meeus, Xian He

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Highlights

•	 At	 present,	 the	 common	 cross-border	 cost	 allocation	 practice	 is	 that	 each	
country	pays	for	the	assets	on	its	territory.	The	recently	adopted	Regulation	
(EU)	 No	 347/2013	 on	 guidelines	 for	 the	 implementation	 of	 European	 en-
ergy	 infrastructure	 priorities	 is	 an	 opportunity	 to	 improve	 this	 practice	 by	
introducing	innovative	cross-border	cost	allocation	(CBCA)	agreements.	The	
Cost	Benefit	Analysis	(CBA)	that	will	now	be	available	for	all	so-called	Pro-
jects	of	Common	Interest	(PCI)	is	a	tool	that	can	be	used	to	design	this	type	
of	agreements.

•	 The	current	practice	can	be	improved	in	three	dimensions,	and	for	each	we	
propose	a	minimum	standard.	The	first	way	to	improve	CBCA	agreements	is	
to	base	them	on	the	CBA	results.	The	minimum	standard	that	we	propose	is	
that	if	one	of	the	involved	parties	in	a	project	is	likely	to	be	a	significant	net	
loser,	that	loss	should	at	least	be	compensated.	The	second	way	to	improve	the	
CBCA	agreements	is	to	enter	into	a	formal	contract.	The	minimum	stand-
ard	that	we	propose	is	that	this	contract	at	least	include	a	reward/penalty	for	
the	commissioning	date.	The	third	way	to	improve	the	CBCA	agreements	is	
to	agree	on	a	set	of	projects	rather	than	individual	projects.	The	minimum	
standard	that	we	propose	is	that	strongly	complementary	projects	be	defined	
as	a	single	PCI.	

•	 We	 recommend	 ACER	 guarantee	 the	 minimum	 standards	 in	 its	 decisions,	
and	we	also	recommend	that	project	promoters	and	National	Regulatory	Au-
thorities	(NRAs)	consider	going	beyond	these	minimum	standards	in	cases	
where	this	is	opportune.	There	is	indeed	room	for	regulatory	innovation	in	
this	context,	and	we	illustrate	that	innovation	in	CBCA	agreements	is	already	
happening	by	referring	to	the	cases	of	Norway-Sweden	and	Italy-Greece.

fsr.eui.eu

Issue 2014/02 
January 2014

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FLORENCESCHOOL OF REGULATIONIntroduction
A	 first	 list	 of	 so-called	 Projects	 of	 Common	 Interest1	 has	
been	approved	in	Europe,	as	foreseen	in	the	recently	adopted	
Regulation	 (EU)	 No	 347/2013	 on	 guidelines	 for	 the	 imple-
infrastructure	 priorities2 
mentation	 of	 European	 energy	
.	 In	 line	 with	 this	 new	 Regulation,	 the	 projects	 have	 been	
selected	 based	 on	 a	 Cost	 Benefit	 Analysis	 (CBA)	 to	 ensure	
that	they	have	a	cross-border	impact	and	a	positive	net	benefit	
for	Europe.	Most	of	the	projects	on	this	list	are	well	advanced	
so	that	the	promoters	can	soon	ask	their	National	Regulatory	
Authorities	 (NRAs)	 to	 approve	 the	 costs.	 Following	 the	 new	
Regulation,	NRAs	then	have	6	months	to	agree	on	how	to	allo-
cate	the	investment	costs	between	the	Member	States	they	rep-
resent,	and	if	they	do	not,	ACER	is	expected	to	decide.	

At	present,	the	common	cross-border	cost	allocation	practice	
is	that	each	country	pays	for	the	assets	on	its	territory.	For	an	
internal	 line,	 this	 means	 that	 the	 investment	 is	 fully	 paid	 by	
one	member	state,	even	if	other	member	states	benefit.	For	a	
cross-border	line,	this	means	that	the	exact	routing	of	the	pro-
ject	determines	how	the	costs	are	shared	between	the	member	
states,	 irrespective	 of	 the	 benefits	 of	 that	 investment	 for	 the	
country	 where	 most	 of	 the	 assets	 happen	 to	 be	 located.	 As	 a	
result,	some	projects	are	delayed	or	not	even	considered,	and	
other	 projects	 are	 distorted	 in	 terms	 of	 their	 dimensioning,	
routing,	or	technology.	

Project	promoters	and	NRAs	therefore	should	have	an	interest	
to	 come	 up	 with	 alternative	 Cross-Border	 Cost	 Allocation	
(CBCA)	 agreements,	 which	 enable	 them	 to	 consider	 cross-
border	compensation	to	improve	the	commitment	of	all	par-
ties	 involved	 in	 the	 development	 of	 a	 project	 that	 increases	
total	welfare.	With	the	CBA	method	that	is	being	developed	in	
the	context	of	the	Regulation	(EU)	No	347/20133,	there	is	now	
also	an	economic	tool	to	support	project	promoters	and	NRAs	
in	designing	innovative	agreements.	Furthermore,	in	order	to	
foster	the	cooperation	of	NRAs,	ACER	published	a	recommen-
dation	 on	 information	 requirement	 and	 high-level	 principles	
that	NRAs	shall	follow	when	handling	a	cross-border	cost	allo-
cation	request4.

In	 this	 brief,	 we	 discuss	 three	 paths	 to	 innovation	 in	 CBCA	
agreements:	 1)	 basing	 the	 agreements	 on	 the	 CBA	 results;	 2)	
entering	 into	 a	 formal	 contract;	 3)	 agreeing	 on	 a	 set	 of	 pro-
jects	 rather	 than	 individual	 projects.	 We	 recommend	 project	

1.	 European	Commission,	List	of	Projects	of	Common	Interest.	14	October	

2013.

2.	 Regulation	(EU)	No	347/2013	on	guidelines	for	trans-European	energy	
infrastructure	and	repealing	Decision	No	1364/2006/EC	and	amending	
Regulations	(EC)	No	713/2009,	(EC)	No	714/2009	and	(EC)	No	715/2009.

3.	 ENTSO-E	 Guideline	 for	 Cost	 Benefit	 Analysis	 of	 Grid	 Development	

Projects.	14	November	2013.

4.	 ACER,	 Recommendation	 of	 the	 Agency	 for	 the	 cooperation	 of	 energy	

regulators	No	07/2013	of	25	September	2013.

2 ■  FSR - Policy Brief ■ Issue 2014/02 ■ January 2014

promoters	and	NRAs	to	take	the	lead	in	designing	innovative	
CBCA	agreements,	but	if	they	cannot	agree,	ACER	will	have	to	
decide.	We	argue	that	we	are	at	an	early	stage	of	innovation	in	
CBCA	agreements.	In	the	short	term,	ACER	should	therefore	
only	guarantee	a	minimum	standard	for	CBCA	agreements	in	
its	 decisions,	 and	 identify	 and	 disseminate	 good	 practices	 by	
project	promoters	and	NRAs,	like	the	examples	we	will	show-
case	in	this	policy	brief.	

1.  Basing  the  agreements  on  the  CBA 
results

Existing practice

As	mentioned	in	the	introduction,	the	common	practice	is	that	
each	 country	 pays	 for	 the	 assets	 on	 its	 territory;	 compensa-
tion	between	countries	is	not	considered.	If	the	costs	are	not	
in	line	with	the	benefits	of	the	countries	hosting	the	line,	this	
might	lead	to	investment	distortions.	The	distortion	could	be	
expressed	 in	 different	 forms,	 such	 as	 a	 delay	 in	 the	 commis-
sioning	date,	or	suboptimal	project	dimensioning	or	routing.	

Complete improvement

A	complete	improvement	would	be	to	allocate	the	costs	strictly	
in	proportion	to	the	benefits,	which	is	in	theory	the	best	way	
to	allocate	the	costs	across	borders.	This	approach	is,	however,	
hard	to	implement	in	practice	due	to	two	main	reasons.	First,	it	
requires	a	common	understanding	of	the	costs	and	benefits	of	
these	projects	among	all	involved	parties,	i.e.	a	validated	data	
set,	scenarios	and	calculation	models.	Thanks	to	the	new	Regu-
lation,	 a	 CBA	 method	 is	 under	 development	 in	 Europe	 with	
input	from	ENTSO-E,	ACER,	and	academia.	See,	for	instance,	
our	own	policy	brief	on	the	topic5.	But	this	is	a	work	in	progress	
and	 the	 current	 PCI	 list	 has	 been	 made	 using	 a	 preliminary	
method.	Second,	even	with	a	well-established	CBA	method,	it	
can	be	difficult	to	agree	on	the	allocation	of	investment	costs	
across	borders.	CBA	will	generate	a	value	of	net	benefit	for	each	
scenario	considered,	which	raises	the	question	of	how	to	take	
uncertainty	into	account.	

Minimum standard

If	the	CBA	shows	that	beneficiaries	are	stable	across	scenarios	
and	 that	 there	 is	 a	 high	 probability	 that	 one	 of	 the	 countries	
expected	to	invest	in	the	project	is	a	net	loser,	that	loss	could	

5.	 Meeus,	 L.,	 von	 der	 Fehr,	 N-H.	 M.,	 Azevedo,	 I.,	 He,	 X.,	 Olmos,	 L.,	
Glachant,	J.-M.,	2013.	Cost	Benefit	Analysis	in	the	context	of	the	Energy	
Infrastructure	Package.	FSR	Policy	Brief	No2/2013.	http://www.eui.eu/
Projects/THINK/Documents/Thinktopic/PB/PB201302.pdf

be	compensated	to	avoid	the	risk	that	the	net	loser	delays	the	
project.	 This	 minimum	 compensation	 does	 not	 fully	 align	
incentivizes	 of	 all	 involved	 parties	 to	 develop	 a	 project	 with	
cross-border	impact,	but	at	least	takes	away	a	strong	disincen-
tive.	 Note	 that	 this	 is	 in	 line	 with	 ACER’s	 recommendation	
that,	‘unless	the	relevant	NRAs	agree	otherwise,	compensations	
are	 provided	 only	 if	 at	 least	 one	 country	 hosting	 the	 project	
is	 deemed	 to	 have	 a	 negative	 net	 benefit’.	 Note	 also	 that	 this	
approach	reduces	the	risk	that	the	compensation	would	be	per-
ceived	as	unjustified	ex-post.	

Room for regulatory innovation

Between	 the	 minimum	 standard	 to	 be	 guaranteed	 by	 ACER,	
and	the	complete	improvement	that	might	be	practically	diffi-
cult	to	implement,	there	is	a	lot	of	room	for	innovation	by	pro-
ject	 promoters	 and	 NRAs.	 And,	 to	 support	 the	 involved	 par-
ties	in	coming	up	with	an	innovative	agreement,	it	is	of	course	
important	 to	 have	 the	 CBA	 results,	 including	 the	 net	 benefit	
for	each	involved	party	in	each	of	the	scenarios	with	the	main	
sensitivities.

In	what	follows,	we	provide	two	examples	with	two	neighbors	
that	 are	 developing	 an	 interconnector,	 and	 they	 managed	 to	
agree	on	an	investment	cost	allocation	based	on	CBA	results.	
Our	interpretation	of	the	case	is	that	they	did	not	try	to	imple-
ment	 a	 proportional	 approach,	 but	 they	 did	 go	 beyond	 the	
above-described	minimum	standard.

Minimum standard

The	scope	of	the	contract	should	be	at	least	extended	to	include	
a	 reward/penalty	 for	 the	 commissioning	 date.	 If	 the	 CBCA	
agreement	includes	compensation	(i.e.	deviation	from	the	‘each	
party	pays	for	the	assets	on	its	territory’	practice),	the	incentive	
scheme	could	be	directly	linked	to	the	compensation.	The	com-
pensation	could	for	instance	depend	on	the	deviation	between	
the	 agreed	 and	 actual	 commissioning	 date.	 This	 minimum	
standard	will	help	avoid	‘bridges	to	nowhere’,	like	in	the	case	of	
interconnection	between	Spain	and	France.	Some	of	the	neces-
sary	investments	had	already	been	made	a	long	time	ago	on	the	
Spanish	side,	while	the	French	investments	have	been	blocked	
for	many	different	reasons6.	

Room for regulatory innovation

Between	 the	 minimum	 standard	 to	 be	 guaranteed	 by	 ACER,	
and	 the	complete	 improvement	that	might	be	practically	dif-
ficult	 to	 implement,	 there	 is	 a	 lot	 of	 room	 for	 innovation	 by	
project	promoters	and	NRAs.	In	one	of	the	two	examples	we	
refer	 to	 in	 this	 brief,	 the	 project	 promoters	 did	 enter	 into	 a	
formal	contractual	arrangement,	which	was	approved	by	their	
NRAs.	Following	that	contract,	the	agreed	compensation	starts	
at	 the	 commissioning	 date	 of	 an	 interconnector,	 and	 stops	 at	
the	commissioning	date	of	an	internal	line	that	strongly	com-
plements	the	interconnector.

2. Enter into a formal contract 

3. Agreeing on a set of projects rather 
than individual projects

Current practice

It	is	not	yet	common	practice	for	project	promoters	from	dif-
ferent	 countries	 that	 are	 jointly	 developing	 a	 project	 to	 write	
a	 formal	 contract	 to	 guarantee	 the	 execution	 of	 their	 CBCA	
agreement.	As	a	result,	a	project	might	be	delayed	unilaterally,	
or	 worse,	 one	 party	 might	 stick	 to	 the	 originally	 agreed	 date	
while	the	other	does	not	so	that	the	former	has	stranded	costs.	
There	 are	 indeed	 a	 few	 ‘bridges	 to	 nowhere’	 in	 the	 European	
electricity	network.

Complete improvement

A	complete	improvement	to	ensure	the	execution	of	the	CBCA	
agreement	is	to	write	a	fully	contingent	contract,	specifying	the	
expected	action	of	involved	parties	in	every	possible	scenario,	
including	a	clause	for	non-compliance.	This	is	either	too	costly	
or	simply	impossible,	given	the	large	number	of	uncertainties	
in	the	scenarios	as	well	as	the	project-specific	uncertainties.	

3 ■ Cross-Border Cost Allocation of Projects

Current practice

Investments	on	different	borders	are	often	developed	as	sepa-
rate	projects	because	they	have	to	deal	with	different	authori-
ties	 for	 permit	 granting,	 and	 cost	 approval,	 even	 if	 they	 are	
complementary.	Complementarity	means	that	the	value	of	one	
project	depends	on	the	existence	of	the	other,	which	then	also	
means	that	the	same	applies	to	the	investment	cost	allocation	
across	borders.	As	a	result,	a	separate	cross-border	cost	alloca-
tion	 process	 for	 strongly	 complementary	 projects	 can	 distort	
the	development	of	both	projects.	

6.	

excava-
Inelfe,	 France-Spain	 Electrical	
tion	 of	 the	 French	 side	 of	 the	 tunnel	 begins.	 Press	 release,	 2012.		
http://www.inelfe.eu/IMG/pdf/ingles_021012_CP_tunnelier_Canig-
ou_-_EN.pdf

Interconnection:	 The	

Complete improvement

A	complete	improvement	would	be	to	make	a	single	agreement	
for	the	first	list	of	PCIs	because	there	are	strong	network	exter-
nalities	 in	 electricity	 networks.	 However,	 this	 overall	 agree-
ment	would	need	to	be	made	contingent	to	all	possible	delays	
of	each	PCI.	The	complexity	of	such	an	agreement	is	beyond	
the	manageable	level	given	the	number	of	the	PCIs.	

Minimum standard

A	 minimum	 standard	 for	 project	 grouping	 should	 be	 part	 of	
the	CBA	method	so	that	strongly	complementary	projects	are	
defined	 as	 a	 single	 PCI.	 In	 our	 previous	 policy	 brief	 on	 the	
CBA	method	proposed	by	ENTSO-E,	we	already	argued	that	
complementarity	 should	 be	 measured	 on	 an	 economic	 basis.	
This	 recommendation	 has	 not	 yet	 been	 fully	 implemented	 in	
the	sense	that	ENTSO-E	adopts	a	technical	criterion	based	on	
‘increase	of	grid	transfer	capacity’.

Room for regulatory innovation

Between	 the	 minimum	 standard	 to	 be	 guaranteed	 by	 ACER,	
and	the	 complete	improvement	that	might	be	practically	dif-
ficult	 to	 implement,	 there	 is	 a	 lot	 of	 room	 for	 innovation	 by	
project	promoters	and	NRAs.	ACER	also	called	upon	project	
promoters	to	indicate	potential	complementary	PCIs,	and	rec-
ommended	NRAs	to	use	it	as	an	input	to	decide	whether	it	is	
necessary	 to	 coordinate	 their	 decision-making	 processes	 for	
related	 CBCA	 requests.	 In	 one	 of	 the	 two	 examples	 we	 refer	
to	in	this	brief,	the	interaction	between	two	strongly	comple-
mentary	projects	has	been	considered	in	the	CBCA	agreement.

4. Showcasing cross-border cost alloca-
tion innovation

The Case of Norway-Sweden 

Scandinavian	 countries	 pioneered	 the	 use	 of	 a	 commonly	
agreed	upon	CBA	method	for	indicative	planning	in	the	Nordic	
Grid	Development	Plans.	The	case	below	illustrates	how	CBA	
results	can	be	used	to	support	project	promoters	and	NRAs	in	
designing	innovative	CBCA	agreements.

Facts7:

Norway	 is	 divided	 into	 5	 bidding	 zones	 because	 it	 has	 struc-
tural	congestion	within	the	country.	In	dry	years,	energy	supply	

7.	 Description	 of	 the	 facts	 is	 based	 on	 Nordic	 Grid	 Development	 Plan.	

2012.

4 ■  FSR - Policy Brief ■ Issue 2014/02 ■ January 2014

within	each	bidding	zone	can	be	very	tight.	This	is	also	the	case	
in	mid-Norway,	but	the	situation	was	worsened	in	2005	because	
of	new	industrial	consumption.	The	situation	became	critical	in	
the	following	dry	year.		The	easiest	and	quickest	solution	was	
to	increase	the	interconnection	capacity	between	mid-Norway	
and	Sweden,	i.e.	Line	A	in	Figure1.	This	is	a	100	km	long	420	
kV	AC	line	between	Nea	and	Järpströmmen,	commissioned	in	
2009.	75%	of	the	assets	are	on	Swedish	territory,	but	the	short-
term	benefits	are	mainly	for	Norway.	To	fully	utilize	Line	A,	the	
isolation	of	mid-Norway	from	the	rest	of	Norway	needs	to	be	
reduced,	i.e.	Line	B,	which	is	less	advanced	in	its	development.	
Line	B	is	expected	to	increase	the	available	capacity	on	Line	A	
from	200	to	750	MW.	Norway	agreed	to	compensate	Sweden	
for	Line	A	until	Line	B	is	ready.

Figure 1. The Norway-Sweden Case

Norway

Sweden

Line A

Line B

Source: own depiction

Interpretation:

The	compensation	incentivized	Sweden	to	speed-up	the	devel-
opment	of	Line	A,	and	also	incentivized	Norway	to	speed-up	
the	 development	 of	 Line	 B.	 The	 details	 of	 the	 compensation	
are	 not	 publicly	 available,	 but	 has	 probably	 been	 negotiated	
starting	 from	 the	 opportunity	 cost	 for	 Norway,	 which	 is	 the	
cost	of	delay	in	the	development	of	Line	A,	and	from	the	extra	
costs	that	Sweden	might	have	had	for	speeding	up	the	develop-
ment	of	that	line.	Moreover,	the	involved	TSOs	did	enter	into	a	
formal	contract,	which	has	been	approved	by	their	NRAs.	

In	other	words,	this	CBCA	agreement	showcases	the	three	pos-
sible	 ways	 in	 which	 the	 commitment	 of	 the	 involved	 parties	
be	improved	because	the	compensation	has	been	based	on	the	
CBA	results	(i.e.	sensitivity	analysis	with	regard	to	the	commis-
sioning	date),	the	parties	did	enter	into	a	formal	contract,	and	
the	 CBCA	 agreement	 considers	 the	 interaction	 between	 two	
strongly	complementary	projects.

The Case of Italy-Greece

Facts8:

In	2002,	a	500	MW	submarine	HVDC	link	between	Greece	and	
Italy	(GRITA)	was	commissioned	(Figure	2).	Italy	paid	for	and	
owns	75%	of	the	project,	Greece	the	remaining	25%.	The	pro-
ject	also	 received	 an	EU	grant	so	this	CBCA	agreement	only	
applies	to	part	of	the	project	costs.	The	project	allows	Italy	to	
import	 cheaper	 electricity	 from	 Eastern	 European	 countries,	
like	Albania	and	Turkey,	via	Greece.	

Figure 2. The Italy-Greece Case

Eastern 
Europe

Italy

Greece

GRITA

Source: own depiction

Interpretation:

This	 is	 a	 typical	 case	 with	 a	 transit	 country	 (Greece)	 that	 is	
compensated	 to	 jointly	 develop	 the	 project	 with	 its	 neighbor	
(Italy).	 According	 to	 the	 available	 information,	 however,	 this	
case	only	showcases	one	of	the	three	dimensions	for	innovation	
in	CBCA	agreements,	which	is	that	the	parties	deviated	from	
the	common	fifty-fifty	cost	sharing	for	submarine	links.	

8.	 Description	of	the	fact	is	based	on	Draft		agreement	between	the	Regu-
Description	of	the	fact	is	based	on	Draft	agreement	between	the	Regu-
latory	Authority	for	Electricity	and	Gas	of	Italy	(Autorità	per	l’energia	
elettrica	 e	 il	 gas)	 and	 the	 Regulatory	 Authority	 for	 Energy	 of	 Greece	
(ΡΥΘΜΙΣΤΙΚΗ	ΑΡΧΗ	ΕΝΕΡΓΕΙΑΣ)	for	the	allocation	of	the	electricity	
transfer	capacity	for	the	year	2002	on	the	High	Voltage	Direct	Current	
link	 interconnecting	 Italy	 and	 Greece.	 http://www.autorita.energia.it/
allegati/docs/02/60-02all.pdf		and	Giorgi,	A,	Rendina, 	R,	Georgantzis,	
G,	Marchiori,	C,	Pazienza,	G,	Corsi,	S,	Pincella,	C,	Pozzi,	M,	Danielsson,	
K.G,	Jonasson,	H,	Orini,	A,	Grampa,	R.	The	Italy	–	Greece	HVDC	link.	
CIGRE	2002.	http://dc217.4shared.com/doc/CgUYZGii/preview.html

5 ■ Cross-Border Cost Allocation of Projects

5. Guidance to project promoters, NRAs 
and ACER

There	 is	 a	 lot	 of	 room	 for	 innovation	 in	 CBCA	 agreements,	
and	we	have	illustrated	that	innovation	is	already	happening.	
The	future	will	tell	if	new	practices	will	prevail	and	replace	the	
current	practice	of	‘each	pays	for	the	assets	on	its	territory’,	or	
whether	 the	 current	 practice	 will	 continue	 to	 dominate,	 with	
exceptional	innovative	agreements.

For	the	short	term,	we	already	recommend	project	promoters	
and	 NRAs	 look	 at	 the	 case	 introduced	 here	 for	 inspiration	
for	their	own	projects,	and	consider	each	of	the	three	dimen-
sions	 for	 innovation	 in	 CBCA	 agreements	 that	 we	 identified:	
1)	 basing	 the	 cross-border	 cost	 allocation	 agreements	 on	 the	
CBA	results;	2)	entering	into	a	formal	contract;	and	3)	agreeing	
on	a	set	of	projects	rather	than	individual	projects.	ACER	can	
play	an	important	role	in	the	identification	and	dissemination	
of	good	practices,	like	the	ones	we	showcase	in	this	policy	brief.

ACER	will	also	have	to	decide	in	cases	that	project	promoters	
and	NRAs	cannot	agree	upon,	but	as	already	said	in	the	intro-
duction,	it	is	too	early	for	ACER	to	set	a	strong	standard.	This	
could	 indeed	 be	 counterproductive	 because	 it	 would	 leave	
fewer	incentives	for	the	involved	parties	to	innovate	in	alterna-
tive	CBCA	agreements,	so	that	more	cases	would	go	to	ACER,	
while	ACER	is	not	necessarily	in	the	best	position	to	deal	with	
regulatory	 innovation.	 We	 therefore	 recommend	 ACER	 set	 a	
minimum	standard,	which	is	also	in	the	spirit	of	the	new	Regu-
lation9.

Note,	however,	that	this	minimum	standard	will	already	make	a	
difference	by	unblocking	certain	projects,	and	it	will	help	avoid	
repetition	of	’bridges	to	nowhere’.	The	minimum	standard	will	
act	as	a	bottom-line	or	starting	point	for	negotiations	between	
project	promoters	and	NRAs:	1)	if	there	is	a	strong	likelihood	
of	a	significant	net	loser,	the	loss	should	be	compensated;	2)	the	
contract,	regardless	the	compensation,	should	be	made	contin-
gent	to	the	commissioning	date;	and	3)	a	minimum	standard	
for	project	grouping	should	be	part	of	the	CBA	method	so	that	
strongly	complementary	projects	are	defined	as	a	single	PCI.

European	 Commission,	 Impact	 assessment.	 Accompanying	 the	 docu-
9.	 European	 Commission,	 Impact	 assessment.	 Accompanying	 the	 docu-
ment	 Proposal	 for	 Regulation	 of	 the	 European	 Parliament	 and	 of	 the	
Council	 on	 guidelines	 for	 trans-European	 energy	 infrastructure	 and	
repealing	Decision	No	1364/2006/EC.	19	October	2011

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Florence	School	of	Regulation
Robert	Schuman	Centre		
for	Advanced	Studies

European	University	Institute
Via	delle	Fontanelle	19
I-50014	San	Domenico	di	Fiesole	(FI)
Italy	

Contact FSR coordinator:
Annika.Zorn@eui.eu

The Florence School of Regulation 

The Florence School of Regulation (FSR) was founded in 2004 as a partnership between the Council of the European Energy 
Regulators (CEER) and the European University Institute (EUI), and it works closely with the European Commission. The 
Florence School of Regulation, dealing with the main network industries, has developed a strong core of general regulatory 
topics and concepts as well as inter-sectoral discussion of regulatory practices and policies.

Complete information on our activities can be found online at:  fsr.eui.eu

© European University Institute 2014
Content © Authors, 2014

6 ■  FSR - Policy Brief ■ Issue 2014/02 ■ January 2014