COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Communication on strengthening Europe's energy networks
Date: 2017-11-23
Institutions: Directorate-General for Energy, European Commission
Subjects: EU financing, clean technology, electricity supply, energy cooperation, energy grid, energy transport, gas supply, innovation, regional cooperation, trans-European network

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 23.11.2017 COM(2017) 718 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Communication on strengthening Europe's energy networks  
 
 
1. Introduction 

The  European  Commission's  “Framework  Strategy  for  a  Resilient  Energy  Union  with  a 
Forward-Looking  Climate  Change  Policy”  has  created  a  new  momentum  to  achieve  energy 
security, sustainability and competitiveness.  

On a global scale, Europe remains the frontrunner in terms of our ambitious contribution to 
the Paris agreement and when it comes to the implementation of the energy transition on the 
ground  as  described  in  the  Third  Report  on  the  State  of  the  Energy  Union1.  An 
interconnected European grid will help deliver the ultimate goals of the Energy Union to 
ensure affordable, secure and sustainable energy to all Europeans. 

An  electricity  system  to  which  renewables  will  contribute  around  half  of  the  generation  in 
2030  and  that  will  be  fully  decarbonised  by  2050  will  be  the  cornerstone  of  this  energy 
transition.  This  implies  very  significant  challenges  in  terms  of  adapting  our  regulation,  our 
infrastructure and triggering the necessary investment.  

As highlighted in several European Councils and by Heads of States and Governments, most 
recently by President Macron during the COP23, well interconnected and integrated trans-
European  grids  are  indispensable  for  making  the  energy  transition  a  success.  The 
Commission has addressed this need in its Communication2 on "Achieving the 10% electricity 
interconnection target". 

The  Clean  Energy  for  All  Europeans  package,  adopted  at  the  end  of  last  year,  is  the  most 
advanced  legal  framework  for  clean  energy  transition  and  for  enabling  clean  energy 
investments to  create jobs and economic growth.  Europe's  network infrastructure should 
develop  in  the  same  direction  and  with  the  same  speed  to  fully  support  this  energy 
transition.  This  is  all  the  more  important  since  a  rising  share  of  renewable  electricity  will 
require more cross-border exchange to keep the grid stable. In this context, stronger regional 
cooperation between Member States can lead to a more optimised deployment of renewables 
and network infrastructure. 

Interconnected electricity and gas grids are also vital for energy security of supply. Well 
integrated networks are not only the best guarantee to compensate for a possible failure of the 
largest infrastructure in any Member State, but they also bring more supply options and hence 
more competitive prices into the national markets. At the same time, Europe has to put the 
consumer  in  the  centre  of  the  energy  system  through  i.a;  reinforcing  and  smartening  the 
distribution networks.  

Moreover,  EU  networks  must  be  modernised  to  enable  the  energy  transformation  and  to 
support and benefit from the rapid digitalisation of the economy. Innovation and intelligence 
in the networks at all levels is essential in the take up of demand side management and other 
the 
smart  grid  services.  Such 
competitiveness of EU industry. 

technologies  empower  consumers  and  help  boost 

1  
2  

COM(2017) 688. 
COM(2015) 82. 

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It is  estimated  that  up to 2030 about 180 bn euro in investments  are needed to upgrade 
and expand European  energy  networks. These  investments would lead to  40-70 bn euro3 
annual  savings  in  terms  of  avoided  generation  costs  and  more  competitive  gas  wholesale 
prices, helping to keep the costs of the energy transition at check and thus strengthening the 
Union's competitiveness. 

This Communication takes stock of the progress achieved in integrating and modernising the 
European energy networks at transmission  level through  our  TEN-E policy  and outlines  the 
way forward in ensuring that infrastructure can play its full part in achieving our energy and 
climate  policy  objectives  for  2030,  and  beyond.  It  also  assesses  progress  towards  achieving 
the  10%  interconnection  target  and  looks  ahead  towards  the  target  for  2030  agreed  by  the 
European Council. 

2. The trans-European energy networks (TEN-E) policy as a cornerstone of the Energy 
Union 

The  investment  needs  to  reach  a  fully  European  energy  grid  where  all  Member  States  are 
interconnected and protected against sudden supply disruptions were, and still are, high4. To 
ensure  the  timely  delivery  of  these  investments  and  the  construction  of  the  necessary 
infrastructures, the European Union adopted the Regulation5 on guidelines for trans-European 
energy networks in 2013. This was accompanied by the Connecting Europe Facility6 (CEF) 
created  to  support  financially  the  development  of  trans-European  energy,  transport  and 
telecommunication networks. 

2.1 A TEN-E policy focused on Europe's priorities and accelerating investment 

The TEN-E policy framework has since 2013 allowed for a focussed approach to identify and 
to support the realisation of the projects that are essential for well-connected networks across 
Member  States  and  the  internal  energy  market.  This  is  based  on  an  objective  and  inclusive 
selection process prioritising the most needed infrastructure projects. 

The  success  of  this  approach  is  becoming  visible.  Approximately  30  energy  infrastructure 
projects of common interest (PCIs) have been completed or will be in operation by the end of 
2018. Another 47 important projects are scheduled to be completed around 2020 out of a total 
of  173.  However,  many  projects  of  common  interest  are  still  not  on  track:  regarding  both 
electricity  and  gas  infrastructure,  and  around  half  of  the  projects  are  facing  delays  typically 

3  

4  
5  

6  

Study on the benefits of an integrated European energy market, 2013, Booz & co, 
https://ec.europa.eu/energy/sites/ener/files/documents/20130902_energy_integration_benefits.pdf. 
See footnote 3. 
Regulation  (EU)  No  347/2013  of  the  European  Parliament  and  of  the  Council  of  17  April  2013  on 
guidelines for trans-European energy infrastructure (OJ L 115, 25.4.2013, p.39). 
Regulation (EU) No 1316/2013 of the European Parliament and of the Council of 11 December 2013 
establishing  the  Connecting  Europe  Facility,  amending  Regulation  (EU)  No  913/2010  and  repealing 
Regulations (EC) No 680/2007 and (EC) No 67/2010 (OJ L 348, 20.12.2013, p.129). 

2 

 
 
 
                                                            
during the permitting process or have been rescheduled7 often because of uncertainty related 
to commercial viability or future demand. 

Table 1: Overview of PCIs by sector 

Oil 
0 

Gas 
8 

Smart Grids 
0 

PCI from the 1st and 2nd lists to be completed* between 2013-2018 
Electricity 
22 
PCIs included in the 3rd list 
Electricity 
106 
PCIs from the 3rd list expected to be completed* by 2020 
Electricity 
31 
*Projects  to  be  completed  include  projects  which  are  either  about  to  obtain  a  permit  or  are  already  under 
construction and which can realistically be completed by the end of the indicated period. 

Smart Grids 
4 

Smart Grids 
0 

Total 
30 

Total 
173 

Total 
47 

CCS 
N/A 

CCS 
4 

CCS 
0 

Gas 
53 

Gas 
14 

Oil 
6 

Oil 
2 

The  Union's  financial  support  under the  CEF  has  been  an  important  factor  in  implementing 
some  critical  electricity  and  gas  PCIs  that  bring  significant  socio-economic  benefits  at 
regional level but the costs of which could not be borne by the market alone. The programme 
is  an  important  enabler  for  the  mobilisation  of  private  investment.  In  total  93  actions 
corresponding  to  the  implementation  of  74  PCIs  have  been  selected  to  receive  grants  for 
works and studies worth in total € 1.6 billion (out of the total CEF energy budget of € 5.35 
billion).  

The EU cohesion funds, in particular the European Regional Development Fund (ERDF) also 
provide  support  to  smart  energy  storage  and  transmission  systems.  Currently  six  Member 
States8 have planned about EUR 2 billion for the 2014-2020 period, with one fourth directly 
for PCI projects. 

The European Fund for Strategic Investments (EFSI), where the energy sector has currently 
the highest share, has mobilised additional investment to the energy infrastructure, renewable 
energy and energy efficiency  projects,  including  PCIs  co-financed  by  CEF.  A  total  of  EFSI 
financing  of  €  420  million  have  been  approved  for  the  first  three  PCIs,  mobilising  overall 
investment  of  more  than  €  2  billion.  The  case  of  the  gas  transmission  corridor  Bulgaria-
Romania-Hungary-Austria (BRUA), which received CEF EUR 179 million grant support for 
works,  and  subsequently  accessed  EFSI  financing  of  EUR  100  million,  demonstrates  the 
potential  for  CEF  to  leverage  private  investment  for  energy  infrastructure.  Additionally,  14 
PCIs in energy have received EIB loans, showing that CEF grants can play the role of enabler 
and attract investors. Furthermore, CEF grants for studies remain an important catalyst to help 
projects overcome their initial, more risky phases. 

7             Consolidated Report on progress of electricity and gas projects of Common Interest for the year 2016. 
8  

Bulgaria, Czech Republic, Greece, Lithuania, Poland and Romania. 

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Beyond financial support, the implementation of the PCIs has also been accelerated thanks to 
regulatory support and cutting red tape. As the evaluation9 shows, the TEN-E Regulation led 
to  accelerated  permit  granting  and  approval  of  projects  is  now  more  streamlined  and 
expedient.  The  regulatory  measures  have  also  started  contributing  to  an  accelerated 
implementation of important PCIs. So far, 18 gas and 6 electricity PCIs have benefited from 
cross-border  cost  allocation  decisions  (CBCAs)  and  three  projects  received  investment 
decisions issued by the National Regulatory Authorities (NRAs). The potential of the TEN-E 
Regulation,  however,  has  not  been  yet  exploited  to  the  maximum.  The  application  of  the 
TEN-E rules at national level should be further reinforced to ensure the implementation 
of the PCIs in good time.  

The  above  toolkit  deployed  through  the  TEN-E  Regulation  has  proven  useful  to  overcome 
financial  and  regulatory  barriers  for  a  number  of  projects.  Still,  more  attention  needs  to  be 
devoted  to  some  more  complex  infrastructural  challenges.  The  Commission  proposed  in 
201510 a more structural form of regional cooperation, including on political level, to align all 
involved Member States' and stakeholders' focus on the implementation of key projects. 

2.2 Deepening regional cooperation – the key role of the High Level Groups  

The  Commission  therefore  established  four  regional  High  Level  Groups  which  in  a  short 
period  of  time  have  managed  to  accelerate  infrastructure  development  in  specific  European 
regions, facing particular challenges. These High Level Groups have contributed in particular 
to  the  prioritisation  of  key  projects  of  common  interest  in  the  region.  The  Commission's 
political and financial support has been a key enabler. 

Building on the good results, the scope of certain High Level Groups was extended to cover 
wider  aspects  of  energy  policy,  notably  energy  markets,  renewables  generation  and  energy 
efficiency.  The  High  Level  Groups  could  also  play  a  role  in  regional  cooperation  in  the 
framework of the preparation of the national energy and climate Plans (NECPs) foreseen in 
the proposal for a Regulation on the Governance of the Energy Union11.  

2.2.1 BEMIP – Baltic Energy Market Integration Plan 

The long-standing regional cooperation under the Baltic Energy Market Interconnection Plan 
(BEMIP)  has  significantly  contributed  to  the  rapid  completion  of  the  key  electricity  links, 
including  "Nordbalt"  (Lithuania–Sweden;  700  MW)  and  "Litpol  Link"  (Lithuania–Poland; 
500  MW).  These  interconnections  have  effectively  ended  the  energy  isolation  of  the 
Baltic States and connected them with the rest of Europe.  

9  

10  

11  

Annex to the Staff Working Document accompanying the Commission Delegated Regulation (C(2017) 
7834). 
COM(2015) 82 final, 25.2.2015; http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=COM%3A2015%3A82%3AFIN.  
Proposal for a Regulation of the European Parliament and of the Council on the Governance of the 
Energy Union – COM (2016) 759 of 23.2.2017. 

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A key political priority remains the synchronisation of the three Baltic States' electricity 
grid  with  the  continental  European  network.  The  European  Commission  remains 
committed to support the Baltic States to this effect. In this context, the study that is currently 
being  carried  out  by  the  Transmission  System  Operators  of  Lithuania,  Latvia,  Estonia  and 
Poland and with the involvement of the European Network of electricity Transmission System 
Operators (ENTSO-E) is an important milestone. In parallel, it is also a good moment for the 
region to tap into its off-shore energy potential. 

The  BEMIP  High  Level-Group  has  also  given  a  new  impetus  to  the  development  of  gas 
interconnections necessary to end the gas isolation of the three Baltic States and Finland. Both 
interconnection 
the  Poland–Lithuania 
(Balticconnector)  have  received  financial  support  through  the  Connecting  Europe  Facility, 
signed  in  the  presence  of  the  Heads  of  State  and  Government  as  well  as  the  Commission 
President. It is now of key importance to ensure that both projects be completed without 
delay. 

(GIPL),  and  Estonia–Finland 

interconnection 

Overall,  the  EU  has  contributed  some  740  million  Euro  from  CEF  and  around  430  million 
from the ERDF to energy infrastructure in the BEMIP region.  

Next steps and milestones   
-  Political agreement on synchronisation and the way forward in 2018;  
-  Completion  of  the  key  gas  PCIs  by  2021,  notably  the  Poland-Lithuania  interconnection  
(GIPL) and the Estonia-Finland interconnection (Balticconnector). 

2.2.2 Implementation of the Madrid Declaration in South-Western Europe 

Important progress has also been  achieved in the High Level Group on  Interconnections for 
South-West Europe in integrating the Iberian Peninsula with the European mainland internal 
energy market. With the support of the European Commission, in 2015 the "INELFE" project 
was  commissioned,  doubling  the  electricity  interconnection  capacity  between  Spain  and 
France and which is functioning now at full capacity.  

Still, more needs to be done to implement the Madrid Declaration and to fully integrate 
the  Iberian  Peninsula  into  the  internal  electricity  market  and  allow  harnessing  its 
renewables potential. 

The  Biscay  Bay  line  –  a  new  electricity  interconnection  with  a  technologically  challenging 
submarine  section  of  around  280  km  length  and  two  converter  stations  –  must  receive  the 
highest  priority  not  only  of  the  promoters  but  also  of  the  regulatory  and  permit  granting 
authorities to ensure its timely completion by 2025 at the latest. The project will again double 
the interconnection capacity between the two countries, increasing exchange capacity to up to 
5000 MW. Attention shall be given to the progress on the two projects crossing the Pyreneans 
which would raise the capacity to 8000 MW and allow the Iberian Peninsula to fully benefit 
from  the  internal  market.  The  finalisation  of  the  ongoing  PCI  between  Spain  and  Portugal 
should continue so that the projects can be commissioned by end 2018 as planned.  

5 

 
 
Some progress has also been made to implement the 2015 Madrid Declaration with regard to 
the development of an Eastern Gas Axis, from the Iberian Peninsula to France. In 2016 and 
2017 preparatory work was carried out to prepare a decision on the phased development of the 
critical Midcat project12, including its first phase known as the STEP project13. 

Next steps and milestones 
- High-level political summit in 2018 to follow-up on the Madrid Declaration; 
- Final investment decision on Biscay Gulf project in early 2018 and start of works in 2019; 
-  Start  of  the  permitting  process  for  the  two  electricity  interconnections  crossing  the 
Pyreneans in 2018; 
- Decision on the next steps of STEP, as a first phase of MIDCAT in 2018; 
- Completion of the Portugal-Spain interconnection in 2019. 

2.2.3 CESEC – Central South Eastern energy connectivity 

Work has progressed also in the Central and South Eastern Europe (CESEC) region which is 
historically  vulnerable  to  supply  disruptions  and  which  still  pays  higher  gas  prices  than 
Western Europe, despite its geographic proximity to its main gas supplier.  

In 2016 and 2017, the High Level Group has made important progress on the CESEC priority 
gas projects, notably on the Bulgaria-Romania-Hungary-Austria interconnector (BRUA) and 
on  the  first  phases  of  reinforcing  the  Bulgarian  grid.  The  2017  Memorandum  of 
Understanding on reverse flows between Croatia and Hungary that will enable the free flow 
of  gas  in  particular  from  the  Krk  LNG  terminal  is  an  example  of  constructive  regional 
cooperation.  However,  for  2018  it  is  of  key  importance  to  implement  without  further 
delay the remaining three priority projects which all benefit from European support to 
ensure access to diversified sources of gas in the region. The priority for 2018 is therefore to 
ensure that the construction of the LNG terminal in Croatia (Krk LNG), the Greece-Bulgaria 
interconnector  and  the  Bulgaria-Serbia  interconnector  starts  as  currently  planned.  This 
requires continued political support to prevent and remove any obstacle that could delay the 
timely completion of these projects. 

Building on the successes in gas, in 2017 the Commission, the CESEC Members States and 
Energy Community Contracting Parties concluded the Memorandum of Understanding which 
extends  CESEC  to  electricity  market  and  infrastructure,  energy  efficiency  and  renewable 
development  and  provides  for  concrete  actions  to  achieve  an  efficient,  well  interconnected 
electricity market in the region. Furthermore, the High Level Group also agreed to extend its 
geographical scope to cover the entire Western Balkans. 

Next steps and milestones  
-  Agreement  by  early  2018  between  the  project  promoters  in  Serbia  and  Bulgaria  on  the 
implementation steps for the Bulgaria-Serbia interconnector; 

12  
13  

Eastern gas axis between Spain and France. 
South Transit East Pyrenees. 

6 

 
 
                                                            
- Final Investment Decision on the Krk LNG terminal in spring 2018; 
-  Start  of  construction  of  the  Romanian  part  of  the  Bulgaria-Romania-Hungary-Austria           
(BRUA) corridor in early 2018 and of the Interconnector Greece-Bulgaria in June 2018; 
- Ministerial meeting in Sofia during the Bulgarian EU Presidency to give further impetus to    
the new CESEC areas. 

2.2.4 North Seas energy cooperation 

In  2016  the  Northern  Seas  Memorandum  of  Understanding  was  signed  promoting  the 
integration of offshore wind and enhanced interconnection. In 2017 work has begun towards a 
regionally  optimised  offshore  energy  system  at  least  cost,  creating  jobs  and  growth,  and 
harnessing the EU's industrial leadership in this field.  

In order to ensure concrete progress, it was agreed to focus on innovative projects that create 
synergies between different elements in the energy system, notably by combining renewable 
generation and transmission. Public and private stakeholders will work together to establish a 
legal and regulatory framework that is conducive to the development of such projects, and to 
facilitate  cooperation  and  coordination  between  project  developers.  Four  clusters  have  been 
identified,  including  Belgium-Netherlands-UK,  German  Bight,  and  Central  North  Sea.  For 
each  cluster  a  stakeholder  group  will  be  established  to  ensure  the  full  involvement  of  all 
parties concerned.  

Next steps and milestones  
- Adoption of a North Sea infrastructure/offshore grid Action Plan in 2018; 
-  Ministerial  meeting  in  May/June  2018  to  reinforce  political  commitment  in  a  context  of  
rapidly decreasing cost of offshore wind. 

2.3 Re-orienting our infrastructure policy for the longer term 

The  TEN-E  toolkit  and  deeper  regional  cooperation  have  been  successful  in  enhancing  the 
security of gas supply and diversification in Europe's more vulnerable regions. Today, Europe 
is in a better position thanks to completed gas PCIs, such as the Klaipeda-Kiemenai pipeline 
necessary for the correct operation of the Klaipeda LNG terminal (Lithuania).  

The gas grid has become more resilient and nearly all Member States14 comply with the N-1 
criterion15  and  already  have  access  to  two  sources  of  gas.  In  this  context,  the  situation  of 
Bulgaria  and  Finland  needs  particular  focus.  If  the  PCIs  are  implemented  on  schedule,  in 
principle  all  Member  States,  except  Malta  and  Cyprus  should  by  2022  have  access  to  three 
gas  sources.  If  the  necessary  commitment  is  ensured  from  Member  States,  promoters, 
regulators and stakeholders, the remaining bottlenecks can be largely addressed around 

14  

15  

Excluding the Member States, i.e. Cyprus, Luxemburg, Malta, Slovenia and Sweden that have an 
exemption. 
The N-1 criterion means that the network must be able to withstand the (temporary) loss of the  
biggest asset on the network. 

7 

 
 
                                                            
2020  or  shortly  after  through  the  finalisation  of  the  already  on-going  projects  of  common 
interest. Gas projects have constituted a significant part both in terms of numbers as well as 
awarded funding until now as the urgent priority has been to improve the energy security of 
more vulnerable Member States and regions. Therefore, by 2022/25, Europe should achieve a 
well interconnected and shock resilient gas grid. In the coming years, electricity projects will 
become  increasingly  important  for  the  integration  of  renewable  energy  across  borders, 
including the digitalisation and smartening of the grid.  

Making  Europe's  electricity  grid  fit  for  the  energy  transition  will  require  further 
continued  action  in  parallel  with  the  implementation  of  the  revised  rules  for  the 
electricity market, as proposed in the Clean Energy Package by the Commission.   Thus, 
the work on the necessary interconnections needs to accelerate. Currently insufficient levels 
of interconnection of regions such as the Iberian Peninsula are representing an obstacle to the 
further penetration of renewable energy and further price convergence. The same is valid for 
the  slow  progress  of  internal  grid  reinforcement  such  as  between  the  North  and  South  of 
Germany.  Political  commitment  to  remove  those  bottlenecks  must  not  waver.  In  general 
terms,  a  high  renewables  scenario  will  mean  a  more  than  doubling  of  investment  needs  in 
interconnectors.16  

The role of electricity, where renewables will constitute half of the electricity generation by 
2030,  will  increasingly  be  driving  the  decarbonisation  of  sectors  so  far  dominated  by  fossil 
fuels, such as transport, industry and heating and cooling. Moreover, focus must be put on the 
reinforcement  of  the  electricity  transmission  and  distribution  grids,  digitalisation  and 
smartening  of  the  grids  and  deployment  of  new  infrastructure  solutions,  particularly  in  the 
electricity storage area, and the impact of self-consumption. 

These  challenges  must  be  fully  reflected  in  the  future  orientation  of  the  EU's  infrastructure 
policy. More projects in these areas are expected to become mature towards 2019-2020 and 
the back-loaded CEF budget fully reflects this ambition. With the increasing maturity, more 
electricity projects are expected to receive financing also from the European Investment Bank, 
including  under  the  European  Fund  for  Strategic  Investments  (EFSI).  The  third  PCI  list, 
adopted together with this Communication, represents an important step in this reorientation. 

Whilst the trans-European networks in transport, energy and telecommunications are strongly 
interdependent and synergies are naturally  present among each of the sectors, these must be 
better harnessed. E.g. energy grids should take up more rapidly the challenge of digitalisation. 
Cyber  security  is  an  overarching  priority  across  all  TEN  sectors  (and  beyond)  and  should 
form an inherent element in any investment carried out in the three sectors. Electromobility 
will require a  dense  network  of  charging  points  along  motorways  and in  cities.  Major  ports 
could develop into hubs also to service off-shore renewable operations. 

16  

European Energy Industry Investments, Study for the ITRE Committee, 2017 
http://www.europarl.europa.eu/RegData/etudes/STUD/2017/595356/IPOL_STU(2017)595356_EN.pdf. 

8 

 
 
 
                                                            
3. The third PCI list better oriented towards EU longer term targets 

The  third  Union  list  identifies  173  PCIs,  including  106  electricity  transmission  and  storage 
projects, 4 smart grids deployment projects, 53 gas projects, 6 oil projects, and – for the first 
time  –  4  cross-border  carbon  dioxide  network  projects.  This  list  is  adopted  based  on  the 
unanimous support of all Member States illustrating the common political will. 

In  line  with  the  Union's  decarbonisation  agenda,  the  focus  under  the  TEN-E  policy  is 
increasingly on electricity interconnections, electricity storages and smart grids projects. 

3.1 Electricity and smart grids PCIs to interconnect and smarten the grid underpinning the 
energy transition 

The  selected  PCIs  will  allow  for  the  integration  of  renewable  energy  and  its  transportation 
over  longer  distances  while  maintaining  a  high  level  of  security  of  supply.  There  are  15 
electricity storage projects among the PCIs, mostly hydro pump storage, but also some using 
compressed  air  technology.  Better  interconnection,  smarter  grids  and  storage  options  will 
provide for more flexibility, grid stability and will allow to handle peak loads both locally and 
transregionally.  

The electricity PCIs will also help the remaining Member States to meet or advance towards 
the 10% interconnection target by 2020, and will contribute to the attainment of the new 2030 
interconnection  target.  Furthermore,  the  electricity  PCIs  will  contribute  to  the  objectives 
agreed by the High Level Groups, in particular: 

 

 

 

 

In  the  BEMIP  region,  the  selected  projects  will  allow  for  the  synchronisation  of  the 
electricity grid with the EU electricity network.  
In  Western  Europe,  the  electricity  PCIs  will  also  allow  for  the  better  integration  of  the 
Iberian  Peninsula  with  France  and  the  rest  of  Europe  and  hence  facilitate  further 
renewable energy sources integration, and will provide for the first, direct interconnection 
of Ireland with Continental Europe (Celtic Link). 
In the CESEC region, the selected projects will reinforce the electricity grids to improve 
interconnections,  allow  for  effective  commercial  transactions  and  allow  the  countries  to 
tap in their important renewable potential. 
In  the  Northern  Seas,  the  focus  is  put  on  enabling  an  off-shore  grid  to  harness  as  much 
renewables potential as possible in a cost-effective way. The goal is to pool resources and 
finances by developing a common off-shore grid.  

The new list contains 4 smart grids projects. The project between Croatia and Slovenia will 
result  in  better  resilience  of  the  networks,  and  will  allow  for  the  deployment  of  more 
renewable  generation  and  demand  response.  The  project  between  the  Czech  Republic  and 
Slovakia  will  address  the  resilience  of  the  networks  from  transmission  to  distribution  level. 
The  two  remaining  projects  between  Austria  and  Italy  and  France  and  Germany  aim  at 
addressing  questions  of  network  operation  under  scenarios  of  stronger  sector  coupling, 
covering e.g. electrification of transport as well as, in the case of the French-German project, 
interactions with the heating sector and stronger customer involvement. 

9 

 
 
 
3.2 More focused gas PCIs addressing the remaining security of supply needs 

Europe  needs  to  ensure  the  timely  implementation  of  the  key  gas  projects,  to  end  the 
energy isolation  of  the Eastern  Baltic  Sea  region,  improve  security  of  supply  of  the  Central 
South-Eastern  part of Europe, and integrate the Iberian Peninsula with the European energy 
market. 

This  should  be  accompanied  by  a  more  efficient  use  of  existing  infrastructure,  optimised  at 
regional  level,  and  more  effective  enforcement  of  the  legal  and  regulatory-based  measures. 
Beyond the already identified priorities, a cautious approach to new investment is required to 
avoid over-investment and the risk of stranded assets that would put an additional burden on 
consumers. The third PCI list with a decreased number of gas projects from 77 to 53 reflects 
this approach. 

3.3 First carbon transport PCIs identified 

For  the  first  time,  the  Union  list  of  PCIs  contains  4  projects  in  the  area  of  carbon  dioxide 
transport  networks.  The  projects  are  located  around  the  Northern  Seas  region  and  involve 
Belgium, Germany, the Netherlands, the United Kingdom, and Norway. They are especially 
important for energy intensive industry as a way to further reduce its carbon footprint. 

4. Realising the electricity interconnection targets for 2020 and 2030 

4.1 Interconnection target for 2020 

The 10% electricity interconnection target has provided political momentum to advance key 
cross-border  projects.  Implementation  of  PCIs  has  led  to  increasing  interconnection  levels 
over the last years. 

Table 2:  Member States' interconnection levels in 2017 and 2020 

Country 

Interconnection levels in 
2017 

Expected interconnection 
levels in 202017  

AT 
BE 
BG 
CY 
CZ 
DE 
DK 
EE 
ES 
FI 
FR 

17  

15% 
19% 
7% 
0% 
19% 
9% 
51% 
63% 
6% 
29% 
9% 

32% 
33% 
18% 
0% 
23% 
13% 
59% 
76% 
6% 
19% 
12% 

As assessed by TYNDP 2016 and ENTSO-E Vision 2020. 

10 

 
 
 
 
 
                                                            
UK 
EL 
HR 
HU 
IE18 
IT 
LT 
LU 
LV 
MT 
NL 
PL 
PT 
RO 
SE 
SI 
SK 

6% 
11% 
52% 
58% 
7% 
8% 
88% 
109% 
45% 
24% 
18% 
4% 
9% 
7% 
26% 
84% 
43% 

8% 
15% 
102% 
98% 
18% 
10% 
79% 
185% 
75% 
24% 
28% 
8% 
21% 
15% 
28% 
132% 
59% 

Today,  17  Member  states  have  already  reached  the  10%  target  and  enjoy  the  benefits  of 
improving  trade  and  lowering  wholesale  prices.  Seven  more  Member  States  –  Bulgaria, 
Germany, France, Ireland, Italy, Portugal and Romania – are on the path to reaching the 10% 
target  by  2020  through  the  completion  of  PCIs  currently  under  construction.  However, 
additional  efforts  are  needed  to  integrate  in  particular  the  Iberian  Peninsula 
(interconnectors  Portugal-Spain  and  Spain-France)  ,  South  Eastern  Europe  as  well  as 
Poland and Ireland (the Celtic interconnection with France will be the first link between 
Ireland and the continent). 

4.2 Interconnection target for 2030 

Recalling the conclusions of the 2014 March and June European Councils, which stressed the 
need  to ensure the full participation of all Member  States in the internal energy market, the 
European  Council  called  upon  the  Commission  in  October  2014  to  report  "regularly  to  the 
European Council with the objective of arriving at a 15% target by 2030, as proposed by the 
Commission19.  Both  [2020  and  2030]  targets  will  be  attained  via  the  implementation  of 
PCIs".  

18  

19  

With the United Kingdom leaving the European Union, Ireland will have 0% interconnection level until 
2025 when the Celtic Interconnector between Ireland and France is expected to be completed. 
See COM(2014) 330 where the Commission proposed to "extend the current 10% interconnection target 
to 15% by 2030 while taking into account the cost aspects and the potential of commercial exchanges in 
the relevant regions". 

11 

 
 
 
  
                                                            
The Commission therefore established an Expert Group, composed of 15 leading experts from 
all  over  Europe,  to  advise  on  the  achievement  and  operationalisation  of  the  15% 
interconnection target for 2030. The Expert Group concluded its report on this in September20.  

The  report  of  the  Expert  Group  acknowledges  the  challenges  posed  by  a  rapidly  changing 
energy  context.  It  recommends  assessing  the  need  for  developing  further  interconnection 
capacity using different metrics and thresholds to reflect in a more nuanced way the different 
energy  realities  of  the  Member  States  and  the  different  roles  interconnectors  play  in 
supporting the completion of the internal energy  market, enabling integration of renewables 
and ensuring security of supply.  

In light of the Group's recommendations, the Commission proposes to operationalise the 15% 
interconnection target through a set of additional and more specific thresholds which serve as 
indicators  of the urgency of the action needed and which reflect the three headline goals of 
European energy policy: increasing competitiveness through market integration, guaranteeing 
security  of  supply  and  achieving  the  climate  targets  through  increased  use  of  renewable 
sources. Action should be taken by Member States, TSOs/promoters, regulators and European 
institutions if any of the following three thresholds is triggered: 

  A  well-functioning  internal  market  should  lead  to  competitive  electricity  prices  for  all 
Europeans.  Member  States  should  therefore  aim  at  minimising  differences  in  their 
wholesale  market  prices.  Additional  interconnections  should  be  prioritised  if  the  price 
differential exceeds an indicative threshold of 2€/MWh between Member States, regions 
or bidding zones to ensure all consumers benefit from the internal market in a comparable 
manner. The higher the price differential, the greater the need for urgent action. 

  Every Member State should ensure that peak demand can be met in all conditions through 
a combination of domestic capacity and imports. Therefore countries where the nominal 
transmission  capacity  of  interconnectors  is  below  30%  of  their  peak  load  should 
urgently investigate options of further interconnectors. 

  The further deployment of renewable energy should not be hampered by a lack of export 
capacity.  Renewable  production  in  any  Member  State  should  be  optimally  used  across 
Europe.  Therefore  countries  where 
transmission  capacity  of 
interconnectors  is  below  30%  of  installed  renewable  generation  capacity  should 
urgently investigate options of further interconnectors. 

the  nominal 

20  

The Expert Group's report is available on: https://ec.europa.eu/energy/en/topics/projects-common-
interest/electricity-interconnection-targets/expert-group-electricity-interconnection-targets. 

12 

 
 
 
                                                            
Map indicating how the Member States, Switzerland and Norway score on the three thresholds 

Green: meet all three thresholds  
Yellow: meet two of the thresholds 
Red: meet one or none of the thresholds 

Projects that are necessary for a Member State or a region to reach any of the three thresholds 
should be  given appropriate priority, including under the procedures  foreseen in  the TEN-E 
Regulation.  The  realisation  of  these  projects  requires  full  commitment  on  both  sides  of  the 
border  and  the  Commission  therefore  calls  upon  Member  States  to  prioritise  the 
development  of  interconnections  with  those  neighbours  that  are  below  any  of  these 
thresholds in a spirit of solidarity and cooperation.  

These  projects  will  be  closely  followed  by  the  High  Level  Groups  established  in  the 
framework  of  the  TEN-E  policy  and  will  benefit  from  the  resulting  political  backing.  The 
Commission invites ENTSO-E to measure the electricity interconnection levels annually and 
to report to the Commission and ACER. This report which should take into account the new 
indicators explained above aiming to reach the 10% and 15% targets should be included in the 

13 

 
 
 
 
 
State of the Energy Union Report and discussed at the High Level Groups and the electricity 
coordination group as well as in the annual Copenhagen Energy Infrastructure Forum.  

The  Commission  moreover  recommends  that  Member  States  take  into  account  the  new 
approach  and  thresholds  in  view  of  reaching  the  15%  interconnection  target  when  drafting 
their  integrated  national  energy  and  climate  plans  under  the  proposed  Regulation  on  the 
Governance of the Energy Union. This includes in particular describing the main existing and 
planned  policies  and  measures  to  facilitate  the  achievement  of  urgent  interconnections,  but 
also consulting neighbouring Member States and other Member States expressing an interest 
on  those  elements  in  the  context  of  regional  cooperation.  The  new  approach  and  thresholds 
will  also  be  considered by  the  Commission  when  developing  recommendations  on the  draft 
integrated national energy and climate plans. 

Apart from the rapid finalisation of the missing infrastructure links, the better use of existing 
interconnectors remains paramount. In this context, the Commission recalls the importance 
for all Member States to fully implement the internal market rules. Moreover, in the market 
design  proposals  as  part  of  the  Clean  Energy  Package,  the  Commission  has  proposed  more 
effective  rules  that  would  ensure  that  more  capacity  would  be  made  available  on  existing 
interconnections,  as  well  as  increasing  the  incentive  for  network  operators  to  reinvest 
congestion rents in new lines. 

5. Conclusion 

Together  with  a  swift  agreement  on  an  enhanced  regulatory  framework  as  proposed  in  the 
Clean  Energy  for  All  European  Package,  rapid  advances  in  building  and  modernising  the 
necessary  physical  infrastructure  remain  key  conditions  for  the  energy  transition  to  be 
successful as well as for energy security. 

The  European  Union  has  a  performant  energy  infrastructure  policy  in  place  that  started 
delivering  results.  While  progress  is  promising,  the  majority  of  the  missing  infrastructure 
links remain yet to be completed. Commitment at all levels, political, technical and financial, 
therefore needs to be kept up and accelerated. 

The achievement of the 2020 and 2030 electricity interconnection targets of 10 and 15%  as 
agreed by the European Council remains essential if Europe is to reap the full potential of its 
renewable  energy  sources  while  ensuring  security  of  supply  and  competitiveness.  The  2015 
Communication  addressed  the  indispensable  need  for  well  interconnected  and  integrated 
trans-European  grids  for  making  the  energy  transition  a  success.  This  Communication 
therefore  proposes  a  new  approach  and  a  set  of  thresholds  that  would  trigger  action  by 
Members  States,  regulators  and  project  promoters  to  investigate  and  develop  further 
interconnections to deepen market integration, strengthen security of supply and to ensure the 
necessary infrastructure will be in place to underpin the achievement of the renewable energy 
target for 2030. 

This  will  also  require  a  modernisation  of  our  electricity  grids  embracing  digitalisation  and 
making  them  smarter,  allowing  for  an  intelligent  coupling  of  sectors.  It  will  be  a  key  focus 

14 

 
 
area of the TEN-E program over the coming years and the third PCI list adopted today marks 
an important step in this direction. 

With the Energy Union and the Clean Energy for All Europeans package, there is now a clear 
momentum  for  accelerating  the  building  of  key  energy  networks  in  view  of  reinforcing 
security of supply and facilitating the transition to clean energy. 

15