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The European Commission has released a guidance document (C/2024/3998), detailing efficient ways to organize investment frameworks for cross-border offshore grid and renewable projects. This guidance aims to assist EU countries, national regulatory authorities, and system operators in forming cost-sharing agreements to meet regional offshore renewable targets. The guidelines are part of the TEN-E Regulation and build on the EU Action Plan for Grids introduced last November, emphasizing the need for collaborative investment frameworks to achieve the EU’s offshore renewable energy ambitions.
Commissioner Kadri Simson unveiled the guidance at the 10th edition of the Energy Infrastructure Forum in Copenhagen, stating, “Europe needs offshore renewables and grids. They will lower our dependence on foreign gas, increase our security of supply thanks to hybrid interconnectors, support our economic competitiveness, and be a pillar of the energy transition. Making this happen requires developing collaborative investment frameworks between Member States, ensuring an equitable distribution of costs.”
The document recommends that EU countries and regulatory authorities engage in discussions on collaboration principles, including cost-sharing, early in the network needs identification process. This approach is intended to accelerate the development of new cross-border projects. Additionally, the guidance calls on ENTSO-E to develop effective modeling tools to better address EU countries’ information needs, facilitating these crucial exchanges.
The Commission’s guidance outlines parameters to ensure that cost-benefit analyses, cost-sharing, and allocation activities are based on fair principles and sound technical calculations. Initially, these efforts should be focused at the sea basin level, with ENTSO-E applying the guidance to their Offshore Network Development Plans, expected to be published in one year. Subsequently, EU countries and National Regulatory Authorities, supported by Transmission System Operators (TSOs), will finalize cost allocation decisions at the project level to secure necessary investments.
The Offshore Renewable Energy Strategy and the EU Action Plan for Grids highlighted the significant potential of offshore renewable generation and the necessity of cross-border hybrid interconnector projects and radials. These projects extend benefits beyond the host countries, impacting the wider region. The strategy and guidance indicate that offshore electricity networks will include radial and hybrid transmission infrastructure projects, evolving into meshed grids. Hybrid interconnector projects, which connect offshore renewables while interconnecting countries, require special consideration in cost-sharing discussions.
The increase in electricity transport infrastructure from coastal regions to demand centers is also crucial to unlocking more offshore wind projects. The regional distribution of benefits and interdependency between infrastructure projects present challenges in agreeing on appropriate cost-sharing across borders. The TEN-E Regulation mandates the Commission to develop guidance for cost-benefit analysis and cost-sharing for the deployment of sea basin offshore network development plans, which ENTSO-E will implement across five priority offshore grid corridors: North Seas, Baltic Energy Market Interconnection Plan, South and West, South and East, and Atlantic offshore grids.
