The European Union Agency for the Cooperation of Energy Regulators (ACER) and the Council of European Energy Regulators (CEER) published a paper reviewing the national treatment of anticipatory investments and proposing ways to facilitate the necessary electricity grid enforcement to meet the EU’s climate and energy targets.
Anticipatory investments can reinforce the grid based on anticipated potential future needs, which go beyond confirmed generation and demand needs. On one hand, this will help ensure that the power grids are fit for the rapid uptake of renewable energy sources (RES), avoiding connection delays of RES caused by a slower grid capacity expansion. However, on the other hand, investing in anticipatory investments carries a risk that they may turn out to be underused, at least until there are developments on the generation side.
Reviewing the current national regulatory frameworks for energy infrastructure investment, ACER and CEER found that, first, the focus should be on implementation as several National Regulatory Authorities (NRAs) reported no need for further actions at a national level with anticipatory investments but called for the already-foreseen measures to be properly implemented. Second, system operators often adopt a forward-looking approach in planning and anticipating future generation and demand. Third, the same regulatory treatment is applied to anticipatory investments as for other types of grid investments. Both are subject to the same regulatory incentives and penalties, as well as the same cost-recognition process.
Thus, ACER and CEER are recommending, among other things, reinforcing the role of energy regulators in assessing energy infrastructure needs and projects; encouraging electricity network users (like generators) to flag their potential connection requests as early as possible; improving coordination and information exchange amongst future network users, network operators and energy regulators; countries having separate regulatory approvals for permit granting and construction to expedite project implementation and minimise “sunk costs” in case the project will not be needed.