A clean, expanded power system is at the heart of a carbon-neutral economy, and its planning framework is critical to a successful delivery. However, a comprehensive system-level planning framework is absent. Even in the electricity sector, the planning of highly interconnected elements is artificially segmented between power generation (ERAA); transmission grids (TYNDP and national grid development plans); flexibility (separate assessment proposed under the revised EMD); and electrolysers (national hydrogen strategies), among other elements. Notable drawbacks of this approach:
- This creates a particular challenge for planning the power grid which facilitates benefits across the entire power system;
- National energy and climate ambitions risk being derailed as the planning of key infrastructures lags behind;
- It renders it impossible for planners to identify solutions that represent the highest system efficiency, thereby keeping costs down;
- New solutions such as digitalisation, different forms of flexibility and storage, electrolysers and hydrogen production are typically not integrated into existing assessments;
- Risk of misalignment between plans of interrelated elements. For instance, even planning at different electrical voltage levels (transmission and distribution) in the same country is often not aligned.
Ultimately, the current planning framework for the power system is insufficient to inform and coordinate the investments required to deliver on the Green Deal or net-zero commitments.
Recommendation: The European Commission should initiate a power system planning reform to integrate and streamline the process
This would be similar in principle to the clean energy package which sought to consolidate most of the energy and climate planning of reporting requirements under a single framework. The ultimate objective would be creating an integrated, streamlined, system-level planning framework for the power sector that prioritises system efficiency. The timely development of grids, flexibility, storage and other solutions will be assessed alongside the evolution of the power generation mix. Such an assessment would also provide a stronger knowledge basis for identifying key anticipatory investments.
Recommendation: The new planning framework should establish an independent central coordinator
There is growing recognition that the complex task of power system planning is best served by a central and independent coordinator. This has been stated by Terna, Italy’s electricity TSO, and is reflected in Germany’s drive to merge its four TSOs which it believes could accelerate the modernisation of power lines. Reform to establish an independent system operator is underway in the UK, where the Future System Operator will be responsible to achieve three objectives: (1) net-zero; (2) security of supply; and (3) efficiency and economy.
In the EU, similar reform could be accomplished by ascribing the role to national regulators and ACER, the latter providing an essential platform to ensure EU coordination and exchange of best practices. Given the urgency of action, this would be preferable to establishing a new institution.
This central and independent body could be tasked with establishing the methodology for integrated power system planning, and provide oversight to the process, ensuring that plans are sufficiently aligned with EU ambitions.