For the first time in our new offices in Milan, we welcomed 24 regulatory staff from our members to participate in a training on Infrastructure Investments, Network Remuneration, and Tariffs.
Indeed, as key actors of the energy transition, energy
regulators must grasp the multiple facets of the sustainable transformation, to advance the power sector and to push forward the energy transition agenda. Some of the
main enabling factors being the
infrastructure, network remuneration, and tariffs that reflect well the costs of production and the needs of the consumers.
To expand our members’ knowledge on these 3 pillars,
top-notch speakers from different backgrounds provided lectures and discussions, over three days, moderated by our MEDREG Secretariat Director.
On the first day, Mr. Nicola Battilana, Head of Investment and Assets Planning at
Snam, the main European operator in the transport and storage of natural gas,
Obvervatoire Méditerranéen de l’Energie represented by Mr. Bruno Castellano and
Enel Grids represented by Ms. Valeria D’Ettore looked at the
importance of infrastructure by discussing
transmission and distribution investments and how they should be made
to maximise the return of decarbonisation. Losses also have a very important role in developing infrastructure especially with the ongoing trend for distributed generation, they stressed.
The lecturers pointed out that investing in the infrastructure of power and gas systems should consider all the advancements that are happening in the global energy markets. Energy transition is entailing a lot of incorporation of distributed generation through renewable energy as well as demand side management options which lead to a different development of the infrastructure. These differences should be considered in the investments that will be implemented in the coming future as they will affect the nature of the infrastructure itself.
The second day tackled network remuneration and related subjects such as the methodologies to calculate remunerations for the electricity and gas transmission, transport, and distribution, as well as the requirements to connect small and large-scale renewable energy projects to the grid.
Technical representatives from our Greek, Portuguese, and Turkish members (Mr. Konstantinos Perrakis from RAE, Mr. Paulo Paulino from ERSE and Mr. Mehmet Kurkcu from EMRA respectively) explained that regulation can play a major role in developing the network requirements if it is set in a way which encourages state-of-the-art technologies and mechanisms and the ancillary services that are forecasted to increase in the coming future.
They indicated that regulation can be used as an incentive for the companies to update the network further but within the necessities of the grid, or as a penalty if the companies do not respect certain minimum requirements that are requested by the regulators. Additionally, as RES projects are under development worldwide, the requirements to connect them to the grids should be regularly updated to follow any breakthrough in the sector.
Day three offered the expertise of Mr. Konstantin Petrov from DNV - one of the world’s leading testing, certification and technical advisory service company of the energy value chain – and of Mr. Sherif Mohamed Zoheir, Mr. Andrea Galliani and Mr. Andrea Rosazza from our Egyptian and Italian members (EgyptERA and ARERA).
They focused on tariffs and addressed the alleviation of subsidies and the setting of cost-reflective tariffs.
They highlighted the essential role of tariffs in the energy transition as poorly designed tariff schemes may have a big effect on the stakeholders and might seclude a part of them if not well planned.
They added that currently, most of the southern neighbourhood of the Mediterranean relies on subsidies for both the electricity and gas sectors. A first step would be to study the possibility of alleviating these subsidies which will help the countries reduce their expenses. However, while alleviating the subsidies, tariffs should be calculated in a way to be fair and cost-based with all stakeholders and protect the vulnerable consumers. In addition, with the potential advancements in smart grids, wheeling tariffs should also be considered so the DSOs and TSOs will still be able to provide the services in case any market reached self-sufficiency.