The EU’s ‘Projects of Common Interest’ (PCIs) – major infrastructure projects of European relevance aiming to boost Europe’s security of energy supply and competition in the energy sector – may benefit from a wide range of risk-mitigating incentives and a more fit-for-purpose regulatory treatment, a new study has found.
PCIs can involve investments in multiple countries however this can increase the risks, such as permitting delays and cost and time overruns, involved. Moreover, some PCIs are technologically challenging or very large projects, for example innovative HVDC subsea electricity cables, which can also increase the risk associated with the project.
These risks can impact the viability or the planned timeframe of the project – a situation which the Commission would like to avoid.
EU rules on major cross-border infrastructure projects state that if the risk associated with a PCI is higher than the risk associated with a similar project, then measures may be taken to ensure that the project is still completed on-time and that the risk-reward ratio stays positive for the project promoter.
The study outlines the possible categories of risk - from planning and permitting to the geographical distribution of costs and benefits - and possible technical measures, such as streamlining cooperation and increasing stakeholder participation, which could be taken to mitigate these risks.
Reducing risk would, according to the study, limit the uncertainty faced by promoters and thus reduce financing costs and encourage investments.
The Commission has drawn up a list of 248 PCIs which may benefit from financial support for the EU’s Connecting Europe Facility between 2014 and 2020. In 2014, €647 million was allocated to 34 PCIs, the majority of which involve electricity and gas transmission lines. A total of €650 million has been earmarked for PCI projects in 2015, with the second of two calls for proposal currently open.