Enhanced institutional coordination across multiple dimensions and more transparency in developing network development plans is a “must,” no longer a “nice to have.”

A cross-energy-vector independent system operator is likely best placed to coordinate and develop the target network. Giving them a net zero mandate with time-horizons aligned with NECPs ensures their focus in development of a net-zero target grid. Cross-energy vector responsibilities will help ensure the system operator has sight of important interactions, such as with hydrogen production or electrification of end uses. An ISO which does not own the network will be free of conflicts of interest in assessing relative merits of operational solutions. The newly formed National Energy System Operator in Britain is an example of a fully independent nonprofit public agency that has a mandate encompassing all energy vectors.

Improved coordination of network development and operation across jurisdictions is needed. The historic distinction between cross-border versus domestic network from the governance point of view creates barriers to developing an optimal network for an integrated European market. New cross-border capacities modify welfare distribution among consumers and producers on both sides of the border. Current cost sharing practice detached from benefits is a barrier for these welfare generating projects.

This points to the value of strengthening the mandates at the regional level (Regional Coordination Centres) towards an EU level (EU ISO) to complement the current bottom-up project identification with a top-down mechanism where transmission project proposals are driven by regional needs.

The “net zero target grid” needs to be coordinated across voltage levels of the domestic network and with adequately utilised across zonal capacities. Coordination is particularly important for higher voltage grid investments, which take longer to build and may present more of a challenge in securing buy-in than local distribution network upgrades.  Enhanced cooperation between DSOs and TSOs will allow for interactions to be accounted for and ensure coherence (for instance aligning time horizons for analysis) in development of NDPs. Estimating the impact of electrification at lower voltages is key for planning upstream.

Engagement of stakeholders in planning is important to support robustness of the outcome. The European Ten Year Network Development Plan (TYNDP) scenarios, which are informed by advice from the European Scientific Advisory Board on Climate Change and the Stakeholder Reference Group, may offer an example to build on at the Member State level. Similarly, bodies leading electrification across different end uses need to feed-in to the planning of power grids. For example, public EV charging infrastructure and local heat planning (now mandatory across the EU) need to feed into power network capacity need assessments. As consumers are the main stakeholders, engagement methods must be designed to cater for the meaningful involvement of different consumers groups.

A cost benefit analysis (CBA) methodology suitable for comparing not just new grid investment options but also alternatives to new grids as required by the efficiency first principle is key to translate multiple scenarios into an actionable plan. The NDPs may use analytical tools to convey an order of priority for grid investments, such as CBA with a lead scenariosuch as CBA with a lead scenario Identification of a “lead approach,” which can guide grid investment by network owners, is important as multiple plans cannot all be acted upon simultaneously. ACER emphasises the importance of developing a best estimate scenario that is stress-tested in a balanced way. ACER’s TYNDP Scenarios Guidelines may provide a framework for development of robust scenarios and a lead scenario., a Least Worst Regrets analysisLeast Worst Regrets analysis Worst Regrets analysis is a decision-making tool that makes recommendations based on which options/strategy produce the least “regret” across all of the analysed. Thus, all investments that feature in the Least Worst Regret approach would be identified as prudent investments and the regulator may have some confidence in the merits a priori of committing the consumer to recover their cost., or other approaches. For projects of medium voltage and above, this can probably be done on a case-by-case basis, while for low voltage inter-related batches of investments may be considered. The approach need not necessarily identify anticipatory investments as distinct from non-anticipatory investments. Rather, it should ensure that risks and uncertainties are accounted for in investment planning processes, and that a robust approach for managing them is pursued. Such a CBA should be able to identify projects where the incremental cost of over-sizing assets is relatively small to the potential benefit in anticipation of future users.

Providing up-to-date information on the existing and planned grids in a granular manner is fundamental for optimal planning and transparency. Tools like hosting capacity maps — becoming mandatory for all DSOs and TSOs — can provide information on remaining capacities, planned investment, anonymised connection requests (dates, capacities and type of resource) and can serve as match-making hub for projects to optimise available capacities (co-location behind the same connection point and coordinating new load and generation siting) and to collect commitments for planned grids (see later).

Getting the price signals right will help system operators develop a ‘net zero grid.’ Of particular importance are prices that provide greater locational granularity, such as nodal pricing (or at least zonal). This transparently shows where constraints lie, facilitates scrutiny and builds public support for the network vision. It also sends signals to use the existing grid efficiently, motivating connection requests where energy and grid are abundant.