ANNEX V ENERGY SYSTEM-WIDE COST-BENEFIT ANALYSIS

the area for the analysis of an individual project shall cover all Member States and third countries, on whose territory the project is located, all directly neighbouring Member States and all other Member States in which the project has a significant impact. For this purpose, ENTSO for Electricity and ENTSO for Gas shall cooperate with all the relevant system operators in the relevant third countries. In the case of projects falling under the energy infrastructure category set out at point (3) of Annex II, the ENTSO for Electricity and the ENTSO for Gas shall cooperate with the project promoter, including where it is not a system operator;

each cost-benefit analysis shall include sensitivity analyses concerning the input data set, including the cost of generation and greenhouse gases as well as the expected development of demand and supply, including with regard to renewable energy sources, and including the flexibility of both, and the availability of storage, the commissioning date of various projects in the same area of analysis, climate impacts and other relevant parameters;

they shall establish the analysis to be carried out, based on the relevant multi-sectorial input data set by determining the impact with and without each project and shall include the relevant interdependencies with other projects;

they shall give guidance for the development and use of energy network and market modelling necessary for the cost-benefit analysis. The modelling shall allow for a full assessment of economic benefits, including market integration, security of supply and competition, as well as lifting energy isolation, social and environmental and climate impacts, including the cross-sectorial impacts. The methodology shall be fully transparent including details on why, what and how each of the benefits and costs are calculated;

they shall include an explanation on how the energy efficiency first principle is implemented in all the steps of the Union-wide ten-year network development plans;

they shall explain that the development and deployment of renewable energy will not be hampered by the project;

they shall ensure that the Member States on which the project has a net positive impact, the beneficiaries, the Member States on which the project has a net negative impact, and the cost bearers, which may be Members States other than those on which territory the infrastructure is constructed, are identified;

they shall take into account, at least, the capital expenditure, operational and maintenance expenditure costs, as well as the costs induced for the related system over the technical lifecycle of the project as a whole, such as decommissioning and waste management costs, including external costs. The methodologies shall give guidance on discount rates, technical lifetime and residual value to be used for the cost- benefit calculations. They shall furthermore include a mandatory methodology to calculate benefit-to-cost ratio and the net present value, as well as a differentiation of benefits in accordance with the level of reliability of their estimation methods. Methods to calculate the climate and environmental impacts of the projects and the contribution to Union energy targets, such as renewable penetrations, energy efficiency and interconnection targets shall also be taken into account;

they shall ensure that the climate adaptation measures taken for each project are assessed and reflect the cost of greenhouse gas emissions and that the assessment is robust and consistent with other Union policies in order to enable comparison with other solutions which do not require new infrastructures.