The role of the EU and ACER to ensure an adequate regulatory framework for projects of common interest

• Projects of common interest are important high-value projects for achieving EU energy and climate policy objectives. To the extent that these projects have higher risks, we need to make sure that the regulatory frameworks also incentivize investment at the high end of the risk spectrum. • In this brief we discuss whether an adequate framework for projects of common interest implies moving towards a dedicated regulatory framework, concluding that this is not necessarily necessary. • Some Member States might prefer to apply their default regulatory framework to projects of common interest. This approach avoids the additional costs of administering another framework. However, the conventional default framework provides the same return for all infrastructure investment, implying a risk of underpaying for high-risk investment and overpaying for low-risk investment. • Other Member States might prefer to apply a dedicated regulatory framework for important infrastructure investment to projects of common interest. These dedicated frameworks allow dealing with underpaying for important investment as well as mitigating the risk of overpaying by adjusting incentives to the value and risk of a project. • In both cases, the EU and ACER have important roles to play in ensuring that the regulatory framework applying to projects of common interest is adequate. Their roles could include assessing the applicable frameworks, assisting NRAs with multi-jurisdictional coordination, ensuring dedicated frameworks for investment of national importance apply also to projects of common interest, and assisting NRAs on a voluntary basis with performing case-by-case assessments.