Cost benefit analysis of STEP, as first phase of MIDCAT

This paper presents a cost benefit assessment (CBA) of a proposed pipeline project in the Eastern Pyrenees – the South Transit Eastern Pyrenees (STEP), as the first phase of Midcat. Pöyry Management Consulting (Pöyry), with the support of VIS Economic and Energy Consultants (VIS), has been mandated by the European Commission to produce a ‘project specific’ CBA (PS-CBA) for STEP consistent with the CBA Methodology set out by the European Network of Transmission System Operators for Gas (ENTSOG).

The paper analyses several scenarios to explore the potential for STEP to provide economic benefits. In addition to these five scenarios, it also presents a series of stresstest cases, and discusses sensitivities investigated during the course of the project. Both economic and financial net-present values and rates of return are presented for each of the five scenarios, alongside the variety of other indicators required by the ENTSOG methodology.