Why are the Network Codes important?
Network Codes and Guidelines are important instruments to organise access to the European Union's gas market. They aim at lowering barriers to entry for market participants, promoting market integration and improving market efficiency to the benefit of all EU citizens.
Why are the Network Codes important ?
The gas industry is based on a vast interconnected physical network consisting of pipelines, LNG terminals, and gas storage facilities. Access to the EU gas market depends on access to the cross-border gas networks. To facilitate networks' access across EU Member States, the Union law foresaw to harmonise the relevant market rules in a number of Network Codes and Guidelines.
There are currently four gas Network Codes covering capacity allocation, tariffs, balancing rules, interoperability and data exchange rules, along with a Guideline on congestion management.
- Capacity Allocation: ensures auctioning of standard capacity products across the EU. The allocation rules foresee bundling of pipeline capacities at both sides of a border and selling them as a single product, thus simplifying trades between neighbouring systems.
- Harmonised Transmission Tariffs: provides transparent and harmonised measures for the charging methodologies, revenue recovery, reserve and payable price across the EU. These rules facilitate competition and promote the efficient use and development of the gas transmission network.
- Balancing Rules: market-based balancing rules financially incentivise network users to balance their positions with short-term products. In doing so, balancing rules contribute to the creation and development of short-term gas wholesale markets in the EU.
- Interoperability and Data Exchange Rules: create operational, technical, communication and business rules for the proper operation and interoperability of gas transmission systems.
- Congestion Guidelines: facilitate the efficient use and maximisation of capacities in the gas transmission networks.
What is the role of ACER?
ACER and ENTSOG are responsible for jointly drafting the Network Codes, which are adopted by the European Commission through comitology procedure as binding regulations. The European Commission is also in charge of developing specific Guidelines, after consultation with ACER and ENTSOG. The Network Codes' and Guidelines' implementation takes place nationally, while the Agency offers guidance and monitors the effectiveness of the implemented rules at European level. ACER occasionally takes individual decisions in case of disagreement between NRAs on a cross-border issue, to ensure a consistent application of the legislation.