Projects of common interest (PCIs) are key cross-border infrastructure projects that significantly enhance the links among the energy systems of EU countries.

They help the EU achieving its energy policy and climate objectives: ensuring affordable, secure and sustainable energy for all citizens. PCIs also play a key role in the long-term decarbonisation of the economy in accordance with the Paris Agreement.

ACER monitors and reports on the progress achieved in the implementation of the projects on the most recent PCI list adopted by the European Commission. If necessary, ACER makes recommendations to facilitate their implementation.

ACER’s monitoring is carried out on the basis of the individual reports submitted by their project promoters and using additional inputs received from the national regulatory authorities (NRAs). These inputs are collected via ACER’s data exchange platform AEGIS.

The ENTSOs' Cost-Benefit Analysis (CBA) methodologies should allow a neutral comparison between the costs of infrastructure projects with their expected benefits, in order to inform decision-makers. The CBA methodologies are useful tools for assessing the projects' merits, and therefore guiding the PCIs selection process first; and later the NRAs to take decisions on investment requests and cross-border cost allocation.

The ENTSOs have also presented an interlinked electricity and gas market and network model which should be incorporated as a future part of the CBA methodologies. A truly interlinked model will allow to study the electricity and gas energy system and network development options in a holistic way and capture the interdependencies between both sectors, leading to a more efficient network planning. The implementation of an ambitious interlinked model has gained momentum given that energy sector integration ranks high in the European agenda.​

ACER provides Opinions on each draft cost-benefit analysis methodologies developed by the ENTSOs, as well as the interlinked model, and may request the process for CBA updates.​​​​

ACER provides a cooperation framework for NRAs to establish and publish a set of indicators and corresponding reference values for the comparison of unit investment costs for projects of gas and electricity infrastructure, which could be used in CBA analysis.​

The projects of common Interest naturally contribute to enhance the security of the European gas supply. The degree of this contribution is assessed with the help of the cost-benefit analysis methodology. 

Under the European regulation on security of gas supply, ACER is mandated to decide on CBCA reverse flow projects, to issue Opinions on exemption requests and on the elements of coordinated decisions taken by national authorities, as well as to participate in the Gas Coordination Group. 

In its opinions on the cost-benefit methodology for gas​, ACER advises on how to improve specific issues connected with security of supply.

To better identify the benefits of a stable gas supply, ACER has carried out a dedicated study on the cost of disrupted gas supply (CoDG). 

​​​​The study provides findings and suggestions for establishing a baseline of negative impact against which the merits of a project or “soft measure" can be assessed.

ACER is mandated to monitor the short-term gas supply outlooks published by ENTSOG for both winter and summer periods.

The summer outlook examines the potential evolution of the gas supply as well as the ability of the gas infrastructures to meet the demand, exports, and the storage injection needs during the summer.

The winter outlook assesses the storage levels before the winter season begins and uses simulations to assess the flexibility of gas infrastructure to dispatch gas supply to meet demand during the winter.

Gas storages play an important role in the European gas system as they supply up to 25-30% of the total gas consumed in the Union during winter. The energy crisis which followed Russia’s invasion of Ukraine in February 2022 underscored the importance of having adequately filled gas storages across Europe to enhance the preparedness for potential gas supply disruptions.

ACER, based on information provided by NRAs, periodically reviews and reports on national gas storage regulations.

What type of regulatory decision on natural gas lie ahead?

Europe’s ambitious energy transition and decarbonisation goals by 2050 point to a changing role for natural gas. Demand for natural gas is expected to decline over time as the decarbonisation goals lead to a substitution of natural gas with other energy vectors. Therefore national regulatory authorities (NRAs) will need to take regulatory decisions on a wide range of issues such as:

• the repurposing of natural gas assets for their use as part of hydrogen networks;
• the potential decommissioning of natural gas assets that become stranded; and
• the reinvestment of assets that reach the end of their regulatory or technical lives.

ACER commissioned consultants DNV to carry out a study on the “Future Regulatory Decisions on Natural Gas Networks”. The DNV study, published in November 2022, addressing issues such repurposing, decommissioning and reinvestments of natural gas networks.

The information and the views set out in this DNV study are those of the author only, DNV, and may not in any circumstances be regarded as stating ACER’s official position, opinion, or recommendation. ACER does not guarantee the accuracy of the data and the statements contained therein.

What is repurposing, decommissioning and reinvestments?

Repurposing

The repurposing of natural gas pipelines for the use of hydrogen transportation will require transferring natural gas assets to dedicated hydrogen networks. This will require

• identifying assets
• defining the value of the asset to be transferred
• deciding on any incentives for the TSO to transfer assets to hydrogen networks.

Decommissioning

The decline of natural gas could potentially lead to some natural gas assets becoming stranded. This raises regulatory challenges such as

• identifying different types of decommissioning costs
• allocating the decommissioning costs and the different measures to prevent asset stranding.

Reinvestments

As assets age and reach the end of their depreciation periods, NRAs will have to take decisions on whether or not to replace these assets or to extend their regulatory lives (where possible or appropriate). The regulatory depreciation times applied for natural transmission assets is often below the technical lives of the assets.

The Bridge beyond 2025 paper jointly released by ACER and CEER in 2019, provides recommendations on the overall framework that could help in reducing the emissions of greenhouse gases and in increasing the availability of decarbonised gases.