The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today its Opinion on the Summer Supply Outlook for 2022 of the European Network of Transmission System Operators for Gas (ENTSOG).

What are the supply outlooks about?

The short-term supply outlooks issued by the European Network of Transmission System Operators for Gas (ENTSOG) and Electricity (ENTSO-E) are becoming increasingly important as they provide relevant information to EU decision-makers in the current times of unusual developments in the energy sector. ACER is mandated to monitor and assess ENTSOs’ summer and winter supply outlooks, and issues recommendations to further improve their methodologies.

ENTSOG’s Summer Supply Outlook 2022: what are the main findings?

ENTSOG’s Summer Outlook simulations consider potential disruption scenarios from 1 April. ACER highlights the following findings and possible scenarios:

• Under a baseline scenario (where there is no supply disruption), the European gas infrastructure provides sufficient flexibility to market participants to reach at least a 90% storage filling level in all underground gas storages by the end of the summer, ensuring planned maintenance and exports to Ukraine.
• The EU is dependent on Russian gas for a minimum of 20% of its supply. In order to minimise this dependency, liquefied natural gas (LNG) imports should increase up to 80 bcm over the summer season. However, there are  limitations in global LNG liquefaction capacities and some limitations in the cross-border transmission capacities within Europe, which may prevent some European countries from receiving all the additional LNG imports needed.
• In case the pipeline supply routes through Belarus and Ukraine are disrupted for the entire summer season, Europe can reach (on average) 84% filling level of its total storage capacity, with significant differences across Member States.
• In case of a full pipeline supply disruption from Russia, storages can only reach a 45% filling level of their total capacity. Most European countries would not reach the 80% filling target (with significant difference between Western and Eastern European countries).
• Most European countries do not rely on Russian gas during summer to satisfy their demand – not considering the refilling of storages - except Latvia, Estonia and Finland.

What is ACER’s assessment?

ACER welcomes ENTSOG’s timely publication and acknowledges the Outlook’s main findings. In particular, ACER appreciates that the scope and methodology used have been revised in light of the Russian invasion of Ukraine and the possible repercussions on risk preparedness in the European Union.

However, ACER finds that the Outlook’s assumptions and methodology could be further improved and therefore issues specific recommendations for future Outlooks.

• Potential impact of supply pipeline routes disruptions: ACER recommends considering the outlook findings dynamically in view of the most recent developments affecting the gas supply situation.
• Demand estimates: It is not clear whether ENTSOG’ gas demand projections have considered that sustained high level wholesale gas prices are likely to erode gas demand, particularly for industries. ACER advises ENTSOG to incorporate gas demand reduction measures in its gas demand projections.
• EU dependence on Russian gas: ACER notes the EU’s dependency on Russian gas is at least 20% to meet the 80% storage level by next winter. Therefore, selected reinforcements of the gas network may be needed to provide sufficient infrastructure capacities to reduce the dependence on Russian gas imports.
• Vigilance over fillings of storage during summer: The current situation calls for continued vigilance of all actors responsible for security of gas supply, and regular monitoring of storage filling trajectories. ACER praises ENTSOG for developing tools and initiatives beyond its legal tasks, which provide real value for monitoring close to real time the gas security of supply situation.
• Infrastructure to reduce dependence on Russian gas: ACER suggests ENTSOG to carry out additional studies to identify concrete investments and costs associated. These assessments should start from the possibilities to re-allocate existing capacities in view of expected changed of gas flow patterns from West to East.
• Treatment of odourised gas: ACER calls on ENTSOG and Transmission System Operators (TSOs) to prioritise, in coordination with national authorities and end-users, a detailed analysis on the feasibility of implementing reverse flows.
• Cooperation between ENTSOG and ENTSO-E: ACER highlights the importance of a close cooperation between the ENTSOs to ensure consistent assumptions and results in their respective gas and electricity seasonal outlooks.

Read more about the ACER’s Opinion.

The EU Agency for the Cooperation of Energy Regulators (ACER) and the Council of European Energy Regulators (CEER) publish today the Gas Wholesale Volume of the Market Monitoring Report (Gas MMR 2021).

The MMR offers an overview of EU gas markets in 2021 and in the first half of 2022. This edition focuses on analysing the various drivers causing unprecedented price escalation, includes recommendations for further market development and contains proposals to secure supplies and to hedge price exposure.

What is the Gas Wholesale Volume of the MMR about?

It looks at:

• gas market developments and the drivers of the unprecedented gas price rise,

• the level of competition and gas market functioning using mainly the metrics in the ACER Gas Target Model,

• the positive effects on markets of the implementation of the gas Network Codes.

It has a set of recommendations:

• to speed up a single Internal Gas Market in Europe,

• to secure gas supplies for Winter 2022 and hedge price exposure amid the challenging market circumstances.

The main findings of the 2021 Gas MMR are:

1. Record high EU LNG imports (mostly from the US) and falling gas demand are (so far) offsetting the lower Russian pipeline flows in 2022.

2. Markets expect gas prices to remain high in the coming months driven by concerns regarding supply.

3. The EU gas market delivers benefits in terms of trade, innovation signals and security of supply. The focus is on finding policy responses to secure supply (e.g. filling storage, diversification of supply etc.).

Explore the rest of the MMR publications and energy market data in our interactive dashboard.

This year for the first time, there will be a new Decarbonised Gases volume, due out in November 2022.

View presentation and recording of Gas MMR 2021 webinar.

Download the 2021 Gas Wholesale Market Volume.

The EU Agency for the Cooperation of Energy Regulators (ACER) has initiated the procedure to adopt new framework guidelines on scenarios regulating future network development planning, in accordance with the recast TEN-E regulation.

What is it about?

Every two years, the European Network of Transmission System Operators  for Electricity (ENTSO-E) and for Gas (ENTSOG) prepare joint scenarios which set the basis for the future network development planning in the European Union.

Scenarios include a set of assumptions about energy demand and supply evolutions which aim at supporting the biennial Union-wide ten-year network development plans (TYNDPs). These TYNDP processes feed into the identification and selection of projects of common interest, which play an important role in making the infrastructure ready to achieve the energy and climate policy objectives.

As such, enhanced scrutiny on the  process of developing scenarios leads to increased trust from stakeholders and citizens.   

What is the role of ACER?

The recasted TEN-E regulation stipulates a more structured process for developing the joint TYNDP scenarios. It requires from ACER to prepare Framework Guidelines which should ensure the TYNDP scenarios are transparent, non-discriminatory and robust, as well as in line with the Union’s climate and energy objectives (e.g. fostering Union’s 2030 energy and climate targets, as well as its 2050 climate neutrality objective). These scenarios should also build on the European Commission’s Fit for 55’ scenarios, as well as on the national energy and climate plans.

The ENTSO-E and ENTSOG shall follow the Agency’s framework guidelines when they construct the joint TYNDP scenarios.

What’s the way forward?

In order to inform its decision-making process in an inclusive and extensive manner, ACER will collect views from interested stakeholders.

Starting from July 2022, and on a regular basis, ACER will organise a series of technical workshops, involving the ENTSOs, stakeholders and scenarios’ experts.

In order to be invited to the technical workshops, stakeholders should raise their interest and share their initial views by writing at scenario.guidelines(at)acer.europa.eu by 25 July 2022.

A broader public consultation was held from 6 October until 14 November 2022; see the responses to the public consultation.

The new framework guidelines will be adopted in January 2023.

For more procedural information, access the Public Notice.

ACER will organise a webinar on 26 January 2023 to explain the Framework Guidelines.

Access the webinar.

Access more information on the ENTSOs’ most recent completed scenario development process.

Privacy Statement.

The EU Agency for the Cooperation of Energy Regulators (ACER) and the European Network of Transmission System Operators for Gas (ENTSOG) have discussed how to ensure greater flexibility to book firm capacity at interconnection points in an online workshop held on 27 June 2022. The discussion is also known as FUNC issue (ID 01/2020).

What is the FUNC issue?

The FUNC issue was reported by the European Federation of Energy Traders (EFET) who has proposed to make firm IP capacity more readily available to shippers by enabling Transmission System Operators (TSOs) to offer it for sale in uniform price allocation (UPA) auctions (outside the auction timetable dates envisaged by the Network Code on Capacity Allocation Mechanisms).

What’s the way forward?

Several solutions to enable a more flexible capacity allocation process, as well as the urgency of facilitating this process, were debated at the workshop. To learn more, access the recording and the slides presented at the event.

To further inform its decision-making process, ACER and ENTSOG are now opening a public consultation to continue the collection of more detailed inputs from stakeholders, particularly in relation to:

• how to optimise capacity allocation and

• how to assess and prioritise the proposals presented in the workshop, as well as their urgency.

Special attention is paid to the current and fast evolving conditions in the EU gas markets and how a change in capacity allocation would benefit the markets.

Update as of 4 August 2022: The deadline to provide input has been extended until 18 August 2022. 

The inputs gathered during the workshop and the public consultation will be key for ACER and ENTSOG to prepare a solution note, closing the FUNC case.

Access the Public Consultation.

The EU Agency for the Cooperation of Energy Regulators (ACER) has published the 8th edition of its annual report on the progress of electricity and gas Projects of Common Interest (PCIs​) for trans-European energy infrastructure for the year 2021.​

PCIs are key cross-border electricity and gas infrastructure projects that enhance the links between the energy systems across Europe. They also play a crucial role in helping the EU to achieve its energy policy, security of supply and climate objectives by delivering socio-economic and environmental benefits. Every two years ACER reports on the progress of the projects' implementation of the most recent PCI list, which is adopted by the European Commission.

The 8th edition of the report evaluates 72 electricity and 20 gas priority projects of the European Union, amounting to €73.9 billion.

What are the report’s main findings?

ACER confirms the positive trend in the implementation of PCIs, as recorded in recent years:

•  most of the progresses are in line with the projects’ planned schedule,

• about 70% of the projects are already in permitting phase or under construction. They are expected to be implemented within the next 5 years.

However, ACER also notes that about:

• 30% of the PCIs encountered delays, frequently caused by permit granting reasons,

• 15% have been rescheduled by the project promoters, for various reasons, including uncertainty connected with the levels of demand and supply.

In line with its mandate, the report focuses on the projects’ past performances. It does not provide recommendations regarding future infrastructure needs or their potential changes, particularly in light of the recent energy price hikes and the new circumstances related to EU energy imports.

Access the PCI Report​ and related Annex I for project specific information on electricity PCIs and Annex II for further information on gas PCIs.

Related information

On 3 June 2022, the revised TEN-E Regulation (laying down new EU rules for cross-border energy infrastructure, including PCIs) was published in the Official Journal of the European Union. The new Regulation, among others, aims to:

• conform the infrastructure development to reflect the climate mitigation’s targets,

• promote the integration of renewables and of clean energy technologies into the energy system,

• continue to connect isolated regions,

• strengthen existing cross-border interconnections and

• promote cooperation with partner countries.

The EU Agency for Cooperation of Energy Regulators (ACER) and the Council of European Energy Regulators (CEER) have published their views and recommendations on the European Commission's legislative proposals on Hydrogen and Decarbonised Gas Markets.

The energy regulators appreciate the ambition of the proposals to establish a comprehensive system design with a clear target model for the hydrogen and decarbonised gas market(s), to reinforce measures on integrated network development and focus on consumer protection issues.

They also see scope to enhance certain elements of the proposals, with a focus on:

• comprehensive system design;

• integrated network development; and

• inclusive consumer protection.

Read the ACER-CEER Reaction.

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today its 9th Report on the Contractual Congestion in the EU gas markets. The report found that contractual congestion in the EU gas transmission networks in 2021 remained low, but that competition for transmission capacity increased in the fourth quarter of the year.

Why contractual congestions should be monitored?

Contractual congestions are relevant as they signal a reduction in market efficiency: while some network users are not able to obtain the transmission capacity product of their choice (and need to rely on congestion-mitigating measures to access the gas market), others who contracted capacity may not use it.

What are the Report’s main findings?

• In 2021, congestion remained low, as observed in 2020. 18 exit and entry points were congested in the EU gas networks - around 5% of all Interconnection Points (IPs) in the EU - compared to 19 in 2020. Half of the reported congestion in 2021 is due to auction premia (where the market clearing price exceeds the regulated capacity tariff), which occurred in the auctions of yearly, quarterly and monthly capacity products. The other half is caused by the lack of offer of any yearly, quarterly and monthly capacity products.

• In the fourth quarter of 2021, competition for transmission capacity increased as manifested through the rising number of auctions clearing with a premium. This applied to several products, from quarterly to within-day capacity products. Rising spreads between markets as of September 2021 could have increased competition for cross-border capacity. If the same level of competition persists in 2022, a rise of contractual congestion may be observed.

Without pre-empting the full analysis of capacity auctions during 2022 (which will be covered in the next edition), ACER observes that multiple auctions in the first and second quarters of 2022 have closed with premia.

Moreover, in a dozen of cases, auctions were terminated without any allocation of capacity because the allocation mechanism has not been flexible enough to accommodate the prevailing market conditions (with high and volatile market spreads). As such, the respective auctions had not been cleared before the capacity product would become active.

Has progress been registered?

While the number of congested IP is low, local contractual congestion can be severe and reduce market efficiency. Around 85% of the congested IPs in 2021 were also congested in the past. On the other hand, three of the congested IPs concerned (German domestic IP sides) have disappeared due to the German market merger. Competition for capacity may shift to other points bordering the German market area.

How can congestion be addressed?

Gas Transmission System Operators (TSOs) can apply several congestion management procedures (CMPs) to ensure users can access the network even when they cannot obtain a specific capacity product in the primary capacity auctions. The oversubscription mechanism (where more capacity is marketed than is technically available) remains the most applied CMP in 2021 despite its usage has further decreased. This decrease is partly compensated by a quadruplicated usage of the surrender mechanism (where a network user returns unused capacity to the TSO who can reallocate it to other parties).

More than half of the congested IPs are already covered by the firm day-ahead use-it-or-lose-it mechanism (FDA UIOLI), while the respective National Regulatory Authorities (NRAs) need to take action for the remaining ones, which shall be in line with the European Commission’s rules on contractual congestion.

What are ACER’s recommendations and policy reflections?

• ACER recommends the European Network of Transmission System Operators for Gas (ENTSOG) and TSOs to continue improving data reliability to ensure the accuracy of information available at the ENTSOG Transparency Platform.

• ACER welcomes the proposal of the European Commission’s ‘Hydrogen and Decarbonised Gas Market’ Package for revising the CMP guidelines. The proposal addresses several long-standing issues raised by ACER.

Access the 9th Congestion Report and its Technical Annex.

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today its second report on the implementation of the European Union Network Code on Harmonised Transmission Tariff Structures for Gas (NC TAR) for the Austrian transmission system.

The report focuses on the introduction of a commodity tariff, which aims at allocating the costs resulting from the recent increase in energy prices taking place in 2021-22 and forecasted for 2023-24. Transmission system operators’ (TSOs) networks require energy to run compressor stations, and the prices of both electricity and gas have increased, compared to the initial estimates made by the national regulatory authority (NRA) in 2020. As a consequence, the Austrian NRA, E-Control, is consulting on the possibility to introduce a commodity charge by 1 June 2022.

What are ACER’s recommendations?

ACER recommends to E-Control to further justify why the proposed commodity tariffs should be applied before the end of the on-going tariff period, which concludes in 2024. Such changes should take place only exceptionally.

In particular, the NRA should:

• provide additional information on how the increases in energy prices affect TSOs’ capacity to continue operating the network;

• further justify the entry into force date of the proposed commodity tariffs based on the TSOs’ capacity to continue operating the network;

• increase the transparency of TSOs’ tenders for purchasing energy, and ensure that these procedures have taken place in a transparent, competitive and non-discriminatory manner.

ACER further notes that, according to the NC TAR, the same flow-based charge should be set at all entry and/or at all exit points. The proposed flow-based charge is not applied at entry points from storage.

Finally, ACER recommends to the NRA to publish the decisions on the TSOs’ allowed revenue, including the initial decision applicable to the current tariff period and the recently adopted amendments to allocate the increase in energy prices. These decisions contain key information for the calculation of the proposed flow-based charge.

E-Control shall adopt a motivated decision on the application of the proposed commodity tariffs by 14 July 2022, although its publication will most likely happen earlier, given the urgency.

Read more on the report.

Access all ACER reports on national tariff consultation documents.

In the current geopolitical context, Europe’s energy regulators welcome the European Commission’s initiative to bolster the Union’s security of gas supply, and have identified some practical reflections to reach the objective of filling EU gas storage facilities more effectively, whilst protecting the consumer interest.

Under normal operating circumstances, gas suppliers would generally fill storage facilities to a very high level. The EU Agency for the Cooperation of Energy Regulators (ACER) and the Council for European Energy Regulators (CEER) therefore underline that the proposed measures must be considered exceptional, temporary and specifically targeted to the current circumstances, where high wholesale prices, negative seasonal spreads and risks on the availability of import gas volumes prevent market players from storing gas.

The present proposals from ACER and CEER aim at responding to the emergency with simple rules and allocation keys and, looking at the longer term, elaborating on methods to better address rights and duties of Member States and gas suppliers. Regulators’ key reflections can be summarised as follows:

Methods:

• Measures must be exceptional, temporary and specifically targeted to the current circumstances

• Intervention should be proportionate to the goals and should avoid distorting the market where it is able to fulfil adequate levels of gas storage

• The EU institutions should find an appropriate balance between top-down and bottom-up approaches

General principles:

• Filling targets should apply a demand-based rather than capacity-based rationale, combining European and national levels

• Apply simple but realistic measures during the course of this year (2022), taking into account national specific characteristics and constraints

• For the future (2023 and beyond): better estimate storage needs on the basis of several parameters (LNG tanks, diversity of supply, demand seasonality, interconnection capacities, dependence on Russian supplies)

• Risk mitigation measures should minimise the use of public funding 

• Implement an EU wide monitoring of storage filling levels and of prices paid for that fill.

Would you like to find out more?

Read the ACER-CEER paper.

Join the ACER-CEER Webinar on Gas Storage Regulation and Security of Supply (17 May, 10-11.30 CET). Registration is open!

ACER’s report on national gas storage regulations provides an overview of the current national gas storage regulations. This report is relevant in the context of the current discussions on new policies for filling storages next winter.

The importance of gas storage

The European Commission’s REPowerEU communication (March 2022) highlights the need to be prepared for a possible interruption of gas supply. Gas storage plays an important role for ensuring continuity of gas supply. More recently, the Commission has tabled a legislative proposal introducing a minimum of 80% gas storage level obligation by 1 November for next winter, rising to 90% for the following years. EU leaders are expected to discuss and decide soon on the approach to refill Europe’s storage facilities.

The ACER report sets out the current storage situation across the EU and is based on information provided by its members, the national regulatory authorities (NRAs).

What are the main findings of the ACER gas storage report?

1. Facts on storage: the EU-27 storage capacity represents around 27% of the annual gas consumption of the European Union. 18 Member States have gas storage facilities. The remaining 9 Member States without storage represent less than 5% of the European annual gas consumption. More than 80% of the EU storage capacity consists of aquifers and depleted fields, which are primarily used for seasonal gas storage. The number and capacity of storage sites as well as the number of storage operators varies across the countries.

Type of storage regulation varies across Member States. 11 Member States have opted for regulated third-party access rules and regulated tariffs, while in 7 Member States, access to storage is negotiated between users and operators according to transparent and non-discriminatory rules. Slightly more than half of the gas storage capacity falls under a negotiated regime while the remaining falls under a regulated regime. NRAs have provided a description of national storage regulation, focusing on key regulatory aspects, roles and responsibilities.

2. Book and usage of storage: On 1st October 2021, the booked storage capacity in Austria, Germany, the Netherlands and Slovakia was significantly above actual used capacity due to low filling levels of storages used or controlled by Gazprom. Some Member States apply use-it-or-lose-it (UIOLI) rules to release booked but not used storage capacity; a measure that could be applied in all Member States.

3. Gas in storage obligations: 11 Member States have some type of storage obligations, including: capacity booking obligations, filling obligations for gas suppliers, strategic storage and regulatory limitations in the usage of storage under some conditions. In 7 Member States, there are no storage obligations at all.

4. Monitoring and compliance with storage obligations. Storage operators regularly monitor storage filling levels. For all regulated storages and most of non-regulated storages, monitoring data is regularly reported to authorities (Ministries, NRAs) and in some instances to oil and gas national stockpiling associations. When storage obligations are applicable, there are different models to address non-compliance: use-it-or-loose-it (UIOLI) regime whereby booked but not used storage capacity is offered on the secondary market, fines or a possibility to suspend licenses and contracts.

5. Different storage tariffs and capacity products. Different tariff and access to storage regimes coexist (11 Member States have regulated tariffs, 7 negotiated).  The same applies to the availability of storage capacity products, which can range from a single standard bundled product to up to six different products. Ten Member States offer three or more types of capacity products. Storage tariffs are public in most of the cases.

6. Assessment of storage and national plans to establish storage obligations. NRAs have increased the vigilance over gas storage this past winter. The main current concern is the filling of gas storages for the upcoming winter. Member States with a regulated regime for storage (e.g. Belgium, France, Italy, Poland and Spain) have a positive assessment of their national systems and note an adequate storage filling level at the start of past winter season. Austria, the Netherlands and Germany have announced plans to consider establishing some type of storage obligations. The war in Ukraine has accelerated the discussions on revising or introducing strengthened gas storage regulations.

7. Validation of data provided by storage operators to ENTSOG and GIE AGSI+ Platform. Most NRAs report no or minor differences on the data provided by storage operators. As data is not always final and complete in the AGSI+ platform, it is recommendable to establish a more rapid process for validating the final storage values as well as an obligation of storage operators to report to AGSI+.

Would you like to find out more? Detailed country information is available in the report.