The EU Agency for the Cooperation of Energy Regulators (ACER) publishes an Opinion assessing the consistency of the most recently published national gas and hydrogen network development plans (NDPs) with the EU-wide Ten-Year Network Development Plan (EU TYNDP).

The comprehensive review is carried out biannually and is based on the information provided by national regulatory authorities (NRAs).

ACER analyses the regulatory aspects and key features of the gas NDPs, as well as the inputs, the methodology used and the resulting outputs, focusing on changes observed during the last two years.

The review also analyses whether the gas NDPs cover energy transition aspects, such as the hydrogen and biomethane developments, the blending of hydrogen and biomethane in gas transmission networks, the existence of hydrogen blending targets, hydrogen strategies and plans for dedicated hydrogen networks.

Project-consistency of national and European gas network plans

ACER is concerned by a continuous falling level of project consistency between gas NDPs and the draft EU TYNDP 2022, compared to previous editions of the EU TYNDP. This is largely explained by the inclusion of hydrogen and biomethane projects in the draft EU TYNDP 2022 which, however, are often not part of the most recent gas NDPs.

ACER Recommendations

ACERs recommendations aim to improve the consistency of national and European plans and to align network plans with decarbonisation efforts.

NDPs should:

• Focus on investments allowing low-carbon and renewable gases to be injected into the networks;
• Consider possible future needs to decommission gas infrastructure;
• Be better coordinated with neighbouring Member States for cross-border issues;
• Include project cost data;
• Include soon-to-be-operational infrastructure aimed to phase out Russian gas;
• Build on compatible scenarios aligned with targets of decarbonisation and phase out dependency on Russian gas.

The EU TYNDP should:

• Reconcile the large number of investment projects with the projected downward gas demand;
• Make gas decarbonisation a main driver of network development;
• Include project costs and monetised benefits data (as it is already the case in the electricity TYNDP);
• Be primarily based on NDPs;
• Include suitable areas for location of power-to-gas assets, in coordination with electricity TYNDP assessments;
• Synchronise expectations of uptick of supply and demand of renewable hydrogen and biomethane with a prudent assessment of need of transportation services.

Key findings on aligning national and EU network plans with decarbonisation targets:

• NRAs would support an EU-wide approach to hydrogen blending limits;
• Hydrogen blending is likely to be a temporary or transitional solution towards decarbonisation;
• Essential network adaptations are required to allow for hydrogen injection in the transmission network;
• The number of Member States with hydrogen strategies doubled in the last two years. However, limited progress is observed regarding the readiness of gas transmission networks and national legislations for accommodating hydrogen.

Access the ACER Opinion and its Annexes I and II and Annex III, which provide comprehensive information on the most recent gas and hydrogen plans. Slides summarise selective findings of this ACER assessment of the gas TYNDP.

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today its Opinion on the Winter Supply Outlook for 2022/2023 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) provide relevant information to EU decision-makers in the current times of unusual developments in the energy sector. ACER monitors and assesses ENTSOs’ summer and winter supply outlooks, and issues recommendations to further improve their methodologies.

Winter supply outlook 2022/2023: what are the main findings?

ACER highlights the following findings and conclusions from the ENTSOG’s Outlook:

• The EU storage level on 1 October 2022 (89%) is one of the highest in recent years and meets the objectives set out in the EU gas storage regulation;

• The European gas infrastructure offers sufficient flexibility to dispatch gas supply to meet demand, assuming that there is cooperation among Member States and that sufficient gas reaches the EU. However, under specific scenarios of high demand and prolonged disruption of Russian gas supply, some possible demand curtailments are possible;

• In case of a “cold winter”, all European countries would be exposed to a risk of 10% demand curtailment for the entire winter season and from 10% to 27% in case of a “peak day”;

• Cooperation between Member States, additional gas supply, LNG infrastructure and a demand reduction of ca. 15% would efficiently mitigate the risk of demand curtailment;

• Early and significant withdrawal of gas from storages will result in low storage levels at the end of the winter season, having a negative impact on the flexibility of the gas system.

What is ACER’s assessment?

ACER appreciates that the Outlook assumptions and methodology were revised to consider already reduced gas flows from Russia and that it includes a scenario of full disruption of Russian gas.

Storage filling levels: ACER welcomes that the 80% EU storage filling objective was already achieved by the end of August, and that storage filling levels have to increased close to 95% by 1 November 2022. Strengthened national and EU gas storage regulations and other regulatory interventions have played a role in the successful replenishment of storages.

Use of gas storage during the winter: ACER highlights the critical importance of having adequate storage levels towards the end of the winter in case of high demand or supply disruption situations. ACER expects storage users to withdraw gas from storage prudently, and national competent authorities to monitor the withdrawal pattern in view of the filling targets for 2023, set out by European Commission.

Gas demand savings: The implementation of gas savings is fundamental for improving preparedness for this and next winter. ENTSOG should have used a “baseline scenario” of gas demand for the winter outlook consistent with the EU targets for reduction of gas demand set out under the EU Regulation on coordinated gas demand-reduction.

New infrastructure projects and maximisation of gas import and cross-border capacities: ACER welcomes that physical gas flows from France to Germany are possible since October 2022; that major gas infrastructure projects increasing the LNG import regasification capacities by more than 30 bcm and the gas connectivity across the EU have recently been commissioned or are expected to become online soon. The rapid finalisation of these projects should become a priority.

Recommendations to improve the Outlook methodology: ENTSOG should consider improving the Winter Supply Outlook assumptions and methodology, in particular by using a complementary scenario based on expected gas supply and booked capacities and estimating the effects of high gas prices on gas demand in the Outlook.     

ACER highlights the importance of close cooperation between ENTSOG and ENTSO-E to ensure, where relevant, consistent assumptions and results in their respective seasonal assessments.

Read more about the ACER’s Opinion. 

The Agency for the Cooperation of Energy Regulators (ACER) publishes today a Study on the Future Regulatory Decisions on Natural Gas: Repurposing, Decommissioning and Reinvestments. ACER commissioned DNV as a consultant to carry out the study.

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 lives and become fully depreciated.

What is in the Study?

The DNV Study provides an overview of current practices in Member States in addition to identifying challenges and offering possible solutions to future challenges that NRAs and the natural gas transmission system operators (TSOs) face with respect to the changing role of natural gas.

The analysis touches upon issues that are part of the European Commission’s Hydrogen and Decarbonised Gas Market Package of legislative proposals, such as the setting of the transfer value for repurposing assets, the forecasting of future transmission tariffs and the benchmarking of TSO costs. The report includes data collected from NRAs on the TSOs’ regulatory asset base, which helps increase understanding of how current TSOs’ costs are foreseen to evolve over time.

The DNV Study also identifies future challenges and suggests future possible legislative steps to be taken at the EU level on natural gas transmission and on hydrogen networks.

The information and the views set out in this study are those of the author (DNV) only 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.

Access the Study on the Future Regulatory Decisions on Natural Gas: Repurposing, Decommissioning and Reinvestments

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

What is the Volume about?

This new Decarbonised Gases Volume describes the current state of EU decarbonised gases and hydrogen, and it examines the regulatory provisions and market context that may drive their evolution in the mid-term.

In particular, it looks at:

• Renewable and low carbon gases production, consumption and price levels, as well as their prospects from now until 2050;
• Key regulatory provisions governing the access of decarbonised gases to the market; and
• Infrastructure expansion required to facilitate the use of biomethane and hydrogen.

What are the main findings?

• Current production of renewable and low carbon gases is modest relative to future policy expectations;
• Production goals have been accelerated as a result of the supply diversification efforts due to the Russian invasion of Ukraine in 2022;
• Numerous challenges are being identified that may hinder the expansion of decarbonised gases and hydrogen production, including the need for:
  • improving infrastructure interconnections,
  • developing greater end-use demand,
  • new infrastructure investments; and
• Energy regulators see the need to clarify the regulatory, financial and technical aspects in time to ensure gas sector decarbonisation and clean hydrogen sector development.

Key recommendations

The Report includes a set of recommendations on how to facilitate the access of decarbonised gases to the market and how to strike a balance between enabling a decarbonised gases market and ensuring regulatory certainty. 

The main regulatory recommendations can be grouped into six areas:

• Technical rules – quality of gas must be defined;
• Market rules – access to networks should be facilitated;
• Access conditions – appropriate tariffing arrangements needed;
• Participation – identification of the appropriate bodies to undertake new roles needed;
• New investments – frameworks must be defined;
• Support – early phase technologies need to be identified.

Access the 2021 Decarbonised Gases Volume.

Explore the rest of the MMR publications.

The EU Agency for the Cooperation of Energy Regulators (ACER) launches today a public consultation inviting stakeholders to submit their views on the new framework guidelines on scenarios for network development planning (Scenarios Guidelines).

The procedure to adopt new Scenarios Guidelines that will be used in the electricity and gas Ten-Year Network Development Plans (TYNDPs) was initiated in July 2022.

In order to make an informed and inclusive decision on these Guidelines, ACER will collect views on draft guidelines from the stakeholders in a public consultation that will run until 14 November 2022.

Background

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 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.

The recasted TEN-E Regulation requires that the TYNDP joint scenarios must be transparent, non-discriminatory and robust.   

What is the role of ACER?

To ensure these TYNDP scenarios meet those criteria and are as well in line with the European Union’s climate and energy objectives, ACER is first drafting and then adopting Scenario Guidelines. ENTSO-E and ENTSOG shall follow these Scenarios Guidelines for developing the joint scenarios.

Next steps

After the Public Consultation, ACER will evaluate the received feedback and take it into consideration when finalising the Guidelines.

ACER’s Scenarios Guidelines will be adopted by 24 January 2023. ACER will organise an online webinar on 26 January 2023 to explain the challenges and key decisions that shaped the Guidelines. Moreover, at the webinar ACER will invite stakeholders to provide feedback on the process of guidelines development to possibly improve the process in future.

Access the public consultation and the responses to the public consultation. 

Access the online webinar.

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today its sixth report on the gas balancing network code implementation.

ACER monitors and reports on the effective implementation of the gas balancing network code​ since 2016. The reports review the country assessments for each Member State, or a large sub-set of balancing zones, focusing on key features of the balancing design.

This year’s report focuses on seven balancing zones that kept transitory or interim measures or showed partial implementation of the network code in 2020.  

In particular, the analysis focuses on zones that:

• did not terminate the interim measures by April 2019 (Bulgaria, Greece, Ireland and Slovakia) or that kept transitory measures (Portugal) after the 2016 deadline; and

• only partially implemented the code’s provisions (Finland and Romania).

What are the main findings?

The report finds that:

• Member States have terminated all interim or transitory measures by June 2022. The only exception is Slovakia which still has interim measures.

• Bulgaria, Finland, and Greece have progressed to a high implementation level. Ireland has improved its implementation level, which was already high.

• Portugal, Romania, and Slovakia have still only partially implemented the code – whilst Portugal has made some progress, Romania and Slovakia have not.

What are ACER’s recommendations?

ACER welcomes the termination of the interim and transitory measures and the progress across Europe.

ACER recommends that the relevant stakeholders:

• increase their transparency on information provision (beyond the minimum requirements); and

• explore possible efficiency gains (e.g. via balancing zone mergers) to overcome the persisting structural market limitations that do not allow the code’s full implementation.

Would you like to find out more? Access the Report.

Gas Balancing Dashboard

Check out ACER’s new Gas Balancing Dashboard. It presents the main monitoring trends visually and allows a comparison between national balancing regimes.

Find out more on how to interact with the Dashboard.

Access the Dashboard via direct link or through AEGIS webpage.

• Energy regulators see the need to adopt gas demand-adjustment measures now to avoid higher costs later
• Regulators support a well-defined crisis response process

Europe’s energy regulators represented by the EU Agency, ACER, and the national regulators’ association, CEER, welcome the European Commission’s “Save Gas for a Safe Winter” Plan.  Reducing gas consumption now will go a long way to avoiding low levels of reserves, potential disruptions and more economically costly sudden measures in the winter. Europe’s energy regulators agree that regulations regarding security of supply should be re-evaluated in terms of their effectiveness in “addressing a longer-term supply disruption from a major supplier affecting several routes at the same time”.

Regarding the voluntary 15% demand reduction efforts in the next eight months, Europe’s energy regulators note the importance (as mentioned in the draft Regulation) that measures not unduly distort competition or the proper functioning of the internal market in gas, or endanger the security of gas supply of other Member States or of the Union and that they be market-based.

The regulators stress the need for market-based mechanisms such as auction or tender systems to incentivise energy reduction by industry, as ACER and CEER recommended in their Gas Wholesale Market Monitoring report published last week.

The plan’s proposal for a clearer mapping of governance in response to a gas supply crisis is important and ACER and national regulators, as a member and observers (respectively) of the EU Gas Coordination Group, appreciate that the role of the Group is further defined in the three stages of crisis response proposed by the Plan. Ultimately, only proactive and coordinated action, which also ensures a fair outcome for consumers, can best address the present challenges and Europe’s energy regulators stand ready to do their part.

Commenting on the European Commission’s “Save Gas for a Safe Winter” Plan, the ACER Director, Christian Zinglersen, stated:

“In light of gas supply disruption risks, it is important to take proactive measures now to reduce gas demand. Demand reduction measures are essential to complement supply side measures.”

The CEER President, Annegret Groebel, stated:

“Extraordinary short-term interventions should not prevent the long-term solutions/targets related to the energy transition and climate targets. Rather, the need to reduce gas demand now should serve as an accelerator to the green transition and reaching the climate targets if handled properly. Of course, we must keep in mind vulnerable consumer groups such as low-income households that that may need targeted measures.”

Access the Press Release.

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today its Opinion on the key elements of the draft Ten Year Network Development Plans (TYNDP) Scenario Report (2022), drafted by the European Network of Transmission System Operators for Electricity (ENTSO-E) and for Gas (ENTSOG).

What are ENTSO’s network development scenarios?

ENTSOs’ network development scenarios represent visions of potential future developments of energy system’s key aspects (e.g. demand, energy prices, technologies, etc.).

ENTSO-E and ENTSOG published their joint draft TYNDP 2022 Scenario Report on 11 April 2022.

ENTSOs’ network development scenarios play an important role in the definition of the pan-European network development plans for gas and electricity. They are also instrumental for selecting the Projects of Common Interest (PCIs). As such, it is essential to define trustworthy, transparent, realistic scenarios that are aligned with the European energy and climate objectives.

In particular, the scenarios described within the draft TYNDP Scenario Report will set the basis for the 2022 TYNDP for gas and electricity transmission networks, expected to be published later this year.

What are the Opinion’s main conclusions?

ACER publishes its Opinion on ENTSOs’ draft network development scenarios on a biennial basis.

In this year’s draft Report, ACER identified some key issues, namely:

• the absence of long term effects on the European energy markets caused by the Russian invasion of Ukraine (e.g. effects on the gas prices, the location of gas sources, the speed-up of renewable energy sources (RES) intake, etc.),

• the (recurrent) lack of a common “slow economic development” scenario (describing how the energy system is to develop under less favourable economic conditions),

• the need to further clarify the connection between various scenarios (to enable a better understanding of diverse scenarios’ results).

ACER suggests that the diversity of scenarios should be better addressed in the new Scenario Guidelines.

However, ACER further notes the consequences of the Russian invasion of Ukraine should be included in the analysis of ENTSOs’ final report for 2022, as it could have a significant effect on the 2022 TYNDPs and subsequent PCIs selection.

While recognising the tight timeline, ENTSOs are strongly encouraged to update at least one scenario:

• ENTSO-E should update at least the gas prices and RES integration levels considered into the analysis,

• ENTSOG should also consider the existing changes of gas sources and flows.

An amended set of scenarios should be made available for the 2022 TYNDPs as soon as possible. ACER is ready to engage and provide support to ensure these amendments can be applied in a timely manner.

Read more on ACER's Opinion.

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.