Today, the EU Agency for the Cooperation of Energy Regulators (ACER) has published its non-binding Framework Guideline on sector-specific rules for cybersecurity aspects of cross-border electricity flows.

The Framework Guideline provides high-level principles for the development of a binding Cybersecurity Network Code that will further contribute to maintaining the security and resilience of the electricity system across Europe.

The Framework Guideline covers various security-related topics, such as:

• governance

• cross-border risk assessment & management (defining the scope of cross-border electricity flows’ cybersecurity risk assessment)

• a common electricity cybersecurity framework (defining both the basic and advanced lists of principles and requirements)

• information sharing and essential information flows

• incident handling and crisis management (including data collection)

• an electricity cybersecurity exercise framework

• protection of information exchange in the context of data processing

• monitoring, benchmarking and reporting

The journey towards a Network Code on Cybersecurity

In April 2021, ACER ran a public consultation for two months on the draft version of the Framework Guideline, inviting stakeholders to share their views on the document.

ACER received 42 responses to the consultation, the majority from energy industry companies or associations based within EU Member States.

The feedback collected showed:

• respondents welcome the draft Framework Guideline

• 88% believe the Framework Guideline contributes to further protecting cross-border electricity flows

• 65% say that there are still gaps concerning the cybersecurity of cross-border electricity flows, which the draft Framework Guideline proposal should address.

Main changes to the draft Framework Guideline

Following the feedback received, ACER revised the content of its draft Framework Guideline.

It now includes:

• An improved risk assessment methodology: tailored for the cybersecurity network code.

• A more balanced role and governance for ENTSO-E and the EU DSO entity in implementing the risk assessment of cross-border electricity flows, while reducing the role of Regional Coordination Centers.

• An updated verification methodology to prove compliance with a common cybersecurity framework: allowing the use of three different paths to verification (including certification, government inspection and peer review schemes).

• The possibility for Computer Security Incident Response Teams (CSIRTs) to withhold information from the information sharing network where dissemination is considered a risk.   

• The right for Cyber Security National Competent Authorities and national energy regulatory authorities to issue derogations for maximum two years for any entities that do not directly or indirectly affect cross-border electricity flows.

• A possibility for those stakeholders not listed as entities in scope of the network code to still be nominated and covered by it, e.g. small and micro entities.

What are the next steps?

ACER has now submitted the non-binding Framework Guideline to the European Commission.

As a next step, a specific drafting committee for the cooperation of ENTSO-E and the EU DSO entity will prepare a proposal for the network code based on the ACER Framework Guidelines. This proposal shall be submitted to ACER within 12 months after ENTSO-E receives the European Commission’s request.

ACER will then review the proposed network code to ensure compliance with its Framework Guideline and make sure it does not hamper market integration, nor the market’s efficient functioning.

ACER shall submit the revised network code to the European Commission within six months.

Would you like to find out more?

Framework Guideline on sector-specific rules for cybersecurity aspects of cross-border electricity flows.

ACER and energy regulators will draft new Framework Guidelines on sector-specific cybersecurity rules for cross-border electricity flows.

ACER and Cybersecurity.

The EU Agency for the Cooperation of Energy Regulators (ACER) and the Council of European Energy Regulators (CEER) publish their joint White Paper on Rules to Prevent Methane Leakage in the Energy Sector. The White Paper is the outcome of a survey of National Regulatory Authorities.

It presents the views of ACER and CEER on the European Commission’s Communication on an EU strategy to reduce methane emissions.

The paper has 13 recommendations covering six areas:

• the general scope and the overall approach to the introduction of rules to prevent methane leakage in the energy sector,
• monitoring and detection
• quantification
• reporting
• validation and mitigation, and
• the regulatory treatment of costs related to methane emissions.

Access the White Paper. 

The paper is one of a series of ACER-CEER “European Green Deal” Regulatory White Papers.

Register for the ACER-CEER Methane Emissions Webinar (14 September).

The EU Agency for the Cooperation of Energy Regulators (ACER) has published its latest Balancing Monitoring Report including a comparative performance assessment of the gas balancing zones of 22 Member States with the aim to assist National Regulatory Authorities for Energy (NRAs) and Transmission System Operators (TSOs) understand the strengths and weaknesses of each regime.

Transparent balancing systems pave the way for fairly priced balancing products, and consequentially lead to efficiency gains at the wholesale level, which should ultimately benefit final consumers.

Most relevant findings on balancing systems design, imbalances, and TSO’s balancing actions are:

• Greece – No trading platform is evident.
• Romania – Several days of TSO balancing actions on both sides of the market with inverted prices, which is not a straightforward outcome.
• Italy – The use of storage tools side by side with short-term standardised products and high levels of long and short imbalances subject to cash-out, compared to other balancing zones.
• France – The availability of the linepack service (GRTgaz’s Alize, Teréga’s SET) partly undermines the incentive of network users to balance themselves fully on a daily basis. 
• Germany – High levels of costs visible in balancing, although these might be justified in the context of wider benefits of variant 2 insofar as it supports competition amongst gas suppliers and which might be the subject of a cost-benefit assessment.
• Croatia – Pricing effects may result from the combination of illiquid balancing market and default imbalance pricing rules that may create instability.
• Lithuania – The system is apparently always short, necessitating only TSO balancing buys, and the balancing regime may be distorted via facilities that allow network users to trade after-the-end of the gas day.
• Hungary – Still using two trading platforms which may fragment short term market liquidity and transparency of price formation.
• Czech Republic – Most imbalance cashouts are avoided via an after-the-day trading of linepack flexibility whereby, effectively, network users are allowed to trade after the end of the gas day.
• Spain – The data submission implies that only within-day title products are used for TSO balancing, yet some aspects raise questions about the need to refine the TSO’s balancing policy.
• Slovakia – Limited TSO balancing actions are fragmented across balancing platform trades and balancing services rather than being focussed on the trading platform.
• Slovenia – Outcomes may be distorted by wide imbalance price differentials which give rise to a bias towards balancing sells other than during some discrete periods within year when balancing buys are dominant.
• Ireland and Latvia-Estonia – The TSO balancing actions are dominated by system sells.
• Denmark-Sweden – Imbalances are higher than observed in our analysis in earlier years, possibly due to a temporary decrease in domestic gas production.

The report, which is the 5th annual report published by the Agency on the matter, has suggestions for further research on balancing implementations in the EU gas markets. ACER considers that a closer look at national balancing systems is needed in case of:

• High price differentials between TSOs balancing actions buy/sell and network users buy/sell.
• High values of network users’ imbalances or TSOs’ actions.
• System asymmetries on either the buy or sell side.

Access the report.

How was the assessment done?

The principal objective of this year’s monitoring has been to offer automated calculations for the indicators of the Balancing Analytical Framework (BAF). These indicators, which describe various aspects of balancing implementation, were first presented by ACER in its 2nd Report on the Implementation of the Balancing Network Code. The work has involved setting up a new IT system to capture data inputs and to process them. The automation will support to systematically assess individual balancing regime performance and cross-balancing regime comparison in the future.

What does the cross-balancing regime comparison show?

ACER compared the 22 balancing regimes using 8 key indicators and paid particular attention where the selected indicators showed extreme values in this cross-country comparison. Briefly, the indicators describe:

• Four of them, the residual role of the TSO with a reference to the frequency and the average price spreads concerning the TSOs’ buy and sell actions.
• Three of them, the network users’ balancing activity looking at the imbalance quantities of the network users, the average imbalance prices and price spreads, in order to understand the different incentives network users might face within the different EU balancing regimes.
• Finally, a single indicator explains the net payments charged or credited to network users, assessing whether these payments are of a high value.

The indicators suggest that some implementations could evolve in order to maximise the benefits from the implementation of the Balancing Code.

What comes next?

The Agency sees two significant strands of activity that could support implementation in the upcoming years:

• The first strand would involve enhancing the IT application, for example allowing access to the data and outputs for individual NRA/TSO.
• The second strand would be for ACER to perform further studies with increased interaction with NRAs/TSOs/stakeholders about the local specificities of balancing regime implementations and deepen the qualitative part of the analysis, as it was done in earlier reports.

The Agency welcomes the stakeholders’ feedback on this report and solicits views about the suggested next steps. 

Main recommendations

The application of the BAF, in particular the cross-regional comparison, may help NRAs to refine the national balancing regimes. In ACER’s view, key regime parameters (e.g. small adjustment in imbalance cashout pricing, the performance of the information systems) should change, as the market evolves. The evolution of the market will create further opportunities to refine the design and/or certain parameters to deliver more efficient outcomes.

The Agency notes that progress has, and continues, to be made. The Agency observes as well that a few countries may be incompliant with certain provisions of the Balancing Code. Whilst this year’s analysis has been focussed on an assessment of effectiveness, it remains desirable to review compliance in a future study.

The EU Agency for the Cooperation of Energy Regulators (ACER) has published its bi-annual Opinion on the electricity national development plans (NDPs).

Why are NDPs relevant?

The development of the electricity transmission network is key to reach the energy policy goals set by the European Union. In particular, the Union-wide Network Development Plan (EU TYNDP), developed by ENTSO-E, is a crucial tool for coordinated network planning across the countries.

The EU TYNDP (and its implementation) strongly depends on the national development plans, calling for the consistency (and the two-way interaction) between these two infrastructure-planning instruments.

What is ACER’s opinion?

In the Opinion, ACER identifies several improvements compared to its previous NDPs’ review (2019), acknowledging that several countries followed its recommendations.

Among the others, more countries:

• adopted a two-years frequency for elaborating the NDPs
• introduced stronger scrutiny by national regulatory authorities (NRAs)
• ensured systematic stakeholders’ involvement in the process
• improved the assessment and transparency of the projects.

ACER welcomes these developments and continues to encourage NRAs and other relevant parties to consider ACER’s recommendations and implement them.

What are ACER’s current recommendations?

ACER highlights the need for:

• a single NDP for electricity infrastructure development per country
• a biennial frequency for elaborating the NDPs (a monitoring update should be issued  between two NDPs)
• stronger NRA scrutiny
• the use of at least one robust EU TYNDP scenario
• public consultations of NDPs
• publication of NDPs and of the corresponding formal acts (e.g. NRA’s opinion)
• transparency on projects’ key information (including commissioning date, project status, project costs), their cross-border and/or cross-zonal relevance and impact on the environment
• inclusion and proper assessment of third-party (so non-TSO) transmission projects
• a proper national coding system of projects and cross-references with the EU TYNDP.

For additional information, access the Opinion on the electricity NDPs. 

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today a Recommendation, addressed to national regulatory authorities (NRAs), on setting the level of the multipliers used for the calculation of gas transmission tariffs applied to non-yearly capacity products.

Why are multipliers relevant?

Multipliers are used to calculate the reserve prices of quarterly, monthly, daily and within-day gas capacity products, and they have an impact on network users’ booking strategies.

More specifically, the Network Code on Harmonised Transmission Tariff structures defines the level for day-ahead and within-day multipliers for standard capacity products to be between one and three. ACER carried out a public consultation in November and December 2020 to assess the possibility of setting a lower cap for multipliers for day-ahead and within-day capacity products.

What are the main recommendations?

After a careful assessment, ACER recommends NRAs to better substantiate their decisions regarding high daily and within-day multipliers, taking into account the specificities of each interconnection point and detailing their regulatory objectives (market integration, liquidity, competition, cost reflectivity and tariff stability, etc.). NRAs of Member States connected by transmission pipelines should also better coordinate their decisions when setting multipliers in combination with seasonal factors.

Access the Recommendation 01/2021.

Read more on its Annexes I and II (overview of multiplier levels & analysis and evaluation of responses).

The EU Agency for the Cooperation of Energy Regulators (ACER) launches today a public consultation on the harmonised allocation rules for long-term transmission rights (HAR).

All interested parties are invited to submit their comments by 27 August 2021.

Why should you contribute?

The harmonised allocation rules ensure a transparent and non-discriminatory capacity allocation of long-term transmission rights to all market participants and are proposed by all Transmission System Operators (TSOs).

In this consultation, ACER focuses mainly on the proposed cap for remuneration of long-term transmission rights (LTTRs).

What are the next steps?

ACER expects to reach its decision by 30 November 2021 to allow for a timely implementation of the newly amended HAR before the yearly LTTR auction that will take place in December 2021. The legal deadline to reach the decision is 25 December.

Find out more about the Public Consultation.

The European Commission’s hydrogen strategy acknowledges the potential future need for transporting hydrogen over long distances throughout Europe. Two main options are considered for connecting supply and demand by transporting hydrogen:

• building new hydrogen-carrying pipelines or
• repurposing existing natural gas pipelines for transporting pure hydrogen.

In order to assess these options, ACER reviewed more than 20 studies focusing on the technical and the cost aspects of repurposing existing gas infrastructure to pure hydrogen. The analysed studies range across various sources and stakeholders, including the gas industry, multi-partner hydrogen initiatives, industry partnerships, academia, think tanks, and others. As a result, ACER developed a summary paper on the technical possibilities for repurposing, based on these available studies. The paper also offers a reflection on the technical and hydrogen market conditions that could trigger the repurposing of natural gas pipelines to pure hydrogen.

What are the main findings?

• Repurposing is feasible and cheaper than building from scratch: as a rule-of-thumb, repurposing does not present insurmountable technical challenges and is cheaper than building new pure hydrogen networks.

• Studies also draw attention to the suitability of salt cavern facilities for storing hydrogen, noting that these facilities are geographically clustered in selected areas in a few EU Member States.

• Ways of hydrogen transportation: similarly to natural gas, trucks and ships can also transport pure hydrogen. In all cases, distance and volume are the main drivers determining the most cost-efficient mode of transportation. However, at this time, transporting pure liquefied hydrogen by ship is not cost-efficient. Shipping hydrogen as a constituent of ammonia appears to be considerably cheaper.

• Future pure hydrogen networks: studies offer divergent visions of the future extent of pure hydrogen networks. These visions range from a large-scale, pan-European backbone transmission infrastructure primarily based on repurposed natural gas networks, to regional, cluster-like systems handling hydrogen supply and demand in closer geographic proximity. Several studies conclude that, based on industrial hydrogen demand, technology and cost assumptions, there is no indication that a large-scale pan-European hydrogen network would be justified.

• Repurposing to hydrogen may be conditional on:

  1. the presence of loop (parallel) lines in natural gas pipeline systems, so that at least one string could be repurposed to pure hydrogen,

  2. ensuring security of natural gas supply to consumers during the conversion phase to pure hydrogen,

  3. hydrogen market uptake in the area serving a pure hydrogen corridor.

It is uncertain when and where these conditions for repurposing would be met across Europe, and whether they will be met at all.

Following a cautious approach in the implementation phase of pure hydrogen corridors seems to be a reasonable strategy, where repurposing would be triggered by compelling hydrogen market commitments and demand expectations. 

The review is provided on a “best effort” basis and should be seen as a “live reference document”, which may need to be further updated as more knowledge about the future of hydrogen networks emerges. 

ACER and energy regulators will continue discussing the repurposing outlook and stand ready to exchange views with all stakeholders, with the goal of delivering on the decarbonisation targets, as well as ensuring cost-efficient and cost-effective solutions to the benefit of energy consumers.  

Access the Review.