ACER publishes today its report on proposed gas transmission tariffs in Greece.

What is in the report?

ACER assessed the proposed tariff methodology to calculate the natural gas transmission network in addition to the charge used to allocate part of the costs of the Revithousa LNG terminal to users of the Greek gas transmission network.

What are ACER’s main findings?

ACER notes that the Greek gas transmission network has seen a significant change in recent years, as a result of the construction of new infrastructure and the changing flow patterns. In the coming years, Greece could become a landing point for LNG to be transported to North Macedonia, Bulgaria and beyond via different interconnection points in the North.

ACER finds that the choice of the postage stamp methodology and the network charge to allocate the costs of the Revithousa LNG terminal should be further substantiated. 

ACER recommends to the Greek national regulatory authority, RAE, to assess the possibility to set tariffs based on locational signals in the future. This can provide investment signals for future investments, enabling efficient decisions over the potential expansion of the network.

Access the report on the Greek gas tariffs.

Access all ACER reports on national tariff consultation documents.

Electricity grid operators must keep the power system stable or in balance. Decreasing the volume of balancing capacity to ensure operational security and allocating cross-zonal capacity to balancing capacity enables the power system to be balanced more efficiently.

To enable this, ACER approved on 19 July 2023 three proposals of Transmission System Operators (TSOs) and the European Network of Transmission System Operators for Electricity (ENTSO-E) on:

• Harmonised methodology for cross-zonal capacity allocation for the exchange of balancing capacity or sharing of reserves;
• Regional Coordination Centres’ (RCCs) task of regional sizing; and
• RCCs’ task of facilitating the procurement of electricity balancing capacity.

How is this relevant for citizens and EU security of electricity supply?

This new ACER Decisions aims at better integrating balancing capacity markets through the use of cross-zonal capacities. The goal is to lower the costs of procuring electricity balancing capacity while ensuring security of supply. This can be achieved by reducing the overall balancing capacity needs and by lowering the procurement cost for acquiring the necessary balancing capacity.

To ensure the informed decisions, ACER gathered input via a:

• Workshop (19 April 2023); and a
• Public consultation (13 April – 15 May 2023).

What are the next steps? 

• ENTSO-E, TSOs and RCC start the implementation of these methodologies.
• The harmonised market-based allocation process should be ready for application in 2 years. 
• The RCC task of facilitating the procurement of electricity balancing capacity should be operational in 2.5 years.
• The RCC task of regional sizing should be operational in 3 years.
• TSOs will submit an amendment proposal of the harmonised methodology for cross-zonal capacity allocation for the exchange of balancing capacity or sharing of reserves in 1 year to include needed provisions for the governance of the market-based process.
• Based on further assessments, ENTSO-E will submit amendment proposals for the RCC task methodologies before they enter into operation to define required thresholds.

Access the:

• ACER Decision No 11-2023 on the TSOs’ proposal for the harmonised cross-zonal capacity allocation methodology.
• ACER Decision No 12-2023 on the Regional Coordination Centre Regional Sizing of Reserve Capacity Methodology.
• ACER Decision No 13-2023 on the Regional Coordination Centre Regional Procurement of Balancing Capacity Methodology.

EU rules require grid operators to make a 70% minimum amount of capacity on interconnectors available for electricity trading with neighbours by the end of 2025. It is ACER’s job to monitor how Member States are doing on reaching this 70% target, but ACER’s monitoring finds that the target is still far off.

ACER is inviting feedback on its monitoring report and holding a webinar to discuss its conclusions (together with the recently published Emergency Measures report) on 6 September.

Why is reaching the minimum 70% target important?

• Delivering on the agreed minimum 70% target of interconnection capacity is crucial to achieving the ambitious political objectives set for renewable generation.
• Reaching the 70% target will:
  • ensure security of supply;
  • mitigate price volatility; and
  • provide key flexibility to the market.
• Building new lines is difficult and environmentally challenging: The 70% target allows for a more efficient use of existing lines.
• The 70% target will become increasingly difficult and costly to reach. Progress towards the 70% target is unlikely to happen without tough trade-offs.

What is the report about?

ACER’s Report on cross-zonal capacities and the 70% margin available for cross-zonal electricity trade:

• Highlights the need for maximizing cross-zonal trading to reach the EU’s clean energy goals;
• Evaluates progress towards achieving the 70% target by the end of 2025;
• Analyses the main barriers to cross-zonal trading and outlines what Member States and Transmission System Operators (TSOs) can do to lift them; and
• Illustrates the impact on welfare and on price spikes of offering low cross-zonal capacity levels in day-ahead electricity markets.

What are the key findings?

• Interconnection capacity available for cross-zonal trade of electricity remains low across the EU. The minimum 70% target of interconnection capacity is still far off for most Member States.
• Reaching the 70% target is a collective effort: Each Member State’s actions (or inactions) impact other Member States and ultimately consumers.
• Lifting both internal and cross-zonal constraints is necessary to achieving the 70% target. Old barriers persist:
  • Loop flows, i.e., internal trades within country A creating electrical flow through country B, thus creating congestion;
  • Insufficient and costly remedial actions;
  • No mechanism in place for sharing the cost of remedial actions.

What are the next steps?

• ACER’s public consultation (from 21 July to 15 September 2023) invites stakeholders’ views on the findings of the ACER monitoring report.
• ACER’s webinar (6 September 2023) presents and discusses the report’s conclusions (and the recent ACER report on Emergency Measures).
• Based on the findings of the report and stakeholders’ input, ACER will issue a formal opinion, on capacity available for cross-zonal electricity trade, to the European Commission and European Parliament by the end of the year. 

Access the ACER Report on cross-zonal capacities and the 70% margin available for cross-zonal electricity trade.

Access the Report's infographic.

Today, ACER publishes an Opinion on the European Network of Transmission System Operators for Electricity (ENTSO-E) draft 4th Guideline for cost benefit analysis of electricity grid development projects (CBA Guideline). The CBA Guideline was submitted to ACER in April 2023.

What is the CBA Guideline?

The CBA Guideline aims at providing guidance on how to assess transmission projects to be included in the Ten-Year Network Development Plan (TYNDP). It is also used at the selection of Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs) and on the cost allocation of cross-border infrastructure projects (CBCA).

What’s in the ACER’s Opinion?

ACER welcomes the following improvements to the CBA Guideline:

• Inclusion of a methodology for the assessment of hybrid offshore projects (i.e. grid projects that serve a dual purpose, to connect offshore generation and interconnect two bidding zones);
• Improved definition of the reference grid used in the modelling;
• Extended scope and increased clarity in assessing projects’ commissioning dates; and
• Improved definition for determining the commissioning year of projects involving multiple investments.

ACER identifies shortcomings in the CBA Guideline and recommends to ENTSO-E the following actions to improve it:

• Extend the analysis of security of supply by considering future extreme weather events;
• Simplify the assessment of hybrid offshore projects by removing Option 2;
• Include the identification of beneficiaries and cost bearers at national level;
• Provide criteria and suggest indicators for a more concrete assessment of ancillary services’ benefits.

Access the ACER Opinion on the ENTSO-E draft 4th Guideline for cost benefit analysis of grid development projects.

Learn more about the CBA.

ACER publishes its Opinion on the European Network of Transmission System Operators for Gas (ENTSOG) draft Ten-Year Network Development Plan (TYNDP) 2022 for gas and hydrogen sectors.

What is the TYNDP?

Every two years, ENTSOG publishes a TYNDP to assess and identify the need of new infrastructure projects to ensure an adequate level of security of gas supply, market integration and competition. ACER monitors the development and execution of the TYNDP process and issues an opinion on ENTSOG’s draft TYNDP 2022.

This TYNDP 2022 for the first time covers hydrogen projects. The estimated investment costs of all projects included in the TYNDP is unprecedentedly high (at €110 billion), and furthermore it still lacks cost information for a significant number of projects.

The TYNDP projects are submitted by project promoters to ENTSOG and are not the result of the modelling exercise that ENTSOG performs to identify investment needs. Hence, some of the TYNDP projects may not match any apparent infrastructure need.

What’s in the ACER Opinion on ENTSOG’s TYNDP for 2022?

ACER welcomes the increased focus of the TYNDP on the energy transition, the dual gas system modelling approach that considers both hydrogen and conventional natural gas networks simultaneously, and for the first time the TYNDP covering hydrogen projects.

Natural gas (methane) projects:

In ACER’s view,

• The TYNDP includes a large portfolio of conventional gas infrastructure projects which is likely to exceed reasonable needs for such infrastructure, considering the expected reduction in gas demand in Europe from 2030;
• The natural gas network in Europe is well developed and resilient;
• Some infrastructure investment gaps will be closed soon with on-going projects, further reducing the dependency on Russian gas supply.

Hydrogen:

In ACER’s view,

• The lack of a complete (European and national) legal framework for hydrogen regulation hinders the assessment of hydrogen infrastructure projects by some regulatory authorities;
• Future TYNDPs should evolve once market signals and final regulations for hydrogen are defined;
• ENTSOG should improve its analysis of market players' interest in developing transportation capacities, as it is one of key drivers of hydrogen infrastructure projects.

Investment costs:

In ACER’s view,

• Investment costs for all projects in TYNDP 2022 are unprecedentedly high (€110 billion) and incomplete due to declared confidentiality of project costs by some promoters;
• Hydrogen projects (at €77.5 billion), primarily in early stages, account for almost 70% of these costs;
• Consistency between the European TYNDP and national Network Development Plans (NDP) projects has decreased compared to previous TYNDPs. This is mainly due to the inclusion of hydrogen and other new project types in the TYNDP, which are not yet included in most NDPs.

What does ACER recommend to ENTSOG to improve its TYNDP?

ACER recommends to ENTSOG for the final TYNDP 2022 to:

• Consider National Regulatory Authorities (NRAs) comments on TYNDP 2022 projects;
• Enhance the comprehensiveness of Annex D (methodology);
• Demonstrate the consideration of feedback from stakeholders and ACER Opinion;
• Publish project-specific Cost-Benefit Analysis (CBA) assessments results, including economic performance indicators.

For ENTSOG’s TYNDP 2024 and beyond, ACER suggests improvements in the following areas (further explained in the Opinion):

• Scenarios, planning and consultation of stakeholders;
• Submission of TYNDP projects;
• Implementation of CBA and cost transparency;
• Identification of infra needs and modelling;
• Interlinked assessments.

Access the ACER Opinion 06/2023 on the ENTSOG draft Ten-Year Network Development Plan 2022.

ACER publishes its Opinion on the 2023 Summer Supply Outlook of the European Network of Transmission System Operators for Gas (ENTSOG). ACER welcomes ENTSOG’s Outlook but recommends some targeted improvements to it.

ENTSOG’s Summer Outlook 2023 assesses the resilience of the European gas network for the summer of 2023 by examining the potential evolution of gas demand and supply. In particular, it analyses the likelihood of gas storage sites being filled to 90% of their capacity by 30 September 2023 (in line with Europe’s minimum gas storage filling obligations), considering the existing gas supply risks and the current dependence of the EU on Russian gas. With EU gas storage above 75% in early July 2023, Europe is on track to meeting the 90% target if current gas storage injection levels continue.

Highlights of ENTSOG’s Summer Supply Outlook

ENTSOG’s Summer Supply Outlook 2023 presents two scenarios:

• Minimised Russian gas imports; and
• Complete disruption of Russian pipeline supply.

Its main findings include:

• Reaching 90% storage filling levels by end of this summer is possible in both scenarios, if there is cooperation among EU countries.
• The existing gas infrastructure, including recently commissioned projects, can effectively reduce the dependency on Russian gas supply.
• In a 'cold winter' with full Russian pipeline disruptions (which is the harshest scenario), additional gas supplies and demand reduction would be required.
• Additional measures to improve the security of gas supply include:
  • Increased liquified natural gas (LNG) imports (beyond historically observed import levels);
  • Enhanced capacities provided by transmission system operators (TSOs), leading to shift in gas flow (from West to East); and
  • Implementation of the existing target to reduce gas demand by 15%.

What is in the ACER Opinion?

• ACER appreciates that ENTSOG’s Outlook reflects already reduced gas flows from Russia and has a scenario of complete disruption of Russian gas.
• ACER welcomes that the recently commissioned infrastructure has added significant cross-border capacities and more than 30 bcm of LNG import capacities, improving the resilience of the EU gas system to import gas from sources other than Russia.
• ACER agrees with ENTSOG that additional LNG imports, enhanced transmission capacities and the implementation of a 15% gas demand reduction target may be needed to secure adequate levels of gas storage at the margins of 2023/24 winter season.
• ACER also stresses that continued vigilance regarding gas supplies and monitoring of storage filling trajectories are crucial because of the persistent risks of a significant reduction in Russian gas supply.

ACER’s main recommendations to ENTSOG for improving Outlook’s methodology and results:

• Use a complementary scenario based on expected gas supply and booked capacities;
• Estimate the effects of high gas prices on gas demand;
• Where relevant, adapt gas supply assumptions to potential events impacting the gas supply import capabilities, going beyond assumptions based on historic values;
• Use gas demand projections which are fully consistent with the European targets on gas demand reduction and phase-out of Russian gas; and
• Increase the level of granularity of the simulation results, the network topology, and its visualisation.

ACER highlights the importance of a close cooperation between ENTSOG and the European Network of Transmission System Operators for Electricity (ENTSO-E) to ensure consistent assumptions and results in their respective seasonal outlooks.

Access the ACER’s Opinion on ENTSOG’s Gas Summer Supply Outlook 2023.

Also see the recent ACER communication on ENTSO-E’s Summer Outlook 2023.

In response to the energy crisis, every EU Member State introduced emergency measures to support their citizens and economy, and to mitigate security of energy supply risks. In March, ACER published an inventory of 400+ measures adopted by Member States.

As part of its series of 2023 Market Monitoring reports, ACER publishes today its assessment of emergency measures in electricity markets.

What is it about?

More than 400 measures were adopted by Member States in response to the energy crisis. Member States had to swiftly respond to complex issues during the crisis, sometimes lacking a comprehensive overview of potential short- and long-term implications of choices made. This report’s objective is not to assign blame but rather to assist decision-makers in making informed choices in similar situations in the future.

The ACER Assessment focuses on lessons learned. This ACER report assesses drawbacks and merits of types of emergency measures against the achievement of 5 regulatory goals, namely how the measures;

1. Help consumers in terms of electricity affordability;
2. Contribute to security of supply;
3. Support energy transition and investment signals;
4. Promote energy efficiency and demand response; and
5. Contribute to efficient cross-border trading and market integration to benefit European consumers. Market integration allows for the mitigation of price shocks and increases security of supply.

ACER’s assessment of emergency measures is timely:

• As energy and fiscal policy makers consider next steps now to cope with persistent short-term energy challenges;
• With Member States starting to re-evaluate their energy emergency support measures in the context of falling energy prices;
• Given recent calls (by certain EU bodies) for fiscal policy (in the current high inflation environment) to be targeted, tailored and temporary.

Lessons from 2022 can help Member States determine where and when to direct any future energy support measures, to those in need.

What’s next?

Save the date – 6 September 2023 – when ACER will present and discuss the conclusions of the report.

ACER welcomes feedback ahead of the webinar, to be sent to 2023_emergency_measures(at)acer.europa.eu.

Access:

• ACER Assessment of emergency measures in electricity markets – 2023 Market Monitoring Report.
• ACER emergency measures infographic.
• ACER interactive inventory of 439 energy crisis measures adopted by Member States (you can filter by country, type of emergency measure).