Natural gas and hydrogen network developments are instrumental for achieving EU’s decarbonisation goals, ensuring natural gas security of supply and fostering the hydrogen market. Consistency in network planning at European and national levels promotes efficient network development.

Every two years, ACER evaluates how well national gas and hydrogen Network Development Plans (NDPs) align with the EU-wide Ten-Year Network Development Plan (EU TYNDP).

What is in ACER’s latest Opinion?

ACER’s latest Opinion (covering 2023-2024) reveals two main trends:

• Growing consistency in gas network planning: there is a modest yet encouraging trend towards aligning national gas NDPs with the EU TYNDP. Key findings suggest:
  • A shift towards biennial gas NDP updates to align with EU TYNDP timeline.
  • Consolidated network operators’ plans published at the Member State level instead of separate publications from each operator.
  • More scenario planning processes that jointly consider gas and electricity sectors.
  • NDPs’ increased focus on integrating low-carbon and renewable gases, along with decommissioning and repurposing projects.

• Emerging hydrogen network planning practices: several countries have developed hydrogen strategies, legal frameworks, and specific hydrogen planning activities.
  • There is a low but growing consistency in hydrogen TYNDP projects included in the NDPs (rising from 17% in 2022 to 33% in 2024).

What does ACER recommend?

To improve consistency of NDPs:

• Consult stakeholders and coordinate with neighbouring operators to exchange information on scenarios, infrastructure gaps, and cross-border projects.
• Coordinate the timing of national planning with the EU-TYNDP development process as much as possible.
• Reinforce national regulatory authorities’ oversight.
• Emphasise the integration of low-carbon and renewable gases, along with decommissioning and repurposing projects.

To improve consistency of EU TYNDPs:

• Provide detailed information on costs and, where possible, on monetised benefits, following electricity TYNDP practices.
• Improve planning to prevent recurrent delays in the TYNDP development and release.
  • Ensure relevant projects appear in both NDPs and TYNDPs.
  • Synchronise expected market developments with a prudent assessment of infrastructure needs.

What are the next steps?

Member States and European Network of Transmission System Operators for Gas (ENTSOG) are expected to implement the new provisions set out by the Hydrogen and Decarbonised Gas Package. ACER encourages them to consider the recommendations of this Opinion to increase consistency in future national and European NDPs.

The next ACER Opinion will be published in 2026.

For a deeper understanding of the European hydrogen landscape and market developments, check out our Market Monitoring Report on European hydrogen markets, published today.

Europe's Hydrogen and Gas Decarbonisation legislation (2024) tasks ACER with monitoring the emerging hydrogen market.

ACER’s first hydrogen monitoring report highlights that, despite ambitious EU strategies, hydrogen projects face risks from uncertainties of future hydrogen demand and high costs.

What are the main findings?

• Low hydrogen demand: The EU is likely to miss the 2030 strategic goal of 20 Mt renewable hydrogen consumption, as current consumption at European level is 7.2 Mt (99.7% of it produced from fossil fuels). EU renewable energy and decarbonisation targets can increase demand for renewable and low-carbon hydrogen by 2030, but so far uptake has been slow.

• Limited electrolyser capacity:
  • Total installed capacity of electrolysers in Europe in 2023 was 216 MW.
  • Further 70 GW planned for 2030 announced but few are advanced.
  • Overall planned capacity is less than the 100+ GW needed to reach EU’s 10 Mt renewable hydrogen production target by 2030.

• High costs prevent renewable hydrogen uptake: The cost of renewable hydrogen is currently 3 to 4 times higher than hydrogen produced from natural gas, discouraging its early offtake.

• Significant infrastructure planned but they face uncertainties in being realised:
  • 42,000 km of hydrogen pipelines, numerous storage projects and terminals are planned for the next decade, but only 1% has reached final investment decision, as future hydrogen demand uncertainties pose significant challenges to project promoters.
  • Integrated planning by network operators is needed to ensure grid development at sufficient pace and to optimally locate electrolysers.

What are ACER’s key recommendations?

• Quickly transpose the EU (2024) hydrogen and decarbonised gas laws into national legislation and implement them.
• Speed up electrolysers deployment and decarbonisation of electricity sector to increase renewable hydrogen’s cost competitiveness.
• Improve forecasting and accelerate integrated planning to identify realistic hydrogen infrastructure needs, avoiding overinvestments and reducing costs related to under-recovery risks.
• When future demand is highly uncertain, consider incremental infrastructure development based on market needs (to avoid building too much network too fast and stranded assets).
• Consider carefully the repurposing of gas networks for hydrogen to minimise costs, while not overlooking the potential impacts on the broader gas sector (including security of gas supplies).                                                     
• Swiftly address demand risk in financing hydrogen networks.
• Provide market certainty over the role of non-renewable, low-carbon hydrogen.

Do not miss the ACER webinar: Europe’s emerging hydrogen market on Tuesday, 3 December (10:00 – 11:00 CET). Register for free and debate with our experts!

Today, ACER releases its report on the Estonian gas transmission tariffs, directed at the Konkurentsiamet, the National Regulatory Authority (NRA) of Estonia.

The report assesses whether the proposed reference price methodology (RPM) complies with the requirements of the Network Code on Harmonised Transmission Tariff structures (NC TAR). The proposed postage stamp RPM is complemented by an inter-transmission system operator compensation (ITC) mechanism, providing part of the revenue collected between Estonia, Finland, and Latvia as part of a market merger process called ‘FINESTLAT’.

What are the key findings?

After analysing the NRA’s consultation document, ACER concludes that:

• The capacity cost driver presented is not sufficiently defined, making it unclear whether it represents an efficient indicator for network utilisation.
• There is limited assessment of the ITC’s impact on the proposed methodology, causing uncertainty in the revenue collected from the proposed RPM.
• The consistent under-recovery of revenue, combined with the implementation of a price cap regime, raises questions about the efficient estimation of target revenue under Article 17 of the Gas and Hydrogen Regulation.
• Due to insufficient information, ACER cannot determine whether the methodology used to calculate tariffs meets the requirements of cost-reflectivity, cross-border subsidisation, cross-border trade, and volume risk.
• No evidence of discrimination in applying the RPM has been identified.

What does ACER recommend?

ACER recommends that the NRA, when adopting its decision:

• Enhances the clarity of published information, ensuring all elements required by Article 26(1) of the NC TAR are included.
• Provides a more elaborate assessment of the RPM, taking into consideration the ITC’s effects on the RPM, in line with Article 7 of the NC TAR.
• Publishes a simplified tariff model, including details on the interaction between the ITC and the proposed RPM.
• Offers a detailed description of the methodology used to compute the target revenue, in line with Article 17 of the Gas and Hydrogen Regulation.

Additionally, ACER invites the Estonian NRA to evaluate the effects of potentially moving to a non-price cap regime and implementing revenue reconciliation principles.

Finally, ACER reiterates its recommendation for NRAs involved in the market integration process to jointly consult on the ITC, aiming for adopting a joint NRA decision.

Access all ACER reports on national tariff consultation documents.

The annual ACER report on EU electricity wholesale market integration:

• Evaluates progress in EU electricity market integration across all market time periods (forward, day-ahead, intraday).
• Highlights challenges in integrating balancing markets, developing forward markets, and the slow progress in implementing methodologies that define operations in day-ahead and intraday markets.
• Outlines ACER's recommendations and ongoing efforts to improve electricity market efficiency, infrastructure investment and usage, and enhance flexibility through demand response.

Check out ACER’s new interactive electricity dashboards

For the first time, this annual monitoring report is accompanied by three separate dashboards on key market indicators such as prices and churn rates (a liquidity metric), balancing data (e.g., volumes, prices and cross border exchanges of balancing services) and data on long-term transmission rights (including risk premia).

What are the key findings?

In March 2024, ACER reported frequent occurrences of negative electricity prices in the EU. In June 2024, the Agency warned of rising congestion management costs in the EU power grid, which reached €4 billion in 2023. ACER emphasised the importance of increased cross-zonal trading capacity.

Today’s report by ACER finds that:

• With the expansion of renewable energy, the role of fossil fuels in electricity systems is diminishing. The new generation mix is marked by a 10% rise in hours of mostly non-responsive generation (generation that does not adapt to short-term changes in demand) in 2023. ACER stresses the need to enhance power system flexibility for an efficient energy transition.
• However, delays in implementing market design changes hinder flexibility. 27% of the market design rules (methodologies, terms, and conditions) are delayed in terms of implementation.
• Balancing market integration remains limited in 2023. The Transmission System Operators (TSOs) of only four Member States have joined the balancing platforms which went live in 2022. ACER encourages more TSOs to join the balancing energy platforms, highlighting that increased participation can expand cross-zonal exchanges and reduce occurrences of high electricity balancing prices.
• Current electricity forward markets offer investors visibility on future electricity prices for only up to one year. ACER has identified shortcomings in regulatory measures aimed at addressing this challenge and proposed improvements.

What are ACER’s recommendations?

The report contains a suite of recommendations. In short, ACER:

• Recommends taking a proactive approach to further integrate power markets and strengthen connections.
• Recommends an efficiency-first approach for both power infrastructure investments and usage, ensuring that every installed megawatt is fully used.
• Stresses that improving long-term investment structures and ensuring better market integration will drive Europe's energy transition and economic growth.

What’s next?

ACER will:

• Publish a new report on power infrastructure investment in December 2024.
• Review the rules (terms, conditions and methodologies) that define market operations starting in 2025.
• Propose a network code on demand-side flexibility to the European Commission by March 2025.
• Continue to monitor power TSOs' involvement in balancing platforms.

These steps aim to enhance market efficiency and contribute to a resilient, flexible electricity infrastructure that can support Europe’s energy transition and long-term economic stability.

On 21 October 2024, ACER received a proposal from Nominated Electricity Market Operators (NEMOs) to amend the single intraday coupling (SIDC) products methodology.

What is the methodology about?

The SIDC products methodology is defined by the Capacity Allocation and Congestion Management (CACM) Regulation. The methodology specifies the types of products that can be traded within the EU’s continuous single intraday market and in intraday auctions (IDAs). Here, trading begins the day before delivery and continues through the day of delivery, supporting real-time adjustments to supply and demand across borders.

Why amend the methodology?

In September 2024, ACER amended the single day-ahead coupling (SDAC) products methodology (where trades occur the day before delivery) to allow the introduction of 15-minute trading products (Decision 13/2024). The proposed changes for the SIDC products methodology aim to align with this update, allowing the introduction of 15-minute trading products in both day-ahead and intraday markets.

Harmonising the rules across both markets is necessary to comply with the EU Electricity Regulation and reduce entry barriers for market participants trading short-term products. These updates will enable participants to trade electricity in 15-minute intervals throughout the day, enhancing market flexibility.

What are the next steps?

ACER expects to decide on the amended methodology by April 2025.

Contact information

Interested parties may contact ACER on this matter at ACER-ELE-2024-012@acer.europa.eu by 11 December 2024 at the latest.

Relevant documents

All NEMO's proposal to amend the SIDC products methodology.

All NEMO's proposal to amend the SIDC products methodology (in track changes).

Explanatory note.