ACER webinar: Evolving role of LNG in Europe

ACER issues today its guidelines to better protect cybersecurity information exchanged under the EU-wide network code on sector-specific rules for cybersecurity aspects of cross-border electricity flows (NCCS).

These guidelines are issued for the electricity sector, including transmission and distribution system operators, generators, organised markets, nominated electricity market operators (NEMOs) and the balancing responsible parties, as well as for providers of critical information and communication technology (ICT) services and managed security services.

ACER consulted the EU cybersecurity agency (ENISA), the European Network of Transmission System Operators for Electricity (ENTSO-E), EU DSO Entity and the competent authorities under the electricity cybersecurity network code in preparing these guidelines.

Why are these guidelines important?

Entities from the electricity sector (e.g. network companies and others) are required under the binding electricity-specific cybersecurity network code to share information, including on cyberattacks, threats, risk assessments and cybersecurity expenditures. Preserving the confidentiality of such sensitive information when sharing it among themselves and with relevant authorities is important. 

What are ACER's recommendations?

The guidelines suggest:

• Usage of the Traffic Light Protocol (TLP) to exchange information. The guidelines also provide basic instructions for the electricity sector on how to apply it. In case there are no legally binding national classification schemes applicable to the shared information, the TLP can also be used to share information within a Member State.
• Several methods for anonymising and aggregating information. The guidelines also provide examples of how specific information exchanged under the NCCS could be anonymised or aggregated.

Find out more on the NCCS.

ACER has published its opinion on the amended balancing monitoring plan of the European Network of Transmission System Operators for Electricity (ENTSO-E), suggesting more flexible reporting timelines, while stressing the need for improved data quality. 

How balancing works and why it needs oversight

In balancing markets, balancing energy is used to always keep the power system stable by correcting differences between electricity production and consumption. If there is not enough electricity in the system, transmission system operators (TSOs) procure upward balancing energy. If there is too much electricity, TSOs procure downward balancing energy. In most EU countries, this is done via EU platforms for the activation of balancing energy.  

Under the Electricity Balancing Regulation, ENTSO-E is tasked with overseeing the implementation and integration of balancing mechanisms across the EU. This includes coordinating the use of key platforms for the exchange of balancing energy and providing detailed reports to ACER on progress, efficiency and market integration.

However, delays in some TSOs joining key balancing platforms could hinder the timely publication of monitoring reports, as insufficient operational data may be available for analysis. As a result, ACER has suggested more flexible reporting timelines, while stressing the importance of high-quality balancing data. 

What are ACER’s key messages? 

ACER recommends that ENTSO-E:

• Adopts alternative reporting timelines suggested by ACER.
• Prioritises the quality of balancing data published on the ENTSO-E Transparency Platform to ensure that national regulators and ACER can effectively conduct their respective monitoring and analyses. 
• Streamlines reporting and promptly notifies ACER of any overlaps between reporting obligations, without the need to resubmit the amended Monitoring Plan. 

What are the next steps?

ENTSO-E is encouraged to begin improving data quality without delay.

Looking ahead, ACER commits to working closely with ENTSO-E to progressively reduce the number of reports required, aiming for more efficient and focused monitoring processes. 

The EU Agency for the Cooperation of Energy Regulators (ACER) has submitted its response to the European Commission’s public consultation on the functioning of the commodity derivatives markets, with a focus on the interplay between energy and financial market regulation. 

ACER believes that it is of importance to add sector-specific context to the consultation with respect to the functioning of wholesale energy markets and the specifics of Regulation No 1227/2011 on Wholesale Energy Market Integrity and Transparency (REMIT). The fundamental differences between financial and energy markets are the reason why Europe has (since 2011) a dedicated and highly successful energy-sector specific framework to ensure open and fair competition in Europe’s wholesale energy markets. 

ACER’s input to this consultation draws on many years of experience of national energy regulators enforcing REMIT, and ACER as the EU energy regulatory agency, protecting consumers and citizens from energy market manipulation and abuse (through its monitoring activities). It outlines the evolution of the REMIT framework with the revised Regulation (2024), including ACER’s evolving role as a wholesale energy market data reference centre.

Put simply, ACER’s position is that European consumers and businesses benefit enormously from the sophisticated EU-wide (REMIT) framework that protects energy markets from abuse. REMIT plays a crucial role in ensuring fairness, transparency and integrity of the wholesale energy market and as such should be the starting point for any further enhancements.

ACER’s response covers different aspects of the consultation, including:

• data aspects;
• position limits, management and reporting; and
• supervisory cooperation.

ACER recommends building on what already works well under REMIT and financial legislation, and to further strengthen the cooperation with the EU Securities and Markets Authority (ESMA) in areas such as data sharing, notifications to energy and financial regulators, coordination mechanisms and best practices exchange.

On 16 April 2025, the European Network of Transmission System Operators for Electricity (ENTSO-E) and the European Distribution System Operators Entity (EU DSO Entity) submitted to ACER a joint proposal on the national flexibility needs assessment methodology. The proposal defines: 

• the methodology for analysing national flexibility needs in electricity systems; and 
• the type of data to be gathered by system operators and in what format.

Why national flexibility assessments matter

The national flexibility needs assessments aim to support Member States in identifying their indicative national targets for non-fossil flexibility (e.g. storage, demand response), ensuring their electricity systems remain secure and efficient during the energy transition. 

How does it link to the EU-wide flexibility assessment and what are the next steps? 

ACER has three months, until 16 July 2025, to approve or amend the system operators’ proposal. Once approved, the methodology becomes binding for national assessments. Based on the national assessments (to be delivered by the national designated entities by July 2026), the Member States must set their national non-fossil flexibility targets within 6 months (by January 2027).

ACER will then review the national reports (by July 2027) and may provide recommendations on issues of cross-border relevance (including on removing barriers) to ensure sufficient non-fossil based flexible capacity is in place. 

In parallel, to complement the national assessments, ACER is working on an EU-wide flexibility needs assessment, which will be published by July 2027. 

Today, ACER publishes its report on trends in the European gas wholesale markets during the gas winter season (October 2024 to March 2025). The report also explores gas storage dynamics over the winter and offers an outlook for summer 2025. 

What trends did ACER monitoring find? 

European gas markets came under more pressure this winter due to higher demand and lower supply.

• Wholesale prices increased by 50% compared to last winter, though regional price variations narrowed.
• Gas consumption increased year-on-year, driven by colder weather than in the past two winters and exceptionally low wind generation. 
• Despite increased demand and the halt of Russian gas flows via Ukraine, gas networks avoided congestion thanks to full storages at the start of winter, expanded LNG infrastructure, and gas consumption remaining structurally lower than pre-crisis levels.
• Storage levels ended winter at 34% capacity, in line with pre-2022 norms but well below 2023-2024 levels. Significant injections will be needed before next winter.
• LNG imports rose seasonally but stayed below early winter 2023 levels. Later in the season, with European gas wholesale prices exceeding Asian spot LNG prices and new US liquification coming online, EU LNG imports hit record monthly highs.

Looking ahead 

To meet summer 2025 gas needs and refill EU gas storage to 90% by next winter, ACER estimates that pipeline flows must remain high and LNG imports will need to increase by 20% compared to summer 2024. 

Today, ACER publishes its report on the Czech gas transmission tariffs directed at the Energetický regulační úřad/Energy Regulatory Office (ERO), the Czech national regulatory authority.

The report assesses whether the proposed reference price methodology complies with the requirements of the EU binding Network Code on Harmonised Transmission Tariff structures. 

What is the proposed tariff methodology about?

The regulator proposes to:

• Adopt a capacity weighted distance methodology as the reference price methodology.
• Adjust the entry-exit split from the current 9-91% to 15-85%. 
• Reduce the discount applied to entry and exit points of storage facilities from 100% to 80%.

What are the key findings? 

After analysing the consultation document, ACER concludes that:

• The proposed methodology largely complies with the requirements of the network code.
• Most required information is provided, with the exception of the calculation and components of the cost allocation assessment. 
• The proposed commodity-based charge generally aligns with Article 4(3) of the tariff network code (which sets the rules for commodity-based tariffs). 

What does ACER recommend? 

ACER recommends that the national regulatory authority (ERO), when adopting its final decision:

• Consults on any benchmarking adjustments, respecting the two-month consultation period set in the tariff network code. If this timeframe cannot be met, ACER recommends that ERO provides the longest possible consultation period, anticipating the opening and closing dates to stakeholders and ACER.
• Justifies the results of the cost allocation assessment, providing an explanation on how the outcomes vary when different assumptions are used. This should help identify the most suitable methodologies for the transmission network.
• Justifies the use of an alternative pricing mechanism for the flow-based charge at interconnection points. For this purpose, ERO should demonstrate that there is a significant risk of volatility in cross-system flows that could impact the cost reflectivity of the flow-based charge.

See all ACER reports on national tariff consultation documents.

Today, ACER releases its report on the Lithuanian gas transmission tariffs directed at the Valstybinė Energetikos Reguliavimo Taryba (VERT), the national regulatory authority (NRA) of Lithuania.

The report assesses the compliance of the proposed reference price methodology (RPM) with the requirements of the Network Code on Harmonised Transmission Tariff structures. 

What is the proposed methodology about?

The Lithuanian regulator proposes to:

• Apply a postage stamp reference price methodology with flexible entry-exit splits, complemented by a 100% discount at entry points for domestic biomethane producers.
• Align entry tariffs with those of the neighbouring FinEstLat (Finland, Estonia and Latvia) zone.
• Simplify the existing tariff structure by abandoning the previously applied system based on multiple asset cost splits and differentiated tariffs.
• Use a flow-based charge (commodity-based tariff) with a fixed tariff level for the entire regulatory period.
• Offer a conditional product with limited allocability (i.e. the product can only be used to ship gas to pre-defined system points) at entry and exit points with non-EU countries.

What are the key findings? 

After analysing the consultation document, ACER concludes that:

• The proposed methodology meets the requirements on transparency, non-discrimination, and volume risk.
• Compliance with the requirements on cost-reflectivity, avoidance of cross-subsidisation, and prevention of cross-border trade distortions cannot be fully assessed, due to several design elements of the methodology.
• While the criteria for setting the flow-based charge are met, further clarification is needed on how the charge will be adjusted and reconciled. 
• Simplifying the tariff structure has made the methodology more understandable for system users.

What does ACER recommend? 

ACER recommends that the national regulator, when adopting its final decision:

• Provides a clear framework for the flow-based charge, preferably by recalculating its level annually.
• Ensures full compliance of non-EU entry and exit points with the network code. 
• Assesses regional networks and allocates their costs in a compliant way, in line with EU rules and ACER’s guidance.

See all ACER reports on national tariff consultation documents. 

The ACER report Unlocking flexibility: No-regret actions to remove barriers to demand response identifies persistent barriers to demand response and proposes 12 no-regret actions to remove them. 

The report is a roadmap and a call to action for policymakers, system operators, regulators, and market participants to act now. These actions will enhance flexibility, improve system efficiency, reduce consumer costs, and support the energy transition.

What are flexibility and demand-response?

Demand is the consumer side of the electricity market. Demand response is when consumers (or aggregators on their behalf) adjust their electricity consumption and generation in response to a change in the electricity market price (or a financial incentive) to increase/decrease/shift the timing of their electricity consumption. 

Power system flexibility is the electricity system’s ability to adjust to changing generation, consumption and grid conditions. Distributed energy resources, including demand response, energy storage, and distributed generation, play a key role in providing this flexibility.

Demand response supports more variable renewable generation and demand-side resources being added to the power grid. When consumers respond to price signals and actively participate in electricity markets, the benefits extend beyond them, helping to reduce price volatility for all consumers.

How is unlocking demand response linked to energy bills and the clean energy transition? 

Consumers have an important role to play in energy markets and the shift to cleaner energy. Enabling demand response supports this transition.

Recognising this, the first action of the European Commission’s Action Plan for Affordable Energy (February 2025) is to make electricity prices more affordable. 

One way to achieve this is by increasing flexibility in the power system. Greater demand response helps reduce price volatility and price spikes, makes it easier to integrate renewables, and increases overall system resilience.

What are ACER’s recommendations?

The ACER report sets out 12 concrete actions to remove the barriers to demand response, calling, for example, for:

• Stronger price signals through dynamic pricing and time-of-use tariffs to encourage consumer participation.
• Simplified market entry allowing aggregators and small players to provide flexibility services.
• Wider adoption of smart meters to enable real-time demand response.

ACER and the national regulatory authorities (NRAs) agree to follow the actions set out in the report and call on policymakers, Member States, system operators, and market players to similarly focus on these 12 actions.

Read more.

Interested in the topic? Read ACER’s recommendation on the Network Code on Demand Response, which provides further insights into the regulatory framework supporting flexibility in electricity markets.