Framework Guidelines & Network Codes Description of relevant NCs/ FGs: problem description and regulatory solution

The Gas Regulation anticipates the development of Network codes (NC) for cross-border and market integration issues, covering twelve broad areas for action. National codes could be developed by the Member states if those do not affect cross-border trade.      

The regulatory policies (designed by the framework guidelines) in the twelve areas of action shall follow the objectives of the Gas Regulation and focus on non-discriminatory access arrangements. The network codes, which are technical rules turning regulatory policies into operational rules, follow the principles and objectives of the Regulation and aim at improving access arrangements in the internal market, as  following:     

      Guidelines on CMP     

      The frequent occurrence of contractual congestion, where users cannot get access to capacity in spite of its physical availability, hinders the good connection of adjacent entry-exit systems.      
       Congestion management procedures (CMP) are applied at interconnection points to facilitate the efficient use and maximisation of capacities in the networks.      
      
NC on CAM      
       The lack of equal and transparent access to gas infrastructure for all network users hamper market integration.      
       Capacity Allocation Mechanisms (CAM) ensure that pipeline capacities offered at both sides of a border become a bundled product, allowing gas shippers to use it between two neighbouring systems.      
      
NC on Balancing     
       Highly fragmented gas markets and inefficient balancing regimes do not support network users to exploit arbitrage opportunities and develop wholesale gas markets.     
       Market-based balancing rules and daily balancing regimes aim at financially incentivising network users to balance their own positions via cost-reflective imbalance charges. These rules are designed to also promote the creation and development of short-term wholesale markets.     
      
NC on Interoperability and Data Exchange Rules     
       The lack of harmonisation of basic interoperability and data exchange rules poses barriers to cross-border gas transport and hinders gas market integration.      
       Operational, technical, communication and business rules are a prerequisite for a proper interoperability of transmission systems.     
FG on Harmonised Transmission Tariff Structures     
       Network users are facing a large variety and often inconsistent tariff structures in the EU, in some cases tariff structures lack objectivity or do not reflect system costs.     
      Transparency rules and harmonised measures proposed by the Framework Guidelines (FG) (covering charging methodologies, revenue recovery, reserve and payable price) provide for cost-reflective, non-discriminatory access arrangements, facilitate competition and promote the efficient use and development of investments in the networks.     

       

 

 

Procedure     

As a first step in the process, the European Commission (EC) establishes a priority list of issues to be tackled annually. It then requests the Agency, for each topic, to develop non-binding Framework Guidelines within a six months period of time.      

Following the adoption of the Framework Guidelines by the Agency, the European Network of Transmission System Operators for Gas (ENTSO-G) is invited by the European Commission to develop, on the basis of the guidelines, the relevant Network Code within 12 months, and submit the Code to the Agency.      
The Agency then has 3 months to deliver an opinion, which assesses the alignment between the Framework Guidelines and the Network Code. Once the Agency finds that the Network Code is indeed in line with the Framework Guidelines, the Agency submits it to the European Commission with a recommendation for its adoption.     

The Network Code may then become legally binding, following its adoption in comitology.

The drafting phases of both the Framework Guidelines and the Network Codes closely involve the Stakeholders, in particular via direct consultation.       

The current areas of work concern capacity-allocation, interoperability, balancing and tariffs rules.​