ACER contributes to efficient and consistent gas network development plans by monitoring the development and implementation of the European-wide TYNDP. ACER also reviews the consistency and complementarity of national, regional and European network development plans.

Additionally, the Agency monitors the implementation of the projects of common interest, which are a subset of the projects listed in the TYNDPs, as well as the gas regional investment plans (GRIPs).

What is the TYNDP and why is it important?

Every two years, ENTSOG publishes a non-binding Ten Year Network Development Plan (TYNDP), which looks forward over a ten-year horizon and includes a European supply adequacy outlook. These periodically updated plans are essential for identifying the need of new infrastructure projects to ensure an adequate level of security of gas supply. The TYNDP must be consistent with the National Development Plans (NDPs).

The Projects of Common Interest (PCIs) are selected from the most recent TYNDP via a separate process led by the European Commission. The TYNDP should provide essential and comprehensive information for the selection of PCIs, particularly a complete, monetised, and trustable cost-benefit analysis results.
 

What is the role of ACER?

ACER is mandated to monitor the development and execution of ENTSOG's Plan. As a result, ACER issues an opinion on the draft TYNDP taking into account the objectives of non-discrimination, effective competition, and the efficient and secure functioning of the internal gas market. ​
 

What are ACER's recommendations for improving future gas TYNDPs?

In July 2024, ACER published its feedback on ENTSOG’s “Implementation Guidelines and other complementary guidance documents” for the 2024 TYNDP, recommending further improvements (see our communication).

​​​​In an integrated energy system, network planning and operation are carried out via a holistic approach for both large-scale and local infrastructures. This includes all the energy carriers (electricity, gas, blended, hydrogen, CO2, heating, district energy, liquid fuels) and would cover a longer timeframe than the ten years required by the current network​​​planning.

Such integrated approach is generally missing in the current energy market design and regulatory framework, with only few exceptions:

• The “Recast Renewable Energy Directive" (2018) establishes that Member States require electricity distribution system operators to assess at least every four years, in cooperation with the local heating or cooling operators, the potential for district heating or cooling systems to provide balancing and other system services and whether this would be more resource and cost efficient than alternative solutions.

• The “Recast Electricity Directive" (2019) has established the obligation for TSOs to consider alternatives to network expansion such as energy storage installations, including power-to-gas facilities. It has also established specific and exceptional conditions for Member States to grant their electricity TSOs the possibility to develop, manage, or operate energy storage facilities while the current gas regulatory framework does not allow it.​

​​Currently, the links in the energy sector between energy carriers (electricity, gas, heat) and between them and the consuming sectors (industry, buildings, transports) are limited.

The market and regulatory rules are designed separately.

Beyond the current electricity and gas market designs, the main market-based mechanisms currently in place are:

• Emission Trading Scheme - ETS: the ETS currently applies to power generation and heavy industries only. CO2 and greenhouse gas emitting sectors such as shipping are left out.

• Guarantees of Origin: as part of the Clean Energy Package, the “Recast Renewable Energy Directive" (2018) has extended the scope of guarantees of origin from 'electricity produced from renewable sources only' to 'gases produced from renewable and decarbonised sources, including hydrogen'. Discussions on whether the scope should be broadened in terms of energy/vectors, but also in terms of functions, are ongoing.

• Storage: the “Recast Renewable Energy Directive" (2018) has clarified the definition of energy storage for electricity, which now also includes power-to-gas installations.

• Flexibility markets: mainly focused on electricity (intraday, balancing, reserves). Currently a “circular economy approach" is missing (i.e. waste-to-energy).

• Bidirectional energy flows: the current electricity and gas demand side response mechanisms mainly involve big energy intensive companies. A more distributed generation/consumption approach is often missing. 

​​One of the key elements of the European Commission Communication “Powering a climate-neutral economy: An EU Strategy for Energy System Integration" is to make energy markets fit for decarbonisation and distributed resources.

The European Commission plans to achieve this by:

• Promoting a level-playing field across all energy carriers - by, among others, issuing guidance to Member States aligning non-energy price components across energy carriers, a possible proposal for the extension of the ETS scheme to new sectors, the revision of the Energy Taxation Directive

• Reviewing the legislative framework to design a competitive decarbonised gas market which can easily integrate renewable gases

• Improving customer information

Studies and impact assessments will be carried out in the next months and will contribute to the EC legislative revisions to be proposed by June 2021.

​​​​​​Most energy conversion technologies have not yet reached an efficient scale. They are likely to develop with an effective price signal, investments in research and development, and a system integrated network planning and operation.

Decarbonised gases, electrolysers, demand side response mechanisms and increased flexibility are likely to develop with more distributed generation and integrated market signals. 

The energy efficiency-first principle, together with the role of energy storage (thermal, gas, electricity, chemical) and the need for an improved access to and operation of the energy flexibility mechanism, are key elements to reach the decarbonisation and other energy system integration targets.

From a regulatory perspective, all technologies must be guaranteed a level playing field, so they can compete on the merits. Any obstacles or barriers to their equal treatment should be identified and removed, following an integrated energy system perspective.

​​​​​​​​​​​​​​​​​​​​​​​The decarbonisation of the energy system requires an increasing level of integration between its various components. Today, network operation and planning, market design, and regulatory provisions are developed separately by type of energy carrier.

Energy system integration refers to the planning and operation of the energy system as a whole - across multiple energy carriers (e.g. electricity, gas, heat), infrastructures, and consumption sectors (industry, buildings, transport) - by more strongly linking them with the objectives of decarbonisation, energy efficiency, affordability and reliability of the energy system.

It includes three complementary and mutually reinforcing concepts:

• A more circular energy system, with efficiency at its core

• A greater direct electrification of end-use sectors

• The use of renewable and low-carbon fuels, including hydrogen, for end-use applications where direct heating or electrification are not feasible, not efficient or have higher costs.

The energy system integration is expected to be a dynamic and learning-by-doing process. The results will depend on the development of economic, technological, environmental, and social elements at local, national, European and global level, as there is not a “one-size-fits-all" solution for all Member States.​

​​​​​Methane is widely regarded as one of the main greenhouse gases and its emissions are considered to be the second most important contributor to climate change. In the context of the Green Deal and as a part of the clean energy transition, the European Union has launched a dedicated effort for reducing methane emissions in the energy sector.

The effort takes into consideration the global nature of the industry and that about 80% of natural gas consumed in the European Union is imported. Approaches dealing with methane emissions in the natural gas industry have to account for the entire gas supply chain link, as well as for technology-specific features.

​​​​​​Cross-border energy infrastructure is the backbone connecting the European markets and allowing their integration. Gas pipelines, together with liquefied natural gas (LNG) terminals and underground gas storage (UGS) facilities, are the hardware supporting market integration, competition, and enhancing the security of supply in an efficient and sustainable way. If coupled with electricity, gas infrastructure can also support the energy transition towards a less carbon-intensive, and eventually carbon-neutral future.

Gas infrastructure offers flexibility, energy storage and back-up services which are already in place and of significant scale. Gas infrastructure is thus not just an object, but a tool that could contribute positively to the most profound decade of change in the European energy system.​

​​​​​​Network Codes and Guidelines are important instruments to organise access to the European Union's gas market. They aim at lowering barriers to entry for market participants, promoting market integration and improving market efficiency to the benefit of all EU citizens.

Why are the Network Codes important ?​

The gas industry is based on a vast interconnected physical network consisting of pipelines, LNG terminals, and gas storage facilities. Access to the EU gas market depends on access to the cross-border gas networks. To facilitate networks' access across EU Member States, the Union law foresaw to harmonise the relevant market rules in a number of Network Codes and Guidelines.

There are currently four gas Network Codes covering capacity allocation, tariffs, balancing rules, interoperability and data exchange rules, along with a Guideline on congestion management.

• Capacity Allocation: ensures auctioning of standard capacity products across the EU. The allocation rules foresee bundling of pipeline capacities at both sides of a border and selling them as a single product, thus simplifying trades between neighbouring systems.
• Harmonised Transmission Tariffs: provides transparent and harmonised measures for the charging methodologies, revenue recovery, reserve and payable price across the EU. These rules facilitate competition and promote the efficient use and development of the gas transmission network.
• Balancing Rules: market-based balancing rules financially incentivise network users to balance their positions with short-term products. In doing so, balancing rules contribute to the creation and development of short-term gas wholesale markets in the EU.
• Interoperability and Data Exchange Rules: create operational, technical, communication and business rules for the proper operation and interoperability of gas transmission systems.
• Congestion Guidelines​: facilitate the efficient use and maximisation of capacities in the gas transmission networks.​