ENTSOG is required to publish a draft cost-benefit analysis (CBA) methodology for hydrogen infrastructure projects, in accordance with Article 11 of the recast Trans-European Networks for Energy (TEN-E) Regulation.

ACER contracted VIS Economic & Energy Consultants to conduct a study to identify recommendations for European Network of Transmission System Operators for Gas’s (ENTSOG’s) future CBA methodology for hydrogen infrastructure.

What are the key findings?

The VIS study:

• Assesses existing CBA documents and technical-economic assessments for hydrogen infrastructure;
• Reviews hydrogen transportation plans and supply/demand targets in selected EU Member States;
• Assesses market and network conditions justifying building hydrogen infrastructure; and
• Provides recommendations to ENTSOG for a CBA methodology for hydrogen infrastructure consistent with CBA methodologies used for other types of energy infrastructure projects.

The recommendations have been clustered into four thematic groups:

The main findings of this study were presented during the ACER webinar on 14 April 2023.

What are the next steps?

• ENTSOG’s CBA methodology will first be used for the development of the European wide ten-year network development plan (TYNDP) 2024 and the following selection process of Projects of Common Interest (PCI).
• ENTSOG is currently consulting on its preliminary CBA methodology. After concluding the consultation, ENTSOG will adapt its preliminary methodology and submit a draft CBA methodology to ACER, the EU Member States and the European Commission.
• ACER shall provide its Opinion within three months upon ENTSOG’s submission, which is expected in June 2023. This consultancy study provides ideas that ACER will consider for its Opinion. However, the information and the views set out in this study are those of the author (VIS) only and may not, in any circumstances, be regarded as stating ACER’s official position, opinion, or recommendation. ACER does not guarantee the accuracy of the data and the statements contained in the study.

Access the consultancy study about cost-benefit analysis for hydrogen networks.

On 19 December 2022, the national regulatory authorities (NRAs) of the Nordic Capacity Calculation Region (CCR) requested an extension to decide on the Nordic Transmission System Operators’ (TSOs’) proposed amendment to the market-based cross-zonal capacity allocation methodology.

On 14 April 2023, ACER granted an extension of six months to the Nordic CCR NRAs (Denmark, Finland, Sweden).

What is the market-based allocation process?

The market-based allocation process compares the market value of cross-zonal capacity for the electricity balancing capacity market with the forecasted market value for the day-ahead electricity market. It then allocates the capacity to the market that generates the most welfare by using the cross-zonal capacity, which:

• allows the integration of balancing capacity markets;
• creates welfare;
• lowers the costs for the procurement of balancing capacity;
• lowers the costs for tariff payers; and
• ensures security of supply.

What are the next steps?

Nordic NRAs have until 28 June 2023 to decide on the proposal of the Nordic TSOs’ for amendment to the market-based cross-zonal capacity allocation methodology.

Access the ACER Decision 09/2023 on the extension request for Nordic CCR.

​Each year, the European Network of Transmission System Operators for Electricity (ENTSO-E) assesses the risks to EU security of electricity supply for up to 10 years ahead with its European Resource Adequacy Assessment (ERAA). ERAA is submitted for ACER’s decision by 1 November each year.

ACER appreciates ENTSO-E`s efforts to consult on the 2023 ERAA assumptions and data. Robust results come from robust input data and stakeholder involvement is key in ensuring it.

ACER did not approve the first two ERAAs submitted by ENTSO-E (see the links to the ACER decisions on ERRA 2021 and 2022 respectively).  The ACER decisions provided recommendations to ENTSO-E to improve their subsequent ERAA.

Taking into account the experience gained in the first two years of ERAA, ACER has decided to contribute to the consultation. The aim is to transparently and concretely express ACER’s key data-related concerns to allow ENTSO-E to address them before their submission of the draft ERRA 2023 to ACER later this year. 

ACER’s key suggestions on how to improve the assessment

To improve the assessment, data input needs to be:

• consistently applied within the two ERRA modules (adequacy & investment), and
• consistent with the relevant EU and national policy goals and plans.

Figure 1: ACER’s focus is consistency of data input between ERAA modules and policy goals

Key areas of ACER’s concern

Cross-zonal capacities:

• Cross-zonal electricity exchange represents an important adequacy resource, hence assumptions regarding cross-zonal capacities and the underlying interconnectors are crucial.

• ACER urges ENTSO-E to consistently consider cross-zonal capacities according to the Ten-Year Network Development Plan (TYNDP) developed by the TSOs and ENTSO-E.

Climate-related assumptions:

• Climatic variables can have a significant effect on security of electricity supply and thus on the ERAA results.
• ACER highlights the importance of the consistent application of climatic variables across the two ERAA modules (adequacy & investment).

See ACER’s reply to ENTSO-E’s public consultation on ERAA 2023.

On 4 April 2023, the regulatory authorities of the Core capacity calculation region referred to ACER two proposals from the Transmission System Operators (TSOs) in their region for amendments to the Core region electricity intraday capacity calculation methodology.

Why change the rules?

Since June 2022, intraday capacity calculation methodology in the Core region is based on a flow-based approach and is aligned with the day-ahead flow-based market coupling (see the original ACER Decision 02/2019 and the first amendment to the Decision 06/2022).

The Core region comprises 13 Member States: Austria, Belgium, Czech Republic, Croatia, France, Germany, Hungary, Luxembourg, the Netherlands, Poland, Romania, Slovakia and Slovenia.

The TSOs of the Core region proposed two amendments to the intraday capacity calculation methodology to align it with the parallel Regional Operational Security Coordination (ROSC) process.

ACER intends to decide on the proposed amendments in cooperation with Core regulatory authorities and TSOs, and thus enable the first intraday flow-based capacity calculation in Europe. This will enable more efficient functioning of intraday electricity market in Core region and its further alignment with parallel congestion management processes.

What are the next steps?

ACER public consultation runs from 4 July to 1 August 2023. 

ACER will decide on the amendments by 4 October 2023.

Public notice.

Pursuant the TEN-E Regulation (Article 11(9)), every three years ACER shall establish and publish a set of indicators and corresponding reference values for the comparison of unit investment costs (UICs) for comparable projects of the energy infrastructure categories included in Annex II.

ACER collected data from project promoters and publishes a set of UIC indicators and corresponding reference values for the comparison of unit investment costs for comparable projects of the energy infrastructure categories.

Access the Unit investment costs indicators for energy infrastructure categories.

What are the next steps?

In the course of the next two months (May-June 2023), ACER, together with PwC consultancy, will publish a complete report with the UICs indicators development background, where more information will be provided, such as analytical methodology, statistics, cost breakdown and research on cost for “new” energy infrastructure as hydrogen infrastructure, CO2 grids and electrolysers.

Read more.

ACER publishes today its report on Latvia’s proposed gas transmission tariffs.

What is in the report?

ACER assessed the proposed methodology to calculate the gas tariffs, including:

• The tariff structure applicable to Latvia as a result of its participation in the merged market zone between Finland, Estonia and Latvia (FinEstLat); and
• The tariffs applicable to domestic exit points of the Latvian network and to the Latvian exit point to Lithuania.

What are ACER’s main findings?

The public consultation of the Latvian national regulatory authority, the Public Utilities Commission (PUC), is missing certain information required to be included in the consultation according to the Network Code on Gas Transmission Tariffs.

ACER recommends that PUC improves:

• Assessment on cross-subsidies resulting from the FinEstLat market merger;
• Calculate the exit tariff to Lithuania using the proposed reference price methodology; and
• Apply capacity-based tariffs at domestic exit points.

Access the ACER report on the Latvian gas tariffs.

Access all ACER reports on national tariff consultation documents.

ACER published today the updated electronic format for the reporting of primary and secondary capacity allocations for gas in accordance with Table 4 of the 2014 Commission Implementing Regulation on data reporting.

The new version of the electronic format for the reporting of Table 4 transactions implements:

• Selected improvements gathered from the 2017 Public Consultation on the Revision of electronic formats for transaction data, fundamental data and inside information reporting;
• Changes required for the alignment of the electronic format with the Transaction Reporting User Manual (TRUM); and
• Changes to the XSD file, which now contains reference annotations to data fields in the TRUM.

The new version is available via REMIT Reporting Guidance page: Annex V.IV to the Manual of Procedures (MoP) on Data Reporting.

Updated guidance documents on REMIT transaction reporting

To reflect the new electronic format and to facilitate the reporting of contracts for the transportation of natural gas under the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT), the following guidance documents on REMIT transaction reporting were also updated:

• Annex III.IV to the MoP on Data Reporting (Data fields for gas transportation data reporting);
• Annex V.IV to the MoP on Data Reporting (XML Schema for Gas Transportation Contracts);
• Chapter 7 of the TRUM v5.2;
• Chapter 4 of the Frequently Asked Questions (FAQs) on REMIT transaction reporting;
• ACER REMIT Information System (ARIS) Data Validation Document; and
• ARIS Data Validation Rules Configuration Document.

All updated documents are available on the ACER website. The TRUM and the FAQs on transaction reporting are also available in the REMIT Knowledge Base.

Reporting parties are expected to comply with the updated electronic format and transaction reporting guidance within six months of their publication (i.e. by 17 October 2023 at the latest). The older version will be retired at the same time.

ACER thanks all stakeholders who tested the new electronic format and provided their feedback.

ACER publishes today its Recommendation on the treatment of electricity losses in the Inter-Transmission System Operator Compensation (ITC) mechanism.

What is the ITC mechanism?

The ITC mechanism compensates Transmission System Operators (TSOs) for the costs incurred on national power systems for hosting cross-border flows of electricity (transits). The ITC fund seeks to cover the costs of the incurred transmission losses and infrastructure’s availability.

What are power losses?

Power losses happen with electricity’s transmission and they can give rise to significant costs. In most EU countries, the procurement of energy to cover transmission losses is in the hands of the TSOs. Reducing losses decreases the operational costs of power grids and increases benefits to the society.

The ACER Recommendation is addressed to the European Network of Transmission System Operators for Electricity (ENTSO-E), TSOs and National Regulatory Authorities (NRAs) after ACER having identified potential shortcomings in its latest yearly monitoring report on the ITC mechanism.

What is the summary of ACER’s recommendations?

• The number of snapshots used for the estimation of the volume of losses due to transits should be increased;
• An ex-post reconciliation of the costs of losses due to transits should be applied in the ITC mechanism, to reflect the costs actually incurred; and
• Where relevant, and at least as an interim measure, liquid forward-market prices should be considered instead of historical prices for determination of the relevant components of the value of losses for the ITC mechanism.

Access the Access the ACER Recommendation on the Treatment of Losses for the Purpose of the ITC Mechanism.