text: OJ L158, 14.6.2019, p. 22. 2 OJ L 152, 3.6.2022, p. 45–102

text: Opinion No 08/2023

text: Published on 28 February 2023. https://entsog.eu/sites/default/files/2023- 03/Preliminary%20Draft%20CBA%20Methodology%20for%20Public%20Consultation_update.pdf 4 https://www.entsog.eu/sites/default/files/2023-06/Draft%20ENTSOG%20CBA%20Methodology_June% 202023.pdf 5 https://www.entsog.eu/sites/default/files/2023-06/Consultation%20report%20accompanying%20ENTSOG %27s%20draft%20CBA%20methodology_Final.pdf 6 Composed by Projects of Common Interest and Projects of Mutual Interest.

text: Opinion No 08/2023

text: “(a) pipelines for the transport, mainly at high pressure, of hydrogen, including repurposed natural gas infrastructure, giving access to multiple network users on a transparent and non-discriminatory basis; (b) storage facilities connected to the high-pressure hydrogen pipelines referred to in point (a); (c) reception, storage and regasification or decompression facilities for liquefied hydrogen or hydrogen embedded in other chemical substances with the objective of injecting the hydrogen, where applicable, into the grid; (d) any equipment or installation essential for the hydrogen system to operate safely, securely and efficiently or to enable bi-directional capacity, including compressor stations; (e) any equipment or installation allowing for hydrogen or hydrogen-derived fuels use in the transport sector within the TEN-T core network identified in accordance with Chapter III of

text: Regulation (EU) No 1315/2013

text: of the European Parliament and of the Council. Any of the assets listed in points (a) to (d) may be newly constructed or repurposed from natural gas to hydrogen, or a combination

text: of the two.”

text: Opinion No 08/2023

text: https://www.acer.europa.eu/Position%20Papers/ACER_Consistency%20of%20CBA%20methodologies.pdf 8 https://entsog.eu/sites/default/files/2023-03/Preliminary%20Draft%20CBA%20Methodology%20for%20Pub lic%20Consultation_update.pdf 9 https://entsog.eu/sites/default/files/2023-02/Introduction%20for%20Public%20consultation%20Questionnai re.pdf and https://forms.office.com/Pages/ResponsePage.aspx?id=_YQFgflpN0GmocDjMoCxXHN4pyFti- FFibAoeq8vfKJUMFpLSUo0V1VKWDJDVkpSU0pXVlU1Q0pKNy4u 10 https://www.entsog.eu/entsog-public-workshop-preliminary-draft-cost-benefit-analysis-methodology 11 https://www.entsog.eu/sites/default/files/2023-03/CBA%20Workshop%20Compilation.pptx 12 https://climate-advisory-board.europa.eu/reports-and-publications/towards-a-decarbonised-and-climateresilient-eu-energy-infrastructure-recommendations-on-an-energy-system-wide-cost-benefit-analysis/advice-ona-harmonised-eu.pdf/@@display-file/file 13 At p.2 of its recommendations document, the ESABCC states that ENTSOG’s “preliminary draft single-sector Cost-Benefit Analysis methodology could not be specifically considered as it was only published on 28 February”.

text: Opinion No 08/2023

text: Seeking individual feedback of organisations representing all relevant stakeholders, such as associations involved in electricity, gas and hydrogen markets, heating and cooling, carbon capture and storage and carbon capture and utilisation, organisations involved in energy efficiency solutions, energy consumer associations, civil society representatives. 15 ACER contracted a preparatory consultancy study on hydrogen networks which covers possible recommendations for ENTSOG's cost-benefit analysis methodology (CBA) for hydrogen infrastructures. The consultancy study and the related webinar recording are available at: https://www.acer.europa.eu/Publications/Study_on_ENTSOG_CBA_for_hydrogen_infrastructure_ACER.pdf and https://www.acer.europa.eu/public-events/acer-webinar-consultancy-study-hydrogen-networks

text: Opinion No 08/2023

text: I.e., according to ENTOG’s methodology, any meaningful transmission constraints within one country or area. 17 Even though in the draft CBA methodology such rule seems applied only to the Economic Performance Indicators while, in ACER’s view, it should be applied to all assessed benefits. 18 Which cover hydrogen infrastructure projects, cross-border carbon dioxide network projects, energy storage projects, electrolyser projects, smart gas and smart electricity grid projects) https://energy.ec.europa.eu/consultations/targeted-consultation-methodologies-assessing-costs-and-benefitscandidate-projects-under-revised_en

text: Opinion No 08/2023

text: For example, at p.9 of the draft CBA Methodology ENTSOG states “[…] For subsequent TYNDPs, a validation mechanism might be established.”, while at p.16 ENTSOG states “[…] consistency check phase in the data collection may be conducted by ENTSOG to ensure as reliable information as possible”. In ACER’s view such formulations leave these tasks as a mere possibility, while they should be established in the methodology.

text: Opinion No 08/2023

text: For example, the supply prices and the supply CO2 contents are currently missing from Table 3.

text: Opinion No 08/2023

text: The draft CBA methodology proposes the following infrastructure levels: 1. FID hydrogen infrastructure level: Existing infrastructure+ FID (not for TYNDP 2024) 2. “Advanced hydrogen infrastructure level: As FID level + advanced infrastructure (PID and IG to define “advanced”, possibly based on inclusion in NDP or result of market test. 3. PCI hydrogen infrastructure level: As advanced level + remaining PCIs

text: TYNDP infrastructure level: As PCI level + all remaining TYNDP projects 22 ACER acknowledges that today only few kilometres of hydrogen infrastructures exist besides a few existing hydrogen pipelines operated by companies for mainly feedstock purposes in chemical industries.

text: Opinion No 08/2023

text: VIS consultancy study for ACER on requirements and implementation of ENTSOG’s Cost Benefit Analysis for hydrogen infrastructure , p.183 24 According to TYNDP 2022 Infrastructure Report, “The “lesser-of-rule” means that, on a Point with Entry and Exit capacities, the minimum of the two values will be considered as the firm capacity available for use.”. 25 Considering the example included in the draft CBA methodology, in the case of additional investments in natural gas infrastructures triggered by security of supply needs after the repurposing of natural gas infrastructures to hydrogen, the costs of these additional investments should be transparently displayed and included in the economic performance indicator of the project group assessment (or, in alternative, the cost of the curtailed gas

text: Opinion No 08/2023

text: demand without the construction of the additional natural gas infrastructure should be considered as project impact). 26 According to

text: Article 11

text: and

text: Article 13 of Regulation (EU) 2022/689

text: and Article 8(10) of Regulation 715/2009, the CBA methodology sets also the frame for the infrastructure gap report. 27 On 4 July 2023, ENTSO-E and ENTSOG published their TYNDP 2024 Scenarios Storyline Report for public consultation. In the dataset published along with the storylines, ENTSOG and ENTSO-E assume as hydrogen reference grid in 2030 (i.e. the starting point for the scenarios expansion model) all the capacities included in the TYNDP 2022 hydrogen “Infrastructure Level 1”, which is almost entirely composed by less-advanced projects which capacities are, in many cases, not matched by all involved project promoters. This represents a too optimistic view of the hydrogen infrastructure development. 28 https://eepublicdownloads.blob.core.windows.net/public-cdn-container/tyndp-documents/TYNDP2022/public /system-needs-report.pdf

text: Opinion No 08/2023

text: This rule should also be applied at Infrastructure Levels stage and not only in the PS-CBA grouping phase. 30 This rule should also be applied at Infrastructure Levels stage and not only in the PS-CBA grouping phase. 31 This rule should also be applied at Infrastructure Levels stage and not only in the PS-CBA grouping phase.

text: Opinion No 08/2023

text: With the inclusion of IGs as part of the TYNDP, there is no need for a specific Annex since all CBA elements (including the indicators) would be part of the IGs, subject to consultation and published in the final version of the IGs before the TYNDP assessment starts.

text: Opinion No 08/2023

text: Opinion No 08/2023

text: Theoretically, the assessment of the impact of future extreme weather events on infrastructure resilience could be split into two aspects: the impact on demand and supply (likely addressed in the joint TYNDP scenarios) and the impact on the actual availability of infrastructures (to be addressed in the infrastructures assessment).

text: Opinion No 08/2023

text: This recommendation is also aligned with ACER recommendation to ENTSO-E indicators S1-S3 included in th ACER Opinion to ENTSO-E draft 4 CBA methodology (p.15) available here https://www.acer.europa.eu/Offic ial_documents/Acts_of_the_Agency/Opinions/Opinions/ACER_Opinion_07-2023_on_the_draft_4th_ENTSO- E_Guideline_for_Cost_Benefit_Analysis.pdf. 35 In line with ACER position paper on CBA consistency, regarding the residual social and environmental impacts of the projects under assessment (currently not captured by monetised benefit indicators), a common methodological framework for the assessment should be described in all CBA methodologies.

text: Opinion No 08/2023

text: The 4% value was based on the “European Commission - Guide to Cost-Benefit Analysis of Investment Projects” (2014), p.55, while most recently the European Commission recommended a 3 % (in real terms) social discount rate for EU policy analysis (as stated in the “Economic Appraisal Vademecum 2021-2027”).

text: Opinion No 08/2023

text: VIS consultancy study for ACER on requirements and implementation of ENTSOG’s Cost Benefit Analysis for hydrogen infrastructure, p.182. 38 VIS consultancy study for ACER on requirements and implementation of ENTSOG’s Cost Benefit Analysis for hydrogen infrastructure, p.84.

text: Opinion No 08/2023

text: https://op.europa.eu/en/publication-detail/-/publication/120c6fcc-3841-4596-9256-4fd709c49ae4 and Inforegio - Economic Appraisal Vademecum 2021-2027 - General Principles and Sector Applications (europa.e u)

text: Opinion No 08/2023

text: Opinion No 08/2023

identifier: ACER Opinion No 08/2023

title: ACER Opinion 08-2023 on the draft ENTSOG cost-benefit analysis methodology of hydrogen infrastructure projects

text: PUBLIC

text: OPINION No 08/2023 OF THE EUROPEAN UNION AGENCY FOR THE COOPERATION OF ENERGY REGULATORS of 25 September 2023 on the draft ENTSOG cost-benefit analysis methodology of hydrogen infrastructure projects

text: THE EUROPEAN UNION AGENCY FOR THE COOPERATION OF ENERGY REGULATORS, Having regard to

text: Regulation (EU) 2019/942

text: of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators , and, in particular,

text: Article 11

text: thereof, Having regard to

text: Regulation (EU) 2022/869

text: of the European Parliament and of the Council of 30 May 2022 on guidelines for trans-European energy infrastructure and, in particular,

text: Article 11

text: thereof, Having regard to the favourable opinion of the Board of Regulators of 20 September 2023, delivered pursuant to

text: Article 22(5) of Regulation (EU) 2019/942

text: , Whereas:

text: 1. INTRODUCTION AND PROCEDURE

text: (1) Pursuant to

text: Article 11(2) of Regulation (EU) 2022/869

text: (‘TEN-E Regulation’) by 24 April 2023 the European Network of Transmission System Operators for Gas (‘ENTSOG’) shall publish and submit to Member States, the Commission and ACER a consistent single sector draft cost-benefit analysis methodology for hydrogen infrastructure projects (‘draft CBA methodology’) after having gathered input from the relevant stakeholders during the consultation process.

text: (2) Prior to submitting its draft CBA methodology, ENTSOG shall publish a preliminary draft methodology and conduct an extensive and transparent consultation process and seek recommendations from Member States and, at least, the organisations representing all relevant stakeholders as defined in Article 11(2) of the TEN-E Regulation. Stakeholders may submit a recommendation to ENTSOG within three months of publication of the preliminary CBA methodology. The European Scientific Advisory Board on Climate Change (‘ESABCC’) may, on its own initiative, submit an opinion to the draft methodology. ENTSOG shall provide reasons where they have not, or have only partly, taken into account the recommendations during the consultation process.

text: (3) Pursuant to Article 11(3) of the TEN-E Regulation, within three months of receipt of the draft methodology together with the input received in the consultation process and the report on the consultation, ACER shall provide an opinion on the draft CBA methodology. The ACER opinion shall be addressed to ENTSOG, be published, and notified to the Member States and the Commission.

text: (4) Pursuant to Article 11(4) of the TEN-E Regulation, within three months of receipt of the draft methodology, Member States may deliver their opinions to ENTSOG and the Commission.

text: (5) Pursuant to

text: Article 11(5)

text: , within three months of receipt of the opinions of ACER and Member States, ENTSOG shall amend its methodology to fully take into account the opinions of ACER and Member States and submit the amended methodology together with the opinion of ACER to the Commission for approval.

text: (6) On 30 June 2023, ENTSOG submitted to ACER for its Opinion a document named “Draft hydrogen cost-benefit analysis methodology” , together with the report on the public consultation of the preliminary methodology .

text: 2. SUMMARY OF ENTSOG’S DRAFT CBA METHODOLOGY

text: (7) According to the TEN-E Regulation, ENTSOG has the task to develop a draft CBA methodology with a focus on hydrogen infrastructure for its use in the Europeanwide ten-year network development plan (‘TYNDP’), in the selection process of projects to be included in the Union list , and Cross-Border Cost Allocation (‘CBCA’) procedures.

text: (8) ENTSOG draft CBA methodology for hydrogen infrastructure projects has been prepared following a period of consultation with stakeholders. The main objective of the CBA methodology is to provide a common and uniform basis for the assessment of infrastructure projects.

text: (9) The draft CBA methodology is structured along the following chapters: assessment framework, system assessment, project-specific assessment based on an incremental approach. It will be complemented by dedicated input data specifications for each TYNDP cycle (‘Implementation Guidelines’) that interpret the rules defined in the CBA methodology. Additionally, the scenario report will specify details for scenarios that are not covered by the CBA methodology.

text: (10) The draft CBA methodology concerns the hydrogen infrastructure categories described in the paragraph below and set out in Annex II (3) to the TEN-E Regulation and it shall be drawn up in line with the principles laid down in Annex V, be based on common assumptions allowing for project comparison, and be consistent with the Union’s energy and climate neutrality objectives, as well as with the rules and indicators set out in Annex IV.

text: 3. ASSESSMENT AND COMMENTS

text: Scope of this Opinion

text: (11) ACER evaluated ENTSOG’s submission of the draft CBA methodology. This Opinion covers:

text: a. The development and consultation process (Section 3.2 of this Opinion);

text: b. The changes from the ENTSOG preliminary CBA and following ACER informal feedback (Section 3.3 of this Opinion);

text: c. The compliance of the draft CBA methodology with the ACER Position Paper “towards greater consistency of CBA methodologies” (‘position paper on CBA consistency’), published by ACER in March 2023, pursuant to Article 11(8) of the TEN-E Regulation (Section 3.43.3 of this Opinion);

text: d. The content of the draft CBA methodology (Section 3.53.3 of this Opinion); and

text: e. Key recommendations for improving the CBA methodology.

text: Development and consultation process

text: (12) On 28 February 2023, ENTSOG published its Preliminary draft CBA Methodology for hydrogen projects for public consultation until 31 May 2023. The online public consultation launched by ENTSOG included a total of 47 questions covering different sections of the preliminary draft CBA Methodology .

text: (13) On 27 March 2023, ENTSOG held a hybrid public workshop to present its preliminary draft CBA methodology and to collect recommendations and feedback for improvements . More than 50 persons took part in the workshop, and the recording and presentations were published .

text: (14) ENTSOG received only 5 replies to its online public consultation, and no recommendations were received from Member States. The European Scientific Advisory Board on Climate Change (‘ESABCC’) issued an opinion mainly focusing on the ENTSO-E CBA methodology as well as on cross-sectorial aspects . ENTSOG prepared a consultation report with justification on how the recommendations received during the consultation process were considered.

text: (15) ACER finds that ENTSOG transparently collected feedback from stakeholders via the workshop and the online public consultation workshop based on a published preliminary CBA methodology. However, the number of responses received was quite limited. ACER calls on ENTSOG to consider how to increase the level of

text: engagement in future consultations on the CBA methodology to ensure at least the involvement of the organisations mentioned under Article 11(2) of the TEN-E Regulation , for example by addressing individual stakeholders during the consultation process and by planning well in advance their involvement, and on stakeholders to participate in ENTSOG’s consultation processes.

text: (16) ACER notes that ENTSOG should have published its preliminary methodology much earlier (by end 2022) in order to allow the 3-months public consultation and the submission to ACER by the TEN-E Regulation deadline of 24 April 2023. This would have avoided a delay of 2-months in the submission of the draft methodology. ACER calls on ENTSOG, once again, to plan timely its activities to comply with legal deadlines as well as assure a better stakeholder outreach.

text: ACER informal feedback on the preliminary CBA methodology

text: (17) ACER appreciates ENTSOG’s openness to discuss with ACER and the Commission the findings of ACER’s consultancy’s study on hydrogen networks CBA and ACER’s informal recommendations to improve the preliminary CBA methodology. ACER welcomes that the submitted draft CBA methodology already includes the following changes in comparison to the preliminary CBA methodology:

text: a. The addition of “Implementation Guidelines and other complementary documents” as recommended in the ACER position paper on CBA consistency;

text: b. The redrafting and skimming of the Scenarios section to keep it concise and aligned with the joint ENTSOs’ scenarios report/methodology and ACER scenario framework guidelines, as well as including the assessment of projects under all ENTSOs’ scenarios and for all relevant time horizons;

text: c. More clarity in the description of the dual assessment between gas-hydrogen and the dual assessment between electricity-hydrogen;

text: d. Better description of network modelling in general and on the calculation and use of indicators;

text: e. The distinction between “cross-border” and “internal” projects;

text: f. The definition of the year from which on the project benefits will start counting, which is defined as the year after the project commissioning year ;

text: g. A different definition of hydrogen and natural gas reference networks;

text: h. The adaptation of grouping principles, type of project benefits, their definition and calculation of indicators.

text: Consistency of ENTSOG’s draft CBA methodology with ACER position paper “Towards greater consistency of cost benefit analysis methodologies”

text: (18) The TEN-E Regulation stresses the importance of consistency in the single sector cost-benefit analysis methodologies which are to be developed according to Article 11 of the TEN-E Regulation.

text: (19) Article 11(8) of the TEN-E Regulation assigned ACER the task to promote the consistency of the methodologies developed by the European Commission with the methodologies elaborated by ENTSO-E and ENTSOG. On 22 March 2023, ACER published its position paper to support that a greater consistency is achieved across all CBA methodologies.

text: (20) ACER acknowledges that ENTSOG has taken into account ACER’s position paper on CBA consistency in its draft methodology. However, ACER finds that there is room to further increase the consistency between the draft CBA methodology on hydrogen infrastructures and the electricity CBA methodology and other CBA methodologies published by the European Commission in May 2023 .

text: The content of the draft CBA Methodology

text: 3.5.1. TEN-E requirements (Chapter 1 of ENTSOG’s CBA methodology)

text: (21) ACER appreciates that the draft CBA methodology includes a table indicating its compliance with the TEN-E Regulation requirements. However, this table does not provide sufficient explanation nor evidence on how the requirements are actually met. ACER recommends ENTSOG to further elaborate on the compliance of the

text: CBA methodology with the legal requirements in the adapted CBA methodology by providing clear explanations on how the different requirements are met.

text: (22) Furthermore, in line with Article 11(6) of the TEN-E Regulation, ACER recommends that the ENTSOG CBA Methodology includes a list of (minimum) input data and output data to be published with its application in each TYNDP.

text: 3.5.2. CBA Implementation Guidelines (Chapter 2 of ENTSOG’s CBA methodology)

text: (23) ACER welcomes that the draft CBA methodology includes a section on “Implementation Guidelines (‘IGs’) and other complementary documents”. As recommended in the ACER position paper on CBA consistency, ENTSOG CBA methodology should also specify that the elements included in the IGs, as well as in any other complementary document (e.g. the TYNDP project Practical Implement Document - PID), have to be consulted with all relevant stakeholders, including ACER and the Commission, before every TYNDP.

text: (24) While acknowledging the need for flexibility and for a gradual implementation of certain aspects of the CBA methodology, ACER reiterates that the CBA methodology should define, to the extent possible, all rules and principles to be applied , while the IGs should focus on the details, the parameters, or the specific assumptions which may vary in each TYNDP.

text: (25) In ACER’s view, in addition to the elements proposed in the draft CBA methodology, the IGs (or in some cases the PID) should include at least:

text: a. Relevant assumptions used for market, network and redispatch modelling;

text: b. A clear description of the tools used and of the different roles in performing the modelling (especially if jointly performed by ENTSOG and ENTSO-E);

text: c. All definitions and criteria used to define cross-border and internal infrastructures;

text: d. All definitions for the different types of capacities considered (e.g. yearly firm capacity, peak capacities, etc.);

text: e. A description of the criteria used for the definition of the natural gas and hydrogen grids;

text: f. The list of TYNDP projects and related capacities included in the natural gas and hydrogen grids; g. The identification and treatment of competing and interdependent projects; h. The approach and values of the cost of disruption of gas supply (‘CODG’) and the cost of disruption of hydrogen supply (‘CODH’); i. The list of non-CO2 emission types and related emission factors; j. The societal cost of carbon and other emissions. k. The definition of the project costs considered and the unit investment costs reference used (if any). 3.5.3. CBA Scenarios (Chapter 2.1 of ENTSOG’s draft CBA methodology) (26) ACER welcomes that the draft CBA methodology includes a table listing the elements from scenarios which are relevant for the application of the CBA. ACER recommends ENTSOG to further review, also in coordination with ENTSO-E, the elements described in the Table 3 of the draft CBA methodology and to make sure that all relevant information is included . 3.5.4. CBA Network and Market modelling assumptions (Chapter 2.2 of ENTSOG’s draft CBA methodology) 3.5.4.1. Dual assessments gas-hydrogen and electricity-hydrogen (27) The draft CBA methodology introduces a new concept of dual assessment between gas-hydrogen and a dual assessment between electricity-hydrogen aiming to capture interactions between the different sectors. However, ACER finds the descriptions provided in the CBA methodology to be still insufficient for a comprehensive understanding and replicability. (28) ACER finds that more clarity is still needed on the way network modelling, market modelling and dual assessments should be performed and recommend ENTSOG to include all relevant information in the final CBA methodology, including examples and the necessary detailed steps to perform the assessment. (29) ACER finds that common rules should apply for defining the electricity, hydrogen and natural gas reference grids used in the joint modelling simulations. 3.5.4.2. Distinction of cross-border and internal infrastructures

text: (30) ACER welcomes that the draft CBA methodology includes the concept of “meaningful transmission constraints within one country”. However, it is not clear how ENTSOG will assess the European relevance of such infrastructures. ACER calls on ENTSOG to develop further guidelines on how to collect, distinguish and consult on “cross-border” and “internal” infrastructures.

text: 3.5.4.3. Criteria for assessing the plausibility of projects’ commissioning year

text: (31) The draft CBA methodology should include criteria to assess plausibility of project’s commissioning year, as per ACER position paper on CBA consistency. ENTSOG states that for TYNDP 2024 project promoters should provide justification for the expected commissioning year and that for the subsequent TYNDPs a validation mechanism might be established by ENTSOG. ACER finds ENTSOG’s approach reasonable, but it calls to explicitly include in the CBA methodology the criteria to evaluate the accuracy of the information provided by project promoters and the measures to be adopted by ENTSOG in case such accuracy is missing (e.g. ranges of commissioning years).

text: 3.5.4.4. Hydrogen reference network(s)

text: (32) ACER welcomes that the draft CBA methodology includes a proposal of hydrogen networks which is more balanced between a “conservative” and a more “optimistic” view of the future evolution of the hydrogen grid. Notwithstanding this, ACER recommends to:

text: • Include an existing infrastructure level that contains only existing infrastructures and all infrastructures expected to be commissioned no later st than 31 December of the year of TYNDP. This infrastructure level could be used as minimum reference network when hydrogen infrastructures have reached a certain level of development . • The conditions for a project to be considered as an “advanced project” are already defined in the CBA methodology as the projects included in the last national development plan (‘NDP’) and/or having concluded a market test and/or having reached the final investment decision (‘FID’). During ACER’s webinar on its consultancy study on hydrogen networks, nearly

text: 60% respondents supported the use of an “advanced infrastructure level” as reference network based on the criteria described above . • The TYNDP hydrogen infrastructure level, consisting of the PCI hydrogen infrastructure level as well as all remaining projects submitted to the TYNDP is deemed overly optimistic. Thus, ACER recommends to remove the TYNDP hydrogen infrastructure level from the assessment. • The CBA methodology should clearly state that the lesser-of-rule (LoR) should be consistently applied when building all infrastructure levels, to both natural gas projects and hydrogen projects. The LoR should be applied also to projects where the resulting capacity after its application is zero.

text: (33) Over time, ACER strongly recommends that the rules applied by ENTSOG and ENTSO-E to plan/build the natural gas, hydrogen and electricity reference networks become as consistent as possible, also across the different steps of TYNDP (i.e. also extending to scenarios reference grids). This would require greater effort to align the concepts and consistently merge them into a single concept.

text: 3.5.4.5. Natural gas reference network(s)

text: (34) ACER finds that the draft CBA methodology clarifies that the transmission system operators (‘TSOs’) must continue to submit natural gas projects to TYNDP for keeping the natural gas reference network updated.

text: (35) Since project promoters are not legally obliged to submit their projects to TYNDP and an updated topology is of utmost importance for a proper infrastructure assessment, ACER invites ENTSOG to explore, in the PID, alternative ways to ensure that all relevant information on natural gas projects are reflected in the TYNDP topology even when not submitted by project promoters.

text: (36) ENTSOG should also clarify what the following sentence at p.63 means: “Only cost related to hydrogen infrastructure should be considered, while it shall be transparently displayed which additional costs might be required (e.g., in the natural gas system) to enable the hydrogen infrastructure by linking it to natural gas projects […]”. ACER reiterates the importance of having full transparency on the project costs collected and used in the assessment .

text: 3.5.5. CBA System Assessment: Identification of infrastructure gaps (Chapter 3 of ENTSOG’s CBA methodology)

text: 3.5.5.1. Infrastructure gaps

text: (37) Under the TEN-E Regulation, the infrastructure gap identification becomes a standalone deliverable in the TYNDP framework, being subject to ACER’s and Commission’s opinions . The approach currently proposed in the draft CBA methodology for hydrogen infrastructure gaps identification is very similar to the one followed for natural gas in previous TYNDPs. However, applying the same approach misses the fact that, except for dedicated industrial (cross-border) pipelines for feedstock purposes in a few countries, currently there is no hydrogen infrastructure in Europe.

text: (38) ACER welcomes that the draft CBA methodology (p.31) plans to further increase the consistency along the entire TYNDP exercise by planning to include “[…] a comparison between the infrastructure levels and the topology derived from the expansion model within the scenario process may be provided, analysing where submitted projects result in less [or more] capacity than in the expanded grid.”. However, ACER emphasises that the effectiveness and quality of such comparison also depends on the level and the quality of the infrastructure’s assumptions in the scenario model .

text: (39) ACER encourages ENTSOG to commit to identify the increases in capacities needed to meet hydrogen demand and supply levels, following an approach which ensures consistency and interlinkages with the scenarios process and with the electricity TYNDP. This commitment should be enshrined in the CBA methodology as a goal and consistently improved over the years, rather than left as a mere possibility.

text: (40) Similarly to ENTSO-E’s approach in the System Needs Study , the infrastructure gap analysis should focus on identifying and quantifying future needs in terms of hydrogen cross-border capacities (as well as import capacities) to be developed. Ideally, the infrastructure gaps analysis should be consistently carried out by ENTSOG and ENTSO-E as a separate exercise from CBA, with its own

text: methodology to be consulted well in advance of the gaps assessment. ACER also recommends ENTSOG to further liaise with ENTSO-E on how to address this recommendation in the best way possible.

text: 3.5.5.2. Natural gas needs assessment

text: (41) The proposed draft CBA methodology introduces the concept of dual assessment between gas-hydrogen. However, natural gas aspects are only included in the methodology to the extent they are needed to assess hydrogen infrastructures. The draft CBA methodology does not clarify which indicators should be used in TYNDPs for the assessment of natural gas infrastructure needs alone. ACER recommends ENTSOG to clarify in the CBA methodology which indicators should be used to assess natural gas infrastructure needs.

text: 3.5.6. CBA Project-Specific Assessment: grouping (Chapter 4 of ENTSOG’s CBA methodology)

text: 3.5.6.1. Project grouping principles

text: (42) ACER notes that the draft CBA methodology clustering (or grouping) rules have been revised following ACER informal feedback on the preliminary methodology. However, ENTSOG’s clustering rules are not fully consistent yet with the clustering rules proposed by ACER in its position paper on CBA consistency and with the rules th proposed by ENTSO-E in its 4 CBA Guideline.

text: (43) ACER calls on ENTSOG to adapt the draft CBA methodology clustering rules in order to fully align them with ACER’s position paper on CBA consistency and with ENTSO-E’s approach. In particular, the following clustering rules should be respected:

text: a. Enabler projects must be maximum one stage of maturity apart from the enabled project, instead of two stages of maturity ;

text: b. Enabler projects “under consideration” can only be grouped with enabled projects of the same stage of maturity ;

text: c. Enabled projects’ commissioning year can only be equal or later than the enabler(s)’ one ; and

text: d. For all clustered projects, the commissioning of projects should be up to 5 years apart, instead of 10 years apart as proposed by ENTSOG. As ENTSOG draft CBA methodology states (p.35) “Grouping together projects expected to be

text: commissioned far apart in time may introduce the risk that eventually one or more investments are not realised”.

text: The above rules should be considered as default rules.

text: (44) In addition, ACER recommends ENTSOG to include a high-level description of the clustering process in the CBA methodology in order to define the steps to be followed for project clustering, and the stakeholder roles. As proposed in the CBA methodology, the clustering rules should be reassessed, and consulted, in the IGs for each TYNDP.

text: (45) In the short-term (for the upcoming TYNDP 2024), the clustering rules defined in the CBA methodology may be used in a more flexible way in case they will impede a logical grouping of projects, absent an existing hydrogen network. In the mid-term (beyond TYNDP 2024), as hydrogen projects are expected to develop, ENTSOG rules should become closely aligned with the ENTSO-E ones.

text: 3.5.6.2. Identification of competing projects

text: (46) The draft CBA methodology does not define clear rules on how to pre-identify “competing projects” and it only states that “The competition between projects might be an observation from the intermediate PS-CBA results.”. This could be resolved by identifying hydrogen target capacities in the gaps identification. In cases where two projects have submitted capacities higher than the target capacities, these projects would be identified as competing.

text: 3.5.7. CBA Project-Specific Assessment: indicators and benefits (Chapters 4.1, 4.2 and 4.3 of ENTSOG’s CBA methodology)

text: (47) ENTSOG draft CBA methodology states that “The details on how the indicators are calculated should be part of the TYNDP report in form of an Annex, as well as part of the Implementation Guidelines of the corresponding TYNDP and PS-CBA process […]” . ACER reiterates the importance for consulting on the indicators well in advance of the TYNDP gaps and project assessment start. To enable a broad participation of all relevant stakeholders, ACER invites ENTSOG to publish the TYNDP project plan beforehand and to communicate with all relevant stakeholder the planned timeline for consulting, as part of each TYNDP cycle, on the indicators and on any other assumption included in the IGs.

text: (48) For each indicator table, ENTSOG should specify to which project category applies. In addition, in line with Annex V(7) of the TEN-E Regulation, ENTSOG should

text: specify which indicator should be computed at country level, allowing to identify all countries on which the project has “net positive impact” and “net negative impact”.

text: (49) In ACER’s view the current draft CBA methodology does not fully capture the following benefits described in the TEN-E Regulation:

text: a. Contribution of a project to flexibility and seasonal storage options for renewable electricity generation (Annex IV(5)(a));

text: b. The contribution of a project to the integration of market areas and to price convergence (Annex IV(5)(b));

text: c. The contribution of a project to supply diversification and facilitation of access to indigenous sources of hydrogen supply (Annex IV(5)(d));

text: (50) ACER invites ENTSOG to consider the recommendations below and to further explore how to incorporate a set of indicators which would allow to capture the full scope of benefits envisaged in the TEN-E Regulation, also by consulting all relevant stakeholders. To identify improvements for the CBA indicators, ACER also recommends ENTSOG to exchange with experts in infrastructure assessment and modelling (e.g. through dedicated workshops or prime movers group).

text: 3.5.7.1. Indicator B1 - Societal benefit due to GHG emissions variation

text: (51) ACER welcomes that, compared to the preliminary draft methodology, the scope of indicator B1 has been extended also to non-CO2 emissions and to non-power sectors. However, ACER finds the description of the methodology for calculating indicator B1 still partially unclear, in particular concerning the calculation of GHG emissions savings from replacement of alternative fuels in non-power sectors. Therefore, ACER invites ENTSOG to provide additional clarifications regarding the specific steps to be followed for indicator B1 as well as regarding the input needed.

text: 3.5.7.2. Indicator B2 - Social Economic Welfare for hydrogen sector

text: (52) ACER understands that the proposed indicator B2 does not entirely cover the situations where hydrogen would replace the use of other fuels (e.g. by replacing oil in transport). As an indicator measuring competition and market integration, ACER recommends that the indicator B2 includes fuel substitution aspects as part of the socio-economic welfare (‘SEW’) calculation. This should also allow to identify situations where hydrogen will replace cheaper (as hydrogen could be more expensive) but more polluting fossil fuels (with this second part of benefit that would be captured under indicator B1).

text: 3.5.7.3. Indicator B3 - Renewable Energy integration

text: (53) ACER understands that the indicator B3 only focuses on benefits from reducing the amount of curtailed renewable generation or benefits from increasing the amount of renewable generation that is connected by the project. ACER recommends

text: expanding the scope of indicator B3 to capture projects contribution to the integration of low-carbon hydrogen, as indicated by Annex IV(5)(a).

text: 3.5.7.4. Indicator B4 - Societal benefit due to non-GHG emissions variation

text: (54) ACER welcomes that the draft CBA methodology clearly states that non-GHG emissions related benefits should not justify alone the construction (or nonconstruction) of hydrogen infrastructure projects.

text: (55) ACER understands that the calculation of the indicator B4 is based on an ex-post allocation of the non-GHG emission savings derived from TYNDP scenarios data. However, the draft methodology does not explain the allocation key that should be used in distributing the emissions reductions (e.g. based on the flows resulting from the modelling). ACER invites ENTSOG to provide further clarity in the CBA methodology on the allocation key(s) used. The proposed approach should also be reassessed and consulted as part of each TYNDP cycle.

text: 3.5.7.5. Indicator B5 - Reduction in exposure to curtailed demand

text: (56) ENTSOG draft CBA methodology at p.41 explains that the indicator B5 covers both security of supply and market integration criterion. However, the indicator B5 measures the reduction on curtailed demand under certain stressful situations. As such, this indicator should be considered as “security of supply” indicator only.

text: (57) ENTSOG should further clarify in the methodology how hydrogen demand in clusters (presumably not connected to the grid at least at the beginning of hydrogen demand uptake) should be considered when computing indicator B5.

text: (58) ENTSOG should also provide additional clarification on whether the impact of future extreme weather events on infrastructure resilience is included in B5 (or in any other indicator) and, if so, how it is considered.

text: (59) ENTSOG draft CBA methodology proposes to use the value of the cost of disruption of gas (‘CODG’) as a proxy for the cost of disruption of hydrogen (‘CODH’). As current gas consumers are expected to be different from hydrogen consumers, the CBA methodology should recommend the use of dedicated CODH values for the hydrogen infrastructures assessment. Those CODH values could be based on the analysis of industrial demand. The proposed methodology and both CODH and CODG values should be reassessed and consulted as part of each TYNDP cycle.

text: 3.5.7.6. Indicator B6 - Cross-border impact of hydrogen transmission projects

text: (60) An increase of cross-border capacity does not automatically translate in more diversified access to supply sources. ENTSOG should clarify (and amend if needed) how the indicator B6 allows to measure the contribution of projects to supply diversification and to access to indigenous sources of hydrogen supply.

text: 3.5.7.7. Concerning Environmental Impact indicator

text: (61) ACER recommends that all information concerning projects’ environmental impact is mandatory and collected from project promoters directly during the TYNDP project collection (and published as part of TYNDP Annex A and PS-CBA project fiches).

text: (62) ACER welcomes that the draft CBA methodology states that any additional expected cost connected to environmental mitigation measures should be included in the economic performance indicators. However, ACER strongly disagrees with the sentence “If such costs are not included in the economic performance indicators used for other TEN-E infrastructure categories like electricity, they shall also not be considered for hydrogen infrastructure projects when comparing these infrastructure projects.” and recommends ENTSOG to remove this text from the CBA methodology and to ensure that such costs are always considered as part of the economic performance indicators calculation .

text: (63) Concerning this indicator, the CBA methodology should describe the methodological framework for the assessment of those impacts and specify the unit measures for the data. Also, it should seek as much consistency as possible with ENTSO-E’s approach .

text: 3.5.7.8. Project Costs indicator (chapter 4.5)

text: (64) ACER recommends ENTSOG to publish cost information as foreseen in ENTSO-E th 4 CBA Guidelines (pp.91-95).

text: 3.5.8. CBA Economic Parameters and Performance Indicators (Chapter 4.6 of ENTSOG’s CBA methodology)

text: 3.5.8.1. Societal discount rate, SDR

text: (65) The draft CBA methodology proposes the use of 3% for discounting costs and benefits. This social discount rate (‘SDR’) value differs from the 4% SDR used in the past and which is used by ENTSO-E in its proposed 4th CBA Guideline.

text: (66) ACER supports the use of the same SDR in both ENTSOs’ methodologies and other CBA methodologies under Article 11 of the TEN-E Regulation. ACER calls on the ENTSOs and the Commission to discuss and agree on the use of a common value for SDR for its use in all CBA methodologies.

text: 3.5.8.2. Economic lifetime and physical life of a project

text: (67) The draft CBA methodology proposes a 40-year period for the economic assessment of hydrogen infrastructure projects, combined with a sensitivity for 25 years of economic lifetime with residual value.

text: (68) ACER recommends that the draft CBA methodology should prescribe an assessment period of 25 years for the following reasons:

text: a. The assessment period should not be confused with the technical or economical lifetime of projects, the latter being indeed longer for many infrastructures;

text: b. To cover an assessment period of 40 years, the scenarios should be built up to 2060/2070. Such long-term scenarios would not provide meaningful results, considering the increasing uncertainty as the scenarios’ horizon is extended. Even in the absence of long-term scenarios, extending the project benefits, for example, through interpolation would not provide neither meaningful nor credible results. It is preferable to limit the assessment period rather than to consider very uncertain long-term benefits, for which scenarios are not even available;

text: c. A 40-year assessment period goes beyond the timeline of the EC 2050 longterm strategy;

text: d. Annex I to the Commission Delegated

text: Regulation (EU) No. 480/2014

text: proposed the use of a reference period of 15 – 25 years for CBA analysis;

text: e. During ACER’s webinar on a consultancy study on hydrogen networks, more than 60% of respondents supported the use of 25-years for the economic

text: assessment for hydrogen projects, in order to consider a timeframe where uncertainty is reasonably acceptable ;

text: f. For consistency with ENTSO-E’s CBA methodology, which uses an assessment period of 25 years, where also electricity projects have a longer technical lifetime; and

text: g. For consistency with all the JRC methodologies used for current PCI selection (including the one for hydrogen projects) which consider an assessment period of 25 years.

text: (69) For projects with technical lives shorter than the assessment period, the economic analysis should be performed until the end of their lifetime.

text: 3.5.9. CBA Sensitivity Analysis and Residual value (Chapter 4.7 of ENTSOG’s CBA methodology)

text: 3.5.9.1. Sensitivity analyses

text: (70) ACER welcomes that the draft CBA methodology includes a sensitivity on the cost of green-house gases (‘GHG’) as required per Annex V to the TEN-E Regulation and ACER position paper on CBA consistency. ACER invites the ENTSOs to seek as much consistency as possible in the approach used for the sensitivity analysis.

text: 3.5.9.2. Residual value

text: (71) ACER considers that no residual value should be included in the CBA methodology in the calculations, consistently with the current ENTSO-E approach. The use of zero residual value in the calculation of the economic performance indicators provides a conservative view of a project’s benefits, as it only focuses on the assessment period, and does not consider potential continuation of its impact in a longer-term period, which is uncertain. Additional considerations on the treatment of residual value are provided in an ACER consultancy’s study . Thus, ACER recommends ENTSOG to adapt the draft CBA methodology to make sure that no residual value is considered.

text: 3.5.10. CBA implementation, presentation and need of examples

text: (72) ACER notes that the draft CBA methodology has revised the descriptions provided for some benefits’ indicators aiming at providing more clarity on how modelling outputs are used and the indicators are practically calculated.

text: (73) ENTSOG should include in the adapted CBA methodology or in complementary documents:

text: a. A numerical example calculating each benefit for each type of fictional hydrogen infrastructure project (transmission pipelines, storage facilities, LH2 terminals and projects for hydrogen in the transport sector).

text: b. A complete case study presenting the application of the methodology (inputs provided by the promoter, assessment of costs, estimation of benefits, calculation of economic performance indicators, sensitivity analysis) for a fictional hydrogen infrastructure project, similar to the presentation of case studies in the Commission’s DG-Regio to Cost-Benefit Analysis of Investment Projects .

text: (74) ACER believes that the CBA methodology should be presented in a more practical way. Examples and guidelines on the application of the methodology to specific cases and projects is particularly important to help the users of the methodology to apply it to concrete projects and to help the project evaluators to understand and interpret the results of the CBA assessments.

text: (75) In addition, ACER recommends ENTSOG to organise for promoters and other stakeholders open webinars and/or trainings before each cycle of implementation of the CBA methodology to explain how to apply the CBA and interpret the results. These trainings with examples of application of the methodology are particularly important for providing better understanding and consistency in the implementation of the methodology.

text: (76) ENTSOG should develop an open toolbox/manual including a template/calculator in which quantitative information and estimates are converted into values to deliver an economic benefits/cost (B/C) ratio of the project.

text: (77) ENTSOG should use (online) project fiches to present CBA information about all the projects included in the TYNDP, following ENTSO-E’s practice. The structure of the fiches, to be defined in the implementation documents of the CBA methodology, should be as consistent as possible across sectors. The minimum contents of the project fiches should be agreed between the ENTSOs and consulted with the Commission and ACER,

text: HAS ADOPTED THIS OPINION:

text: 1. ACER has assessed ENTSOG’s submitted draft CBA methodology for hydrogen infrastructure projects, which ENTSOG has prepared following a period of consultation with stakeholders. ACER welcomes that the submitted draft CBA methodology includes improvements to the preliminary CBA methodology, following informal exchanges between ACER and ENTSOG.

text: 2. ACER notes that the draft CBA methodology for hydrogen infrastructure projects is, to a large extent, consistent with the rules and indicators of Annex IV, the principles of Annex V and the specific criteria of

text: Article 4(3)

text: (d) to the TEN-E Regulation.

text: 3. ACER calls on ENTSOG to implement the following adaptations to the draft CBA Methodology before it will be submitted to the Commission:

text: a. Review the list of information to be included and consulted as part of the TYNDP Implementation Guidelines and other complementary documents;

text: b. Improve the project planning to allow for a better consultation of stakeholders;

text: c. Modify the definition of the hydrogen reference grid. The conditions for a project to be considered as “advanced project” should be defined in the CBA methodology as the projects included in the last national development plan (‘NDP’) and/or have concluded a market test and/or have reached the final investment decision (FID), while the TYNDP hydrogen infrastructure level should be removed. Over time, ENTSOG and ENTSO-E rules to build the natural gas, hydrogen and electricity reference networks should become as consistent as possible;

text: d. Provide more clarity on the way the proposed dual assessments are performed;

text: e. Strengthen the project clustering rules and align them with ACER position on CBA consistency as well as with ENTSO-E clustering approach, while allowing some flexibility in the implementation for the next TYNDP 2024, in case those rules impede a logical grouping of projects due hydrogen network maturity;

text: f. ENTSOG to commit to identify, as part of the infrastructure gap exercise, the capacities needed to meet hydrogen demand and supply levels, following an approach which ensures consistency and interlinkages with the scenarios process and with the electricity TYNDP;

text: g. Improve the indicators, notably by providing a clear and detailed description of the calculation steps and formulas to be applied, as well as by ensuring compliance with all the requirements established in Annex IV(5) of the TEN-E Regulation;

text: h. Clarify in the CBA methodology which element and indicator should be used to assess natural gas infrastructure needs for sustainability, security of supply, market integration and competition, and expand their scope if needed;

text: i. Use the same social discount rate in all CBA methodologies. ACER calls on ENTSOs and the Commission to discuss and agree on the use of a common value for the social discount rate;

text: j. Prescribe an assessment reference period for all projects of maximum 25 years. For projects with a technical life shorter than the assessment period, the analysis should be performed until the end of their lifetime;

text: k. Not to use the residual value in the project calculations, following a prudent approach to projects benefits calculations;

text: l. Improve the presentation of the CBA methodology, by providing examples of application to fictional hydrogen projects (transmission pipelines, storage facilities, LH2 terminals and projects for hydrogen in the transport sector), developing a CBA toolbox and a CBA template as consistent as possible with ENTSOE’s CBA for electricity projects. The CBA fiches should be published for all projects included in the TYNDP, following ENTSO-E’s practice.

text: 4. In line with Article 11(5) of the TEN-E Regulation, ENTSOG shall fully take into account this Opinion and submit to the Commission an amended CBA methodology within 3-months. ACER expects ENTSOG to clearly show in its amended CBA methodology how the proposed recommendations have been considered, including reasons in case they would not be followed, in order to facilitate the Commission’s assessment when deciding on the approval of the amended CBA methodology.

text: 5. ACER stands ready to constructively work with ENTSOG and the European Commission for improving ENTSOG’s CBA methodology.

text: This Opinion is addressed to ENTSOG.

text: This Opinion is notified to ENTSO-E, ENTSOG, the Member States and the Commission.

text: Done at Ljubljana, on 25 September 2023.

text: - SIGNED –

text: Fоr the Agency The Director

text: C. ZINGLERSEN


text: OJ L158, 14.6.2019, p. 22. 2 OJ L280, 28.10.2017, p.1.

text: Opinion No 08/2024

text: 4 (4) Before submitting their proposal, GAZ-SYSTEM and NET4GAS conducted a public consultation from 24 October 2023 until 6 November 2023 with all potentially affected transmission system operators (‘TSOs’). Specifically, all neighbouring TSOs (EUSTREAM, GAS CONNECT AUSTRIA, GASCADE, Open Grid Europe, ONTRAS, GRTgaz Deutschland, Energinet and Amber Grid) were informed via email that the consultation on the exemption from bi-directional capacity at the IP Cieszyn /Český Těšín was initiated. Neither NET4GAS nor GAZ-SYSTEM received any comments to the consulted document, so the consultation procedure was closed, and the document was finalised without additional changes.

text: Opinion No 08/2024

text: Opinion No 08/2024

text: Regulation (EU) No 347/2013

text: of the European Parliament and of the Council of 17 April 2013 on guidelines for trans-European energy infrastructure and repealing Decision No

text: and amending Regulations

text: (EC) No 713/2009

text: (EC) No 714/2009

text: and

text: (EC) No 715/2009

text: , OJ L 115, 25.4.2013, p. 39. 6 See ENTSOs TYNDP 2024 Draft Scenario Report, pp.24-25, scenarios of EU methane demand. During the consultation, the Czech Ministry has stated that the promoters’ gas demand projections are in line with the draft updated State Energy Policy in Czech Republic.

text: Opinion No 08/2024

text: Projects on the Polish side include the Sławków (Tworzeń) – Oświęcim gas pipeline, currently under construction, with project completion anticipated in December 2024 and total cost of EUR 93.3 million; and the expanded Kędzierzyn gas compressor station with a new compressor unit, which investment was finally completed in April 2024 with a total cost of EUR 28.8 million.

text: Opinion No 08/2024

text: See ACER Opinion No 6/2024 on the elements of the coordinated decision on the application for determination of permanent physical bi-directional capacities at the cross-border interconnection point "Deutschneudorf EUGAL", in particular Section 5.2. 9 Currently, the Czech Republic imports natural gas via long-term contracts from LNG terminals in Germany and the Netherlands, which now provide a significant portion of its gas needs. These efforts have been supported by agreements with partners to secure a stable supply of LNG, representing over 25% of the Czech Republic's annual consumption

text: Opinion No 08/2024

identifier: ACER Opinion No 08/2024

publisher: Europeiska unionens byrå för samarbete mellan energitillsynsmyndigheter

sprak: en

title: ACER Opinion 08-2024 on the reverse flow at the Cieszyn/Český Těšín interconnection point between Poland and the Czech Republic

serie: yttranden

text: PUBLIC

type: stycke

text: OPINION No 08/2024 OF THE EUROPEAN UNION AGENCY FOR THE COOPERATION OF ENERGY REGULATORS of 9 December 2024 on the elements of the coordinated decision granting a temporary exemption from the obligation to enable physical bi-directional capacity at the cross-border interconnection point Cieszyn/Český Těšín on the gas pipeline STORK I between the Czech Republic and Poland

type: rubrik

text: THE EUROPEAN UNION AGENCY FOR THE COOPERATION OF ENERGY REGULATORS,

text: Having regard to

text: Regulation (EU) 2019/942

text: of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators (‘ACER’) , and, in particular,

text: Article 9(4)

text: thereof,

text: Having regard to

text: Regulation (EU) 2017/1938

text: of the European Parliament and of the Council of 25 October 2017 concerning measures to safeguard the security of gas supply and repealing

text: Regulation (EU) No 994/2010

text: (‘the SoS Regulation’), and, in particular,

text: Article 5(4)

text: and (5) and point 8 of Annex III thereof,

text: Having regard to the consultation with the national regulatory and the competent authorities concerned,

text: Whereas:

text: 1. INTRODUCTION AND PROCEDURE

text: (1) On 26 June 2024, ACER received from the Ministry of Climate and Environment of Poland (‘the Polish Ministry’) Decision DELG-WG.522.25.2023.RS dated on the same day titled “temporary exemption from the obligation to enable physical bi-directional capacity at the IP Cieszyn/Český Těšín cross-border interconnection point on the STORK

text: I natural gas pipeline” (‘the Polish Decision’). On 9 September 2024, ACER received from the Ministry of Industry and Trade of the Czech Republic (‘the Czech Decision’) Decision dated on 27 May 2024 on the same subject matter. The Polish Decision and the Czech Decision are coordinated and grant a temporary exemption from the requirement to enable physical bi-directional capacity at the Cieszyn/Český Těšín interconnection point.

text: (2) On 29 December 2022, the Polish and Czech Ministries granted their transmission system operators, respectively Operator Gazociągów Przesyłowych GAZ-SYSTEM S.A (‘GAZ- SYSTEM’) and NET4GAS, s.r.o (‘NET4GAS’), a temporary exemption until 31 December 2023 from the obligation to enable permanent physical bi-directional capacity at the interconnection point (‘IP’) Cieszyn /Český Těšín between Poland and the Czech Republic.

text: (3) On 7 November 2023, GAZ-SYSTEM and NET4GAS jointly submitted to their respective Ministries a request to prolong a temporary exemption from the obligation to enable physical bi-directional capacity at the IP Cieszyn /Český Těšín on the STORK I natural gas pipeline. This request concerns a time limited exemption until 31 December 2025 and follows the procedure pursuant to Article 5 (5) of the SoS Regulation. The proposal is based on the promoters’ assessment of the capacity situation at the border, focussing on the direction of flow from Poland to the Czech Republic where currently there is no permanent physical flow capacity.

text: (5) During November 2023, the Polish and Czech Ministries in accordance with Annex III of the SoS Regulation consulted GAZ-SYSTEM’s and NET4GAS’s proposal with the European Commission, ACER, and other competent authorities with a request for comments within four months. No comments were received by the end of this period.

text: Subsequently, the Polish and Czech Ministries agreed on the content of their coordinated decisions.

text: Summary of the promoters’ proposal and the coordinated Decisions

text: (6) The relevant Ministries of Poland and the Czech Republic jointly decided to grant a temporary exemption until 31 December 2025 from the requirement to enable physical bi-directional capacity at the Cieszyn /Český Těšín interconnection point on the STORK I natural gas pipeline. The Decisions argue that this exemption allows sufficient time for GAZ-SYSTEM to complete the ongoing investments in Poland, and for the Czech side to decide on the most appropriate technical solution to enable bi-directional flow at this point in the future.

text: (7) The promoters and the Decisions argue that offering firm capacity would have a marginal positive effect on the security of gas supply for customers in the Czech Republic, where gas security of supply (SoS) metrics are already at adequate levels. Furthermore, the promoters carried out a non-binding assessment of market demand which indicates no significant interest in developing additional capacities from Poland to the Czech Republic. The Decisions considered the criteria outlined in

text: Article 5(4)

text: and Annex III of the SoS Regulation, including risk assessments, cost-benefit analyses, and stakeholder consultations, as well as the impact on gas supply security and contribution to the internal gas market.

text: (8) The Polish Decision provides a detailed assessment covering the topics listed under Article 5(5) of the SoS Regulation. The Czech Decision supports the promoters’ proposal but is limited to a formal letter.

text: 2. SCOPE OF THE OPINION

text: (9) ACER shall deliver an opinion on the elements of the coordinated Decisions against the criteria specified in

text: Article 5

text: and Annex III of the SoS Regulation, including any possible objection received pursuant to point 7 of Annex III.

text: 3. OBSERVATIONS RECEIVED BY THE AGENCY

text: (10) By 9 November 2024, i.e. within 2 months of the receipt of the last coordinated Decision, the Competent Authorities did not submit objections to ACER related to the coordinated Decision.

text: 4. ASSESSMENT OF THE PROCEDURE

text: (11) ACER finds the joint proposal of GAZ-SYSTEM and NET4GAS and the coordinated Decisions of the Czech and Polish Ministries have followed the process and consultation steps defined in Annex III to the SoS Regulation, as summarised above.

text: 5. ASSESSMENT OF THE ELEMENTS OF THE DECISION

text: CBA prepared on the basis of the methodology pursuant to

text: Article 11 of Regulation (EU) No 347/2013

text: (12) The joint proposal covers the elements set out in Article 5(5) of the SoS Regulation and includes an evaluation comparing the costs of implementing bi-directional capacity for STORK I on both the Czech and Polish sides, with the anticipated benefits for gas supply security. This assessment considers the project's potential to help meet the Infrastructure Standard (e.g. N-1 indicator) and the need for physical reverse-flow capability, as assessed withing the risk groups that include the Czech Republic as a beneficiary of reverse-flow capacity.

text: Assessment of market demand

text: (13) Based on the promoters’ proposal, the Czech’s Decision notes that based on the incremental capacity procedures conducted following Chapter V of Network Code on Capacity Allocation Mechanism (‘NC CAM’) and national processes by GAZ-SYSTEM and NET4GAS, the most recent market screening took place from 3 July to 28 August 2023, covering the period from 2023 to 2025. No declarations of market interest in incremental capacity between the market areas of Poland and the Czech Republic were received from market participants during this screening. Based on the foregoing, ACER concurs with the Decisions on the lack of market demand for enabling additional transportation capacity from Poland to the Czech Republic.

text: Projections for demand and supply

text: (14) As regards gas demand, operators project an approximate 20% increase in annual natural gas demand in the Czech Republic from 2024 until 2033, driven by a shift from lignite to natural gas in heating, industry, and households. This projection also accounts for potential future use of natural gas in the transport sector as compressed natural gas (‘CNG’) and liquefied natural gas (‘LNG’). The forecasted peak daily demand for natural gas in the Czech Republic is expected to rise by 26%, from 727 GWh/day in 2024 to 919 GWh/day in 2033.

text: (15) ACER finds NET4GAS demand estimates which are reflected in the Decision as potentially overly optimistic, given the expected mid- and long-term decline in European gas demand .

text: (16) ACER notes that the Proposal and the Decisions lack some details as regards anticipated changes in gas supply patterns. The promoters argue that, as they do not have access to gas supply contracts, they are unable to provide an analysis of current or future gas supplies to the Czech Republic and Poland. However, ACER takes notes that, in the future, with the newly build floating storage regasification (‘FSRU’) LNG terminal in Poland there could be increased market interest to supply LNG from Poland to the Czech Republic.

text: Possible economic impact on existing infrastructure

text: (17) Enabling permanent physical capacity in the direction from Poland to the Czech Republic (i.e. securing reverse flows) would require investments at both sides of the border. Investments in Poland are already approved within the Polish national network development plan (‘NDP’). The Czech Ministry has informed during the consultation that in the Czech Stage 1 of possible investments (see Section 5.1) are under implementation and expected to be finalised in December 2025. Further investments on the Czech side have not been decided yet. The investments in the Polish transmission system will be borne by Polish network users; it can also be assumed that investments on the Czech side would be most probably allocated to the Czech national regulatory asset base (RAB) in its entirety.

text: Results of the feasibility study and costs of implementing bi-directional capacity

text: (18) According to the promoters, to establish permanent physical bi-directional capacity at the Cieszyn /Český Těšín IP from Poland to the Czech Republic, the following costs would be incurred.

text: (19) On the Polish side, the overall project cost is estimated at EUR 122.12 million . On the Czech side, NET4GAS presents three possible technical measures of additional stages for enabling reverse flow at the IP Cieszyn /Český Těšín. Stage 1 (EUR 5.4 million) would consist of minor network adaptations– no compressor station- to allow physical flows under an exceptional state of emergency. Stage 2A (EUR 14.7 million) would entail a small compressor station and distribution system operators (‘DSO’) and storage system operators (‘SSO’) commitment allowing for a firm capacity up to 40 tcm/h. Stage 2B (EUR 22.2 million) would consist of a multi-stage compressor station, allowing for firm capacity of 30 - 40 tcm/h, without a need of DSOs and SSOs commitment.

text: (20) ACER notes that the reverse flow capacity offered according to the Stage 1 would only be available during emergencies (e.g., exceptional emergency scenarios), posing the question on whether can be considered as permanent capacity — implying it would endure indefinitely or for an extended period. Consequently, ACER recommends NET4GAS to follow developments regarding the understanding of the concept of permanent physical bi-directional capacity .

text: Benefits for the security of gas supply

text: (21) Natural gas can currently be supplied to the Czech transmission system from multiple independent sources. The Czech Republic significantly exceeds the minimum N-1 infrastructure standard of 100%, as outlined in the SoS Regulation, achieving currently over 450%. Implementing reverse flow towards the Czech Republic at the IP Cieszyn /Český Těšín would increase the current N-1 indicator by only 2.5%, with the entry capacity rising from 4,307 GWh/d to 4,327 GWh/d.

text: (22) Further detailed calculations indicate that enabling reverse gas flow from Poland to the Czech Republic at IP Cieszyn /Český Těšín would have minimal impact on improving the security of gas supplies in the Czech Republic or neighbouring Member States within identified risk groups.

text: (23) The coordinated Decisions also recognise that firm capacity might be valuable to the Czech market during emergency situations.

text: (24) In light of this, ACER notes the N-1 indicator in the Czech Republic is well beyond the minimum regulatory requirements, and that implementing reverse flow towards the Czech Republic would only marginally increase reverse flows. However, this capacity may provide benefits to the Czech Republic as it may allow to supply LNG from Poland, therefore contributing to reduce the remaining dependence of the Czech Republic on Russian gas supply ,

text: HAS ADOPTED THIS OPINION:

text: 1. The coordinated Decisions adhere to the procedural and substantive requirements outlined in the Security of Supply (SoS) Regulation, specifically under

text: Article 5

text: and

text: Annex III. These provisions govern the assessment of proposals for permanent bidirectional capacity and exemptions from such obligations. 2. In terms of substantive elements, ACER is of the view that: a. The Decision correctly concludes that the infrastructure standard indicators (e.g. N-1 indicator) are at adequate levels in the benefiting country (Czech Republic). The implementation of a permanent physical bi-directional capacity project would result in only a marginal increase of 2.5% to the Czech’s N-1 indicator, reflecting minor additional positive impact on this security of supply metric, which is already four 4 times above the minimum required level in the Czech Republic. b. While the project would not significantly enhance infrastructure standards, it is noted that enabling reverse flow could have a value for the Czech Republic, particularly by improving access to LNG supplies from Poland. c. Granting a temporary exemption until December 2025 provides time for NET4GAS to identify the most suitable technical option for implementing a physical reverse flow project.

text: 3. Before the exemption expires, ACER recommends a techno-economic reassessment of the solutions envisaged on the Czech side to implement reverse flow capabilities by GAZ-SYSTEM and NET4GAS focusing on:

text: a. Technical solutions to be implemented for enabling firm capacities to ensure permanent physical reverse flow capabilities; b. Market interest and expected gas flows; and c. The contribution of the project to reduce the remaining dependency of the Czech Republic from Russian gas.

text: This Opinion is submitted to the Commission for consequential actions deemed necessary, all competent authorities concerned, and the national regulatory authorities referred to in points 3 and 6 of Annex III SoS Regulation.

text: Done at Ljubljana, on 9 December 2024.

text: - SIGNED –

text: Fоr the Agency The Director

text: C. ZINGLERSEN

type: vagledning

utgivare: acer


text: Regulation (EU) 2024/1789

text: of the European Parliament and of the Council of 13 June 2024 on the internal markets for renewable gas, natural gas and hydrogen, amending Regulations

text: (EU) No 1227/2011

text: (EU) 2017/1938

text: (EU) 2019/942

text: and

text: (EU) 2022/869

text: and Decision

text: (EU) 2017/684

text: and repealing

text: Regulation (EC) No 715/2009

text: (recast) Official Journal L, 2024/1789, 15.7.2024.

text: Regulation (EU) 2024/1789

text: (EU) No 1227/2011

text: (EU) 2017/1938

text: (EU) 2019/942

text: and

text: (EU) 2022/869

text: and Decision

text: (EU) 2017/684

text: and repealing

text: Regulation (EC) No 715/2009

text: (recast). Official Journal 2024/1789, 15.7.2024. 3 ‘Until 5 February 2026, regulatory authorities may submit a request to the Commission for a derogation from the application of the network codes and guidelines referred to in paragraph 1 at entry points from and exit points to third countries pursuant to paragraph 2, point (d). The request for a derogation shall be submitted simultaneously to the Commission and to ACER. Within three months of the date of receipt of the request for a derogation ACER shall provide a reasoned opinion to the Commission. The Commission shall adopt a decision on the request for a derogation, taking into account ACER’s reasoned opinion and after assessing whether the regulatory authority has: (a) demonstrated that a network code or guideline, or specific element of those acts, cannot be effectively implemented at entry points from and exit points to third countries; in the case of interconnection points with third countries which have the obligation to adapt to the Union energy acquis, including this Regulation, pursuant to an agreement concluded between the Union and those third countries, but where application or implementation has not been completed, the request for a derogation shall specify which provisions of this Regulation have not been effectively applied or implemented in the third country concerned or which technical rules or lack of technical rules in the third country impede the application of the specific provisions of the relevant network code or guideline; (b) explained which measures were taken to alleviate the obstacles to the application of the specific provisions of the relevant network code or guideline; (c) demonstrated that the derogation is not detrimental to the proper functioning of the internal market for natural gas, or to the security of supply of the Union or of a Member State. The derogation shall be limited to the specific provisions that cannot be effectively implemented and shall be granted for a limited period of time.’

text: Established in Regulation No 93 of the Government of the Estonian Republic of 29 September 2022 on the Implementation of Sanctions by the Government of the Republic Prohibiting the Purchase of Natural Gas and Liquefied Natural Gas in Connection with the Aggression of the Russian Federation in Ukraine, Supported by the Republic of Belarus RT I, 01.10.2022, 7 https://www.riigiteataja.ee/akt/101102022007. 5 Pursuant to ECA decision No 7-29/2024-002 of 1 October 2024

text: Regulation (EU) 2026/261

text: of the European Parliament and of the Council of 26 January 2026 on phasing out Russian natural gas imports and preparing the phase-out of Russian oil imports, improving monitoring of potential energy dependencies and amending

text: Regulation (EU) 2017/1938

text: . Official Journal L, 2026/261, 2.2.2026. Estonia, as an EU Member State, cannot implement provisions whose application depends on the simultaneous implementation by a third country which is outside its control, as these provisions are not binding upon the Russian Federation. 8

text: Commission Regulation (EU) 2017/459 of 16 March 2017

text: establishing a network code on capacity allocation mechanisms in gas transmission systems and repealing

text: Regulation (EU) No 984/2013

text: . C/2017/1660. Official Journal L 72, 17.3.2017.

text: Commission Regulation (EU) No 312/2014 of 26 March 2014

text: establishing a Network Code on Gas Balancing of Transmission Network. Official Journal L 91, 27.3.2014. 10

text: Commission Regulation (EU) 2015/703 of 30 April 2015

text: establishing a network code on interoperability and data exchange rules. Official Journal L 113, 1.5.2015. 11

text: Commission Regulation (EU) 2017/460 of 16 March 2017

text: establishing a network code on harmonised transmission tariff structures for gas. Official Journal L 72, 17.3.2017.

identifier: ACER Opinion No 08/2026

title: ACER Opinion 08-2026 on the derogation request submitted by the Estonian Competition Authority (ECA) from the application of the network codes and guidelines

text: No 08/2026

text: OPINION

text: on the derogation request submitted by the Estonian Competition Authority (ECA) from the application of the network codes and guidelines, 2024/1789, at the entry point from and the exit point to Russia

text: 30 April 2026

text: A C E R O P I N I O N N O 0 8 / 2 0 2 6

text: Executive summary

text: Pursuant to

text: Article 70(3) of Regulation (EU) 2024/1789

text: (‘Gas Regulation’), ACER is required to provide the European Commission with a reasoned opinion within three months of the date of receipt of a request for a derogation, submitted by a national regulatory authority (‘NRA’) in line with the aforementioned provision, from the implementation of network codes or guidelines, referred to in Article 70(1) of the Gas Regulation, or specific elements of them. On 2 February 2026, the Estonian Competition Authority (‘ECA’) submitted a derogation request to the European Commission and to ACER asking for a derogation from the application of all network codes and guidelines with reference to the Luhamaa entry point from and exit point to the Russian Federation (‘Luhamaa point’) for an undetermined period, yet conditioned on that the current prohibition to import gas from Russian origin remains in place.

text: The Estonian gas transportation network is linked to the network of the Russian Federation through three points, i.e. Narva, Värska, Luhamaa. Only the Luhamaa point is still operational. Its sole purpose is to allow gas originating from the Russian Federation reaching the Kaliningrad region as a backup route.

text: Conclusion

text: Article 16

text: would further support the avoidance of cross-subsidisation and guarantee equal treatment of network users of the Union internal gas market

text: A C E R O P I N I O N N O 0 8 / 2 0 2 6

text: 1. Background

text: Regulation (EU) 2024/1789

text: (‘Gas Regulation’) extends the application of network codes and guidelines, referred to in Article 70(2) of the Gas Regulation (‘network codes and guidelines’), to the entry points from and exit points to third countries, namely countries that are not members of the European Union. The principle embedded in the Regulation at issue is the enhancement of the internal gas market by supporting cross-border trade and efficient operations also at the borders with third countries. Applying network codes and guidelines at these border points helps to avoid market fragmentation and ensures the seamless functioning of the internal market, in particular by guaranteeing consistent rules, non-discriminatory access and efficient cross-border trading conditions, even at the borders of the Union.

text: Article 70(2)

text: (d) of the Gas Regulation lays down that network codes and guidelines, adopted in accordance with paragraph 1 of the same provision, shall apply to all interconnection points within the Union and to entry points from and exit points to third countries from 5 August 2026.

text: 3 Furthermore,

text: Article 70(3)

text: thereof states that until 5 February 2026 national regulatory authorities (‘NRAs’) may submit a request to the European Commission and ACER for a derogation from the application of the network codes and guidelines at entry points from and exit points to third countries pursuant to

text: Article 70(2)

text: (d).

text: 4 ACER shall provide a reasoned opinion to the European Commission within three months of the date of receipt of the request for a derogation. In its reasoned opinion ACER provides an assessment on the request submitted by the NRA. The European Commission shall adopt a decision on the request for a derogation, taking into account ACER’s reasoned opinion and after assessing the existence of the conditions listed in

text: Article 70(3)

text: (a), (b) and (c).

text: 5 Notably, whether the NRA has demonstrated that provisions of a network code or guideline cannot be effectively implemented at an entry point from or exit point to a third country; has taken measures to alleviate obstacles to such implementation; and has shown that the derogation is not detrimental to the internal gas market or to the security of supply of the Union or of a Member State. The derogation shall be limited to specific provisions that cannot be effectively implemented and shall be granted by the European Commission for a limited period of time.

text: A C E R O P I N I O N N O 0 8 / 2 0 2 6

text: 6 Furthermore, Recital 95 of the Gas Regulation acknowledges that specific circumstances, including the existence of long-term contractual arrangements or legal difficulties in establishing dispute resolution procedures with transmission system operators or natural gas suppliers established in third countries, may prevent the effective application of network codes in the short term.

text: A C E R O P I N I O N N O 0 8 / 2 0 2 6

text: 2. Procedure

text: 8 On 2 February 2026, ACER received from the Estonian Competition Authority (‘ECA’) in written form via electronic post a request for a derogation from the application of network codes and guidelines pursuant to Article 70 (3) of the Gas Regulation.

text: 9 Upon the submission of the derogation request, and after an in-depth analysis thereof, ACER has interacted with ECA to further clarify elements included in the derogation request. ACER has thus taken due account of the additional information provided by the NRA in its assessment.

text: 10 On 1 April 2026, ACER shared the draft version of the reasoned opinion with ECA for a factual check and to verify the completeness of the information provided.

text: 11 On 30 April 2026, ACER adopted this reasoned opinion and sent it to the European Commission in accordance with Article 70(3) of the Gas Regulation following the prescribed timeline.

text: 3. Summary of Derogation Request

text: 12 ECA’s derogation request concerns the application of all network codes and guidelines at the Luhamaa entry point from and exit point to the Russian Federation (‘Luhamaa point’). ECA states that the Luhamaa point is only used as a back-up route for transit purposes from the Russian Federation to the Russian Federation’s Kaliningrad region neighbouring Lithuania and Poland.

text: 13 According to ECA’s derogation request, it is not possible that the Estonian TSO, Elering SA (‘Elering’), cooperates with the Russian TSO - nor with any Russian-controlled entity - due to safety and security reasons deriving from the Russian invasion of Ukraine, and the related provisions of the Estonian legislation forbidding the import of gas of Russian origin in Estonia since 1 January 2023.

text: 14 ECA informs that the Estonian gas transportation network is linked to the network of the Russian Federation through three points, i.e. Narva, Värska, and Luhamaa. ECA states that in 2024 it had removed the Narva and Värska points from the relevant regional cooperation arrangements due to their inactivity , whereas the Luhamaa point remains operational, as backup line, with the sole purpose of allowing gas originating from the Russian Federation reaching the Kaliningrad region of the Russian Federation. Therefore, ECA highlights that the gas flowing at the Luhamaa point is not destined to the Union gas market.

text: 15 ECA requests a derogation from the application of all network codes and guidelines at the Luhamaa point for un undetermined period yet conditioned on that the current prohibition to import gas from Russian origin remains in place.

text: 16 Furthermore, ECA seeks clarification from the European Commission as to whether, if a derogation were to be granted for the Luhamaa point and changes were subsequently made to the type of capacity products offered at that point, such operational changes would fall within the scope of the existing derogation or whether a supplementary derogation request would be required notwithstanding the expiry of the initial application deadline.

text: A C E R O P I N I O N N O 0 8 / 2 0 2 6

text: 17 In addition, ECA requests clarification from the European Commission regarding the possibility of requesting a derogation for the Narva and Värska points in the future, should those points become operational again. In this reasoned opinion, ACER will not analyse this additional element included in ECA request to the European Commission.

text: 4. ACER assessment

text: 4.1. Application of network codes and guidelines at the Luhamaa point

text: 18 The Luhamaa point has two sides, i.e. an entry side and an exit side. As stated in ECA’s derogation request, since 2023 such point is operational solely to ensure that gas originating from the Russian Federation is transported to the Russian Federation’s region of Kaliningrad.

text: 19 Given the absence of any prohibition to export gas from Estonia to Russia, both under the Estonian law and under

text: Regulation (EU) 2026/216

text: , ACER is of the opinion that all the provisions of network codes and guidelines not requiring mutual implementation with the adjacent TSO shall apply at Luhamaa exit point, should the point become operational again.

text: 20 Therefore, ACER considers ECA’s derogation request as solely related to the entry side of the Luhamaa interconnection point.

text: 21 In this section, ACER analyses the current framework on capacity allocation, balancing, congestion management, interoperability, and tariffs applying at the Luhamaa entry point.

text: Capacity allocation

text: 22 ACER understands that only firm capacity products are offered at the Luhamaa entry point. This transportation capacity is allocated exclusively through daily capacity products, and specifically through a transportation notification submitted by the third-country TSO at least two weeks prior to the day of delivery.

text: 23 Such transportation notification must be confirmed by a third-party network user holding capacity both at the Luhamaa entry point and at the Kiemenai exit point (connecting the Latvian gas network to the Lithuanian gas network).

text: 24 Therefore, this framework partially implements the provisions of

text: Commission Regulation (EU) 2017/459

text: (‘CAM NC’).

text: 25 The capacity booked and the physical flows at the Luhamaa entry point have been scattered since 2023, with capacity only booked for a few days in 2023 and in 2024. Still, the Luhamaa entry point can potentially ensure the flow of high volumes of gas compared to the size of the Estonian network.

text: A C E R O P I N I O N N O 0 8 / 2 0 2 6

text: Balancing

text: 27 ACER understand that all the provisions of

text: Commission Regulation (EU) 312/2014

text: (‘BAL NC’) apply at the Luhamaa entry point (including those established in BAL NC Chapter VI, i.e. regarding daily imbalance charges, and those established in Chapter VII, i.e. regarding neutrality arrangements), excluding the following two ad-hoc provisions.

text: 28 First, the entry nominations and physical flows at Luhamaa entry point must equal the exit nominations and physical flows at the Kiemenai exit point. Second, the imbalance volume in the event of discrepancies between the gas nominated and the gas physically injected at the Luhamaa entry point is allocated on a monthly basis and pro-rata on the basis of the share of capacity bookings at the Luhamaa entry point (while at other interconnection points of the common zone, the imbalance volumes are allocated on a daily basis and pro-rata on the basis of the share of network users’ nominations).

text: Congestion management

text: 29 None of the provisions established in Annex I, paragraph 2.2. of the Gas Regulation, i.e. regarding congestion management procedures in the event of contractual congestion, apply at Luhamaa entry point. ACER notes that it is unlikely that measures to manage contractual congestions would be needed at Luhamaa entry point under the current specific circumstances.

text: Interoperability

text: Articles 16 of Commission Regulation (EU) 2015/703

text: (‘INT NC’) establish that TSOs shall publish on their website for each interconnection point, with a frequency of at least once per hour during the gas day, the Wobbe-index and the gross calorific value for gas directly entering their networks. This provision is not implemented at the Luhamaa entry point. ACER acknowledges the technical difficulties in implementing such provision at these points as well as the relatively stable values of the Wobbe-index and gross calorific value of the gas entering at the Kotlovka entry point from the Russian Federation.

text: Tariffs

text: 31 ACER understands that the implementation of

text: Commission Regulation (EU) 2017/460

text: (‘TAR NC’) at the Luhamaa entry point was not completed by ECA when setting the reference price methodology for the Estonian gas network points for the regulatory period 2025-2029. In fact, in 2024 ECA foresaw a null level of bookings at such point.

text: 32 Still, as Estonia is part of the FinEstLat gas zone, the tariff applying at the Luhamaa entry point is the same as the tariff applying at all the other entry points of the FinEstLat zone. For 2026, such tariff is set at 142.77 EUR/MWh/day, and the corresponding daily multiplier is set at 1.5.

text: A C E R O P I N I O N N O 0 8 / 2 0 2 6

text: 4.2. ACER considerations

text: 33 ACER acknowledges the existence of an exceptional situation in Estonia, in which ECA is required to ensure both that the prohibition on importing gas originating from the Russian Federation into Estonia is respected and that gas originating from the Russian Federation reaches the Kaliningrad region as a back-up route via the Luhamaa entry point.

text: 34 ACER acknowledges the role and the need for ECA to guarantee that the gas system is kept safe and secure.

text: 35 ACER notes that the Gas Directive and the Gas Regulation aim at creating a fully operational internal market for natural gas. In the case under consideration, the gas flowing from the Russian Federation via the Luhamaa entry point is not destined to the internal market itself, as it is transported through the infrastructure of Estonia.

text: 36 The Luhamaa entry point can potentially guarantee high levels of gas flows compared to the size of the Estonian network. Such point is not a standalone element of the integrated Estonian natural gas network. Common infrastructure elements are used to provide both transmission services for transporting gas through the system from the Luhamaa entry point and services for transporting gas to end-users within the Union, making it difficult to establish a clear separation at asset level. Lacking such a clear separation of assets and costs, any exclusion of network costs would have to rely on assumptions and modelling. The modelling may not reduce the risk of crosssubsidisation and decreased cost-reflectivity, both ultimately affecting the internal market for natural gas. This would pose a risk of cross-subsidisation and decreased cost-reflectivity, due to the non-application of the TAR NC provisions.

text: 37 Therefore, while acknowledging that the transportation capacity is rarely booked and the corresponding network usage is low, ACER highlights the need to implement at Luhamaa entry point the TAR NC in the same way as to all the other points of Elering’s network.

text: 5. Conclusions

text: 38 ECA’s derogation request concerns the application of all network codes and guidelines at the Luhamaa point for an undetermined period yet conditioned on that the current prohibition to import gas from Russian origin remains in place.

text: 39 ACER acknowledges the existence of an exceptional situation in Estonia, in which ECA is required to enforce the prohibition to import gas from Russia to Estonia and to ensure that gas of Russian origin reaches exclusively the Kaliningrad region as a back-up route through the Luhamaa entry point.

text: 40 ACER notes that the Gas Directive and the Gas Regulation aim at creating a fully operational internal market for natural gas. In the case under consideration, the gas flowing from the Russian Federation via the Luhamaa entry point is not destined to the internal market itself, as it is transported through the infrastructure of Estonia.

text: 41 The regulatory framework established by ECA correctly reflects the specific circumstances affecting the Luhamaa entry point.

text: 42 ACER acknowledges the limited usage of such point while also noticing that implementing the provisions of the TAR NC in the same way as they apply to the other points of the Estonian gas network and the provisions of INT NC

text: Article 16

text: would further support the avoidance of crosssubsidisation and guarantee equal treatment of network users of the Union internal gas market.

text: A C E R O P I N I O N N O 0 8 / 2 0 2 6 This Opinion is addressed to the European Commission. Done at Ljubljana, on 30 April 2026. — SIGNED — V. ZULEGER, ACER Director ad interim


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