Network development for natural gas and hydrogen and powers to make investment decisions
1. At least every two years, all transmission system operators and hydrogen transmission network operators shall submit to the relevant regulatory authority a ten-year network development plan based on existing and forecast supply and demand after having consulted the relevant stakeholders in accordance with paragraph 2, point (f). There shall be one single network development plan per Member State for natural gas and one single network development plan per Member State for hydrogen, or one joint plan for natural gas and hydrogen per Member State.
Member States allowing for one joint plan shall ensure that such a plan is sufficiently transparent to allow the regulatory authority to clearly identify the specific needs of the natural gas sector and the specific needs of the hydrogen sector addressed by the plan. Separate modelling shall be performed for each energy carrier, with separate chapters showing network maps for natural gas and network maps for hydrogen.
Member States in which separate plans for natural gas and hydrogen are developed shall ensure that transmission system operators and hydrogen transmission network operators cooperate closely where decisions need to be made to ensure system efficiency, as defined in Article 2, point (4), of Directive (EU) 2023/1791, across energy carriers, such as for repurposing.
Hydrogen transmission network operators shall closely cooperate with electricity transmission system operators and electricity distribution system operators, if applicable, in order to coordinate joint infrastructure requirements, such as the location of electrolysers and the relevant transmission infrastructure, and shall take the utmost account of their views.
Member States shall endeavour to ensure coordinated planning steps of the respective ten-year network development plans for natural gas, hydrogen and electricity.
Infrastructure operators, including LNG terminal operators, natural gas storage system operators, distribution system operators, hydrogen distribution network operators, hydrogen terminal operators, hydrogen storage operators, district heating infrastructure operators and electricity operators shall be required to provide and exchange all relevant information to the transmission system operators and hydrogen transmission network operators of the ten-year network development plans. The ten-year network development plan for natural gas shall contain efficient measures in order to guarantee the adequacy of the natural gas system and the security of supply, in particular compliance with the infrastructure standards laid down in Regulation (EU) 2017/1938. The ten-year network development plans shall be published and accessible on a website along with the outcome of the stakeholder consultation. That website shall be updated regularly to ensure that the relevant stakeholders are informed about the timing, manner and scope of the consultation.
2. The ten-year network development plans referred to in paragraph 1 shall, in particular:
(a)
contain comprehensive and detailed information on the main infrastructure that needs to be built or upgraded over the next ten years, taking into account any infrastructure reinforcements needed for connecting renewable gas and low-carbon gas installations and including infrastructure developed to enable reverse flows to the transmission network;
(b)
contain information on all the investments already decided and identify new investments and demand-side solutions not requiring new infrastructure investments which have to be executed in the next three years;
(c)
in the case of natural gas, include comprehensive and detailed information on infrastructure that can or is to be decommissioned;
(d)
in the case of hydrogen, include comprehensive and detailed information on infrastructure that can or is to be repurposed for the transmission of hydrogen, in particular to deliver hydrogen to end-users in hard-to-decarbonise sectors taking into account the greenhouse gas abatement potential and the energy and cost-efficiency in relation to other options;
(e)
provide for a time frame for all investment and decommissioning projects;
(f)
be based on a joint scenario developed every two years between the relevant infrastructure operators, including relevant distribution system operators, of at least natural gas, hydrogen, electricity and, where applicable, district heating;
(g)
in the case of natural gas, be consistent with the results of the common and national risk assessments pursuant to Article 7 of Regulation (EU) 2017/1938;
(h)
be in line with the integrated national energy and climate plan and its updates, take into account the state of play in the integrated national energy and climate reports submitted in accordance with Regulation (EU) 2018/1999, be consistent with targets set by Directive (EU) 2018/2001 and support the climate-neutrality objective set out in Article 2(1) and Article 4(1) of Regulation (EU) 2021/1119;
(i)
be consistent with the Union-wide ten-year network development plan for natural gas referred to in Article 32 of Regulation (EU) 2024/1789 and the Union-wide ten-year network development plan for hydrogen referred to in Article 60 of that Regulation, as applicable;
(j)
take into account the hydrogen distribution network development plan referred to in Article 56 and the natural gas network decommissioning plans referred to in Article 57.
The joint scenarios referred to in the first subparagraph, point (f), shall be based on reasonable assumptions about the evolution of the production, supply and consumption, in particular the needs of hard-to-decarbonise sectors taking into account the greenhouse gas abatement potential and the energy and cost-efficiency in relation to other options, and shall take into account demand-side solutions not requiring new infrastructure investments. They shall also take into account cross-border exchanges, including with third countries, and the role of hydrogen storage and the integration of hydrogen terminals. Infrastructure operators shall conduct an extensive consultation process on such scenarios open to the relevant stakeholders including the distribution system operators for natural gas and electricity, hydrogen distribution network operators, associations involved in markets for electricity, natural gas and hydrogen, heating and cooling, supply and production undertakings, independent aggregators, demand-response operators, organisations involved in energy efficiency solutions, energy consumer associations, and civil society representatives. The consultations shall take place at an early stage prior to the development of the ten-year network development plan in an open, inclusive and transparent manner. All documents provided by the infrastructure operators to facilitate the consultations shall be made public, as shall the outcome of the stakeholder consultation. The relevant website shall be updated in a timely manner when those documents are available so that relevant stakeholders are informed sufficiently to allow them to participate in the consultation effectively.
The joint scenarios referred to in the first subparagraph, point (f), of this paragraph shall be in line with Union-wide scenarios established in accordance with Article 12 of Regulation (EU) 2022/869 and with the integrated national energy and climate plan and its updates in accordance with Regulation (EU) 2018/1999 and support the climate-neutrality objective set out in Article 2(1) and Article 4(1) of Regulation (EU) 2021/1119. Such joint scenarios shall be approved by the competent national authority. The European Scientific Advisory Board on Climate Change established pursuant to Article 10a of Regulation (EC) No 401/2009 may, on its own initiative, provide an opinion on the compatibility of joint scenarios with the Union’s 2030 targets for energy and climate and its 2050 climate-neutrality objective. That opinion shall be taken into account by the competent national authority.
3. When elaborating the ten-year network development plans, the transmission system operator and the hydrogen transmission network operator shall fully take into account the potential for alternatives to system expansion, for instance the use of demand response, as well as expected consumption following the application of the energy efficiency first principle in accordance with Article 27 of Directive (EU) 2023/1791, trade with other countries and the Union-wide network development plans. In view of the energy system integration, the transmission system operator and the hydrogen transmission network operator shall assess how to address, where possible, a need across electricity, heat where applicable and natural gas and hydrogen systems including information on the optimal location and size of energy storage and power to gas assets as well as the co-location of hydrogen production and consumption. The hydrogen transmission network operator shall include information on the location of end-users in hard-to-decarbonise sectors with a view to targeting the use of renewable and low-carbon hydrogen in those sectors.
4. The regulatory authority shall consult all actual or potential system users on the ten-year network development plan in an open and transparent manner. Persons or undertakings claiming to be potential system users may be required to substantiate such claims. The regulatory authority shall publish the result of the consultation process, including possible needs for investments, decommissioning of assets and demand-side solutions not requiring new infrastructure investments.
5. The regulatory authority shall examine whether the ten-year network development plan complies with paragraphs 1, 2 and 3 of this Article, covers all investment needs identified during the consultation process, and, where appropriate, whether it is consistent with the most recent Union-wide simulation of disruption scenarios carried out by the European Network of Transmission System Operators for Gas (ENTSO for Gas) pursuant to Article 7 of Regulation (EU) 2017/1938, with the regional and national risk assessments pursuant to Article 7 of Regulation (EU) 2017/1938 and with the non-binding Union-wide ten-year network development plans (the ‘Union-wide network development plans’) referred to in Article 30(1), point (b), of Regulation (EU) 2019/943, and with Articles 32 and 60 of Regulation (EU) 2024/1789. If any doubt arises as to the consistency with the Union-wide network development plans, the regulatory authority shall consult ACER. The regulatory authority may require the transmission system operator to amend its ten-year network development plan.
The competent national authorities shall examine the consistency of the ten-year network development plan with the climate-neutrality objective set out in Article 2(1) of Regulation (EU) 2021/1119, with the national energy and climate plan and its updates and with the integrated national energy and climate reports submitted in accordance with Regulation (EU) 2018/1999 and, in the case of inconsistency, may provide the regulatory authority with a substantiated opinion setting out the inconsistency, to be taken duly into account.
6. The regulatory authority shall monitor and evaluate the implementation of the ten-year network development plan.
7. In circumstances where the independent system operator or independent transmission operator, or the integrated hydrogen transmission network operator or independent hydrogen transmission network operator, other than for overriding reasons beyond its control, does not execute an investment which, under the ten-year network development plan, was to be executed in the following three years, Member States shall ensure that the regulatory authority is required to take at least one of the following measures to ensure that the investment in question is made if such investment is still relevant on the basis of the most recent ten-year network development plan:
(a)
require the transmission system operator or the hydrogen transmission network operator to execute the investment in question;
(b)
organise a tender procedure open to any investors for the investment in question;
(c)
oblige the transmission system operator or the hydrogen transmission network operator to accept a capital increase to finance the necessary investment and allow independent investors to participate in the capital.
Where the regulatory authority has made use of its powers pursuant to point (b) of the first subparagraph, it may oblige the transmission system operator or the hydrogen transmission network operator to agree to one or more of the following:
(a)
financing by any third party;
(b)
construction, repurposing or decommissioning by any third party;
(c)
building the new assets concerned itself;
(d)
operating the new assets concerned itself.
The transmission system operator or the hydrogen transmission network operator shall provide the investors with all information needed to realise the investment, shall connect new assets to the transmission system or the hydrogen transmission network and shall generally make its best efforts to facilitate the implementation of the investment project.
The relevant financial arrangements shall be subject to approval by the regulatory authority.
8. Where the regulatory authority has made use of its powers pursuant to paragraph 7, the relevant network access tariffs as set or approved by the regulatory authority shall cover the costs of the investment in question.
Hydrogen distribution network development plan
1. Hydrogen distribution network operators shall submit to the regulatory authority every four years a plan presenting the hydrogen network infrastructure they aim to develop. The plan shall be developed in close cooperation with distribution system operators for natural gas and electricity, as well as district heating and cooling operators where applicable, ensuring effective energy system integration and taking the utmost account of their views. Member States may allow hydrogen distribution network operators in accordance with this Article and distribution system operators in accordance with Article 57 that are active in the same region to develop a joint plan.
Member States allowing for one joint plan shall ensure that the plan is sufficiently transparent to clearly identify the specific needs of the natural gas sector and the specific needs of the hydrogen sector addressed by the plan. Separate modelling shall be performed for each energy carrier and with separate chapters showing network maps for natural gas and network maps for hydrogen.
Member States in which separate plans for natural gas and hydrogen are developed shall ensure that distribution system operators and hydrogen distribution network operators cooperate closely where decisions need to be made to ensure system-efficiency across energy carriers, such as for repurposing.
2. The hydrogen distribution network development plan shall, in particular:
(a)
include information on capacity needs, both in volume and duration, as negotiated between hydrogen distribution network users and hydrogen distribution network operators, on hydrogen supply, and on capacity needs, both in volume and duration, of existing and potential future hard-to-decarbonise end-users taking into account the greenhouse gas abatement potential and the energy and cost-efficiency in relation to other options and the location of those end-users with a view to targeting the use of renewable and low-carbon hydrogen in those sectors;
(b)
take into account the heating and cooling plans established pursuant to Article 25(6) of Directive (EU) 2023/1791 and the demand of sectors that are not covered by the heating and cooling plans, and assess how the principle of energy efficiency first in accordance with Article 27 of that Directive is respected when considering hydrogen distribution network expansion in sectors where more energy efficient alternatives are available;
(c)
include information on the extent to which repurposed natural gas pipelines are to be used for the transport of hydrogen, as well as the extent to which that repurposing is required to fulfil the capacity needs established in accordance with point (a);
(d)
be based on a consultation process that is open to the relevant stakeholders in order to enable their early and effective participation in the planning process, including the provision and exchange of all relevant information;
(e)
be published on the hydrogen distribution network operator’s website with the outcome of the stakeholder consultation and submitted to the regulatory authority, together with the outcome of the stakeholder consultation; that website shall be updated regularly so that the relevant stakeholders are informed sufficiently to allow them to participate in the consultation effectively;
(f)
be in line with the integrated national energy and climate plan and its updates, and with the integrated national energy and climate reports submitted in accordance with Regulation (EU) 2018/1999 and support the climate-neutrality objective set out in Article 2(1) of Regulation (EU) 2021/1119;
(g)
be consistent with the Union-wide network development plan for hydrogen referred to in Article 60 of Regulation (EU) 2024/1789 and the national ten-year network development plans developed in accordance with Article 55 of this Directive.
3. Hydrogen distribution network operators shall exchange all relevant information required for developing the plan with other hydrogen network operators, including hydrogen network operators in neighbouring Member States if there is a direct connection.
4. The regulatory authority shall assess whether the hydrogen distribution network development plan complies with paragraph 1 of this Article. The regulatory authority shall examine the plan and may request amendments to the plan in line with the assessment. It shall take into account in that examination the overall energy-economic necessity of the hydrogen network as well as the joint scenario framework developed pursuant to Article 55(2), point (f). With regard to plans submitted in relation to hydrogen networks benefitting from a derogation pursuant to Article 51 or 52, the regulatory authority may abstain from examining the plan and making recommendations for amendments.
5. The regulatory authority shall take the examination of the hydrogen distribution network development plan into account in its approval of dedicated charges within the meaning of Article 5 of Regulation (EU) 2024/1789.
6. Until 31 December 2032, and without prejudice to the powers of the regulatory authority to supervise network access rules, Member States may entrust another competent authority with the task of examining the hydrogen distribution network development plan and of making recommendations for amendments to the plan by the hydrogen distribution network operator to ensure consistency with the integrated national energy and climate plans and their updates.
7. By way of derogation from paragraphs 1 to 5 of this Article, Member States may decide to apply to hydrogen distribution network operators the requirements set out in Article 55 from 4 August 2024.
Network decommissioning plans for distribution system operators
1. Member States shall ensure that distribution system operators develop network decommissioning plans where a reduction in natural gas demand requiring the decommissioning of natural gas distribution networks or parts of such networks is expected. Such plans shall be developed in close cooperation with hydrogen distribution network operators, distribution system operators for electricity, and district heating and cooling operators, ensuring effective energy system integration and reflecting the reduced use of natural gas for the heating and cooling of buildings where more energy and cost-efficient alternatives are available. Member States may allow distribution system operators in accordance with this Article and hydrogen distribution network operators in accordance with Article 56 that are active in the same region to develop a joint plan if parts of the natural gas infrastructure are to be repurposed. Member States allowing for one joint plan shall ensure that the plan is sufficiently transparent to clearly identify the specific needs of the natural gas sector and the specific needs of the hydrogen sector addressed by the plan. Where applicable, separate modelling shall be performed for each energy carrier, with separate chapters showing network maps for natural gas and network maps for hydrogen.
Member States in which separate plans for natural gas and hydrogen are developed shall ensure that distribution system operators and hydrogen distribution network operators cooperate closely where decisions need to be made to ensure system-efficiency across energy carriers, such as for repurposing.
2. The distribution network decommissioning plans shall at least comply with the following principles:
(a)
the plans are based on the heating and cooling plans developed in accordance with Article 25(6) of Directive (EU) 2023/1791 and duly take into account the demand of sectors that are not covered by the heating and cooling plans;
(b)
the plans are based on reasonable assumptions about the evolution of production, injection and supply of natural gas, including biomethane, on the one hand, and the consumption of natural gas in all sectors at distribution level, on the other hand;
(c)
distribution system operators identify required infrastructure adaptations, while demand-side solutions not requiring new infrastructure investments are prioritised, and the plans list infrastructure that is to be decommissioned, also in view of creating transparency with regard to the possible repurposing of such infrastructure for the transport of hydrogen;
(d)
distribution system operators conduct a consultation process open to the relevant stakeholders when developing the plan in order to enable their early and effective participation in the planning process, including the provision and exchange of all relevant information; the results of the consultation and the network decommissioning plan are submitted to the relevant national authority;
(e)
the plans and the outcome of the stakeholder consultation are published on the distribution system operators’ websites and those websites are updated regularly to ensure that the relevant stakeholders are informed sufficiently to allow them to participate in the consultation effectively;
(f)
the plans are updated at least every four years, based on the latest projections for natural gas demand and supply in the relevant region, and shall cover a ten-year period;
(g)
distribution system operators that are active in the same regional area may opt to develop one single joint network decommissioning plan;
(h)
the plans are consistent with the Union-wide network development plan for natural gas referred to in Article 32 of Regulation (EU) 2024/1789 and the national ten-year network development plans developed in accordance with Article 55 of this Directive;
(i)
the plans are consistent with the Member State’s integrated national energy and climate plan, the integrated national energy and climate progress report and the long-term strategy submitted pursuant to Regulation (EU) 2018/1999 and support the climate-neutrality objective set out in Article 2(1) of Regulation (EU) 2021/1119.
3. Relevant national authorities shall assess whether the distribution network decommissioning plans comply with the principles laid down in paragraph 2. They shall approve or reject the distribution network decommissioning plan and may require amendments to that plan.
4. The development of the distribution network decommissioning plans shall facilitate the protection of final customers in accordance with Article 13 as well as take into account their rights pursuant to Article 38(6).
5. Member States may decide not to apply the obligations set out in paragraphs 1 to 4 to distribution system operators that serve fewer than 45 000 connected customers by 4 August 2024. Where distribution system operators are exempted from submitting a distribution network decommissioning plan, they shall inform the regulatory authority of the decommissioning of the distribution networks or parts thereof.
6. Where parts of the natural gas distribution network may require decommissioning before their originally projected life cycle, the regulatory authority shall establish guidelines for a structural approach to the depreciation of such assets and tariff setting in accordance with Article 78(7). When developing such guidelines, regulatory authorities shall consult the relevant stakeholders, in particular distribution system operators and consumer bodies.
Connection fees and costs for biomethane production facilities
1. Member States shall provide an enabling regulatory framework for biomethane production facilities in relation to connection fees and costs resulting from their connection to the transmission or distribution networks. Such regulatory framework shall ensure that:
(a)
connection fees and costs take into account the energy efficiency first principle applicable to network development in accordance with Article 3 and Article 27(2) of Directive (EU) 2023/1791;
(b)
connection fees and costs are published as part of the procedures for the connection of new production facilities for renewable gas and low-carbon gas to the transmission and distribution system established in Articles 41 and 45 of this Directive and pursuant to Article 20(2) of Directive (EU) 2018/2001;
(c)
the principles of transparency and non-discrimination, the need for stable financial frameworks for existing investments, the advancement of the roll-out of renewable gas and low-carbon gas in the Member State concerned and the existence of alternative support mechanisms for scaling up the use of renewable gas or low-carbon gas, where appropriate, are taken into account.
2. When setting or approving tariffs or the methodologies to be used by transmission system operators and distribution system operators, regulatory authorities may take into account the costs incurred and investments made by those system operators to comply with their obligations and not directly recovered from the connection costs and fees, insofar as the costs correspond to those of an efficient and structurally comparable regulated operator.
Financing cross-border hydrogen infrastructure
1. Where Member States apply a system of regulated third-party access to hydrogen transmission networks pursuant to Article 35(1) and where a hydrogen interconnector project is not a project of common interest as referred to in Chapter II of, and point 3 of Annex I to, Regulation (EU) 2022/869 of the European Parliament and of the Council ( 49 ) , adjacent and affected hydrogen transmission network operators shall bear the costs of the project and may include them within their respective tariff systems, subject to approval by the regulatory authority. If the hydrogen transmission network operators identify a substantial gap between benefits and costs, they may design a project plan, including a request for cross-border cost allocation, and submit it jointly to the regulatory authorities concerned for joint approval.
2. Where hydrogen transmission network operators submit a project plan as set out in paragraph 1, that project plan and the request for cross-border cost allocation shall be accompanied by a project-specific cost-benefit analysis, taking into account benefits beyond the borders of Member States concerned, and by a business plan evaluating the financial viability of the project, which shall include a financing solution and specify whether the hydrogen transmission network operators involved agree on a substantiated proposal for a cross-border cost allocation.
The regulatory authorities concerned shall, after consulting the hydrogen transmission network operators, take a joint decision on the allocation of investment costs to be borne by each hydrogen transmission network operator for the project.
3. From 1 January 2033, all hydrogen transmission network operators concerned shall negotiate a system of financial compensation to ensure financing for cross-border hydrogen infrastructure in the event that no tariffs are charged for access to hydrogen transmission networks at interconnection points between Member States pursuant to Article 7(8) of Regulation (EU) 2024/1789. When developing that system, hydrogen transmission network operators shall conduct an extensive consultation process involving all relevant market participants.
4. The hydrogen transmission network operators concerned shall agree on the system of financial compensation by 31 December 2035 and submit it to the regulatory authorities concerned for their joint approval. If no agreement is reached within that period, the regulatory authorities concerned shall decide jointly within two years. Where the regulatory authorities concerned cannot reach a joint agreement within two years, ACER shall take a decision, following the procedure pursuant to Article 6(10) of Regulation (EU) 2019/942.
5. The system of financial compensation shall be implemented in line with Article 78(1), point (c).
6. For the transition to a system of financial compensation, existing capacity contracts shall not be affected by the established financial compensation mechanism.
7. Further details required to implement the process set out in this Article, including required processes and time frames, process for reviewing and, if necessary, amending the system of financial compensation to allow the taking into account of tariff evolution and the development of the hydrogen networks, shall be set in a network code established pursuant to Article 72 of Regulation (EU) 2024/1789.
