Payment issues

This LAP concerns the injection of hydrogen into the high pressure transmission gas grid at the TSO level and the cost allocation, payment and incentives framework covering injection installations and hydrogen gas conveyance via the TSO network

Glossary:

Additional tariff restrictions (positive or negative) relating the transport of hydrogen compared to the regulated transport tariffs for natural gas (e.g. payment issues in connection to the injection of hydrogen or methane into gas network are: connection costs, feed-in tariffs, remunerations).
Is it a barrier?
Yes
Type of Barrier
Regulatory gap
Assessment Severity
3

Questions:

Question 1 Who bears the following costs and if they are shared between the DSO/TSO and the hydrogen facility operator/ supplier – in which proportion. a) grid connection costs: i. for connection facility ii. for connecting pipe line b) costs for availability of the network connection, maintenance, and operation of the network connection c) feed-in costs d) remuneration for avoided network costs e) tax incentives f) others
a - grid connection costs i. – the connection facility will be rented by the H2 / gas producer and will be operated by the DSO/TSO ii. – gas /H2 producer
Question 1 Who bears the following costs and if they are shared between the DSO/TSO and the hydrogen facility operator/ supplier – in which proportion. a - grid connection costs: i. for connection facility ii. for connecting pipe line
b - not known at this stage – probably the TSO/DSO, if the operation costs are higher than with a natural gas injection, the gas producer will probably have to pay them = t.b.c.
Question 1 Who bears the following costs and if they are shared between the DSO/TSO and the hydrogen facility operator/ supplier – in which proportion. b - costs for availability of the network connection, maintenance, and operation of the network connection
c - H2 / gas producer
Question 1 Who bears the following costs and if they are shared between the DSO/TSO and the hydrogen facility operator/ supplier – in which proportion. c - feed-in costs
d - not known at this stage
Question 1 Who bears the following costs and if they are shared between the DSO/TSO and the hydrogen facility operator/ supplier – in which proportion. d - remuneration for avoided network costs
e - not known at this stage
Question 1 Who bears the following costs and if they are shared between the DSO/TSO and the hydrogen facility operator/ supplier – in which proportion. e - tax incentives
f -
Question 2 In case additional costs occur for injection of hydrogen in the grid, e.g. metrology equipment needed for measurement, in your country compared to natural gas injection, who will bear these costs?
The additional costs will probably have to be covered by the H2 gas producer, as H2 is not considered as a natural gas or biomethane. This point is not fixed by the regulation at this stage, so the answer has to be challenged by asking the national DSO/TSO. The costs of the piping from the production site to the connection site have also to be covered by the gas producer.
Question 3 Is a hydrogen injection connection point treated in the same way as a natural gas injection point with respect to the (transport) tariffs framework?
Normally yes There is no specific regulation at this stage.
Question 4 Does the sustainability (hydrogen in the natural gas grid) have additional financially benefits for you as a TSO besides the regular transportation fees?
No At this stage, there is no specific regulation for this point.
Question 5 Does a TSO have contractual agreement and/or responsibilities with the supplier/shipper regarding injection of hydrogen in the grid that could influence/affect payment issues?
The TSO has normally an agreement with the supplier specifying the rules of each party and their responsibilities on the technical aspects and financing aspects related to the availability of the injecting facility and the connecting point. The payment issue related to the inject gas are defined in a specific agreement between the gas producer and the gas provider who buys the gas.
Question 6 Are there any benefits from the national tariff-system in relation to “sustainable” / “non (or less)-sustainable” about hydrogen – natural gas blend?
No There is no specific regulation at this stage.
Question 7 Are there any incentives granted for the hydrogen facility operator/supplier?
There are no specific incentives for the gas producer . If the hydrogen is produced by electrolysis with electricity from the grid, there in a tax exemption on the “Taxe Intérieure sur la Consommation finale d’’Electricité” (French Tax on final use of electricity).

National legislation:

EU Legislation:

  • Directive 2009/73/EC concerning common rules for the internal market in natural gas
    Directive 2009/73/EC establishes common rules for the transmission, distribution, supply and storage of natural gas.

    Its provisions and obligations apply to Hydrogen Gas by virtue of Article 1 (2), which states that the rules established by this Directive for natural gas, including LNG, shall also apply in a non–discriminatory way to biogas and gas from biomass or other types of gas in so far as such gases can technically and safely be injected into, and transported through, the natural gas system.

    Article 25 establishes the “Tasks of the distribution system operator” which include: ensuring the long-term ability of the system to meet reasonable demands for the distribution of gas […];shall provide any other distribution, transmission, LNG, and/or storage system operator with sufficient information […] as well as to ensure that the system operator does not discriminate between system users or classes of system including, including e.g. when setting rules for the charging of system users, etc

    Article 32 sets the rules on “Third party access”: access to the transmission and distribution system, and LNG facilities shall be based on published tariffs, applicable to all eligible customers, including supply undertakings, and applied objectively and without discrimination between system users.
  • Regulation 715/2009 on conditions for access to the natural gas transmission networks
    Regulation 715/2009 sets non-discriminatory rules for access conditions to (a) natural gas transmission systems; (b) LNG facilities and storage facilities taking into account the special characteristics of national and regional markets

    To achieve this, it sets harmonised principles for tariffs, or the methodologies underlying their calculation, for access to the network, but not to storage facilities, the establishment of third-party access services and harmonised principles for capacity-allocation and congestion-management, the determination of transparency requirements, balancing rules and imbalance charges, and the facilitation of capacity trading.
  • Regulation (EC) No 713/2009 of the European Parliament and of the Council of 13 July 2009 establishing an Agency for the Cooperation of Energy Regulators
    Article 1 Project matter and scope
    This regulation aims at:
    (a) setting non–discriminatory rules for access conditions to natural gas transmission systems taking into account the special characteristics of national and regional markets with a view to ensuring the proper functioning of the internal market in gas;

    Article 8 “Tasks as regards terms and conditions for access to and operational security of cross border infrastructure
  • Commission Regulation (EU) 2015/703 of 30 April 2015 establishing a network code on interoperability and data exchange rules
    The network code on interoperability aligns the complex technical procedures used by network operators within the EU, and possibly with network operators in the Energy Community and other countries neighbouring the EU.Article 7, Measurement principles for gas quantity and quality. In addition to interconnection points, Article 17 shall apply to other points on transmission network where the gas quality is measured. Article 18 shall apply to transmission systems. This Regulation may also apply at entry points from and exit points to third countries, subject to the decision of the national authorities.
  • Commission Regulation (EU) 2017/460 of 16 March 2017 establishing a network code on harmonised transmission tariff structures for gas
    Regulation (EU) 2017/460 establishes a network code setting out the rules on harmonised transmission tariff structures for gas, including rules on the application of a reference price methodology, the associated consultation and publication requirements as well as the calculation of reserve prices for standard capacity products.

    The network code on harmonised transmission tariff structures for gas enhances tariff transparency and tariff coherency by harmonising basic principles and definitions used in tariff calculation, and via a mandatory comparison of national tariff–setting methodologies against a benchmark methodology. It also stipulates publication requirements for information on tariffs and revenues of transmission system operators.