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).

select country:

Is it a barrier?

Yes

Type of Barrier

Regulatory gap

Assessment Severity

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. – At present there is no legal basis (law or regulation) for injection of hydrogen in the gas grid. The only regulation is Gas Grid Code of Snam Rete Gas, submitted to the Authority for the electricity, gas and water market on 14 November 2002 and continuously updated ever since, where is only foreseen the presence of hydrogen with reference to bio–methane. Therefore, there is no regulation on Payment Issues, related to the injection of hydrogen into gas network as for example connection costs, feed–in tariffs and remunerations. ii. – n/a

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

At present it is no possible to inject hydrogen in the gas grid, therefore there no specific regulation. The only regulation is Gas Grid Code of Snam Rete Gas, where is only foreseen the presence of hydrogen with reference to bio–methane. There is no regulation on Payment Issues, related to the injection of hydrogen into gas network as for example grid connection costs, feed–in tariffs and remunerations.

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

At present it is no possible to inject hydrogen in the gas grid, therefore there no specific regulation. The only regulation is Gas Grid Code of Snam Rete Gas, where is only foreseen the presence of hydrogen with reference to bio–methane. There is no regulation on Payment Issues, related to the injection of hydrogen into gas network as for example costs for availability of the network connection, maintenance, and operation of the network connection.

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

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

At present it is no possible to inject hydrogen in the gas grid, therefore there no specific regulation. The only regulation is Gas Grid Code of Snam Rete Gas, where is only foreseen the presence of hydrogen with reference to bio–methane. There is no regulation on Payment Issues, related to the injection of hydrogen into gas network as for example connection costs, feed–in tariffs and remunerations.

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 - n/a

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?

See the reply to Question 1

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?

See the reply to Question 1 >

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?

See the reply to Question 1 >

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?

See the reply to Question 1 >

Question 6 Are there any benefits from the national tariff-system in relation to “sustainable” / “non (or less)-sustainable” about hydrogen – natural gas blend?

See the reply to Question 1

Question 7 Are there any incentives granted for the hydrogen facility operator/supplier?

See the reply to Question 1

Describe the comparable technology and its relevance with regard to hydrogen

Bio–gas

National legislation:

Gas network code of Snam Rete gas (TSO)
Gas network regulation of SNAM Rete Gas defining the role of each party involved in gas transmission and distribution activities.

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.