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?
No
Assessment Severity
0

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. – In Germany, with the aim to promote the feeding in of hydrogen and synthetic methane to the grid, the both of them are included in the definition of biogas in Energy Industry Act, subject to the condition that they primarily originate from renewable energy sources. This means that the privileges/incentives described below are applicable only for the injection of renewable hydrogen and synthetic methane. According to § 33(1) of Gas Network Access Ordinance the grid connection costs for the connection facility shall be borne by network operator to 75%, and by the connecting party (hydrogen supplier) to 25% ii. – a) for connecting pipeline with length < 1 km but no more than 250, 000EUR – 75% network operator, 25% connecting party (hydrogen supplier) b) for connecting pipeline with length < 10 km. for the length < 1km – see a) for the length ≥1 km < 10 km – 75% network operator, 25% connecting party (hydrogen supplier) c) for connecting pipeline with length ≥ 10 km – for the length < 10 km – see a) and b) – for the length ≥ 10 km – 100% connecting party (hydrogen supplier)
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 - According to § 33(2) of Gas Network Access Ordinance the network operator has to ensure permanently the availability of the network connection, but at least 96%, and is responsible for the maintenance and operation of network connection. He bears the costs for this.
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 - The water electrolysis plants for production of hydrogen and closing methanation plants are free from feed–in costs for the gas network, for which they are connected. (§118 (6) of Energy Industry Act) No feed– in costs are payable for the feed in of biogas into the transmission network.( §19(1) of Gas Network Charges Ordinance)
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 - Biogas transport customers (hydrogen suppliers) receive from the network operator in whose network they feed directly, fixed remuneration of 0.07 EUR/kWh of fed biogas for avoided network costs for 10 years from commissioning of the respective network connection for feeding biogas. This applies regardless of the power level into which is fed. (§ 20a of Gas Network Charges Ordinance). These costs are transferred to all gas network customers in Germany
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 - None
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 - No
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?
According to § 36(3) of Gas Network Access Ordinance the network operator is required to exchange the process gas chromatograph if this is necessary in order to comply with the gas billing requirements in DVGW Worksheet G 685 following injection of renewable hydrogen and if the associated costs would not make the entire connection economically unreasonable
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?
The water electrolysis plants for production of hydrogen and closing methanation plants are free from feed–in costs for the gas network, for which they are connected. (§118 (6) of Energy Industry Act) No feed– in costs are payable for the feed in of biogas into the transmission network.( §19(1) of Gas Network Charges Ordinance)
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?
Avoided network costs
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 payment issues are stipulated in the connection and in injection agreements between the network operator and the hydrogen supplier.
Question 6 Are there any benefits from the national tariff-system in relation to “sustainable” / “non (or less)-sustainable” about hydrogen – natural gas blend?
Yes, described in Question 1.
Question 7 Are there any incentives granted for the hydrogen facility operator/supplier?
Yes, described in Question 1
Describe the comparable technology and its relevance with regard to hydrogen
Biogas

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.