Payment issues

This LAP concerns the injection of hydrogen into the low pressure transmission gas grid at the local DSO level and the cost allocation, payment and incentives framework covering injection installations and hydrogen gas conveyance via the DSO 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
Structural barriers, Operational barriers, Economic barriers, 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) i. - following the so far established methodology in the natural gas sector, it is the hydrogen supplier ii. – not clarified yet BUT, following the so far established methodology in the natural gas sector, it is the hydrogen supplier/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
a - not clarified yet BUT, following the so far established methodology in the natural gas sector, it is the hydrogen supplier/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. b - costs for availability of the network connection, maintenance and operation of the network connection
b - not clarified yet BUT, following the so far established methodology in the natural gas sector, it is the hydrogen supplier/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
c - not clarified yet BUT, following the so far established methodology in the gas sector there will not be any remuneration for the avoided network costs since the gas storage operators and domestic gas producers do not receive a remuneration as well. The argument is that without the pipeline the hydrogen producer cann’t feed into the system.
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
d - if any, then the hydrogen supplier/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. e - tax incentives
e - not defined yet
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? Please indicate which additional costs.
not clarified yet BUT, following the so far established methodology in the natural gas sector, it is the hydrogen supplier/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?
not clarified yet BUT, following the so far established methodology in the gas sector then yes
Question 4 Does the sustainability (hydrogen in the natural gas grid) have additional financially benefits for you as a DSO besides the regular transportation fees?
not clarified yet BUT, following the so far established methodology there are no financial benefits for the DSO regarding sustainability – on the contrary the DSO has to take care of a safe and reliable operation of the gas grid, hence in case of deviations of the quality of the injected medium from the specified quality, the DSO has to reject the acceptance of the hydrogen to be fed into the system.
Question 5 Does a DSO have contractual agreement and/or responsibilities with the supplier/shipper with regard to injection of hydrogen in the grid that could influence/affect payment issues?
Not clarified yet, BUT following the so far established methodology in the gas sector, the DSO has to take care of a safe and reliable operation of the grid – subsequently in case of deviation of the quality from the specified quality, the DSO has to reject the acceptance of the medium since it is him who is responsible for the quality of the transported gas, hence any deviations would lead to problems in the billing since it is the gross calorific value the consumer has to pay for and not for the transported volumes. The injection of hydrogen – on the contrary to the injection of biomethane – does change the gross calorific value and the thereto linked Wobbe Index.. 4% (mol) injection of hydrogen would lower the gross calorific value by 2.6%. In Austria a change of 2% in the calorific value, requires a new basis for the billing of the consumed energy
Question 6 Are there any benefits from the national tariff-system in relation to “sustainable” / “non (or less)-sustainable” with regard to hydrogen – natural gas blend?
Not clarified yet BUT following the so far established methodology in the gas sector, there are no benefits in place currently
Question 7 Are there any incentives granted for the hydrogen facility operator/supplier?
According to the established methodology there are no incentives in place for hydrogen facilities

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.