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
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. – 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 - 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 - not appicable
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.
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 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 DSO besides the regular transportation fees?
No At this stage, there is no specific regulation for this point.
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?
The DSO has normally an agreement with the supplier specifying the rules of each party and there responsibilities on the technical aspects and financing aspects related to the availability of the injecting facility and the connecting point.
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?
No There is no specific regulation at this stage
Question 7 Are there any incentives granted for the hydrogen facility operator/supplier?
No There are no specific incentives for the gas producer. If the hydrogen is produced by electrolysis with electricity from the grid, there is a tax exemption on the “Taxe Intérieure sur la Consommation finale d’’Electricité” (French Tax on final use of electricity).
Describe the comparable technology and its relevance with regard to hydrogen
Electro–intensive processes like: aluminium electrolysis, steel electrolysis, chlorine electrolysis……

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.