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).

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 - 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

b - 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. b - costs for availability of the network connection, maintenance and operation of the network connection

c - 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. c - feed-in costs

d - 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. d - remuneration for avoided network costs

e - 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. 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? Please indicate which additional 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 DSO besides the regular transportation fees?

See the reply to Question 1 >

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?

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” with regard to hydrogen – natural gas blend?

See the reply to Question 1 >

Describe the comparable technology and its relevance with regard to hydrogen

Bio–gas

National legislation:

Gas Network Code >
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.