EU energy regulatory agency ACER wants powers to control transmission system operators' ten-year EU investment plans and to restrict them from owning power-to-gas facilities included in further EU decarbonization proposals expected next year.
TSOs may not be market neutral parties in the future, as the EU's push to decarbonize by 2050 could see gas and power grids competing directly with each other, and also with storage, power-to-gas facilities and demand side response as non-grid flexibility alternatives.
"We already see transmission system operators looking to invest in assets that are arguably for competitive activities, for example power to gas or renewable gas facilities," ACER said in a consultation paper published late Tuesday.
Switching heating to renewable power, developing power-to-gas facilities and potentially pure hydrogen transport grids "could change the value of gas and electricity transmission assets," ACER said.
TSOs may start to face a conflict of interest when assessing grid needs and investment plans.
GRID PLAN APPROVAL
ACER wants at minimum the power to approve the scenarios used by formal EU gas and power TSO bodies Entsog and Entso-e to develop their ten-year network development plans, published every two years.
These scenarios should take into account EU governments' 2030 national energy and climate plans, which set out how they intend to contribute to the EU's renewable energy and energy efficiency targets. Governments must finalize their plans by the end of this year.
Such scenarios could also be used to develop "alternative, realistic pathways" which account for and promote "efficiently produced green gases," ACER said.
Ideally, it wants the power to approve the final ten-year network development plans, including the power to require changes if justified.
Only projects listed in the development plans are eligible to be designated as European projects of common interest, which gives them access to faster permitting and EU funding.
ACER wants EU rules changed so that new technology assets such as power-to-gas facilities can be included in the development plans and be eligible for PCI status.
P2G RESTRICTIONS
ACER said it is generally against transmission or distribution grid operators investing in "potentially competitive activities" like power-to-gas facilities.
If the market does not generate the investment needed, the next step should be a competitive tender.
If this fails, then regulators could grant limited exemptions to allow TSOs and DSOs to invest to get the market started, after "careful analysis" of the costs, benefits and impact on competition of the proposed investment, ACER said.
Further restrictions could include that the investment is made by a related but separate company, and that the TSO or DSO must divest the asset once the market can take it over.
This approach is similar to that in the EU's electricity directive, adopted this year, to regulate TSOs and DSOs owning energy storage facilities.
ACER is consulting until September 1 on how the EU's energy sector, and particularly gas, should be regulated beyond 2025.
It will use the results to prepare recommendations for the European Commission on future energy legislative proposals.
EC president-elect Ursula von der Leyen has promised to propose a "green new deal", including a 2050 net-zero carbon target, by early 2020.
