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ACER and CEER publish recommendation on the regulatory path towards decarbonisation of Europe’s energy sector

Tuesday, November 19, 2019

The Bridge Beyond 2025 Conclusions Paper, presented on 20 November in Brussels, follows extensive public consultation by ACER and CEER. This joint ACER-CEER Conclusions Paper proposes legislative action (beyond the “Clean Energy for All Europeans” Package – CEP) to decarbonise the gas sector, and for electricity and gas sector coupling beyond 2025.

ACER and CEER recommend in their paper to update Europe’s gas sector legislation, to future-proof regulations to facilitate decarbonisation of the energy sector, to promote a competitive Internal Energy Market and to maximise the opportunities arising from sector coupling. The Bridge Beyond 2025 Conclusions Paper covers four key themes: (i) access and market monitoring; (ii) governance of infrastructure and oversight of existing and new entities; (iii) dynamic regulation for new activities and technologies; (iv) transmission tariffs and cross-border capacity allocation.

The two bodies believe that an updated gas legislation should define and categorise decarbonised gases and integrate them into existing gas markets, with full valuation of their environmental benefits. The Conclusions Paper recommends new investments in natural gas to be assessed in line with the EU decarbonisation targets and that existing assets are evaluated for possible re-use – following consultation with neighbouring authorities and stakeholders – before decommissioning. Furthermore, ACER and CEER recommend the establishment of a system of dynamic and targeted regulation based on the Gas Target Model (GTM) and the Agency’s market monitoring, as well as the analysis of national regulatory authorities (NRAs).

The joint paper further recommends that a technology-neutral level playing field is established between different conversion and storage facilities so that they face equivalent treatment of costs, and equivalent recognition of environmental and security of supply benefits. For infrastructure planning, the improvements in network code governance introduced in the CEP for electricity are needed in the gas sector as well, in particular better regulatory oversight over entities which may have an interest in promoting infrastructure investments.