Acer debates tariffs for alternative gases

European regulatory body Acer has opened a discussion on how national transmission tariffs for alternative gases should be structured.

The main question posed by the regulatory body was whether transmission tariffs for alternative gases — either hydrogen or biomethane — which could replace natural gas should be cost reflective.

Cost reflective tariffs run the risk of a sharp rise in fees, which could impede the development of alternative gas sources, Acer said.

While it is too early to predict future trends, gas consumption could fall with the transition to renewable energy, which could reduce revenues for transmission system operators (TSOs), Acer said.

The development of biomethane and the transformation of existing natural gas pipelines into hydrogen networks could mitigate this risk. But it is not clear if hydrogen will be injected into existing networks or a dedicated network will be created, it said.

The regulatory body suggested that while the risk of under-utilisation has been taken into account in the remuneration of TSOs until now, this does not work in cases where the risk is too high. Policies may need to work with "long-term targets" in order to "manage stranded assets in the long run", while clear policies are needed on who bears the cost and the reasons behind it, Acer said.

By Eleni Charisi