A fully functioning and interconnected internal energy market is crucial for maintaining security of energy supply, increasing competitiveness and ensuring that all consumers can purchase energy at affordable prices. Europe's cross-border gas networks operate according to rules that regulate who can use them and under what conditions. In the past, these rules were drawn up nationally. However, with increased interconnections and trade between countries in the internal energy market, EU-wide rules have become increasingly necessary to effectively manage gas flows. These rules, known as network codes or guidelines, are legally binding European Commission implementing Regulations. They govern all cross-border gas market transactions.
The European Gas Regulatory Forum, also known as the Madrid Forum, is organised regularly and discusses issues regarding the creation of the internal gas market. The forum participants include national regulatory authorities, EU national governments, the European Commission, transmission system operators, gas suppliers and traders, consumers, network users, and gas exchanges. It is organised in Madrid and is co-hosted by the Spanish energy regulator Comisión Nacional de los Mercados y la Competencia and the European Commission.
How network codes for gas are developed
Each year, the European Commission draws up an 'annual priority list' of areas to be included in the development of network codes for electricity, with input from a public consultation. The Commission, with further input from the Agency for the Cooperation of Energy Regulators (ACER) and the European Network of Transmission System Operators for Gas (ENTSOG), adopts proposals for network codes. The proposals for network codes are checked by a Gas Cross-Border Committee of specialists from national energy ministries and then adopted with the approval of the Council of the European Union and the European Parliament.
Adopted network codes
The Network Code on Interoperability and Data Exchange Rules aligns the complex technical procedures used by network operators within the EU, and possibly with those used by network operators in the Energy Community and other countries neighbouring the EU.
The Network Code on Gas Balancing of Transmission Networks sets out gas balancing rules including the responsibilities of transmission system operators and users. It has applied since 1 October 2015.
Capacity Allocation Mechanism
The Network Code on Capacity Allocation Mechanisms in Gas Transmission Systems requires gas grid operators to use harmonised auctions when selling access to pipelines. These auctions sell the same product at the same time and according to the same rules across the EU. It has applied since 1 November 2015.
Congestion Management Procedures
The European Commission's rules on congestion management procedures aim to reduce congestion in gas pipelines. They require companies to make use of their reserved capacity or risk losing it. Unused capacity is placed back on the market.
Transmission Tariff Structures
The network code on harmonised transmission tariff structures for gas enhances tariff transparency and tariff coherency by harmonising basic principles and definitions used in tariff calculation, and also includes a mandatory comparison of national tariff-setting methodologies against a benchmark methodology. It also stipulates publication requirements for information on tariffs and revenues of transmission system operators.
- Regulation on Conditions for Access to the Natural Gas Transmission Networks (715/2009/EC)
- Commission Decision on the establishment of the annual priority lists for the development of network codes and guidelines for 2017 (2017/89/EU)
- Commission Implementing Decision (EU) 2015/1960 on the establishment of the annual priority lists for 2016 for the development of network codes and guidelines (2015/1960)