EU's Strategic Plan for a Sustainable Hydrogen Market Development
Key Ideas
  • The EU's hydrogen and decarbonised gas market package aims to support a competitive hydrogen market and integrate renewable gases into the energy system.
  • ACER will issue a recommendation on inter-temporal cost allocation methodologies by 2025 to ensure fair distribution of infrastructure costs.
  • Member States have the authority to implement inter-temporal cost allocation mechanisms to avoid high fees for early hydrogen users.
  • ACER's recommendation will guide TSOs, DSOs, hydrogen network operators, and NRAs on effective implementation of cost allocation mechanisms.
The EU has introduced a strategic plan through the Hydrogen and Decarbonised Gas Market Package to foster the development of a vibrant and competitive hydrogen market in Europe. The package aims to facilitate the integration of renewable gases into the energy system, promoting sustainability. One key aspect of this initiative is the extension of ACER's role to include new tasks related to hydrogen. ACER is tasked with issuing a recommendation on the methodologies for setting the inter-temporal cost allocation by 2025. This recommendation will be updated every two years to keep pace with market developments. Inter-temporal cost allocation is crucial for the European hydrogen market as it addresses the challenge of financing infrastructure. The traditional method of funding infrastructure through regulated tariffs could lead to prohibitively high fees for early hydrogen users, potentially stifling demand. To tackle this issue, Member States have been granted the authority to implement inter-temporal cost allocation mechanisms. These mechanisms aim to distribute infrastructure costs fairly between early and future hydrogen consumers, preventing an unequal burden on the former. ACER's forthcoming recommendation will serve as a guiding document for various stakeholders, including TSOs, DSOs, hydrogen network operators, and NRAs, on how to effectively develop and implement inter-temporal cost allocation mechanisms. The goal is to ensure that the European hydrogen market grows sustainably, remains competitive, and contributes positively to the overall energy transition in the region.
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