COMMISSION STAFF WORKING DOCUMENT EVALUATION Evaluation Report Accompanying the Proposal for a Directive of the European Parliament and of the Council on common rules for the internal markets in renewable and natural gases and in hydrogen (recast) Proposal for a Regulation of the European Parliament and of the Council on the internal markets for renewable and natural gases and for hydrogen (recast)
Date: 2021-12-15
Institutions: Directorate-General for Energy, European Commission
Subjects: carbon neutrality, energy cooperation, energy grid, energy market, energy transport, gas supply, hydrogen, natural gas, renewable energy, security of supply

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   EUROPEAN COMMISSION  Brussels, 15.12.2021  SWD(2021) 457 final  COMMISSION STAFF WORKING DOCUMENT  EVALUATION  Evaluation Report  Accompanying the Proposal for a Directive of the European Parliament and of the Council on common rules for the internal markets in renewable and natural gases and in hydrogen (recast) Proposal for a Regulation of the European Parliament and of the Council on the internal markets for renewable and natural gases and for hydrogen (recast)       {COM(2021) 803 final} - {COM(2021) 804 final} - {SEC(2021) 431 final} - {SWD(2021) 455 final} - {SWD(2021) 456 final} - {SWD(2021) 458 final}  
 
 
Table of Contents 

1. 

Introduction ........................................................................................................................ 1 

1.1.  Scope of the Evaluation .................................................................................................. 1 

1.2.  Purpose of the Evaluation ............................................................................................... 4 

2.  Background to the evaluated initiatives ............................................................................. 5 

2.1.  Objectives of the Third Gas Package ............................................................................. 5 

2.2.  Description of the Third Gas Package ............................................................................ 7 

3.  Evaluation logic ................................................................................................................ 11 

4.  Evaluation method ............................................................................................................ 12 

5. 

Implementation of the initiatives and state of play .......................................................... 15 

6.  Answers to the Evaluation questions ............................................................................... 17 

6.1.  Effectiveness ................................................................................................................. 17 

  Market integration, competition and investments ................................................. 17 

  Consumer empowerment and protection ............................................................... 26 

6.2.  Efficiency ..................................................................................................................... 35 

6.3.  Relevance ..................................................................................................................... 36 

  The  2009  market  design  is  not  fully  adapted  to  the  decarbonisation  of  our 
economy … ...................................................................................................................... 37 

  …nor to changing market realities ........................................................................ 39 

  The Third Package does not provide regulatory certainty for the development and 
deployment of hydrogen ................................................................................................... 40 

  Decarbonisation and the integration of renewable and decarbonised gases into the 
market ............................................................................................................................... 43 

  Consumers participation and protection ................................................................ 44 

6.4.  Coherence ..................................................................................................................... 45 

  Internal Coherence ................................................................................................ 46 

  External Coherence ............................................................................................... 47 

6.5.  EU value added ............................................................................................................. 54 

  Value added of EU market framework .................................................................. 54 

  Assessing the case for continuing EU-intervention............................................... 58 

7.  Conclusions ...................................................................................................................... 59 

Annex 1 – Procedural information ............................................................................................ 62 

Annex 2 – Stakeholder consultation ......................................................................................... 62 

Annex 3 – Table of Synergies between Evaluation and Impact Assessment as well as relevant 
connected legal acts which require revision ............................................................................. 63 

Annex  4  –  Specific  aspects  of  Retail  market  competition  and  consumer gas  prices,  products 
and services .............................................................................................................................. 67 

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Table of Figures 

Figure 1: Fitness Check evaluation logic ................................................................................. 12 

Figure 2: Average household gas price increase ...................................................................... 21 

Figure 3: Composition of the EU household gas price (DC) ................................................... 22 

Figure 4: Performance indicators – Difficulties of switching .................................................. 31 

Figure 5: Market shares of three largest gas suppliers for households by metering points and 
number of suppliers for households with a market share above 5% by metering points . 67 

Figure 6: Market share of the three largest suppliers in the market for households  – Gas (by 
metering points, in %) ...................................................................................................... 67 

Figure 7: Number of Member States where the offer is available ........................................... 68 

Figure 8: Existence of price intervention in electricity and in natural gas in 2019 .................. 69 

Figure 9: Performance indicators – Market foreclosure by price regulation ........................... 69 

Figure 10: SoLR energy price compared to conventional energy prices in EU Member States 
and Norway – 2018 .......................................................................................................... 70 

Figure 11: Entity determining the energy price for SoLR in EU Member States and Norway – 
2018 (number of Member States) ..................................................................................... 70 

Figure  12:  Switching  rates  for  gas  household  customers  in  2018  and  annual  average  2013-
2017 (%; by metering points) for selected countries ........................................................ 71 

Figure 13: Performance indicators – comparability of offers .................................................. 72 

Figure 14: Measures in place to protect vulnerable consumers in EU MS and Norway – 2019 
(number of MS) ................................................................................................................ 75 

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1. 

Introduction  

1.1. 

Scope of the Evaluation 

The Evaluation  covers  two EU Directives and Regulations concerning the  gas sector, which 
form the so-called ‘Third Gas Package’. The main evaluated acts are: 

  Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 
concerning common rules for the internal market in natural gas and repealing Directive 
2003/55/EC,  OJ  L  211,  14.8.2009,  p.  94–136  (henceforth  the  Gas  Directive)  as 
amended by: 

  Directive (EU) 2019/6921: this amendment clarified the application of the Gas 

Directive with regard to interconnections with Third Countries;  

  Regulation (EU) 2018/19992: The Governance Regulation integrated, amended, 
replaced  and  withdrew  certain  planning,  reporting  and  monitoring  obligations 
currently  contained  in  sectoral  energy  and  climate  Union  legislative  acts  to 
ensure  a  streamlined  and  integrated  approach  to  the  main  planning,  reporting 
and  monitoring  strands.  In  this  regard,  it  deleted  Article  5  of  Directive 
2009/73/EC  on  monitoring  of  security  of  supply,  and  replaced  Article  52  of 
Directive 2009/73/EC on Reporting. According to the amended Article 52, the 
Commission  shall  monitor  and  review  the  application  of  the  Directive  and 
submit  an  overall  progress  report  to  the  European  Parliament  and  to  the 
Council as an annex to the annual State of the Energy Union Report. 
  Regulation  (EC)  No  715/2009  of  the  European  Parliament  and  of  the  Council  of  13 
July  2009  on  conditions  for  access  to  the  natural  gas  transmission  networks  and 
repealing Regulation (EC) No 1775/2005, OJ L 211, 14.8.2009, p. 36–54 (henceforth 
Gas Regulation) as amended by: 

  Commission Decision 2010/685/EU3  
  Commission Decision 2012/490/EU4 
  Regulation (EU) No 347/20135  

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4  

Directive  (EU)  2019/692  of  the  European  Parliament  and  the  Council  of  17  April  2019  amending  Directive 
2009/73/EC  concerning  common  rules  for  the  internal  market  in  natural  gas:  https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv:OJ.L_.2019.117.01.0001.01.ENG  
Regulation  (EU)  2018/1999  of  the  European  Parliament  and  of  the  Council  of  11  December  2018  on  the 
Governance  of  the  Energy  Union  and  Climate  Action,  amending  Regulations  (EC)  No  663/2009  and  (EC)  No 
715/2009  of  the  European  Parliament  and  of  the  Council,  Directives  94/22/EC,  98/70/EC,  2009/31/EC, 
2009/73/EC,  2010/31/EU,  2012/27/EU  and 2013/30/EU  of  the  European Parliament  and  of  the  Council,  Council 
Directives  2009/119/EC  and  (EU)  2015/652  and  repealing  Regulation  (EU)  No  525/2013  of  the  European 
Parliament and of the Council: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32018R1999  
2010/685/EU: Commission Decision of 10 November 2010 amending Chapter 3 of Annex I to Regulation (EC) No 
715/2009 of the European Parliament and of the Council on conditions for access to the natural gas transmission 
networks: https://eur-lex.europa.eu/eli/dec/2010/685/oj 
2012/490/EU: Commission Decision of 24 August 2012 on amending Annex I to Regulation (EC) No 715/2009 of 
the  European  Parliament  and  of  the  Council  on  conditions  for  access  to  the  natural  gas  transmission  networks: 
https://eur-lex.europa.eu/eli/dec/2012/490/oj 

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  Commission Decision (EU) 2015/7156  

The  Commission  decisions  amended  Annex  I  of  the  Gas  Regulation  by 
introducing  more  detailed  rules  on  congestion  management  procedures  and 
including  transparency  obligations  to  be  published  on  a  single  EU  wide 
platform to provide all interested stakeholders with information,  inter alia, on 
capacity contracted and available at relevant points, e.g. interconnection points 
between Member States. 

The  Third  Energy  Package  sets  the  legal  basis  for  establishing  more  detailed  common 
European rules in the form of gas network codes and framework guidelines, with the aim to 
harmonise  and  coordinate  the  different  processes  of  energy  markets  and  systems.  Since  the 
entry  into  force  of  Regulation  715/2009  in  2011,  four  network  codes  have  been  adopted, 
covering  capacity  allocation  mechanisms  (CAM  NC7),  gas  balancing  rules  (BAL  NC8), 
interoperability between gas systems (IO NC9), and transmission tariff structures (TAR NC10). 
Additionally, the Guidelines on congestion management procedures (CMP) and Transparency 
annexed  to  the  Gas  Regulation,  have  been  detailed  out  with  several  amendments11.  The 
harmonisation  of  these  technical  rules  has  both  enhanced  the  market  functioning  at  national 
level  (in  particular  BAL  NC)  and  further  advanced  the  interconnection  of  national  gas 
markets.  Notably,  CAM  NC  has  fully  harmonised  the  procedure  and  the  calendar  for  the 
booking  of  transmission  capacity,  which  fosters  competition  and  accessibility  of  national 
markets.  The  most  recently  adopted  TAR  NC  has  introduced  extensive  publication 
requirements on gas tariff parameters and calculations, which provides additional transparency 
and  tariff  predictability  for  network  users  across  the  EU,  while  highlighting  potential  tariff 
outliers.  Whereas  the  implementation  of  network  codes  is  far  advanced  across  Member 
States12, the continued enforcement of these rules by the Commission remains crucial for the 
completion of the internal energy market. 

By  Directive  2019/692  of  17  April  2019,  Directive  2009/73/EC  was  amended  to  clarify  its 
applicability  to  gas  interconnector  pipelines  between  Member  States  and  third  countries.  In 

5  

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8  

9  

10  

11  

12  

in  gas 

Regulation (EU) No 347/2013 of the European Parliament and of the Council of 17 April 2013 on guidelines for 
trans-European energy infrastructure and repealing Decision No 1364/2006/EC and amending Regulations (EC) No 
713/2009, (EC) No 714/2009 and (EC) No 715/2009: https://eur-lex.europa.eu/eli/reg/2013/347/oj 
Commission Decision (EU) 2015/715 of 30 April 2015 amending Annex I to Regulation (EC) No 715/2009 of the 
European  Parliament  and  of  the  Council  on  conditions  for  access  to  the  natural  gas  transmission  networks: 
https://eur-lex.europa.eu/eli/dec/2015/715/oj 
Commission  Regulation  (EU)  2017/459  of  16  March  2017  establishing  a  network  code  on  capacity  allocation 
mechanisms 
transmission  systems  and  repealing  Regulation  (EU)  No  984/2013:  https://eur-
lex.europa.eu/eli/reg/2017/459/oj 
Commission  Regulation  (EU)  No 312/2014  of  26 March  2014  establishing  a  network  code  on  gas  balancing  of 
transmission networks: https://eur-lex.europa.eu/eli/reg/2014/312/oj 
Commission Regulation (EU) 2015/703 of 30 April 2015 establishing a network code on interoperability and data 
exchange rules: https://eur-lex.europa.eu/eli/reg/2015/703/oj 
Commission Regulation (EU) 2017/460 of 16 March 2017 establishing a network code on harmonised transmission 
tariff structures for gas: https://eur-lex.europa.eu/eli/reg/2017/460/oj 
Commission Decision 2010/685/EU of 10 November 2010, Commission Decision 2012/490/EU of 24 August 2012 
and Commission Decision (EU) 2015/715 of 30 April 2015. 
Cf. 
individual 
Implementation 
https://acer.europa.eu/Official_documents/Publications/Pages/Publication.aspx. 

network 

Reports 

ACER 

codes 

on 

at 

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addition  to  this  clarification  of  the  scope,  the  amendment  added  a  derogation  regime  for 
existing  interconnectors  with  third  countries  and  procedural  rules  on  the  consultation  of 
authorities  of  third  countries  on  regulatory  issues.  Due  to  the  recent  entry  into  force  (the 
deadline  for  transposition  into  national  law  expired  on  24  February  2020),  these  amended 
provisions are excluded from the scope of the present Evaluation. 
The revision of the Electricity Directive13 and Electricity Regulation14 adopted in 2019 as part 
of the Clean Energy Package reinforced the institutional framework of the Third Package to 
make  it  fit-for-purpose  for  the  changes  in  the  electricity  sector  (integration  of  renewables, 
decentralised  electricity  production,  regionalisation,  etc.).  However,  this  has  created 
differences in the institutional set-up between the electricity and gas sectors, which might lead 
to detrimental regulatory divergence and unnecessary complexity that could affect consumers, 
industry and regulators alike. Furthermore, some of the reasons for changes in the electricity 
sector, based on experience with applying the Third Package legislation, equally apply to the 
parallel provisions in the gas sector and justify similar changes to those provisions. 

The  Recast  Internal  Electricity  Market  Directive  reinforced  ACER’s  powers  in  order  to 
diminish  the  fragmentation  of  the  regulatory  oversight  at  the  EU  level.  To  foster  the 
independence  of  National  Regulatory  Authorities  (NRAs),  new  requirements  for  board 
members  or  top  managers  must  ensure  that  their  appointment  is  based  on  objective, 
transparent  and  published  criteria.  The  appointment  follows  an  independent  and  impartial 
procedure,  aimed  at  selecting  candidates  with  the  necessary  skills  and  experience  for  each 
position15. For the same reasons, the directive requires that board members or top management 
can only be dismissed based on transparent criteria16 and that specific provisions on conflict of 
interests  are  in  place  and  confidentiality  obligations  extend  beyond  the  mandate  of  board 
members or top management17.  
The Electricity Regulation18 and ACER Regulation19 adapted the procedures for establishing 
detailed regulatory rules on the operation of the market and networks (i.e. network codes and 
guidelines)  to  the  requirements  of  the  Treaty  on  Functioning  of  the  European  Union.  They 
also  introduced  provisions  reflecting  the  increasing  link  between  the  distribution  and 
transmission network levels in the regulatory framework (e.g. requirements for cooperation on 
network planning, Electricity Regulation Article 57). 

The Electricity Regulation adapted the mission, tasks and the rules by the European Network 
for Transmission System Operators for Electricity (ENTSO-E) governing its transparency and 

13  

14  

15  
16  
17 
18  
19  

Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the 
internal  market  for  electricity  and  amending  Directive  2012/27/EU  (hereinafter  Electricity  Directive),  OJ  L  158, 
14.6.2019, p. 125–199. 
Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for 
electricity, OJ L 158, 14.6.2019, p. 54–124. 
Art. 57(5)e Electricity Directive. 
Art. 57(5)g Electricity Directive. 
Art. 57(5)f Electricity Directive. 
Art. 58-60 Electricity Regulation. 
Art. 5 ACER Regulation, Agency for the Cooperation of Energy Regulators. 

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oversight by ACER. It also formalised the role of Distribution System Operators (DSOs)20 at 
European  level  by  creating  a  single  European  DSO  entity,  rendering  their  participation 
effective  and  independent21,  The  aim  was  to  facilitate  distributed  resources  to  participate  in 
the market by – among others – enabling DSOs to become more active at the European level 
and  have  increased  responsibilities  and  tasks  (similar  to  those  of  the  Transmission  System 
Operators (TSOs)). 

The main market principles as set out in the electricity network codes and guidelines were also 
lifted-up  into  the  Electricity  Regulation  to  increase  transparency  and  reliability  of  the  legal 
framework. 

The Evaluation is based on several comprehensive monitoring reports on the functioning of 
the implemented market legislation22, as well as on a number of specific public consultations 
issued by the Commission to verify the effects of its legislation23. Furthermore, some external 
studies  also  included  assessments  of  specific  elements  of  the  implemented  market 
legislation24. Other consultations via public events such as forums and conferences have also 
contributed  to  gather  feedback  from  stakeholders  on  the  functioning  of  the  Third  Energy 
Package. The Madrid Forum was set up to discuss the creation of true internal gas markets in 
Europe25.  The  participants  include  NRAs,  EU  national  governments,  transmission  system 
operators, gas suppliers and traders, consumers, network users, and gas exchanges. The Third 
Gas  Package  and  its  implementation  was  discussed  in  this  stakeholder  forum  at  several 
occasions26. 

1.2. 

Purpose of the Evaluation  

This Evaluation provides the basis for the Impact Assessment for the initiative to review the 
existing EU gas market design rules meanwhile also known as the ‘Hydrogen and gas markets 

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24  

25  

26  

Transmission  System  Operators  (TSOs)  maintain  high  pressure  grids  which  transport  gas  over  long  distances. 
Distribution System Operators (DSOs) are usually smaller networks, often at regional or local level, mainly for the 
distribution  to  end  customers.  Unbundling  requirements  exist  also  for  DSOs  (basically  legal,  functional  and 
accounting unbundling for all DSOs with more than 100 000 customers).  
Art. 52-55 Electricity Regulation. 
See  the  ‘Progress  report  on  the  internal  market’  annexing  the  ‘2020  report  on  the  State  of  the  Energy  Union 
pursuant to Regulation (EU) 2018/1999 on Governance of the Energy Union and Climate Action’ COM(2020) 950 
final. 
Powering  a  climate-neutral  economy:  An  EU  Strategy  for  Energy  System  Integration,  COM(2020)  299  final, 
Brussels,  8.7.2020,  https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020DC0299&from=EN; 
A  hydrogen  strategy  for  a  climate-neutral  Europe,  COM(2020)  301  final,  Brussels,  8.7.2020,  https://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020DC0301&from=EN;  EU  renewable  energy  rules  – 
review, 
(europa.eu).https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52020DC0301&from=EN;  EU  renewable  energy  rules  –  review,  .https://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020DC0301&from=EN;  EU  renewable  energy  rules  – 
review, 
EU 
renewable energy rules – review. 
Potentials  of  sector  coupling  for  decarbonisation:  Assessing  regulatory  barriers  in  linking  the  gas  and  electricity 
sectors in the EU, December 2019, Potentials of sector coupling for decarbonisation: Assessing regulatory barriers 
in linking the gas and electricity sectors in the EU | Energy (europa.eu). 
The  participants  are  NRAs,  Member  States,  the  European  Commission,  transmission  and  distribution  system 
operators, gas traders, consumers, network users, and gas exchanges. The Forum convenes once or twice a year. 
Madrid forums | Energy (europa.eu). 

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020DC0301&from=EN; 

renewable 

energy 

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rules 

EU 

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decarbonisation  package’27.  It  seeks  to  contribute  to  the  formulation  of  an  adequate  and 
effective policy response to the challenges gas markets are currently facing in contributing to 
the climate objectives of the EU. 

The  Evaluation  will  assess  whether  the  abovementioned  EU  rules  introduced  in  2009  have 
been successful in meeting their stated objectives, in particular achieving a better-functioning 
internal  gas  market.  The  evaluation  will  analyse  the  effectiveness,  efficiency,  coherence, 
relevance and EU added value of the relevant measures in relation to the objectives strived for 
by the Third Gas Package. In view of the increased climate ambition of the EU, the evaluation 
will  also  analyse  the  possible  contribution  of  EU  gas  market  regulation  and  verify  to  what 
extent the gas market rules adopted in 2009 and the EU internal energy market framework are 
still  able  to  respond  to  the  energy  sector's  new  challenges  and  to  meet  current  and  future 
expectations on decarbonising the European economy.  

2. 

Background to the evaluated initiatives 

1.3.  Objectives of the Third Gas Package  

Prior to the EU’s liberalisation initiatives, gas was produced, purchased, transported and sold 
mostly  by  domestic,  state-controlled  monopoly  companies.  Competition  in  gas  markets  was 
almost  absent.  This,  however,  led  to  manifold  problems  in  terms  of  cost-efficiency  and 
security of supply. 

The  EU  has  taken  the  initiative  to  gradually  liberalise  EU  energy  markets  and  to  create  an 
internal gas market. The process started with the adoption of the First Gas Directive in 199828. 
The  liberalisation  initiative  brought  some  first  successes,  but  progress  remained  limited.  In 
2003,  a  Second  Gas  Package  was  therefore  adopted  to  stimulate  the  development  of 
competition in gas markets29. 

Despite  good  progress  in  some  individual  countries,  the  Commission’s  systematic  sector 
inquiry  into  the  energy  sector  from  2005-200730  revealed  that  significant  obstacles  to 

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30  

in 

gas: 

market 

natural 

internal 

Impact Assessment report for the hydrogen and decarbonised gas markets package. 
Directive 98/30/EC of the European Parliament and of the Council of 22 June 1998 concerning common rules for 
the 
http://data.europa.eu/eli/dir/1998/30/oj.  
The  Directive  provided  for  a  partial  market  opening,  giving  suppliers  a  possibility  to  transport  their  gas  on 
networks  owned  by  the  incumbent  companies,  under  conditions  to  be  negotiated  with  the  incumbent  (so-called 
‘negotiated Third Party Access’). The biggest consumers (e.g. industrial consumers) were given the right to choose 
their supplier. Knowing about the incentives of suppliers to use their grids to avoid competition, the Directive also 
required  network  owners  to  create  separate  accounting  for  their  network  business,  and  to  nominate  a  dedicated 
management  for  their  network  which  should  not  be  active  in  production/supply  businesses  (‘management  and 
accounting unbundling’). Member States were obliged to provide for basic regulatory oversight of these rules. 
Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules 
for  the  internal  market  in  natural  gas  and  repealing  Directive  98/30/EC:  http://data.europa.eu/eli/dir/2003/55/oj 
The Second Package replaced the right for network owners to negotiate network access rules freely with potential 
users  and  introduced  regulated  Third  Party  Access  rules.  For  this  purpose,  every  Member  State  had  to  create 
national  energy  regulators  to  determine  network  access  tariffs  and  other  access  conditions,  and  to  better  detect 
discriminating  practices  by  incumbents.  The  new  Package  also  reinforced  the  existing  loose  unbundling  rules by 
imposing  a  legal  separation  between  network  and  production/supply  business  (‘legal  unbundling’).  It  also 
prescribed  a  mandatory  path  for  full  market  opening  until  2004  (for  non-household  customers)  and  2007  (for 
household customers). 
http://ec.europa.eu/competition/sectors/energy/2005_inquiry/index_en.html  

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competitive  cross-border  markets  remained,  and  that  consumers  could  still  not  fully  benefit 
from  liberalisation.  Incumbent  companies  –  mostly  still  state  owned  –  had  managed  to 
maintain their dominant positions and tried to  avoid  competition  from domestic and foreign 
companies.  They  notably  used  their  control  over  their  networks  to  avoid  competition  from 
new energy suppliers. The results of the sector inquiry triggered the Commission’s proposal 
for a comprehensive Third Energy Package. The new legislation mainly aimed at addressing 
the problems identified in the Sector Inquiry31, namely: 

  market concentration and market power in wholesale and retail markets; 
  vertical foreclosure (in particular the inadequate unbundling of network and supply); 
 
 
 
  distorted price formation mechanisms (regulated prices and cross-subsidies); 
  downstream market foreclosure (access to consumers).  

lack of market integration (cross border and national); 
lack of transparency; 
insufficient independent regulatory oversight; 

The  identified  problems  harmed  competition,  leading  to  unnecessarily  high  prices  and 
limiting  choice  for  consumers.  Incomplete  and  inefficient  unbundling  rules  for  TSOs32 
prescribed  by  the  Second  Directive  resulted  in  structural  conflict  of  interest.  Insufficient 
unbundling of networks from the competitive parts of the sector (vertical integration) resulted 
in  lack  of  investment  in  infrastructure  and  discriminatory  conduct  on  the  supply  and 
production  markets  downstream  and  upstream  from  network  activities.  Consequently,  the 
Commission  recommended  taking  urgent  action  with  regard  to  some  key  areas  of  the 
regulatory framework33.  

The overarching objective of the Third Energy Package was to complete the internal market 
for electricity and gas. Within this objective the EU intended to improve competition in the 
gas  sector  through  better  regulation  and  unbundling  aimed  at  removing  obstacles  resulting 
from  the  fact  that  most  established  national  incumbent  gas  suppliers  were  vertically 
integrated34  and  could  use  the  control  over  their  networks  to  fend  off  potential  new 
competitors. 

The  Third  Energy  Package's  objectives  in  the  area  of  retail  markets  and  consumer 
empowerment  were:  (i)  to  enable  effective  consumer  choice  and  boost  competition  through 
the  availability  of  transparent,  comparable  and  reliable  information  on  prices,  costs,  energy 
to 
consumption,  fuel  mix  and  environmental 

impact  of  gas  suppliers;  and  (ii) 

31  

32  

33  
34  

EN 

for 

the 

also: 

Third 

Impact 

Package 

Assessment 

See 
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52007SC1179 
See  in  this  context  also  the  numerous  antitrust  investigations  of  the  Commission  between  2006  and  2009, 
identifying  systematic  problems  of  network  foreclosure  and  ineffective  unbundling  rules  see  e.g.  Case 
COMP/39.402  —  RWE  https://ec.europa.eu/commission/presscorner/detail/en/MEMO_07_186  or  Case  COMP/ 
https://ec.europa.eu/commission/presscorner/detail/en/MEMO_09_120 
39.315 
https://ec.europa.eu/commission/presscorner/detail/en/MEMO_09_120  
COM(2006) 841, Communication from the Commission, Prospects for the internal gas and electricity market.  
In  a  vertically  integrated  company  multiple  steps  in  the  typical  distribution  process  are  consolidated.  In  other 
words, a vertically integrated company performs tasks of a producer, distributor and retailer.  

(SEC(2007) 

1179/2) 

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enable/incentivize energy savings through sufficiently frequent feedback to consumers about 
(the  cost  of)  their  energy  consumption.  In  order  to  guarantee  consumer  choice,  the  Third 
Package  provides  that  all  customers  shall  be  free  to  buy  electricity/natural  gas  from  the 
supplier of their choice as from 1 July 200735.  

At  the  same  time,  the  Third  Energy  Package  sought  to  ensure  protection  of  vulnerable 
consumers.  This  objective  was  put  in  place  to  facilitate  the  decision  by  Member  States  to 
proceed with electricity and gas market liberalisation, as it was recognised by the legislators 
that  actions  to  protect  vulnerable  consumers  were  needed  in  the  context  of  liberalising  the 
European energy market. 

In a broader context, the Third Energy Package also served the overall goals as formulated in 
the EU’s 2020 Strategy (or so-called ‘Lisbon strategy’) for smart, sustainable and inclusive 
growth36. 

1.4.  Description of the Third Gas Package  

The  Third  Gas  Package  followed  up  on  the  liberalisation  steps  in  the  two  ‘packages’  from 
1998  and  2003.  It  built  upon  key  concepts  established  in  the  previous  packages  (e.g.  Third 
Party Access (TPA) to networks, unbundling, regulatory oversight, right to choose a supplier) 
and  developed  these  further  in  order  to  create  a  regulatory  framework  that  would  allow  for 
integrated and competitive EU gas wholesale and retail markets, to the benefit of consumers.  

The legislation of the Third Gas Package covers five main areas: 

1.  unbundling energy suppliers from network operators; 

2.  strengthening the independence of regulators; 

3.  establishment of the Agency for the Cooperation of Energy Regulators (ACER); 

4.  cross-border  cooperation  between  transmission  system  operators  and  the  creation  of 

European Networks for Transmission System Operators; 

5.  open and fair retail markets and consumer protection. 

(1)  Unbundling  is  the  separation  of  energy  supply  and  generation  from  the  operation  of 
transmission or distribution networks. It is based on the observation that if a single company 
operates a transmission or distribution network and generates or sells energy at the same time, 
it will have an incentive to  obstruct  competitors' access  to  infrastructure  or the market.  This 
prevents fair competition in the market and can lead to higher prices for consumers. Under the 
Third Package, unbundling for Transmission System Operators must take place in one of three 
ways, depending on the preferences of individual EU countries: 

  Ownership  unbundling  where  integrated  energy  companies  sell  off  their  gas  and 
electricity networks. In this case, no supply or production company is allowed to hold 
a majority share or interfere in the work of a transmission system operator; 

35  
36  

Article 37 of the Gas Directive. 
COM(2010)  2020,  Communication  from  the  Commission,  Europe  2020,  A  strategy  for  smart,  sustainable  and 
inclusive growth.  

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 

 

Independent  System  Operator  (ISO)  where  energy  supply  companies  may  still 
formally  own  gas  or  electricity  transmission  networks  but  must  leave  the  entire 
operation, maintenance, and investment in the grid to an independent company; 
Independent  Transmission  System  Operator  (ITO)  where  energy  supply  companies 
may  still  own  and  operate  gas  or  electricity  networks  but  must  do  so  through  a 
subsidiary. All important decisions must be taken independent of the parent company. 

The relevant provisions concerning Distribution System Operators require legal unbundling of 
those  operators  that  serve  more  than  100  000  customers.  Member  States  may  decide  not  to 
apply  unbundling  rules  to  DSOs  serving  less  than  100  000  customers,  in  which  cases  only 
accounting  unbundling  applies.  It  is  at  the  discretion  of  Member  States  whether  or  not  to 
apply this threshold or to set a lower threshold. 

(2) A competitive internal energy market cannot exist without  independent regulators who 
ensure the application of the rules. The Commission's assessment of the role of regulators in 
2007  showed  a  number  of  deficiencies:  The  effectiveness  of  regulators  was  frequently 
constrained  by  a  lack  of  independence  from  government  and  insufficient  powers. 
Consequently,  under  the  Third  Package,  the  requirements  for  national  regulators  have 
undergone a number of changes. Specifically:  

  Regulators  must  be  independent  from  both  industry  interests  and  government.  They 
must  be  their  own  legal  entity  and  have  authority  over  their  own  budget.  National 
governments  must  also  supply  them  with  sufficient  resources  to  carry  out  their 
operations; 

  Regulators  can  issue  binding  decisions  to  companies  and  impose  penalties  on  those 

that do not comply with their legal obligations; 

  Gas  network  operators  and  suppliers  are  required  to  provide  accurate  data  to 

regulators; 

  Regulators  from  different  EU  countries  must  cooperate  with  each  other  to  promote 
competition, the opening-up of the market, and an efficient and secure energy network 
system.  In  order  to  support  the  implementation  of  the  Directive,  the  Commission 
issued an interpretative note on the energy regulatory authorities37. 

(3)  In  order  to  help  the  different  national  regulators  cooperate  and  ensure  the  smooth 
functioning  of  the  internal  energy  market,  the  EU  established  the  Agency  for  the 
Cooperation of Energy Regulators  (ACER). ACER  is  independent  from  the Commission, 
national governments, and energy companies. Its work involves: 

  drafting  guidelines  for  the  operation  of  cross-border  gas  pipelines  and  electricity 

networks; 
reviewing the implementation of EU-wide network development plans; 

 
  deciding on cross-border issues if national regulators cannot agree or if they ask it to 

intervene; 

37  

Interpretative  note  on  Directive  2009/72/EC  concerning  common  rules  for  the  internal  market  in  Electricity  and 
Directive  2009/73/EC  concerning  common  rules  for  the  internal  market  in  natural  gas,  available  at: 
https://ec.europa.eu/energy/sites/ener/files/documents/2010_01_21_the_regulatory_authorities.pdf 

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  monitoring  the  functioning  of  the  internal  market  including  retail  prices,  network 

access, and consumer rights. 

The functioning, role, and structure of ACER was most recently addressed in the recast of the 
ACER Regulation, and will not be part of this report except where specifically relevant to the 
evaluation of other areas. 

(4) The Third Gas Package also created a framework for the co-operation of TSOs by creating 
the European Network for Transmission System Operators for  Gas (ENTSOG). Before 
the reform, national transmission system operators were responsible for ensuring that natural 
gas  is  effectively  transported  through  pipelines  in  a  secure  manner,  without  any  legal 
framework for the coordination of their activities on European level. Due to the cross-border 
nature of Europe's energy market, they must work together to ensure the optimal management 
of EU networks. ENTSOG supports the development of network codes to harmonise the flow 
of  gas  and  enable  efficient  cross-border  trade  across  different  transmission  systems.  It  also 
coordinates  the planning of new network investments  and monitors the development  of new 
transmission  capacities.  This  includes  publishing  every  two  years  a  European-wide  ten-year 
network development plan (TYNDP) to help identify infrastructure gaps. These plans provide 
the  basis  for  identifying  the  projects  of  common  interest  (PCIs)  for  enhancing  cross-border 
network development under the framework of the Trans-European Network for Energy (TEN-
E) Regulation38. 

The  TEN-E  Regulation  also  mandates  both  ENTSOG  and  ENTSO-E  to  jointly  develop 
energy-system  wide  scenarios  to  be  used  in  their  respective  TYNDPs.  For  this  purpose,  the 
two  organisations  are  requested  to  submit  consistent  and  interlinked  market  and  network 
models for both electricity and gas transmission infrastructure as of the end of 2016. However, 
ACER  notes  in  its  opinion  on  the  ENTSOG  TYNDP  2020  ‘that  the  implementation  of  the 
interlinked  model  is  mostly  limited  to  a  joint  ENTSO-E  and  ENTSOG  TYNDP  scenario 
development’39. 

(5)  In  order  to  pursue  the  objective  of  consumer  empowerment,  the  Third  Gas  Package 
contains  provisions  on  a  number  of  aspects  related  to  gas  supplies,  such  as  switching  and 
contract  termination  fees,  billing  of  electricity  and  gas  consumption,  the  right  to  receive 
information on energy consumption, and to quickly and cheaply resolve disputes. 

With regard to consumer protection, the Third Gas Package prescribes the Member States to 
define  the  concept  of  vulnerable  consumers  at  national  level,  adopt  the  measures  to  protect 
such consumers and to address energy poverty.  

An  important  tool  to  enable  competition  and  consumers’  choice  in  the  retail  sector  is  the 
default  prohibition  of  applying  regulated  prices40.  Regulated  prices  are  unlawful  under  the 

38  

39  
40  

Regulation (EU) No 347/2013 of the European Parliament and of the Council of 17 April 2013 on guidelines for 
trans-European energy infrastructure and repealing Decision No 1364/2006/EC and amending Regulations (EC) No 
713/2009, (EC) No 714/2009 and (EC) No 715/2009. 
ACER Opinion No. 02/2021. 
A  regulated  supply  price  is  considered  as  a  price  subject  to  regulation  or  control  by  public  authorities  (e.g. 
governments, NRAs), as opposed to being determined exclusively by supply and demand. This definition includes 

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current Gas Directive as interpreted by the Court of Justice41, unless they form part of a public 
service  obligation  (PSO)  imposed  on  undertakings  in  the  gas  sector  and  fulfil  specific 
conditions prescribed by the Third Package.  

Smart metering is an important measure to allow taking informed decisions by consumers. In 
recognition  hereof,  provisions  were  included  in  the  Gas  Directive  2009/73/EC  and  in  the 
Electricity  Directive  2009/72/EC,  as  well  as  the  Energy  Efficiency  Directive  2012/27/EU42, 
fostering the smart metering roll-out and targeting the active participation of consumers in 
the energy supply market, through: 

 

 

transparency provided by the meter (timely and accurate information on consumption: 
predictability of costs, awareness); 
third  party  access  to  data  and  interoperability  (facilitate  competitive  offers  at  the 
customer end, lower cost); and, 

  due regard to best practises (for instance installation of in-home displays, connection 

to home automation)43. 

The  intervention  logic  table  from  the  Impact  Assessment  for  the  Third  Package44  illustrates 
the relationship between the measures and the structural problems addressed by the respective 
measures.  

Table 1: Intervention logic table 

Problems 

Measures 

Market 
concentratio
n 

Vertical 
foreclosure 

Lack of 
market 
integration 
and 
cooperation 
(cross-border 
and national) 

Lack of 
trans-
parency 
(insufficient 
info e.g. on 
generation & 
capacities) 

Distorted 
price 
formation 
(e.g. 
regulated 
prices, cross-
subsidies) 

Downstream 
market 
foreclosure 
(access to 
customers) 

Secure grid 
investments 
& cross-
border 
connections 

41  

42  

43  

44  

many  different  forms  of  price  regulation,  such  as  setting  or  approving  prices,  standardisation  of  prices  or 
combinations thereof.  
The Court of Justice has ruled that supply prices must be determined solely by supply and demand as opposed to 
State intervention as from 1 July 2007 (Case C-265/08 Federutility and Others v Autorità per l'energia elettrica e il 
gas EU:C:2009:640; the continuing applicability of this approach to the Third Energy Package is confirmed in C-
121/15  ANODE  v  Premier  Ministre,  para.  35).  The  Court  based  its  interpretation  on  the  provision  stating  that 
Member  States  must  ensure  that  all  customers  are  free  to  buy  electricity/natural  gas  from  the  supplier  of  their 
choice as from 1 July 2007 (Article 33 of the Electricity Directive 2009/72/EC and Article 37 of the Gas Directive) 
interpreted in light of the very purpose and the general scheme of the directive, which is designed progressively to 
achieve  a  total  liberalisation  of  the  market  in  the  context  of  which, in  particular,  all  suppliers  may  freely  deliver 
their products to all consumers. 
Articles  9(2),  12(2b)  of  the  Directive  2012/27/EU of  the  European Parliament  and of  the  Council of  25  October 
2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC 
and 2006/32/EC, EUOJ L315, 14.11.2012, pp. 1-56. 
These provisions were then complemented with provisions under the Energy Performance in Buildings Directive 
2010/31/EU, and the Energy Efficiency Directive 2012/27/EU which amongst others added demand response as a 
specific  means  for  energy  efficiency  benefits  via  novel  energy  services  based  on  smart  metering  data,  and  of 
particular relevance to the electricity sector. 
SEC(2007) 1179/2 Commission Staff  Working Document, Accompanying the legislative package on the internal 
market  for  electricity  and  gas  COM(2007)  528  final,  COM(2007)  529  final,  COM(2007)  530  final,  COM(2007) 
531 final, COM(2007) 532 final, SEC(2007) 1180, Impact Assessment, page 91-92.  

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TSO 
unbundling 

improves TPA 
and thus 
market entry 

tackles 
problem at the 
root 

facilitates 
TSO 
cooperation 
and mergers 

eliminates 
preferential 
information 
flows 

Strengthen 
NRA 

to ensure level 
playing field; 

to better 
monitor 
unbundling 
obligations 

ACER 

indirect effect  indirect effect 

ENTSOG 

to improve 
interconnectio
n and create 
larger markets 

to develop 
common rules 
on TPA and 
grid 
connection 

to monitor 
management 
of inter-
connection 
capacity 
closes 
regulatory 
cross-border 
gap, oversees 
ETSO+/GTE+ 
to develop 
market and 
technical 
codes, 
coordinate 
grid operation 

eliminates 
cross 
subsidies 

to monitor 
cross-
subsidies and 
determine 
tariffs 

N/A 

to monitor 
access to 
customer data 

to monitor 
transparency 
obligations 

oversees 

ETSO+/GTE+ indirect effect  indirect effect 

to develop 
market and 
technical 
codes, rules 
on trading & 
transparency 

to improve 
interconnectio
n and thus 
liquidity 

N/A 

promotes e.g. 
inter-
connection 
investment 

to monitor 
investment in 
grid & 
generation 

to assess 
cross-border 
Art. 22 
requests 

10-year 
investment 
plan, security 
and reliability 
rules 

Transparency 
obligations 

to facilitate 
market entry 

to overcome 
information 
advantage of 
integrated 
groups 

to facilitate 
market entry 

tackles 
problem at the 
root 

to reveal cause 
of price 
deformation 

to overcome 
information 
advantage of 
integrated 
groups 

to increase 
network 
security & 
reliability 

DSO 
unbundling 

to improve 
market entry 

strengthen 
resources of 
DSOs 

NRA to 
monitor 
transparency 
obligations 

to strengthen 
compliance 
officers, NRA 
to monitor 
cross-
subsidies 

to eliminate 
brand 
confusion; 
NRA to 
monitor 
access to 
customer data 

N/A 

N/A meant that a certain measure was not deemed not to have a direct effect on respective fundamental problem  
Shaded fields indicated that more detailed measures were envisaged to tackle the respective problem 

Evaluation logic 

3. 
The  evaluation  logic  is  framed  under  five  different  evaluation  categories:  Effectiveness, 
Efficiency,  Relevance,  Coherence  and  EU  added  Value  (Figure  1).  Effectiveness  considers 
how successful the initiatives have been in achieving or progressing towards their objectives. 
This  will  be  done  by  comparing  the  objectives  with  the  actual  effects  generated  by  the 
initiatives  (outputs,  results,  and  impacts).  Efficiency  considers  the  relationship  between  the 
resources  used  (inputs)  and  the  effects  generated  by  the  Directives  (outputs,  results,  and 
impacts).  Relevance  looks  at  the  relationship  between  the  needs  and  problems  of  the  gas 
sector and the objectives of the current legislation. Coherence looks for evidence of synergies 
or  inconsistencies  between  the  Directives  and  other  EU  policies  that  are  expected  to  work 
together.  EU  added  value  assesses  whether  action  continues  to  be  justified  at  the  EU  level 
and looks for changes, which it can reasonably be argued, are due to EU intervention, rather 
than any other factors. For each of these categories a series of questions guide the evaluation. 
These questions are presented under Section 6 for each category. 

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11 

 
 
 
 
 
 
Figure 1: Fitness Check evaluation logic 

Evaluation method 

4. 
Detailed evaluations of the functioning of the Internal Gas Market were carried out over the 
last  years,  such  as  the  Commission  study  ‘Potentials  of  sector  coupling  for  decarbonisation: 
Assessing regulatory barriers in linking the gas and electricity sectors in the EU’ in which the 
Commission identified a number of market failures that a future reform may need to address45. 
The Commission analysed as well the regulatory framework for Liquified Natural Gas (LNG) 
terminals  in  the  EU  in  which  a  number  of  market  failures  and  barriers  have  been  identified 
that  might  be  addressed  to  improve  the  LNG  regulatory  framework  in  the  EU.  In  2020,  a 
comprehensive  regulatory  study  has  been  conducted  to  identify  and  assess  options  for  a 
potential EU regulatory framework for dedicated hydrogen networks and markets46. Other EU 
institutions,  notably  ACER,  are  also  regularly  reviewing  the  functioning  of  the  EU's  gas 
markets  and,  in  its  ‘Bridge  beyond  2025’,  carried  out  an  assessment  of  shortcomings  of  the 
current gas market design47. 

Since 2001, the European Commission has reported on the progress and implementation of the 
internal gas market. Indeed, since the adoption of the Gas Directive, Article 52 legally obliges 
the Commission to monitor the application of the Directive and to submit an overall progress 
report to  the European Parliament and the Council. Such monitoring and reporting has been 

45  
barriers_en  
46  
47 

https://ec.europa.eu/energy/studies/potentials-sector-coupling-decarbonisation-assessing-regulatory-

Sector integration – Regulatory framework for hydrogen, final Report. 

https://www.acer.europa.eu/Official_documents/Acts_of_the_Agency/SD_The%20Bridge%20beyond%202025/Th
e%20Bridge%20Beyond%202025_Conclusion%20Paper.pdf 

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12 

 
 
 
                                                 
 
conducted  yearly48.  The  findings  and  conclusions  of  these  reports  have  fed  into  the  present 
Evaluation.  Moreover, several  studies have been conducted by  external  experts on behalf of 
the European Commission to assess in detail different aspects of the implications of the Third 
Energy Package on the gas market49. 
The  Governance  Regulation  (EU)  2018/199950  helps  the  EU  meet  its  climate  and  energy 
policy goals until 2030 and beyond. An important tool are the integrated National energy and 
climate plans (NECPs) prepared by Member States. The plans cover the five dimensions51 of 
the Energy Union, based on a common template, including market integration. Member States 
report on the current  situation of their energy markets,  relevant  objectives and targets  in  the 
context  of  reaching  the  decarbonisation  objective,  as  well  as  appropriate  policies  and 
measures. The provided information supports the Evaluation of the effectiveness of the Third 
Gas  Package  and  the  identification  of  issues  for  which  the  current  rules  are  no  longer 
sufficiently  relevant.  In  line  with  the  Regulation,  Member  States  are  also  obliged  to  report 
biannually to the Commission on the status of implementation of their NECP by means of an 
integrated progress report covering all five dimension of the Energy Union including market 
integration.  

Key  data  (such  as  raw  market  data)  are  based  on  data  provided  by  ACER,  which  acts  as 
primary collector of market data from EU Member States and carries a responsibility to make 
the  data  comparable  across  time  and  geographies.  ACER  publishes  annually  a  report  on  the 
results  of  the  monitoring  on  the  electricity  and  natural  gas  markets  where  it  identifies  any 
barriers  to  the  completion  of  the  internal  markets  for  electricity  and  natural  gas52.  The 
provided information supports the Evaluation of the effectiveness of the Third Gas Package. 

The  Commission  ran  multiple  consultations  to  inform  the  EU  Communications  on  Energy 
System  Integration  and  the  Hydrogen  Strategy,  respectively.  The  consultation  responses 
covered aspects relevant for the revision of the gas market regulatory framework and for the 
integration of the gas sector into an integrated energy system53. The consultation in May and 

48  

49  

50  

51  
52  
53  

be 

the 

can 

and 

and 

gas, 

found 

of  EU 

law,  which 

implementation 

Until  2014,  the  European  Commission  published  an  annual  progress  report  on  the  internal  energy  market  for 
electricity 
at: 
https://ec.europa.eu/energy/en/topics/markets-and-consumers/single-market-progress-report.  From  2015,  it  was 
superseded  by  reports  on  the  Energy  Union,  which  can  be  found  at:  https://ec.europa.eu/energy/topics/energy-
strategy/energy-union_en?redir=1 
  https://ec.europa.eu/energy/en/topics/markets-and-consumers/single-market-
progress-report.  From  2015,  it  was  superseded  by  reports  on  the  Energy  Union,  which  can  be  found  at: 
https://ec.europa.eu/energy/topics/energy-strategy/energy-union_en?redir=1 
See a full list of the studies with published reports carried out for the European Commission in the field of energy, 
including 
https://ec.europa.eu/energy/studies_main/final_studies_en 
https://ec.europa.eu/energy/studies_main/final_studies_en  
https://eur-lex.europa.eu/legal-
content/EN/TXT/?toc=OJ:L:2018:328:TOC&uri=uriserv:OJ.L_.2018.328.01.0001.01.ENG 
https://ec.europa.eu/info/strategy/priorities-2019-2024_en 
ACER Market Monitoring webpage: https://www.acer.europa.eu/en/Gas/Pages/Market-Monitoring.aspx  
The  Commission  consulted  on  specific  questions  via  a  dedicated  website  with  a  functional  mailbox  between  14 
April and 8 June 2020 (https://ec.europa.eu/info/news/preparing-future-eu-strategy-energy-sector-integration-2020-
apr-14_en) and on the roadmap of the strategy via the have-your-say website from 11 May to 8 June 2020. These 
consultations were open to the public. Additionally, the Commission organised five targeted workshops in March 
and April 2020 to gather experts’ input on different elements of the strategy and discussed the topic in a dedicated 

markets, 

at: 

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June 2020 on ‘An EU Smart Sector Integration Strategy’54, based on a roadmap, received 156 
responses.  
The Commission also organised a stakeholder consultation55 on the review of the Renewable 
Energy  Directive  (Directive  2018/2001/EU)  between  17  November  2020  and  09  February 
2021. 
The Commission’s public consultation on the Inception Impact Assessment56 for the ‘Revision 
of EU rules on Hydrogen and Gas Market Decarbonisation Package’57 was open between 10 
February  and  10  March  2021  and  received  altogether  128  replies  on  the  ‘Have  your  say’ 
platform  of  the  European  Commission.  These  were  divided  between  113  business/industry 
representatives  (companies  and  associations),  five  NGOs,  two  think-thanks,  two  NRA 
representatives (one national regulatory authority and the European association of NRAs), one 
European  consumer  association  (BEUC),  one  national  authority  (non-EU  Member  State)58, 
one research entity, one national trade union and the Energy Community Secretariat and one 
EU citizen. Within the industry group, we received responses from 30 national industry and 
business  associations  and  26  European  industry  and  business  associations  (representing  gas 
infrastructure  operators,  energy  companies,  industrial  gas  end-users,  gas  end-use  appliance 
manufacturers,  hydrogen  industry  and  traders).  Gas  infrastructure  operators  were  the  group 
strongest  represented  (15  gas  TSOs  and  their  associations,  five  gas  DSOs  and  their 
associations and one gas storage system operator). 

Stakeholders  expressed  general  agreement  with  the  Commission’s  plan  to  revise  the  gas 
legislation  (Gas  Directive  and  Gas  Regulation)  and  consider  legislative  proposals  for  the 
regulation of hydrogen infrastructure as a key element for achieving the increased greenhouse 
gas emissions reduction targets and to implement the European Green Deal. 
In  addition,  a  specific  stakeholder  consultation59  was  open  between  26  March  and  18  June 
2021 in the form of a questionnaire on the future initiative on gas market design. This wide 
public consultation gathered the views of EU and Member States’ authorities, energy market 
participants and their associations, SMEs, energy consumers, NGOs,  academia, international 
organisations,  representatives  of  civil  societies  and  citizens.  The  public  consultation  on  the 
revision  of  the  gas  market  regulatory  framework  aimed  at  obtaining  stakeholder’s  views  on 
how fit the current regulatory framework is to meet the  energy transition challenges that the 

54  

55  

56  

57  
58  
59  

EN 

session  during  the  European  Sustainable  Energy  Week.  https://ec.europa.eu/info/law/better-regulation/have-your-
say/initiatives/12383-Strategy-for-smart-sector-integration 
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12383-Strategy-for-smart-sector-
integration 
Consultation  on  the  Review  of  Directive  2018/2001/EU  on  the  promotion  of  the  use  of  energy  from  renewable 
sources,  available  at:  https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12553-EU-
renewable-energy-rules-review/public-consultation_en 
Available 
revision-of-EU-rules-on-market-access_en 
Proposal for a Gas Directive (PLAN/2020/8564) and for a Gas Regulation (PLAN/2020/8563).  
Norway, Ministry of Petroleum and Energy.  
Open  Public  Consultation  on 
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12911-Revision-of-EU-rules-
on-Gas/public-consultation_en 

https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12911-Gas-networks-

the  Hydrogen  and  Gas  Market  Decarbonisation  Package,  available  at: 

at: 

14 

  EN 

 
 
                                                                                                                                                         
 
market faces and on how the issues may need to be addressed in a  revision of the European 
gas market regulation.  

Implementation of the initiatives and state of play 

5. 
Given the complex nature of the Third Energy Package, the Commission has assisted Member 
States  in  the  process  of  the  implementation  of  the  new  rules,  e.g.  by  discussing  draft 
legislative  measures  and  implementation  solutions  with  the  national  governments  and 
regulators  (as  well  as  with  ACER,  ENTSOG  and  other  stakeholders)  on  an  on-going  basis 
since its adoption. This intensive implementation cooperation has proven efficient to prevent 
deficiencies at national level at an early stage as well as to resolve existing incompatibilities 
between  national  and  EU  legislation.  In  order  to  facilitate  the  implementation  of  the  Third 
Energy Package, the Commission has also issued a number of interpretative notes, providing 
guidance to national authorities and stakeholders concerned60.  

In a first step (‘transposition checks’), the Commission opened 19 infringement proceedings 
against 19 Member States to ensure full transposition of the Gas Directive between September 
and November 2011. Non-resolved cases were followed up in 2012-2013 by sending reasoned 
opinions  and  referrals  to  Court.  At  present,  all  of  the  infringement  proceedings  for  partial 
transposition  of  the  Gas  Directive  have  been  closed  as  the  Member  States  achieved  full 
transposition in the course of the proceedings.  

In  a  second  step  (‘non-conformity  checks’),  focus  has  been  put  on  possible  incorrect 
transpositions  or  EU  law  incompatible  application  of  the  Third  Gas  Package.  Priority  was 
given to  violations having the highest  impact  on  the functioning of the internal  market,  e.g. 
incomplete unbundling of transmission activities from production or supply, violations of the 
principle  of  independence  of  national  regulators,  or  disregard  of  consumer  protection  rules. 
On  this  basis,  the  Commission  opened  so-called  ‘EU-Pilot’  cases  against  a  number  of 
Member States61. In parallel, it carried out a structured dialogue with the Member States so as 
to resolve the identified implementation problems. In many cases, such dialogue with national 
governments  has  brought  satisfactory  solutions  and  the  ‘EU-Pilot’  cases  could  be  closed. 
However, as of 9 November 2020, seven of these EU Pilot cases have resulted in infringement 
procedures where, inter alia, violation of EU gas market rules is at stake. 

In parallel to these systematic non-conformity procedures, the Commission has also acted on 
an ad hoc basis, following up on specific non-conformity problems of which the Commission 
became  aware  through  complaints  from  individuals  or  undertakings,  or  emanating  from 
contacts with National Regulators or based on the Commission's own assessment. Here again, 
the Commission first opened EU-Pilot cases against the respective Member States. If the issue 
raised  was  not  resolved  at  the  EU-pilot  phase,  the  Commission  opened  an  infringement 
procedure. As of 9 November 2020, four of such infringement procedures are still pending.  

60  
61  

Interpretative notes are available at http://ec.europa.eu/energy/en/topics/markets-and-consumers/market-legislation. 
EU  Pilot  is  a  scheme  designed  to  resolve  compliance  problems  without  having  to  resort  to  infringement 
proceedings. It is based on a website that the Commission and national governments use to share information on 
the  detail  of  particular  cases,  and  give  governments  a  chance  to  remedy  any  breaches  through  voluntary 
compliance. 

EN 

  EN 

15 

 
 
                                                 
 
At the time of writing, some type of price intervention for household consumers exists in 15 
Member States62. A regulated end-user price is considered as a price subject to regulation or 
control  by  public  authorities  (e.g.  governments,  NRAs),  as  opposed  to  being  determined 
exclusively  by  supply  and  demand.  This  definition  includes  many  different  forms  of  price 
regulation,  such  as  setting  or  approving  prices,  standardisation  of  prices  or  combinations 
thereof.  

Price  regulation  for  non-households  has  been  challenged  via  infringements  while  price 
regulation  for  households63  has  not  been  yet  subject  to  infringement  procedures.  Price 
regulation for non-households has been challenged by the Commission as a priority due to the 
more important market  distortion that the regulation of prices for large and potentially most 
active consumers represents – after all these consumers cover an important amount of energy 
sold on the market.  

Regulation  in  Member  States  is  often  justified  by  social  policy  objectives  and/or  lack  of 
conditions  for  fair  competition.  Deregulating  household  prices  may  be  politically  unpopular 
as  refocussing  the  support  only  to  those  in  need  (such  as  energy  poor)  would  reduce  the 
access  of  middle  and  high  income  groups  to  the  discounted  prices.  Therefore,  an  informal 
approach  via  bilateral  consultations  with  Member  States  was  initially  preferred  to  discuss 
reasonable  and  sustainable  alternatives  to  price  regulation  and  accompanying  measures. 
However,  in  the  follow-up  to  informal  consultations,  the  Commission  will  assess  if  the 
conditions  for  opening  infringement  actions  against  price  regulation  for  households  are 
present.  

The  Commission  published  a  detailed  report  on  its  enforcement  activities  in  relation  to  the 
Third Energy Package (see the document ‘Enforcement of the Third Internal Energy Market 
Package (SWD(2014) 315 final’64). 

The  regulatory  framework  of  the  Third  Package  has  also  created  new  Commission 
competences to verify the implementation of EU market rules. It created a competence for the 
Commission  to  provide  an  opinion  on  draft  decisions  of  national  regulators  who  have  to 
decide  whether  national  TSOs  can  be  considered  as  compliant  with  unbundling  rules  (so-
called ‘certification’ of TSOs, Articles 10 and 11 of the Gas Directive and Article 3 of the Gas 
Regulation).  The  Commission  has  provided  opinions  on  more  than  60  preliminary 
certifications of TSOs for gas since 2012. The Third Package gave the Commission also the 
competence to  decide on the compatibility of national exemptions  from EU rules  in  case of 
investments  into  major  new  infrastructure  (see  Article  36  Gas  Regulation).  To  the  extent 
pertinent, the experience gained from these ex-ante approval procedures will be fed into the 
Evaluation (see ‘Effectiveness’ Section). 

62  

63  
64  

EN 

Latvia, 

Estonia. 

Hungary,  Romania,  Croatia,  Bulgaria,  Slovakia,  Poland,  France,  Italy,  Spain,  Portugal,  Belgium,  Luxembourg, 
juncto 
study 
this 
Lithuania, 
https://extranet.acer.europa.eu/en/Electricity/Market%20monitoring/Pages/Current-edition.aspx 
And other comparable customers such as SMEs, schools, hospitals etc. 
https://ec.europa.eu/energy/sites/ener/files/documents/2014_iem_communication_annex6_0.pdf.  Figures  presented 
here are updated, to the extent necessary. 

retail  market 

regard, 

barrier 

See 

in 

16 

  EN 

 
 
                                                 
 
The  transposition  deadline  of  Directive  2019/692  of  17  April  2019,  that  amended  Directive 
2009/73/EC to clarify its applicability to gas interconnector pipelines between Member States 
and third countries, expired on 24 February 2020. In the first step (‘transposition check’), the 
Commission  opened  13  infringement  proceedings  against  13  Member  States  to  ensure  full 
transposition.  

Answers to the Evaluation questions 

6. 
This section summarises the main findings in relation to the analysis of each of the key areas 
of the Evaluation. Guiding questions indicate the focus of the Evaluation at the beginning of 
each section.  

1.5.  Effectiveness  

The  effectiveness  evaluation  aims  at  verifying  whether  the  Third  Gas  Package  has  been 
achieving  its  objectives.  This  is  being  done  by  comparing  the  intended  objectives  with  the 
actual effects generated in the various areas under consideration.  

Two aspects were analysed in particular, namely to what extent the new legislation removed 
competition  problems,  contributed  to  increased  market  integration,  better  coordination  and 
stimulated  grid  investments  (6.1.1.)  and  to  what  extent  the  new  provisions  improved  the 
situation for consumers in terms of consumer protection (6.1.2.).  

  Market integration, competition and investments 

  To what extent have wholesale markets become more competitive?  

  To  what  extent  has  market  integration  already  been  achieved?  To  what  extent  has 

cooperation between TSOs and regulators evolved? 

  What factors contributed hereto in particular or prevented this?  

Reduced competition and foreclosure problems through strengthened unbundling  

In order to further promote competition on the energy gas markets, the Third Energy Package 
strengthened  the  unbundling  rules  to  completely  remove  any  conflict  of  interest  between 
producers and suppliers on the one hand and transmission system operators on the other hand. 
With the aim of ensuring structural independence of network operation, the Directive foresees 
three unbundling models: ownership unbundling, the independent system operator (ISO) and 
the independent transmission operator (ITO).  

Following  the  expiry  of  the  transposition  deadline  on  3  March  2011,  the  Commission  has 
systematically assessed all national transposition measures. As of 1 January 2020, regarding 
gas,  25  Member  States  had  implemented  the  mandatory  ownership  unbundling.  In  addition, 
ten  Member  States  had  implemented  also  the  ITO  framework,  and  two  Member  States  the 
ISO framework.  

Compliance with unbundling requirements is monitored at national level by the NRAs, under 
a  procedure  set  out  in  Articles  10  and  11  of  the  Gas  Directive  and  Article  3  of  the  Gas 
Regulation.  Under  this  procedure,  NRAs  are  required  to  submit  their  draft  decisions  on  the 
certification  of  transmission  system  operators  to  the  Commission.  The  Commission  then 
adopts an Opinion on the draft decision within a period of two months. NRAs are obliged to 
take  utmost  account  of  the  Commission’s  Opinion  when  adopting  the  final  certification 
decision. This notification procedure ensures a high degree of consistency in the interpretation 

17 

EN 

  EN 

 
 
 
of  the  rules  on  unbundling  for  transmission  system  operators,  and  thereby  increases  legal 
certainty  for  Member  States,  transmission  system  operators  and  other  stakeholders.  The 
certification  procedure  pursuant  to  Article  10  of  the  Gas  Directive  has  been  successfully 
implemented in practice. In the period of 3 March 201265 until March 2021, the Commission 
has issued 145 Opinions on draft certifications of NRAs from 25 Member States66. Of these, 
65 Opinions concerned transmission system operators for gas, and 80 concerned transmission 
system operators for electricity67. 

The  positive  impact  of  the  reinforced  unbundling  rules  was  confirmed  by  a  specific 
evaluation, as required by Article 52(3) of the Gas Directive. In its report on the ITO model 
from  October  201468,  the  Commission  analysed  in  detail  to  what  extent  the  new  rules  were 
capable  of  sufficiently  and  adequately  ensuring  the  effective  separation  of  transmission 
networks  from  generation  and  supply  interests.  According  to  the  Commission’s  initial 
assessment, most requirements related to the ITO model seem to work in practice and can be 
(but are not always), sufficient and adequate to ensure effective separation of the transmission 
business  from  production  and  supply  activities  in  the  day-to-day  business.  This  assessment 
was  notably  based  on  the  view  of  national  regulators,  the  network  users  and  compliance 
officers within the ITOs. The report confirmed that problems of network foreclosure, which 
had been an ongoing concern prior to the adoption of the Third Package69, had become less 
frequent after the introduction of the reinforced unbundling rules. However, both the ITO and 
(to lesser extent)  the  ISO models  depend on behavioural  safeguards  which create additional 
regulatory  costs  for  operators  and  NRAs.  Moreover,  such  behavioural  safeguards  are  more 
reliant  on  the  monitoring  by  national  authorities  than  structural  separation  (as  in  the 
ownership  unbundling  model),  which  eliminates  incentives  for  anti-competitive  behaviour 
altogether.  

With regard to DSO unbundling, the intervention mainly aimed at the unbundling of vertical 
integrated  distribution  companies  with  the  objective  to  ensure  non-discriminatory  and 

65  
66  

67  

68  

69  

on 

the 

ITO 

link: 

Model 

SWD(2014) 

the  following 

the  website  of  DG  Energy  under 

The application date for the unbundling requirements, as set out in Article 9 of the Gas Directive. 
This  includes  draft  certifications  by  which  a  transmission  system  operator  previously  certified  under  the  ITO  or 
ISO model was re-certified under the ownership unbundling model. 
The  Commission  Opinions  are  available  on 
https://ec.europa.eu/energy/sites/default/files/documents/certifications_decisions_0.pdf 
Report 
https://ec.europa.eu/energy/sites/ener/files/documents/2014_iem_communication_annex3.pdf 
See e.g. Communication from the Commission, Inquiry pursuant to Article 17 of Regulation (EC) No 1/2003 into 
the European gas and electricity sectors (final report), COM(2006) 851 final, 10.1.2007 
http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52006DC0851  
and DG Competition report on energy sector inquiry (SEC (2006)1724, 10.1.2007 
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52006SC1724   
Cases COMP/39.388 – German Electricity Wholesale Market and COMP/39.389 – German Electricity Balancing 
market). http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52009XC0213(02) 
Case 
content/EN/TXT/?uri=uriserv:OJ.C_.2009.133.01.0010.01.ENG&toc=OJ:C:2009:133:TOC  
Case COMP/39.315 – ENI http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv:OJ.C_.2010.352.01.0008.01.ENG&toc=OJ:C:2010:352:TOC  
Case  COMP/39.386 
content/EN/TXT/?qid=1439992538223&uri=CELEX:52010XC0522(01)  

–  Long  Term  Electricity  Contracts 

http://eur-lex.europa.eu/legal-

http://eur-lex.europa.eu/legal-

COMP/B-1/39.402 

Foreclosure 

France 

RWE 

final: 

Gas 

312 

– 

EN 

  EN 

18 

 
 
                                                 
 
transparent third party access in distribution networks, in order to promote competition in the 
energy  market.  There  is  no  evidence  that  the  intervention  within  the  boundaries  of  the 
unbundling  requirements,  did  not  achieve  the  objective  of  promoting  competition  in  the 
market. 
According to CEER70 the number of DSOs varies from one or two in some Member States to 
several hundred in other countries. In 2019 there were 1 317 gas DSOs in the EU (data for 27 
Member States). From these 1 200 fall under the 100 000 rule and according to Article 26(4) 
for  these  DSOs  Member  States  are  not  obliged  to  implement  unbundling  provisions  under 
Article  26  of  the  Gas  Directive.  That  means  that  only  117  DSOs  across  EU  have  the 
obligation to be unbundled according to the rules included in the Gas Directive. 

Increased liquidity and competition leading to fairer prices on wholesale markets 
The  Commission’s71  and  ACER’s72  analyses  of  the  development  of  the  gas  market  showed 
that  the  set  of  the  different  measures  of  the  Third  Gas  Package  had  a  positive  effect  on 
liquidity and competition in the wholesale market. 

The number of active suppliers and traded volumes increased, while market concentration and 
price spreads between markets decreased. Developments on wholesale markets also benefitted 
European  consumers.  ACER  estimates  that  since  2013,  benefits  for  European  consumers 
stemming  from  positive  wholesale  market  developments  are  in  the  range  of  several  billions 
per  year73.  The  main  share  of  these  gains  are  caused  by  a  move  away  from  oil-price 
indexation to gas-to-gas competition. While the Third Gas Package and subsequent network 
codes proofed to  be efficient and effective  in  delivering on identified issues such as lack of 
market integration, high market concentration and market power, its relevance for the efforts 
to  implement  the  European  Green  Deal  are  not  focusing  on  how  to  extend  the  benefits  of 
liquidity and competition to a decarbonised gas system. 

Cooperation between TSOs increased…  

The creation of ENTSO-E and ENTSOG has  intensified the cooperation between  EU  TSOs 
across Europe and within regions. The European Network for Transmission System Operators 
(ENTSOs) have notably  worked intensively on developing draft text  proposals  for so-called 
‘network  codes’,  i.e.  implementing  legislation  for  more  coordinated  network  operation  and 
trading rules. Based on the ENTSOs work and other stakeholders' input, the Commission was 
in  a  position  to  adopt  a  large  number  of  implementing  Regulations  under  comitology  rules 
since  200974.  ENTSOG  has  also  delivered  the  required  input  for  a  more  coordinated 
infrastructure  planning75.  According  to  the  results  of  the  Commission's  stakeholder 

70  
71 
72 
73 
74 

75 

EN 

CEER 2019. 
https://ec.europa.eu/energy/data-analysis/market-analysis_en 
https://www.acer.europa.eu/en/Electricity/Market%20monitoring/Pages/Current-edition.aspx  

  https://www.acer.europa.eu/en/Electricity/Market%20monitoring/Documents/MMR2018presentation19nov2019.pdf 
at: 

The  network 
https://ec.europa.eu/energy/topics/markets-and-consumers/wholesale-energy-market/gas-network-
codes_en 
Joint Scenario Report develop by ENTSOG and ENTSO-E: https://2020.entsos-tyndp-scenarios.eu/ 

codes  which  have  been 

adopted  or  on 

in  preparation 

can  be 

found 

19 

  EN 

 
 
                                                 
 
consultations  on  the  ENTSO’s  work  on  network  codes  (see  the  Consultation  on  the 
establishment  of  the  annual  priority  lists  for  the  development  of  network  codes  and 
guidelines76)  and  the  ENTSOs  role  in  general,  stakeholders  consider  the  creation  of  the 
ENTSOs as a step into the right direction for more TSO cooperation. Also recent reports from 
ACER77  confirm  that  both  ENTSOs  have  achieved  a  good  level  of  performance  since  their 
establishment  by  the  Third  Package.  Implementing  legislation  adopted  under  the  new  Third 
Package provisions on ‘network codes’ have further strengthened cooperation between TSOs. 
These network codes oblige TSOs to find common solutions for problems that require action 
of  several  neighbouring  TSOs  (e.g.  allocation  of  bundled  capacity,  scheduling  and 
coordination of maintenance).  

Consumer  gas  prices  vary  significantly  for  non-market  related  reasons,  and  have  risen 
steadily for households 

With  regards  to  retail  markets,  gas  prices  still  vary  significantly  from  Member  State  to 
Member  State  for  nonmarket  reasons,  and  prices  have  risen  steadily  for  households  since 
200978 (Figure 2), primarily as a result of a significant increases in non-contestable charges in 
recent years (network charges, taxes and levies), but also a more recent increase of the energy 
component79.  The  taxes  and  levies  component  has  been  the  most  significant  driver  of  retail 
price developments over the last decade80. The next section analyses in  greater detail which 
specific policies and fiscal instruments were driving this increase.  

Figure 2: Average household gas price increase 

76 

77 

78 
79 
80 

EN 

for 

list 

the  development  of  gas  network  codes  and  guidelines 

Priority 
https://ec.europa.eu/energy/consultations/priority-list-development-gas-network-codes-and-guidelines-
2021_en 
The  above  mentioned  ACER  Report  ‘Energy  Regulation:  A  Bridge  to  2025  Conclusions  Paper’,  19  September 
2014 and ‘The Bridge beyond 2025 Conclusions Paper’, 19 November 2019. See also recent annual activity reports 
of ACER: http://www.acer.europa.eu/official_documents/publications/pages/publication.aspx 
2020 Energy Prices and Costs Report SWD, p. 66. 
Ibid., p. 66. 
Ibid., p. 66. 

for  2021,  available  at: 

20 

  EN 

 
 
 
                                                 
 
The  first  observation  on  gas  consumer  prices  is  that  these  vary  significantly  between 
different  Member  States.  Household  gas  prices  in  2019  remained  lowest  in  Romania  (3.4 
euro cents/kWh post-tax), and highest in Sweden (11.8 euro cents/kWh), where considerably 
higher taxes and charges are levied. A wide range of factors contribute to this, including the 
sources  and  kinds  of  energy  consumed,  the  level  of  regulatory  intervention  in  price  setting, 
differing levels of competition and the different taxes and levies applied81. 

The  second  observation  is  that  industrial  consumers  pay,  in  general,  two  to  three  times 
less  for  their  gas  than  household  consumers  do82.  This  is  due  to  a  number  of  factors, 
including  industry’s  greater  ability  to  benefit  from  scale  economies  (higher  levels  of 
consumption), the fact that industry is less burdened by non-contestable charges, and the fact 
that  industry  may  benefit  from  better  market  information  and  bargaining  power  vis-à-vis 
suppliers than household consumers.  

The third pertinent observation, illustrated in the figures below (Figure 3), is that gas prices 
for  household  consumers  rose  steadily  between  2010  and  2019.  Post-tax  prices  for  gas 
supplied to households increased on average by 2.1%83. An analysis of the price components 
reveals the main drivers of rising household prices in the period 2010-2019. Data show that 
household  gas  prices  were  greatly  influenced  by  non-contestable  charges  (i.e.  taxation  and 
network charges) in most Member States during this period (Figure 3).  

Figure 3: Composition of the EU household gas price (DC) 

81 
82 
83 

2019 ACER Market Monitoring Report – Energy Retail and Consumer Protection Volume, pp. 20-23. 
2020 Energy Prices and Costs Report SWD, p. 66. 
Ibid., p. 28. 

EN 

  EN 

21 

 
 
 
                                                 
 
The  composition  of  gas  prices  changed  from  2010  until  2019.  The  energy  component 
increased at  an annual rate of 0.8% and reached 30  EUR/MWh in 2019, whilst the network 
charges  and  taxes  increased  annually  for  household  gas  consumers  by  2.6%  and  3.6%, 
respectively84. In 2019, these non-contestable charges make up, on average, 55% of the total 
household gas bill. Taxes and levies remain as such the most important cause of differences in 
retail  prices  across  Member  States  due  to  the  varied  nature  of  Member  States’  policies  and 
fiscal instruments affecting the taxation of gas consumption85. 

Retail gas markets for households remain concentrated in most Member States 

Overall,  the  average  market  share  of  the  three  largest  supplier  seems  to  show  a  downward 
trend. However, performances by the Member States are rather differentiated86. 

Member  States  like  Germany,  Italy,  Czech  Republic  and  Romania  have  a  high  number  of 
suppliers with a market share below 1% on the gas market. For some Member States such as 
Germany  and  Italy,  this  implies  the  numerous  presence  of  local  or  regional  suppliers. 
However, for countries such as Czech Republic and Romania, such a logic does not hold, as 
all of the suppliers are active nationwide. 

The cumulative market shares of the three largest gas suppliers for households is more than 
70%  in  the  majority  of  countries,  including  those  with  a  large  number  of  nationwide 
suppliers87.  As  a  result,  the  retail  household  market  for  small  competitors  is  above  30%  in 
only  five  out  of  25  countries  in  gas,  while  the  rest  of  the  market  is  held  by  three  dominant 
suppliers.  CR388  values  above  70%  and  low  numbers  of  main  suppliers  are  indicative  of 
possible competition problems. 

As  regards  the  general  trend,  data  suggests  that  there  has  been  little  change  in  these  CR3 
values since 2009, with decreases of 10% or more recorded only in the Czech Republic’s and 
Spanish  gas  household  markets.  The  comparable  CR3  data  for  retail  markets  for  non-
households  show  that  non-household  markets  are  much  less  concentrated  than  household 
markets in many Member States.  

To summarize, retail gas markets for households are highly concentrated in more than 2/3 of 
Member  States  –  a  situation  that  has  remained  largely  unchanged  for  the  last  years.  In  the 
non-household sector, market concentration is less pronounced, although still generally high. 

Whilst the variety of products is improving in some dimensions, it is lagging in others 

Although low prices are the most commonly thought  of way  for firms  to  attract  consumers, 
firms  may  also  seek  to  distinguish  their  products  by  other  means.  Whilst  challenging  to 
quantify precisely, the data suggest that ‘choice’ for consumers in European capitals widened 

84 
85 
86 
87 
88 

2020 Energy Prices and Costs Report SWD, p. 27. 
Ibid., pp. 28 and 66. 
2017 CEER Retail Markets Monitoring Report, p. 15. 
See Annex 4, Figure 1.  
Measures the total market shares of the three largest suppliers in one market. 

EN 

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between 2012-201489 and 2018-201990. The increasing diversity and variety of offers is a sign 
of more innovation in the sector, and helps raise consumer interest in the market. 

Although fixed, mixed, variable, online and green offers are still the most available products 
on the European gas markets, recent data suggests a downwards trend between 2018 and 2019 
in  availability  of  these  products.  The  type  of  pricing  of  the  offer  (i.e.  fixed,  spot-based  or 
variable) remains one of the most visible features of energy products. Whilst there is diversity 
in this dimension, there is certainly scope for improvement. Fixed-price offers still account for 
the majority of all gas offers in Europe. 

Furthermore, there are positive developments observable in terms of availability of offer type 
in the Member States. There were ten more types of offers available in 2019 in comparison to 
2018,  with  social  offers  being  increasingly  available  in  Member  States  (from  two  to  eight 
Member States by 2019).  In addition,  Member States have also  reported the  introduction of 
offers with different pricing options, monetary or additional service91. 
Many Member States still practice some form of price regulation92 
Today,  regulated  offers  are  present  in  1593  out  of  27  gas  markets94.  The  regulation  of  gas 
prices  limits  consumer  choice,  restricts  competition,  and  discourages  investments.  This  is 
particularly  true  for  markets  where  retail  end-user  prices  are  set  below  costs  (i.e.  without 
taking into consideration wholesale market prices and other supply costs). In general, EU gas 
markets  show  a  higher  penetration  of  price  regulation  among  residual  customers  and  low 
mark-ups  of  the  regulated  offer  because  regulated  prices  are  more  commonly  set  below 
competitive levels95. Data shows that the combination of the high share of the customers with 
regulated price and the low margin of the regulated offer may lead to market foreclosure in 
Latvia,  Hungary,  Romania,  Croatia,  Bulgaria,  Slovakia  and  Poland.  In  five  countries,  price 
regulation leaves some space for market competition but  may prevent entry by reducing the 
contestable part of the market96. 

Infringement  procedures  have  been  launched  to  address  the  most  serious  market  distortions 
created by the regulation of prices in favour of larger and potentially most active consumers, 
including  industry  sector  and  commercial  and  public  services,  who  use  the  majority  of  the 
energy sold on the European market (53% of the total gas consumption in 2017)97. In parallel, 

89 

90 
91 
92 

93 

94 
95 
96 
97 

2014  ACER  market  monitoring  report,  annual  report on  the  results  of  monitoring the  internal  electricity  and  gas 
markets in 2014, pp. 39-40. 
2019 ACER Market Monitoring Report, Energy Retail and Consumer Protection Volume, p. 54. 
2019 ACER Market Monitoring Report, Energy Retail and Consumer Protection Volume, p. 54. 
Transmission and distribution tariffs are addressed in separate parts of this Evaluation. The analysis in this section 
focuses on the regulation of the energy component of retail prices and does not address network tariffs. 
2019 ACER Market Monitoring Report, Energy Retail and Consumer Protection Volume, p. 47. An up-date on the 
number  of  Member  States  with  regulated  price  may  be  available  when  the  next  ACER  report  will  be  published 
(foreseen in September 2021). 
Annex 4, Figure 4. 
Retail market barrier study, final report, p. 50. 
Ibid., p. 50. See also Annex 4, Figure 5. 
In  2019,  the  industry  sector  and  commercial  and  public  services  1  663  352.818  Gigawatt-hour  out  of  the  total 
2 565 547.259  Gigawatt-hour  electricity  consumption  (64.83%)  –  Eurostat  data,  2019;  and  in  2017,  the  industry 
sector and commercial and public services 1 486 314 Gigawatt-hour out of the total 2 783 059 Gigawatt-hour of 

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the Commission has opted initially for an informal approach via bilateral consultations with 
Member  States  to  discuss  reasonable  and  sustainable  alternatives  to  price  regulation  and 
accompanying support for vulnerable consumers. However, infringement actions against price 
regulation for households are not excluded in the follow-up to informal consultations.  

Investments (pipelines) 

The 2011 Impact Assessment for the TEN-E Regulation identified an investment need for gas 
networks in  the period 2011-2020 of  EUR 89 billion, with  EUR 67.8 billion  not  yet  having 
received a final investment decision even though the projects are very important to enhancing 
the security of gas supply. (Significantly) more than EUR 10 billion worth of projects were at 
risk. The study supporting the  Impact Assessment for the revision of the TEN-E Regulation 
found that the total amount of funding realised for gas PCI projects summed up to EUR 1 500 
million98.  

The  reasons  for  investing  into  infrastructure  are  different  and  ranged  from  market  driven 
investments, to security of supply required investment (e.g. to enable physical reverse flow or 
to  reach  the  N-1  infrastructure  standard)  to  investments  identified  in  national  network 
development plans as required for the system on the basis of gas demand and supply scenarios 
that were expected to materialise.  

While  there  is  little  indication  for  underinvestment,  some  stakeholders  rather  point  to  an 
overestimation  of  gas  demand,  which  led  to  overinvestments  including  a  risk  of  future 
stranded  assets.  In  any  case,  the  rules  on  network  investment  effectively  prevented 
underinvestment. 

Investments (renewable and decarbonised gases) 

Investments in biogas and biomethane 

Investments in biogas production has seen a significant growth in the last 10 years in Europe, 
mainly  driven  by  favourable  renewable  energy  sources  (RES)  support  schemes  in  place  in 
several  European  Union Member States.  The EU energy  and climate policies, together with 
positive  policy  framework  conditions,  programmes,  administrative  procedures  and  financial 
support (feed-in tariffs, investment support, etc.), have generally encouraged the development 
of biogas  markets.  This have favoured in  several  Member States the development  of biogas 
plants  for  energy production.  As a matter of  fact, most  of the biogas in  the EU is  currently 
used  as  a  fuel  for  electricity  generation,  in  electricity  only  or  in  combined  heat  and  power 
plants with the effort toward the maximum use of heat aiming to increase the income and to 
improve  the  economics  of  the  biogas  plants.  A  combination  of  factors,  including  the 
advancement of biogas upgrading technology, poor economics of electricity biogas plants and 
the new opportunities for the use in the transport sector, has resulted in a shift from electricity 
and  heat  production  to  upgrading  biogas  to  biomethane.  This  has  created  new  opportunities 

98 

gas consumption – Eurostat data, 2017 (https://www.eea.europa.eu/data-and-maps/daviz/final-energy-consumption-
of-fuel-1#tab-chart_1). 
Ecorys et al. (2020) Support to the Evaluation of Regulation (EU)No 347/2013 on guidelines for trans-European 
energy infrastructure, p. 67. 

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and opened the competition between various biogas uses. Biomethane could be used as fuel in 
Natural Gas-powered Vehicles (NGVs) or injected into the natural gas grid as a substitute for 
natural  gas  to  supply  traditional  end-users  (power  plants,  industries  and  households). 
However, there is no harmonized EU framework enabling direct participation of biomethane 
production on the gas market as well as there is no obligation upon gas networks operators to 
connect and accept biomethane or other renewable or low-carbon gases. Therefore, in so far 
investments  in  biogas  and  biomethane  have  been  driven  by  national  policies  based  on 
renewable  energy  targets  with  no  EU  rules  on  how  to  enable  direct  renewable  gases 
penetration of the gas market.  

Conclusions 

Overall, the Third Package partially fulfilled its original mission and created a stable market-
based approach on which however further legislation should be built. In particular, it can be 
concluded that: 

  The strengthening  of unbundling rules has had  a positive effect on competition with 
new players entering the market, except in some Member States where the incumbent 
still holds a dominant position;  

  Market integration has improved; however, obstacles to further integration still exist. 
While  tariff  structures  and  the  methodology  has  become  more  transparent,  structural 
differences as well as tariff pancaking affects the cost for cross-border trade. Missing 
definitions  or  clear  rules  on  the  integration  of  DSOs  has  delayed  and  in  some  cases 
prevented access on a level playing field to the wholesale market; 

  Cooperation between TSOs and between regulators has improved, but needs to evolve 

further; 

  Retail  level  competition  has  progressed  in  some  Member  States,  while  it  remains 
limited in others, mainly where price regulation is still in place with negative impact 
also  on  lower  switching  and  consumer  satisfaction.  Overall,  the  linkage  between 
wholesale and retail markets could be improved to enable the pass-through of the price 
signals to the consumers and trigger demand response;  

  The  largely  unchanged  high  concentration  in  the  more  than  2/3  of  Member  States’ 
retail gas markets for households over last years has resulted in the rising of gas prices 
for household consumers who pay on average two to three times more than industrial 
consumers. 

  Consumer empowerment and protection 

  To  what  extent  have  consumers  been  properly  empowered,  including  been  given 

effective freedom of choice to purchase gas from their supplier of choice; 

  Are consumers sufficiently protected, what is the level of consumer satisfaction? 

This Evaluation addresses four aspects of the existing acquis that cover consumer engagement 
and  protection:  the  measures  for  easy  and  timely  access  to  the  appropriate  tools  and 
information  for  consumers  to  get  actively  engaged  in  the  market;  the  provisions  to  protect 
vulnerable  and  energy  poor  consumers;  the  measures  on  fees  related  to  switching  energy 
suppliers; and the measures on billing. 

Consumer satisfaction and engagement in gas markets has improved in the last years  

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25 

 
 
Although  subjective,  consumer  satisfaction  is  a  valuable  indicator  on  the  extent  to  which 
competition  in  the  market  is  working  for  customers  and  whether  suppliers  are  responding 
adequately  to  changing  consumer  preferences.  According  to  the  new  Market  Monitoring 
Survey  (MMS)99,  in  the  gas  services  market  a  strong  majority  of  EU27  consumers  (82%) 
trust their providers. This is in line with the average across all surveyed markets (81%, in the 
electricity market trust counts 77%). This figure varies to an extent by Member State, from a 
high of 93% (in Greece) to a low of 70% (in Italy and Romania).  

89%  of  EU  consumers  report  positive  experiences  of  making  purchases  in  the  gas  market, 
with  no  notable  differences  between  countries  or  sociodemographic  subgroups.  This 
percentage is below the average of other markets (92%), and above the 86% of the electricity 
services  market.  Such  89%  positive  opinion  by  consumers  on  their  gas  provider  ranks  this 
market 12th out of 22 surveyed markets for services across the EU. There seems to be thus a 
negative  trend  if  compared  to  the  MMS  2018,  where  it  ranked  9th  out  of  then  25  markets, 
though  the  criteria  of  the  two  surveys  do  not  entirely  coincide  so  any  comparison  is  only 
relatively reliable. 

89%  of  consumers  say  that  price  is  important  to  them  when  choosing  gas  services.  In 
comparison,  78%  say  the  likely  environmental  impact  of  services  is  important.  (For 
electricity, it is 77%.)  

Across  all  surveyed  markets,  9%  of  EU27  consumers  have  experienced  a  problem  (either 
with  the  product/service  bought  or  with  the  retailer/provider/operator)  that  they  felt  gave 
cause for complaint. This percentage is of 7% for gas services. The figure is highest in Italy 
(14%)  and  Portugal  (13%),  and  lowest  in  Estonia  (1%).  Looking  at  experience  of  problems 
more  generally,  whether  or  not  these  gave  grounds  for  complaint,  the  most  common  is 
difficulties  accessing  support  from  providers  (e.g.  difficulties  getting  in  contact  with  them), 
reported by 10% of consumers who have purchased gas services. This is closely followed by 
incorrect  or  unclear  pricing,  and  inaccurate  or  misleading  information  about  services  both 
reported by 9% of consumers.  

Of  all  those  who  have  experienced  a  problem,  approaching  a  third  (31%)  suffered  financial 
detriment  as  a  result  and  80%  suffered  other,  non-financial  impacts.  The  non-financial 
impacts  were  most  commonly  a  loss  of  time  (75%)  or  anger/frustration  (60%).  Two-thirds 
(66%)  of  all  those  who  have  experienced  a  problem  in  the  market  have  gone  on  to  make  a 
complaint – most commonly to the service provider (53%). Just over half (55%) of all those 
who have made a complaint report being satisfied with the outcome. 

99  

https://ec.europa.eu/info/policies/consumers/consumer-protection/evidence-based-consumer-policy/market-
monitoring_en  
Starting  in  2020,  the  new  Market  Monitoring  Survey  assesses  the  performance  of  a  range  of  goods  and  service 
markets  across  the  European  Union,  the  UK,  Iceland  and  Norway.  It  looks  at  consumers’  experiences  and 
perceptions  of  the  markets  using  a  small  set  of  core  indicators  to  allow  consistent  and  comparable  monitoring 
across markets, countries and survey waves, as well as additional indicators that are specific to a particular market 
or survey wave. The main differences from the previous Market Monitoring Survey are a more targeted selection of 
markets to monitor, the higher frequency of the surveys, and the increased emphasis on indicators that are market-
specific. 

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Consumers  have  demonstrated  an  interest  in  bundled  products  in  recent  years  (offers 
increased for gas in the 2018-2019 period). From the MMS survey, 22% of EU27 consumers 
have  purchased  gas  services  in  combination  with  other,  similar  services  (such  as  electricity 
services). This figure ranges from a high of 60% in Belgium to a low of 8% in Slovenia. 8% 
of EU27 consumers have bought gas services in combination with other, non-similar products 
or services. 

Slow and uneven deployment of smart metering 
The  Third  Energy  Package  promoted  the  rollout  of  smart  metering  for  gas100,  to  assist  the 
active participation of consumers and the modernisation of the energy market. The aim of the 
co-legislators was not to enforce an EU-wide smart metering deployment, but to encourage it 
only in those situations where it is economically reasonable, cost-effective and beneficial, and 
therefore  appropriate101.  The  related  provisions  instructed:  (i)  the  deployment  potentially 
subject to a Cost-Benefit-Analysis; but also (ii) the function of the systems to be rolled-out, 
namely  to  be  interoperable,  with  due  regard  to  standards  and  able  to  support  the  active 
participation  of  consumers  in  the  energy  market.  Complementary  functional  requirements 
were also introduced in the Energy Efficiency Directive102 for the metering systems to make a 
substantial  contribution  to  energy  efficiency  and  serve  consumers’  needs  and  their  active 
participation.  To  guide  Member  States  in  their  choices  and  assist  them  in  meeting  these 
in  non-binding 
obligations 
Recommendations103,104 and issued related standardisation mandates105.  

the  Commission  also 

tabled  guidelines 

field, 

the 

in 

To  date,  the  implementation  of  gas  smart  metering  in  the  EU  is  progressing  in  a  rather 
conservative  manner,  at  different  speeds  and  operational  environments  across  the  Member 
States  that  are  the  ones  deciding  whether,  and  under  which  conditions,  they  proceed  with 
deployment. Member States do that usually following a Cost-Benefit-Analysis106,107 which in 
many cases turns out unfavourable for a large-scale implementation given that the business 
case  for  gas  smart  metering  is  more  challenging  to  make  than  that  for  electricity108. 
Accordingly,  no  penetration  target  is  set  in  the  legislation  so  far,  nor  a  fixed  timeline  for 
deployment, unlike electricity109. 

100 
101 
102 
103 

104 

105 
106 
107 

108 

109 

Articles 3(8) and Annex I.2 of the Gas Directive 2009/73/EC. 
Recital (52) of the Gas Directive 2009/73/EC. 
Articles 9(2), 10(2), 12(2b) of the Energy Efficiency Directive (EED) 2012/27/EU. 
Commission Recommendation 2012/148/EU on preparations for the roll-out of smart metering systems, OJ L 73, 
13.03.2012, p. 9-22. 
Commission Recommendation 2014/724/EU on the Data Protection Impact Assessment Template for Smart Grid 
and Smart Metering Systems, OJ L 300, 18.10.2014, p. 63–68. 
See standardisation mandates M/441 and M/490 to CEN-CENELEC-ETSI. 
COM(2014) 356 and accompanying SWD(2014) 188 and SWD(2014) 189. 
Tractebel 
https://ec.europa.eu/energy/studies_main/final_studies/benchmarking-smart-metering-deployment-eu-28_en. 
The  fact  that  gas  can  be  held  in  storage  while  the  supply  and  prices  of  gas  do  not  vary  much  over  short  time 
periods, makes the expected advantages of smart  metering  more  modest than for electricity (source: SWD(2014) 
189 and EP briefing (September 2015) on smart electricity grids and meters in the EU Member States). 
Provisions for timeline/target for smart metering rollout in the case of electricity can be found in Annex I.2 in the 
former Electricity Directive 2009/72/EC, and Annex II in the new Electricity Directive (EU) 2019/944. 

‘Benchmarking 

metering 

Impact: 

(2019): 

report’ 

EU-28 

smart 

in 

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The rollout of gas smart metering in Europe reached only a 27% penetration rate in the EU-28 
by 2020120,  despite Member States’  earlier  announcements119 and following the lowering of 
targets in a number of occasions and changes in national deployment programmes120, In this 
slow-paced deployment110, few Member States only are currently proceeding with large-scale 
rollouts, namely France, Italy, Luxembourg and the Netherlands111. Installations of gas smart 
meters have also started in other countries but at different speed and level of ambition, namely 
in Germany, Estonia, Ireland112 and Poland. The rest of the Member States concluded for now 
that  the  costs  outweigh  the  benefits;  others  intend  to  install  gas  smart  metering  only  under 
certain conditions or have reached no decision yet113.  

The  successful  rollout  is  to  large  extent  controlled  by  Member  States  that  decide  on  the 
deployment  conditions  and  the  respective  arrangements.  This  calls  for  setting  up  well  in 
advance clear roles and responsibilities. In most cases, the DSOs are (or expected to be) the 
responsible  party  for  the  implementation,  ownership  of  smart  meters  as  well  as  the  data 
handling  when  countries  proceed  with  a  rollout.  These  are  extra  responsibilities  for  DSOs. 
They should be performed in a transparent and non-discriminatory way, given the increasing 
importance of metering data, and with due respect to applicable rules, such as the General Data 
Protection  Regulation114  when  data  is  identified  as  personal.  This  is  clearly  instructed  in  the 
new Electricity Directive115; there is nothing similar currently enforced for gas. However, the 
Third Energy Package entitles consumers to receive their consumption data from electricity 
and  gas  undertakings,  and  allow  access  to  it  by  a  third  party  of  their  choice,  free  of 
charge116.  In  addition,  NRAs  must  provide  an  easily  understandable  and  harmonised 
framework for accessing the respective data117.  

With  the  introduction  of  smart  meters,  this  data  is  more  granular  and  further  enriched, 
enabling  service  providers  to  offer  to  consumers  broader  value  propositions  beyond  energy 
supply. To do that, they need to access/exchange the data in an easy, safe and secure way. In 
this  context,  the  new  Electricity  Directive118  sets  a  comprehensive  framework  for  data 
management119  Such  clear  rules  for  handling  (smart)  meter  data  and  data  required  to  run 
certain processes, are currently lacking in the gas provisions.  

110 
111 
112 

113 
114 

115 
116 

117 
118 

119 

ACER Market Monitoring Report 2020 – Energy Retail and Consumer Protection Volume. 
See Figures 35 and 36 in the Tractebel report ‘Benchmarking smart metering in EU-28’ (2019). 
In Ireland, smart ready gas meters are being provided by default as part of a meter replacement programme, with 
smart  gas  meter  functionality  due  to  go  live  at  the  end  of  2024  (source:  9th  ACER/CEER  Market  Monitoring 
Report). 
See Figure 28 and Table 22 (source: Tractebel report ‘Benchmarking smart metering in EU-28’ (2019)). 
General Data Protection Regulation – GDPR: Regulation (EU) 2016/679 on the protection of natural persons with 
regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC, 
OJ L 119 4.5.2016, p.1-78; https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02016R0679-20160504  
Article 23, and Article 34 of the Electricity Directive (EU) 2019/944. 
Annex  I.1(h)  of  Directive  2009/73/EC;  and  Annex  I.1(h)  of  Directive  2009/72/EC  (replaced  the  1/1/2021  by 
Directive (EU) 2019/944).  
Article 41(1)(q) of the Gas Directive 2009/73/EC. 
Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the 
internal market for electricity and amending Directive 2012/27/EU, OJ L158, 14.06.2019, p. 125–199; https://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019L0944&from=EN 
Article 23 of Directive (EU) 2019/944. 

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Equipped  with  the  right  tools  (smart  meters)  and  with  access  to  timely  and  accurate  data, 
consumers can actually get actively involved in the gas market, if they wish so. Prior to that 
though they need to trust and feel at ease with such a perspective. Consumer acceptance of 
smart metering is a prerequisite for this, and a key element for the success of a rollout. To this 
respect,  pilot  projects  confirm  the  need  for  tailored-made  communication  campaigns  with 
targeted  messages120.  These  could  help  increase  the  effectiveness  of  the  respective  smart 
metering provisions. 

Switching and exit fees 
The  switching  rate121  is  an  important  indicator  of  consumer  engagement  and  of  the  choice 
available  on  the  retail  market.  Although  switching  is  affected  by  multiple  factors  such  as 
regulated  prices122,  the  difference  in  price  between  offers  on  the  market  and  trust  in  new 
suppliers, the switching  rate is  an  important quantitative indicator of the effectiveness  of 
the Gas Directive provisions.  

Even  though  consumer  rights  related  to  switching  were  already  strengthened  to  an  extent 
through  the  Third  Energy  Package123,  these  still  lag  behind  the  electricity  sector.  In  recent 
years,  the  switching  rates  have  increased  overall  and  consumer  trust  and  experience  with 
regard  to  the  gas  sector  has  generally  improved124.  Nevertheless,  switching  remains 
inconsistent among countries and still forms one of the main retail barriers125 with conflicting 
data  about  consumer  satisfaction  with  the  switching  process.  To  facilitate  further 
consumer engagement in the gas market and improve consumer experience, it is necessary to 
strengthen consumer rights related to switching. 

According to the new Market Monitoring Survey 2020 on gas services, 12% of consumers 
in  the  gas  services  market  have  switched  provider  in  the  last  year126.  Switching  rates  are 
driven by consumer engagement and incentives in the way of competitive offers127. However, 
despite an overall increase in recent  years, external as well as internal switching rates for 
household consumers vary significantly across Member States128. Countries such as the UK, 
Belgium, Finland, Ireland, the Netherlands and Portugal had around 10-20% switching rate129. 
However,  there  are  countries,  like  Poland,  Luxembourg,  and  Croatia  where  the  switching 

120 

121 
122 

123 
124 

125 
126 
127 
128 
129 

ASSET study on consumer satisfaction KPIs for the roll-out of smart metering in the EU Member States – external 
study  launched  by  the  Commission  (2018);  ANEC  position  paper  ‘Monitoring  the  success  of  smart  metering 
deployment from a consumer perspective’ (2015).    
That is, the percentage of consumers who change suppliers in any given year. 
As  noted  by  CEER  in  its  Monitoring  Report  on  the  Performance  of  European  Retail  Markets  in  2018,  this  is 
especially  the  case  if  regulated  prices  are  set  below  cost  levels  such  that  the  development  of  competitive  retail 
markets is hampered and no economic incentive for switching exists. 
See Annex 4, Section 5 ‘Switching’ for more details. 
Commission  Market  Monitoring  Survey  2020  for  Gas  services,  https://ec.europa.eu/info/sites/default/files/gass-
services-mms20-ppt_en.pdf 
European Barriers in Retail Energy Markets Project: Final Report; European Commission, 2021, p. 58. 
Market Monitoring Survey 2020, Gas Services Dashboard, European Commission. 
ACER Market Monitoring Report 2019 – Energy Retail and Consumer Protection Volume, p. 59. 
See Annex 4, Section 5 ‘Switching’.  
European Commission 2018, Consumer study on precontractual information and billing in the energy market, final 
report. 

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rate still remains below 1%130. The inconsistent data among switching rates across Member 
States points to a need to strengthen consumer rights with regard to switching and incentivise 
consumer engagement in the market.  

Across  Member  States,  the  number  of  types  of  gas  offers,  where  fixed  ones  prevail,  is 
generally  lower  than  for  electricity  products.  Nevertheless,  the  trend  is  positive  in  this 
segment. Data from 2018 collected by CEER shows that consumers in 14 out of 23 countries 
had the choice between five or more different types of offers, compared with 11 countries in 
2017. To further illustrate the positive trend, ten types of offers were made available in more 
MS in 2019 than in 2018131.  

With  regard  to  customer  satisfaction  with  the  switching  process,  there  is  clear  room  for 
improvement. While consumer satisfaction and trust in the gas sector in general has improved, 
consumers report issues with the switching process. In the ‘Market Monitoring Survey 2020’, 
customers reported a positive experience with the gas services in general132.  

At  the  same  time,  data  collected  in  the  ‘Barriers  in  retail  energy  market  study’  shows 
consumer dissatisfaction with the switching process in the gas sector and difficulties with 
switching  (see  below  Figure  4).  On  average,  approximately  60%  of  the  customers  had  a 
bad experience or expressed a negative opinion on the switching process in both markets. 
In the gas markets, seven countries had high barriers (close to or above 9 points), while two 
countries (Belgium and Netherlands) had low barriers (ca. 3 points)133.  

130 

131 
132 

133 

Consumer  study  on  precontractual  information  and  billing  in  the  energy  market,  final  report,  p.  91 
https://ec.europa.eu/info/sites/default/files/final_report_2_july_2018.pdf  
ACER Market Monitoring Report 2019 – Energy Retail and Consumer Protection Volume.  
Market  Monitoring  Survey  2020,  Gas  Services  Dashboard,  European  Commission;  see  also  below  Annex  4, 
Section 5 ‘Switching’. 
European Barriers in Retail Energy Markets Project: Final Report; European Commission, 2021, p. 57. 

EN 

  EN 

30 

 
 
                                                 
 
Figure 4: Performance indicators – Difficulties of switching134 

Reasons for consumers not to switch vary, ranging from regulatory barriers (such as regulated 
prices) to behavioural aspects (e.g. lack of trust in new suppliers or perceived time-consuming 
procedures)135.  An  important  factor  that  enables  consumer  empowerment  and  improves 
switching  behaviour  is  the  availability  of  clear  and  transparent  information  of  energy 
supply prices and effective tools to compare offers. Data suggests that comparison websites 
cover both the electricity and gas markets, and the offers are communicated in a similar way.  

Price Comparison Tools (PCTs) have risen across the EU in 2018: Almost 64% of European 
consumers  had  used  a  comparison  tools  to  switch  suppliers136.  However,  European 
countries show heterogeneous results in terms of uptake of PCTs in the gas sector. As an 
example,  in  four  countries  (Bulgaria,  Cyprus,  Hungary  and  Malta)  consumers  do  not  have 
access to comparison tools for energy offers, while in others, several PCTs are in place. In the 
Netherlands 25 prices comparison tools were reported137.  

134 

135 
136 

137 

The comparability of offers is measured by combining two approaches. The customer’s opinion is explored based 
on  a  survey  commissioned  by  the  DG  Justice  and  Consumers.  The  supply  side  is  quantified  with  a  checklist 
indicator which covers the availability of comparison websites, based on their number and functionalities.  
ACER Market Monitoring Report 2019 – Energy Retail and Consumer Protection Volume, p. 95.  
Market  Monitoring  Survey  2020,  Gas  Services  Dashboard,  European  Commission;  see  also  below  Annex  4, 
Section 5 ‘Switching’. 
Consumer study on precontractual information and billing in the energy market, final report, p. 51. 

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31 

 
 
 
                                                 
 
Consumer  experience  with  comparability  of  prices  is  generally  positive.  Three  in  five 
(61%)  consumers  report  finding  it  easy  to  compare  the  services  of  different  gas  providers, 
though the figure varies widely by Member State, from a high of 82% in Portugal to a low 
of  31%  in  Denmark.  Among  consumers  who  report  finding  it  difficult  to  compare  services, 
45% say the total price of different services is not always clear and a similar proportion say it 
is difficult to know how services compare on aspects other than price (42%), or that service 
specifications are either not provided, are unclear or differ between providers (41%)138.  

Studies  also  showed  that  vulnerable  groups  of  consumers  were  more  likely  to  state  that 
comparing offers had been difficult. 35% of those in the group with respondents for whom 
it was not easy at all to make ends meet, answered that it had been very or rather difficult to 
compare the information on contract duration, while among those who stated that it was very 
easy to make ends meet, 28% expressed this view139. 

Respondents’ evaluations of the ease of comparing offers varied by the type of channel they 
had used to  compare offers. Respondents  who had used  PCTs  to  look  for alternative deals 
tended  to  be  most  likely  to  think  that  comparing  energy  offers  had  been  easy,  while 
respondents who had received offers via door-to-door and other channels were less likely to 
describe comparisons as easy140. 

Contract  exit  fees  represent  a  salient  potential  barrier  to  switching,  since  they  tend  to 
increase  the  threshold  for  consumers  to  switch  due  to  the  perceived  diminished  potential 
savings  available.  Concerning  switching  fees,  current  provisions  already  ensure  that  the 
switching process itself is mostly free for consumers141; however, contractual conditions may 
differ and include additional charges, such as termination fees or administrative costs. PCTs 
that do not cover termination fees are therefore incomplete142.  

From  the  MMS  2020  survey,  among  consumers  who  report  finding  it  difficult  to  compare 
services  –  45%  say  the  total  price  of  different  services  is  not  always  clear  and  a  similar 
proportion  say  it  is  difficult  to  know  how  services  compare  on  aspects  other  than  price 
(42%),  or  that  service  specifications  are  either  not  provided,  are  unclear  or  differ  between 
providers (41%).  

Technical switching times  

Most Member Stats have legal maximum durations for switching in place, usually within 
three weeks143. In 2019, eight countries did not have a specification on the timeframe (max. 
three weeks) of the switching period in their national legislation and five countries reported a 

138 

139 
140 
141 
142 
143 

Market Monitoring Survey 2020, Gas Services Dashboard, European Commission, available at: 
EURO_COMMISSION_Dashboard_20_19-036243-01-12_Finale_Slide 2 (europa.eu)  
Consumer study on Precontractual information and billing in the energy market, final report, p. 38. 
Ibid., p. 35. 
Ibid., p. 93; see also below Annex 4, Section 5 ‘Switching’. 
Ibid., p. 45. 
The legal and practical switching rates are within 15 working days in most Member States and comparable to those 
for electricity.  ACER Market Monitoring Report 2019  – Energy  Retail and Consumer Protection Volume, p. 58, 
Figure 38. 

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32 

 
 
                                                 
 
timeframe of one month144. The duration for technical switching of supplier is available in 
9 Member States and range from one to 15 days145. 

In  comparison  to  the  Electricity  Directive,  according  to  which  the  process  of  technical 
switching should take no longer than 24 hours  by 2026146, the  Gas  Directive does not  set  a 
limit for technical switching.  

Collective switching 

Collective switching can serve as a powerful tool to stimulate switching, as well as to improve 
competition  on  the  market  by  removing  barriers  for  new  entrants.  The  right  to  collective 
switching  is  currently  not  granted  in  the  Gas  Directive  in  comparison  to  the  already 
established consumer right in electricity. Consumers could benefit from collective switching 
rights explicitly granted for their gas supply so that they can choose the best offer.  

Billing 

Transparent  bills  and  billing  information  are  essential  to  enabling  consumers  to  regulate 
their consumption, compare offers and switch suppliers. Certain rights related to billing and 
contractual  conditions  are  already  provided  by  the  Gas  Directive  and  Energy  Efficiency 
Directive147.  However,  these  are  elementary  compared  to  the  current  electricity  market 
provisions, as set out in the Electricity Directive, and bills and billing information remain the 
most common consumer concern148. 

The composition of the final gas bill for household consumers continues to vary greatly across 
the  EU,  and  consumers  in  many  Member  States  have  expressed  low  satisfaction  with  the 
comparability and clarity of gas billing information149. The Gas Directive entitles consumers 
to  have  access  to  relevant  data,  but  it  does  not  specify  minimum  requirements  for  the 
content of bills for gas supply150 alike regarding frequency of bills. 

Vulnerable and energy poor consumers 

Energy  poverty  continues  to  be  a  major  challenge  for  the  Union  and  one  of  the  biggest 
concerns in view of the upcoming reinforcement of climate and energy legislation to meet the 
2050  climate  targets,  in  view  of  the  decarbonisation’s  distributional  impacts  on  vulnerable 
low and middle income households that will be hit hardest. 

144 

145 
146 
147 
148 

149 

150 

Investigating  the  benefits  of  aligning  EU  consumer  protection  and  information  rules  in  the  gas  and  electricity 
sectors, final report, p. 47 
ACER Market Monitoring Report 2019 – Energy Retail and Consumer Protection Volume, p. 58. 
Article 12 Directive 944/2019 (EU). 
Annex 4, Section 6 ‘Billing’. 
European Consumer Complaints Registration System,  which gathered data from EU Member States from 2006 to 
2018,  shows  that  the  majority  of  complaints  reported  between  2011  and  2016  concerned  billing  available  at: 
https://ec.europa.eu/info/policies/consumers/consumer-protection/evidence-based-consumer-policy/consumer-
complaints-statistics_en 
Investigating  the  benefits  of  aligning  EU  consumer  protection  and  information  rules  in  the  gas  and  electricity 
sectors, final report, p. 50-51. 
In comparison, Annex I to Directive 944/2019 (EU) provides a comprehensive list of key information – see below 
Annex 4, Section 6 ‘Billing’.  

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33 

 
 
                                                 
 
Article 3(3) and (4) of the Gas Directive sets out provisions for the protection of vulnerable 
consumers. Member States are required to establish a definition of vulnerable consumers and 
to  adopt  appropriate  protection  measures  and  safeguards.  In  particular,  Member  States  are 
required  to  take  appropriate  measures  to  protect  final  customers  in  remote  areas  who  are 
connected to the gas system. In order to adequately address energy poverty, including in the 
broader context of poverty, Article 3 of the Gas Directive states that Member States shall take 
appropriate  measures,  such  as  formulating  national  energy  action  plans151,  providing  social 
security benefits to ensure the necessary gas supply to vulnerable customers, or providing for 
support for energy efficiency improvements. 

Given the absence of a common EU definition of consumer vulnerability and energy poverty, 
however, the implementation of the consumer protection provisions has resulted in an uneven 
level  of  consumer  protection  across  the  EU  Member  States.  Some  Member  States  have 
defined  in  their  legislation  the  concept  of  the  ‘vulnerable  consumer’  and  have  adopted 
corresponding  measures  to  protect  those  belonging  to  this  category.  Such  measures  have 
tended  to  be  predominantly  at  the  level  of  welfare  provision  and  social  policy,  and  not  so 
much  at  the  level  of  specific  energy  policy  measures.  They  were  nonetheless  successful  in 
making more visible and effective the fight against energy poverty in the concerned Member 
States.  

State of play indicators and definition 

Income levels belong to the defining criteria of vulnerability in 19 and 14 Member States in 
electricity and gas respectively, followed by critical dependency for health reasons in 11 and 
six MS and age in nine and seven Member States. Many NRAs reported a combination of the 
listed determinants as well as specific ones, such as mental and/or physical disabilities, larger 
family  size,  unemployment  or  remote  locality.  Especially  in  Member  States  with  implicit 
definitions  of  the  concept  of  vulnerable  consumers,  e.g.  Austria,  determining  criteria  are 
closely bound to eligibility criteria for ear-marked social benefits. 

Since  precise  data  on  the  topic  remains  limited,  levels  of  energy  poverty  remain  significant 
and  a  lack  of  clarity  on  the  most  appropriate  means  of  tackling  consumer  vulnerability  and 
energy poverty persists and constitutes to be a barrier to the further deepening of the internal 
energy market. In particular, the need to address the problem seems pressing given that some 
form of retail energy price regulation, in some cases intended to protect vulnerable and energy 
poor consumers152, still exists in some Member States153, and levels of market concentration 
remain high in some liberalised markets. As much as well-targeted direct interventions in the 

151 

152 

153 

Elaborated  according  to  Article  3  of  Regulation  (EU)  2018/1999  on  the  Governance  of  the  Energy  Union  and 
Climate Action). 
General social policy measures targeting low-income or poor households in general, which may include support to 
help them pay their energy bills. 
According to the European Barriers in Retail Energy Markets study from 2020, the amount is 12 out of 24 Member 
States, including Latvia, Hungary, Romania, Croatia, Bulgaria, Slovakia, Poland, France, Italy, Spain, Portugal and 
Belgium.  The ACER  Market  Monitoring  Report  2019 concludes  on  15  Member  States,  p.  47.  ACER  Report 
survey:  Only  six  countries  in  electricity  (out  of  13  that  responded),  and  three  countries  in  gas  (out  of  13 
responding),  replied  that  some  type  of  intervention  exits  in  the  price  setting  for  energy  poor  or  vulnerable 
consumers. 

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34 

 
 
                                                 
 
price  of  supply  of  energy  to  energy-poor/vulnerable  consumers  (e.g.  Belgium,  Spain,  and 
Portugal) can be good practices, badly designed interventions can distort markets. The same 
applies  for  energy  vouchers,  credit  line  sand  subsidies  or  tax  exemptions  or  reductions  for 
structural solutions154. 

Switching  rates  are  inconsistent  among  countries  and  data  show  dissatisfaction  with  the 
switching  process  and  difficulties  with  switching.  PCTs,  an  important  factor  to  enable 
consumers to switch, show inconsistent uptake among Member States. Consumer experience 
with PCTs is generally positive, but contract termination and switching fees continue to be an 
obstacle.  Some  countries  still  do  not  have  in  place  a  maximum  timeframe  of  3  weeks  for 
switching  and,  compared  to  the  electricity  sector,  some  rights  such  as  technical  switching 
times or collective switching are missing. 

Bills remain one of the largest consumer concerns and the composition of the final gas bills is 
not consistent among Member States. Minimum requirements and frequency of billing, as e.g. 
provided for in the Electricity Directive, are missing in the gas sector.  

1.6.  Efficiency 

 
In qualitative terms, to what extent are the costs proportionate to the benefits achieved? 
  Are  there  areas  where  there  is  potential  to  reduce  inefficiencies  particularly  regulatory 

burden and simplify the intervention? 

  Are there areas where the current regulatory framework for the EU’s gas markets could be 

streamlined and optimised?  

led 

Undoubtedly,  the  detailed  rules  for  TSOs,  DSOs,  and  suppliers,  and  in  particular  the 
respective  monitoring  obligations  for  national  regulators, 
to  some  additional 
administrative  costs  for  undertakings  (e.g.  for  unbundling  compliance  monitoring  and 
reporting  obligations  towards  the  NRAs  and  for  NRAs  (e.g.  through  increased  tasks  in 
monitoring and deciding on implementation details of the Third Package). This constituted a 
significant  additional burden  given the moderate size of many  NRAs. Half of the 28  NRAs 
have  less  than  100  staff  members155.  This  ratio  did  not  change  structurally.  In  2019,  the 
number  of  NRAs  with  less  than  100  staff  dedicated  to  energy  regulation  was  14  out  of  24 
NRA  reporting  data156.  Generally,  the  level  of  resources  available  to  different  NRAs  varies 
considerably.  As  underlined  by  the  Court  of  Auditors157  in  2015,  the  number  of  people 
dealing  with  energy  issues  in  NRAs  visited  during  their  audit  ranged  from  21  (Estonia)  to 

154 
155 

156 

157 

EN 

Namely to support building renovation and energy efficiency. 
See overview per Member state in ‘EU Energy Markets in 2014’. 
http://ec.europa.eu/energy/sites/ener/files/documents/2014_energy_market_en.pdf 
Independence’, 
‘Monitoring 
See 
https://www.ceer.eu/documents/104400/-/-/3daa9416-edc7-c741-6042-c71d4ed50bb0  
Special Report 16/2015 by the European Court of Auditors, Improving the security of energy supply by developing 
the internal energy market: more efforts needed, 2015 
http://www.eca.europa.eu/en/Pages/DocItem.aspx?did=34751 

C20-RBM-23-04, 

Report 

CEER 

NRAs 

Ref. 

35 

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more  than  200  at  the  time.  In  2019,  these  numbers  ranged  from  16  (Cyprus)  to  more  than 
350158. 

Certain  regulatory  measures  contained  in  the  Third  Package  have  had  a  cost  for  gas 
stakeholders.  The  implementation  of  the  unbundling  requirements  for  all  TSOs  certainly 
entailed  costs  for  these  companies.  However,  these  are  difficult  to  quantify  and  no  detailed 
aggregated  data  on  the  cost  of  these  organisational  changes  required  by  the  unbundling 
measures  exist.  The  Commission’s  report  on  the  impact  of  its  unbundling  reform  from 
October 2014159 showed that cost effects did not play a significant role for stakeholders. The 
possibility for a Member State to choose between three unbundling models has provided some 
flexibility which may have contributed to keep the costs related to the organisation changes 
relatively  limited.  Indeed,  it  may  be  assumed  that  the  Member  States  have  opted  for  the 
unbundling model which was the closest to the existing organisational structure of their TSOs.  

ENTSOG  is  financed  almost  exclusively  by  fees  collected  from  its  members  i.e.  the  TSOs. 
ENTSOG also  holds as  observers  TSOs from the Energy Community  from  countries which 
are not part of the EU. The fees paid by the TSOs to ENTSOG appear to be of an acceptable 
level  and  justified  by  the  benefits  that  the  TSOs  enjoy  from  the  existence  of  such  an 
organisation whose task is, inter alia, to defend their interests.  

Overall,  it  can  be  concluded  that  the  new  rules  of  the  Third  Energy  Package  have 
generated  additional  administrative  costs  for  undertakings  and  regulators.  However, 
these are not perceived as too heavy by stakeholders and appear to be counterbalanced 
by the benefits they generate notably through the increase in competition in the sector.  

1.7.  Relevance 

The  Evaluation  of  the  effectiveness  and  efficiency  of  the  Third  Electricity  Package  showed 
that the new rules clearly had a positive effect on markets and for consumers. However, with 
a  view  to  some  fundamental  changes  in  gas  markets  since  2009,  the  Evaluation  needs  to 
assess  if  the  Third  Package  framework  is  still  sufficient  to  deal  effectively  with  future 
challenges of the sector.  
With the 2030 Climate Target Plan160, the Commission proposed in September 2020 to raise 
the EU’s ambition on reducing GHG emissions to at least 55% below 1990 levels by 2030, 
delivering on the  commitment made in  the Communication on the European Green Deal161, 
which sets out a renew growth strategy to make Europe the first climate neutral continent in 
the  world  by  2050.  In  June  2021,  the  European  Parliament  and  the  European  Council 
approved the first European Climate law, which embeds into EU law legally binding targets 
for  net  zero  greenhouse  gas  emissions  by  2050  and  sets  targets  to  reduce  EU  emissions  by 
55% by 2030. 

158 

159 

160 
161 

EN 

CEER 

Report 

‘Monitoring 

See 
https://www.ceer.eu/documents/104400/-/-/3daa9416-edc7-c741-6042-c71d4ed50bb0 
Report on the ITO Model (SWD(2014) 312 final), available at: 
https://ec.europa.eu/energy/sites/ener/files/documents/2014_iem_communication_annex3.pdf 
COM/2020/562 final. 
COM/2019/640 final. 

Independence’, 

NRAs 

Ref. 

C20-RBM-23-04, 

36 

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The transition to a climate-neutral society requires from energy markets to adapt in support of 
the  decarbonisation  of  the  whole  energy  system,  while  remaining  affordable,  safe, 
competitive, and secure. A fully integrated and well-functioning internal energy market is the 
most  efficient  means  of  ensuring  affordable  energy  prices,  necessary  price  signals  for 
investments  in  green  energy,  securing  energy  supplies  and  enabling  the  least  cost  path  to 
climate neutrality. 

The surge of the COVID-19 pandemic has further demonstrated the crucial role of the energy 
sector  in  the  EU’s  economic  recovery.  The  Commission’s  recovery  plan162  presented  on  27 
May  2020  highlights  the  need  to  better  integrate  the  energy  system  as  part  of  its  efforts  to 
unlock  investment  in  key  clean  technologies  and  value  chains  and  increase  economy-wide 
resilience. 

  The 2009 market design is not fully adapted to the decarbonisation of our economy … 

Whilst the Third Energy Package applies to all gases that can safely be injected into the gas 
network, it is not necessarily suited for the decarbonisation of gases and their local production 
and it neither applies to networks transporting pure hydrogen.  

Hydrogen is  generally  perceived as a promising  energy  carrier and  feedstock to  support the 
EU’s  decarbonisation  efforts  if  decarbonised.  This  is  a  new  development  and  significant 
uncertainties  remain  as  to  the  actual  deployment  of  clean  hydrogen  in  terms  of 
production  pathways  (electrolysis-based  vs.  gas-based  with  carbon  capture  and  storage  or 
usage technologies), geographical location of hydrogen production, sectors and geographical 
location of hydrogen consumption, and the predominant means of its transportation (pipelines, 
ships, etc). 

Although  no  developed  hydrogen  market  exists  yet  in  Europe,  working  on  a  transparent, 
contestable market framework based on clear rules is expected to be beneficial already at an 
early stage of development. This is because:  

  all decarbonisation scenarios show that clean hydrogen, in particular renewable, will play 
an important role in the not too distant future163 – it is thus not a question of whether but a 
question of when precisely this will happen; 
investment  decisions  are  expected  to  be  taken  in  the  years  towards  2030;  national 
strategies including on clean hydrogen are currently being developed and Member States 
are looking to the Commission for guidance164;  

 

  setting  the  principles  and  objectives  of  regulation  early  on  provides  for  investment 

security; 

162 
163 

164 

‘Europe’s moment: Repair and Prepare for the Next Generation’, COM(2020) 456 final. 
Due to the uncertainty regarding the pace and scale of deployment in each market segment, the overall expectations 
for the scale-up of renewable hydrogen production differ substantially, ranging from 30 to 175 TWh by 2030, and 
between 800 and 2 250 TWh by 2050. This would require around 7 to 40 GW of electrolysers to come on stream 
by  2030,  and  between  100  to  300  GW  of  installed  electrolyser  capacity  in  2050  with  the  LTS  foreseeing  an 
important surge shortly after 2030. 
Indeed, the recently published German hydrogen strategy explicitly sets out a German perspective on the EU policy 
agenda. 

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37 

 
 
                                                 
 
 

 

 

the draft ‘EU Hydrogen Strategy for a climate-neutral economy’ recognises the need for 
planning  transportation  infrastructure  already  in  the  first  phase  of  building  a  hydrogen 
economy  i.e.  before  2025  and  the  first  availability  of  this  infrastructure  already  in  the 
second phase i.e. between 2025 and 2030165; 
the use of pipelines and possibly other type of hydrogen infrastructure such as large scale 
storage and import terminals, requires rules securing competition166 as they can constitute 
a natural monopoly; setting basic rules now can avoid the costly ex-post interventions that 
were needed in the gas and electricity markets;  
if the Commission proposes rules for a regulatory framework on clean hydrogen late 2021 
at the earliest, usually such rules could be expected to become binding in Member States 
not  earlier  than  2024/2025,  i.e.  at  the  start  of  phase  2  and  when  important  investment 
decision to prepare this phase need to have been taken already.  

Important  developments  are  also  expected  for  other  renewable  gases.  The  most  significant 
production of renewable gases in the EU  is  currently provided by  biogas and biomethane167 
with  some  17 bcm  annually  (against  around  400  bcm  of  total  market).  There  were  16 859 
biogas  installations  in  2019168  and  currently  some  550  biomethane  plants  in  the  EU  are 
connected  to  the  gas  grid.  Biogas  is  mainly  used  today  for  producing  electricity  and  heat 
supported by support schemes169. However, once support schemes end, it is foreseeable that 
existing biogas plants may decide to invest into upgrading biogas to biomethane for injection 
into the gas grid.170  

Investments  in  new  plants  are  expected  to  increase  biogas  and  biomethane  production 
significantly. Estimates range from 33 to 50 bcm by 2030 and 50 to 140 bcm by 2050171. A 
2016 study by DG ENER172 found that until 2030 the production of 18 bcm renewable gases 
could be doubled if the potential is optimally utilized. One of the main recommendations of 
this  study  for  EU  regulation  was  to  ensure  that  EU  rules  enable  biomethane  cross-border 
trade. 

165  

166 

167 

168 
169 

170 

171 

172 

The  phases  and  their  timing  in  the  hydrogen  strategy  are  highly  educational  but  unlikely  to  reflect  the  variety 
between Member States, some of which will enter stage 2 earlier. 
Currently  existing  pipelines  normally  secure  delivery  point-to-point  to  large,  sophisticated  buyers.  The  future 
network  looks  set  to  be  meshed  and  non-replicable,  thus  conferring  market  power  if  operated  by  vertically 
integrated  suppliers.  Moreover,  buyers  are  likely  to  be  of  a  different  nature  whereas  entrants  are  unlikely  to 
consider entry in a vertically integrated manner. 
Biogas  is  about  60%  methane,  40%  CO2  +  some  impurities.  Upgrading  biogas  to  biomethane  level  requires 
removal  of  CO2  and  impurities.  If  used  and,  more  importantly,  stored  the  CO2  obtained  in  production  of 
biomethane from biogas is sometimes argued to create ‘negative’ emissions. 
EBA (2020), EBA statistical report 2020. 
This is due to subsidy schemes as well as the additional costs required for upgrading biogas to biomethane for grid 
injection. 
In Austria, for instance, 74 out of 301 biogas plants could be connected with an expected 100 m EUR investment, 
injecting 16 813 Nm3/h (ÖVGW, 2019).  
Different  ranges  taken  from  LTS  EC  (2018),  Ecofys  (2018),  Trinomics  (2018),  Navigant  (2019),  Guidehouse 
(2020), GreenGas Project (2014). Note: in some studies biogas and biomethane is treated as the same, while others 
focus only on biomethane. Not all biomethane is expected to be injected into the grid. 
https://ec.europa.eu/energy/sites/ener/files/documents/ce_delft_3g84_biogas_beyond_2020_final_report.pdf 

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38 

 
 
                                                 
 
The current gas market design cannot fully accommodate the increasingly important role that 
renewable gases will play in the system. The vast majority of today’s biomethane plants are 
connected at the distribution level without the possibility to inject gas from the distribution to 
the transmission level. As distribution grids have limited possibilities for physical balancing, 
in  practice,  an  injection  at  the  distribution  level  requires  consumption  by  consumers 
connected  to  that  local  grid.  In  cases  of  high  over-supply  at  distribution  level  and  lack  of 
arrangements  between  DSOs  and  TSOs  allowing  ‘virtual’  trade,  biomethane  producers  are 
deprived of access to wholesale markets and cross-border trade. This distorts the level playing 
field vis-à-vis other gas producers and is a barrier to scaling up renewable gas production.  

  …nor to changing market realities 

Decarbonisation of the gas sector will need to happen across Member States. In this process, 
both fuel switching and the development of renewable and decarbonised gases could benefit 
from  a  pooling  of  supply  and  demand  beyond  existing  market  areas.  Particularly  for  the 
upscaling of  renewable  and decarbonised  gas production, larger market  areas provide better 
conditions  because  they  allow  the  exploitation  of  economies  of  scale  through  easier  trading 
and  access  to  a  larger  consumer  base.  Additionally,  overall  gas  demand  is  expected  to 
decrease, which requires a larger area to be covered to reach comparable demand supporting a 
liquid market.  

Gas quality management 

In  the  current  framework,  gas  quality  standards  are  not  binding  on  EU-wide  scale  and 
therefore gas quality differences can be a barrier to (cross-border) trade. Injection of growing 
volumes  of  decarbonised  gases,  in  particular  biogas  and  the  blending  of  hydrogen  into  the 
existing gas network as well as further diversification of supply sources, including LNG, will 
change the quality of gas consumed in Europe. This will affect the design of gas infrastructure 
and end-user applications, as well as industrial processes using gas as feedstock. 

Such changes have important repercussions on the role and responsibilities of different actors 
(e.g.  system  operators,  producers  and  network  users)  along  the  value  chain  in  measuring, 
managing,  and  ensuring  gas  quality.  At  present,  the  process  to  manage  cross-border 
restrictions  due  to  gas  quality  differences173  is  lengthy  and  not  effective.  With  more  gas 
injected  at  distribution  level  the  process  will  become  even  more  complex,  involving  new 
actors and additional quality measurement and management. The future regulatory framework 
needs  to  address  fundamental  issues  of  gas  quality  and  its  standardisation,  such  as  the 
acceptance  of  gases  with  diverging  gas  quality  injected  into  the  grid  at  transmission  and 
distribution levels and their cross-border tradability. 

The  possible  integration  of  growing  volumes  of  hydrogen  blended  into  the  gas  network 
would change the quality of gas transported in the pipeline network. The design of any future 
hydrogen  regulatory  framework  containing  rules  on  hydrogen  blending  levels  –  be  it  at 
Member  State  or  at  EU-level  –  will  strongly  influence  gas  qualities  in  the  network  and 

173 

Art. 15 Commission Regulation (EU) 2015/703 of 30 April 2015 establishing a network code on interoperability 
and data exchange rules. 

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consequently  the  discussion  on  gas  quality  standardisation  in  the  EU.  Hydrogen  blending 
obligations  will  aggravate  the  issue  of  technical  feasibility  of  adjusting  the  quality  and 
increase the cost of handling the differences in gas quality specification.  

Role of LNG 

LNG  in  Europe  has  helped  diversify  supply,  thereby  strengthening  our  security  of  supply, 
and bringing price competition and flexibility in the supply of gas. This is especially relevant 
due  to  the  significant  increase  of  LNG  imports  to  the  EU  in  the  recent  years.  At  the  same 
time, the existing capacity of LNG terminals is not being used to its full potential.  

The Third Energy Package regulatory framework for LNG leaves a wide margin of discretion 
to Member States (e.g. no strict unbundling provisions  – Member States designate the LNG 
System  Operators,  access  negotiated  or  regulated,  with  possible  exemptions).  At  the  same 
time, LNG terminals are used inefficiently with sometimes high booking ratios but low rate of 
utilisation/accessibility  as  utilisation  rate  stands  currently  at  27%174  in  Europe.  Rules  on 
capacity  allocation,  utilisation  of  unused  capacity  and  congestions  management  (set  in 
network codes – CAM and CMP) are not applicable to the LNG facilities. In accordance with 
the  tariff  network  code  (TAR  NC),  discounts  may  be  applied  by  the  regulators  to  the 
transmission tariffs on the entry points from LNG facilities to the respective entry exit zones 
of the Member States. 

There are still some barriers and gaps that could be addressed in order to ensure the optimal 
use  of  existing  LNG  terminals,  notably  with  regards  to  capacity  allocation,  tariff  structures, 
transparency, products flexibility, and exemption regime. Improving these areas of the exiting 
framework would positively impact  on  terminal  utilisation rates and competition on the  gas 
market.  These  regulatory  improvements  have  also  the  potential  to  further  support  the 
decarbonisation of the EU gas market by enhancing the liquidity, transparency and flexibility 
in the internal gas market and ensuring a more efficient usage of existing infrastructure.  

Overall,  the  rules  of  the  Third  Energy  Package  appear  to  be  insufficient  to  meet  the  new 
climate  targets  and  to  ensure  an  effective  and  cost-efficient  transition  to  a  cleaner  energy 
system. Different rules appear to be needed to ensure in particular a level playing field for the 
market  up-take  of  renewable  and  low  carbon  gases  and  to  unlock  the  potential  of  emerging 
market realities. The Third Package does not provide regulatory certainty for the development 
and deployment of hydrogen. 

  The  Third  Package  does  not  provide  regulatory  certainty  for  the  development  and 

deployment of hydrogen 

To  achieve  the  EU  decarbonisation  goals  by  2050,  it  will  be  necessary  to  gradually  replace 
natural gas with renewable and low-carbon gases. A large potential to achieve this objective 
lies  with  hydrogen.  As  a  gaseous  energy  carrier,  hydrogen  can  be  deployed  in  hard-to-
decarbonize  sectors  for  which  low  carbon  and  renewable  alternatives  are  scarce  or  non-
existent  and  where  direct  electrification  is  currently  challenging.  In  addition,  hydrogen  can 

174 

Trinomics 2020. 

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contribute  to  energy  system  integration  by  linking  the  electricity  and  gas  system.  It  can  be 
used to manage a European electricity system increasingly based on renewables by offloading 
electricity grids in times of abundant electricity supply and by providing an option for large 
scale and long term (electricity) storage. 

In order to realize climate neutrality in 2050, the share of hydrogen in Europe’s energy mix is 
projected to grow. In the strategic vision for a climate-neutral EU175, the share of hydrogen in 
Europe’s energy mix is expected to increase from the current less than 2%176 to 13-14% by 
2050177. According to the Climate Target Plan Impact Assessment, which outlines the policy 
options  to  cut  greenhouse  gas  emissions  by  at  least  55%  by  2030,  hydrogen  will  have  to 
represent  a  significant  share  of  gases  in  the  energy  mix  in  any  of  the  more  pertinent  policy 
scenarios. Alongside these projections, Member States have developed national strategies on 
the  deployment  of  hydrogen  and  have  requested  the  European  Commission  to  create 
regulatory guidance178. 

The  European  Commission  has  set  out  its  vision  on  actions  needed  to  realize  an  integrated 
energy  system  and 
its 
Communications on Energy System Integration and Hydrogen179. 

the  further  development  and  deployment  of  hydrogen 

in 

EU Member States have a different potential for the production of renewable and low carbon 
hydrogen.  Consequently,  an  internal  market  for  hydrogen  and  a  suitable  European  market 
framework  to  support  it  may  well  be  necessary  for  hydrogen  to  play  its  role  as  an  energy 
carrier and enabler of energy system integration in the EU. However, the Third Gas Package 
applies to all gases that can be safely injected into the gas network, which include hydrogen 
blended  safely  into  the  natural  gas  system  but  does  not  apply  to  dedicated  hydrogen 
infrastructure. Gas market rules apply therefore neither to newly build hydrogen networks nor 
to natural gas networks that could be retrofitted in the future to transport pure hydrogen. Thus, 
the current framework cannot facilitate the large deployment of hydrogen as an independent 
energy carrier via dedicated pure hydrogen networks.  

At  the  same  time,  Member  States  may  take  national  initiatives  based  on  national  strategies, 
but these efforts are likely to be dispersed, resulting in uncoordinated and weak cross-border 
integration  and  network  development.  In  the  absence  of  infrastructure  and  well-functioning 
markets, some Member states will have no or limited access to hydrogen storage and import 
facilitates as geographical and geological circumstances are vary among Member States. 

Moreover,  the  existing  provisions  do  not  include  rules  on  unbundling  the  network-related 
activities  between  natural  gas  and  pure  hydrogen  infrastructure.  The  level  of  separation 
between network activities, i.e. to what extent these regulated activities can be kept within the 

175 

176 
177 

178 
179 

A Clean Planet for All. A European strategic long-term vision for a prosperous, modern, competitive and climate 
neutral economy, COM(2018) 773. 
FCH JU (2019) Hydrogen Roadmap Europe. This includes the use of hydrogen as feedstock 
Considering hydrogen consumption for energy purposes only, the shares in different scenarios range from less than 
2% to more than 23% in 2050. 
Council Conclusions ‘Towards a hydrogen market for Europe’, available at: st13976-en20.pdf (europa.eu)  
Communication on a Strategy for Energy System Integration COM(2020) 299 and Communication on a hydrogen 
strategy for a climate-neutral Europe COM (2020) 301.  

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same  asset  base,  is  expected  to  be  an  important  aspect  of  the  regulatory  framework  for 
hydrogen. Different regimes can influence the re-purposing of existing natural gas assets and 
the  potential  synergies  between  the  natural  gas  and  the  hydrogen  sectors.  Important 
consequences  are  also  expected  to  materialize  in  the  cost-reflectivity  of  network  tariffs  (i.e. 
distributional  effect  of  cross-subsidisation)  and  in  the  cross-border  integration  of  dedicated 
hydrogen networks. 

Already in earlier phases of hydrogen deployment, pipelines are expected to be the most cost-
effective  means  for  hydrogen  transportation  with  high  potential  cost  savings  in  the 
repurposing  of  existing  natural  gas  networks.  However,  the  tendency  towards  insufficient 
competition, which results from the existence of natural monopolies in energy networks, can 
be  expected  to  arise  equally  within  a  future  hydrogen  market  and  significantly  hamper  the 
entry  of  new  players  in  upstream  (hydrogen  production)  and  downstream  (hydrogen 
consumption)  parts  of  the  hydrogen  value  chain  and  the  achievement  of  competitive  market 
outcomes.  To  avoid  market  foreclosures  and  inefficiencies,  early  regulatory  intervention  – 
along the principles of an open and competitive market as laid down in the current gas market 
framework, (e.g. neutrality of network operation, third party access, cost reflective prices and 
network planning) – may therefore be needed. 

Tailoring the current gas market rules towards the option of pure hydrogen networks creates 
regulatory certainty and clarity that is needed for investments in the development of hydrogen. 
In addition,  it prevents  costly ex-post harmonization interventions and mitigates the risks of 
sunk-investments. The following elements of the Third Gas Package could help to enable the 
development  of  a  competitive  and  liquid  cross-border  hydrogen  market.  The  Impact 
Assessment  that  is  published  alongside  this  Evaluation  provides  for  a  deeper  and  wider 
analysis on the options for a regulatory framework for hydrogen180. 

  Unbundling  supply  and  production  from  the  operation  of  networks  and  network 
access.  The  Third  Gas  Package  further  pursued  the  separation  of  energy  supply  and 
generation activities from the operation of networks. Applying unbundling principles 
to  the  hydrogen  chain,  namely  separating  hydrogen  production,  trade  and  supply 
activities  from  network-related  activities,  could  ensure  fair  competition  and  avoid 
foreclosures  in  a  future  hydrogen  market.  Similar  considerations  may  exist  for  other 
types of hydrogen infrastructure, such as large-scale storage and import terminals;  
  Tariffs-setting:  According  to  the  Third  Gas  Package,  energy  network  access  charges 
should be cost-reflective (e.g. tariffs should reflect the actual network costs caused by 
each  network  user)  and  applicable  to  all  users  on  a  non-discriminatory  basis.  In 
addition,  tariffs  should  be  remunerative  for  network  operators  in  order  to  invest 
adequately  in  (new)  infrastructure.  However,  applying  the  same  levels  of  regulatory 
intervention  to  hydrogen  tariffs  can  be  counterproductive  for  such  an  infant  market, 
especially in its early phases. Tariff principles will need to be carefully developed for 
the  future  hydrogen  market,  striking  a  balance  between  the  impacts  of  regulatory 

180 

Impact Assessment for the hydrogen and decarbonized gas package. 

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interventions on market structures – particularly in regards of price transparency and 
cost reflectivity – and investments incentives for new hydrogen infrastructure;  

  Network planning: Network Planning on European level was meant to ensure greater 
transparency. Additionally, projects could apply for PCI status only if included in the 
Community plan, which builds upon national plans where these are required. National 
to  avoid 
plans  are  required  for  ITO  and  ISO  certified  TSOs  and  meant 
underinvestment.  Including  hydrogen  infrastructure  in  network  planning  processes 
could  facilitate  the  cost-effective  roll  out  of  hydrogen  networks  in  areas  where 
hydrogen  supply  and  demand  will  arise.  The  proposed  revision  of  the  TEN-E 
Regulation  aims  to  create  a  support  framework  for  developing  an  EU-wide 
infrastructure in the long-run by making hydrogen projects eligible for a PCI status; 
  Creation  of  regulatory  oversight:  A  competitive  internal  hydrogen  market  governed 
by  rules  such  as  may  result  from  the  above  consideration  cannot  exist  without 
independent regulators who ensure the application of market rules.  

Price  regulation  continues  to  be  possible  under  current  EU  acquis,  including  for  non-
household customers despite its distortive effects in the gas market 

Under current Article 3 of the Third Gas Package, price regulation continues to be allowed, 
under  specified  conditions  and  in  accordance  with  Federutility  case-law.  Concordantly, 
distortive retail price regulation continues to remain in place in different forms across various 
Member States in the EU181. 

In the context of supplier of last resort (SoLR) schemes, all but seven Member States out of 
23 screened Member States intervene in the price setting in some fashion182. Whilst primarily 
focussed on households in most Member States183, there are some countries such as Italy and 
Hungary with schemes in place that target enterprises. 

In general, it is recommended that price regulation shall be avoided all together because it is 
considered  as  a  major  barrier  for  the  completion  of  the  internal  energy  market.  More 
information  on  the  effectiveness  of  price  regulation  can  be  found  under  Section  6.1.1.  on 
market integration, competition and investments. 

  Decarbonisation  and  the  integration  of  renewable  and  decarbonised  gases  into  the 

market  

Today, natural gas supply (imported and indigenous production) flows from the transmission 
system  directly  to  large  consumers  and  to  distribution  systems,  from  where  it  reaches 
decentralised  end-consumers.  The  current  market  organisation  and  the  generally  accepted 
ACER Gas Target Model184 follow the logic of these physical flows.  

181 
182 
183 

184 

See Section 6.1.1. 
See Annex 4, Figure 7. 
Data shows that a large share of households are supplied by SoLRs. See 2014 CEER/ACER Annual Report on the 
Results of Monitoring the Internal Electricity and Natural Gas Markets in 2014, p. 114.  
This  model  organises  the  trade  of  gas  on  the  Virtual  Trading  Points  (Hubs)  established  in  the  Entry/Exit  zones, 
allowing each supplier crossing the border of a zone to use the entire gas network of the given zone. The design of 
an Entry/Exit zone is not harmonised in the EU, the Gas Target Model does not apply at distribution level and there 

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With increasing production of renewable and decarbonised gases, more production facilities 
could  be  connected  at  the  distribution  level.  The  current  market  organisation  does  not 
necessarily  foresee  participation  of  the  distribution  level  in  the  wholesale  market.  The 
tradability  of  decentrally  produced  gases  is  hence  limited,  blocking  (smaller)  facilities  from 
becoming active components of the energy system. 

Although  Article  8  of  the  Gas  Directive  and  Article  20  of  the  RED  II  are  requiring  that 
transmission and distribution operators publish technical  and financial conditions to connect 
to the networks, the current EU market organisation does not require inclusion of the plants 
connected  at  the  distribution  level  to  the  wholesale  market.  Rules  on  the  flow  from  the 
distribution  to  the  transmission  level,  i.e.  physical  reverse  flow,  do  not  exist  at  EU  level 
either. However, such rules exist in those Member States most successful in the role-out and 
scaling-up of biomethane and biogas. In Denmark and Germany, the distribution level is part 
of the entry-exit system and the balancing zone. 

  Consumers participation and protection 

Several  consumer  related  provisions  of  the  Gas  Directive  have  been  surpassed  by 
developments and could benefit from being updated in order to align consumer protection in 
gas with electricity sector and tackle new emerging challenges of the sector. In the gas sector, 
measures  at  the  national  level  are  not  consistent  across  member  States  with  regards 
transparency  and  clarity  of  information  of  energy  bills,  creating  unbalanced  protection  of 
consumers  across  the  EU.  Moreover,  the  increase  in  the  amount  of  information  provided  in 
gas  bills  has  not  necessarily  translated  into  more  clarity  of  the  energy  bills185.  In  addition, 
comparison  tools  have  been  set  up  in  several  Member  States,  however,  uptake  remains 
inconsistent across countries.  

Similarly, there is also diversity in national practices when it comes to easy, safe and secure 
access to consumption data by final customers (and third parties of their choice), and therefore 
to necessary tools for their empowerment and active participation in the market. This becomes 
more  pertinent  with  the  introduction  of  gas  smart  meters,  usually  owned  by  DSOs,  and  the 
enriching of the respective metering data, calling for clear, transparent and non-discriminatory 
rules for access to data, independently of the data management model used. At the same time, 
the  existing  gas  smart  metering  provisions  remain  relevant,  although  parts  of  them  could 
benefit  from  being  revisited/updated.  For  example,  one  could  consider  introducing  a 
requirement  to  revise  at  regular  intervals,  or  in  response  to  technological  and  market 
developments, those negative assessments for the rollout of smart metering, given the noted 
positive  trend  on  accrued  benefits  and  lower  costs,  or  to  set  a  penetration  target  for  the 
positively assessed cases.  

are no obligations to include the distribution level into the efficient operations of the network of a zone. Opposite to 
electricity  market,  Gas  Target Model implies explicit booking of cross-border capacities when selling the gas on 
the market.  
European Commission 2018, Consumer study on pre-contractual information and billing in the energy market, final 
report. 

185 

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Overall, the decarbonisation, rapid digitalization, and technology developments are reshaping 
the  functioning  of  the  sector.  Member  States  and  their  regulatory  bodies,  service  providers, 
consumer organizations and consumers are thus being forced to adapt to all these changes and 
redefine their roles. An intervention to up-date current rules looks, therefore, highly relevant. 

Since  2000,  expenditure  on  energy  services  for  the  poorest  households  in  the  EU  has 
increased by 50%, reaching almost 9% of their total budget on average. And in 2014, the gap 
in  the  share  of  expenditure  spent  on  domestic  energy  services  between  the  average  and  the 
poorest  households  increased  to  3%.  These  developments  have  provoked  strong  political 
interest in the issues of consumer vulnerability and energy poverty, and may suggest that the 
existing  provisions  on  these  topics  in  the  acquis  need  to  be  revisited  to  be  relevant  in  the 
current context. Consumer vulnerability will remain relevant as some drivers of vulnerability 
are permanent. Energy poverty problem is likely to grow in the future if no policy measures 
are adopted. About 34 million Europeans reported an inability to keep their homes adequately 
warm  in  2018,  and  6.9%  of  the  Union  population  have  said  that  they  cannot  afford  to  heat 
their home sufficiently in a 2019 EU-wide survey186. 

1.8.  Coherence 

Under this section the Evaluation aims at verifying both internal and external coherence of the 
Third  Energy  Package.  The  former  (internal  coherence) 
includes  consistency  and 
interdependence of various regulatory measures adopted under the Third Package:  

  network codes and guidelines: 

  Commission  Regulation  (EU)  2017/459  of  16  March  2017  establishing  a 
network code on capacity allocation mechanisms in gas transmission systems 
and repealing Regulation (EU) No 984/2013187; 

  Commission  Regulation  (EU)  No 312/2014  of  26 March  2014  establishing  a 

network code on gas balancing of transmission networks188; 

  Commission  Decision  2010/685/EU  of  10  November  2010  on  amending 

Chapter 3 of Annex I to Regulation (EC) 715/2009 (Transparency)189; 

  Commission Decision 2012/490/EU of 24 August 2012 on amending Annex I 
to Regulation (EC) No 715/2009 (Congestion Management Procedures)190; 
 Commission  Decision  (EU)  2015/715  of  30  April  2015191  Commission 
Regulation  (EU)  2015/703  of  30  April  2015  establishing  a  network  code  on 
interoperability and data exchange rules192; 

 

186 
187 
188 
189 
190 
191 
191 
191 
191 
191 
192 

Data from 2018; Eurostat, SILC [ilc_mdes01]). 
https://eur-lex.europa.eu/eli/reg/2017/459/oj 
https://eur-lex.europa.eu/eli/reg/2014/312/oj 
https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32010D0685 
https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A32012D0490 
https://eur-lex.europa.eu/eli/reg/2015/703/oj 
https://eur-lex.europa.eu/eli/reg/2017/460/oj 
https://eur-lex.europa.eu/eli/reg/2019/942/oj 
https://eur-lex.europa.eu/eli/reg/2017/1938/oj 
https://eur-lex.europa.eu/eli/dir/2018/2001/oj 
https://eur-lex.europa.eu/eli/reg/2015/703/oj 

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  Commission  Regulation  (EU)  2017/460  of  16  March  2017  establishing  a 

network code on harmonised transmission tariff structures for gas193; 

  Regulation (EU) 2019/942 of the European Parliament and of the Council of 5 
June  2019  establishing  a  European  Union  Agency  for  the  Cooperation  of 
Energy Regulators (ACER Regulation)194. 

The latter (external coherence), in turn, means checking coherence of the Third Package with 
other pieces of legislation relevant for the energy sector namely:  

  Regulation  (EU)  2017/1938  of  the  European  Parliament  and  of  the  Council  of  25 
October  2017  concerning  measures  to  safeguard  the  security  of  gas  supply  and 
repealing Regulation (EU) No 994/2010 (Gas SoS Regulation)195;  

  Directive  (EU)  2018/2001  of  the  European  Parliament  and  of  the  Council  of  11 
December  2018  on  the  promotion  of  the  use  of  energy  from  renewable  sources 
(RED II)196; 

  Directive  (EU)  2018/2002  of  the  European  Parliament  and  of  the  Council  of  11 
December  2018  amending  Directive  2012/27/EU  on  energy  efficiency  (Energy 
Efficiency Directive)197.  

  Internal Coherence 

  Are the various measures comprised in the Third Package properly working together 

or not?  

  Does  the  ineffectiveness  of  certain  measures  compromise  the  effectiveness  of  other 

components? 

General  speaking,  the  Third  Energy  Package  provisions  have  worked  together  well. 
ENTSOG and ACER monitoring reports on the network code implementation do not identify 
that  the  norms  and  rules  contained  in  the  different  network  codes  are  not  working  jointly. 
Rather, they complement each other. For example, the network code on interoperability sets 
out communication standards and protocols, which support the implementation of the network 
code on capacity allocation or rules for the allocation of gas quantities, which are necessary 
for the network code on balancing. The network code on transmission tariff structures, on the 
other hand, is relevant to provide the starting price for the capacity auction as detailed out in 
the network code on capacity allocation.  

193 
194 
195 
196 
197 

https://eur-lex.europa.eu/eli/reg/2017/460/oj 
https://eur-lex.europa.eu/eli/reg/2019/942/oj 
https://eur-lex.europa.eu/eli/reg/2017/1938/oj 
https://eur-lex.europa.eu/eli/dir/2018/2001/oj 
https://eur-lex.europa.eu/eli/dir/2018/2002/oj 

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However,  the  Commission  has  spotted  several  provisions  which  would  need  to  be  either 
deleted because they are obsolete or were never used, or modified because they are unclear or 
confusing.  

More precisely, regarding ACER, the report prepared by ACER in 2014, ‘Energy Regulation: 
A  Bridge  to  2025  Conclusions  Paper’198  recommends  that  the  Agency  be  given  adequate 
powers  to  fulfil  effectively  the  important  monitoring  responsibilities  assigned  to  it  in  the 
ACER  Regulation,  in  particular,  in  respect  of  information  gathering.  There  seemed  to  be  a 
mismatch between the monitoring tasks and the powers of the Agency to request information 
from NRAs, TSOs, and ENTSOs. 

The recast ACER Regulation strengthens the Agency’s powers to request information, both in 
the electricity and in the gas sectors.  

With  regard  to  protection  of  vulnerable  consumers,  the  main  discrepancy  between  the 
Electricity  and  Gas  Directive  arises  from  Universal  Services  (Article  3(3)  of  the  Electricity 
Directive). The right to universal service does not exist for gas. This limits some provisions 
related  to  the  protection  of  vulnerable  consumers  in  the  gas  sector.  Member  States  are  not 
obliged  to  ensure  certain  protection  to  all  vulnerable  consumers,  but  only  to  those  already 
connected  to  the  gas  system.  The  reason  is  that  a  piped  gas  network  for  consumers  is  not 
available throughout every EU MS.  

The  Third  Package’s  provision  on  allowing  regulated  prices  in  specific  cases  adhere  to 
difficulties  with  carrying  out  the  overarching  objectives  of  the  EU  regulatory  framework: 
introducing competition and enabling consumer choice.  

The 2019 revision of the Electricity Directive, Electricity Regulation  and ACER Regulation 
strengthened  the  comprehensive  institutional  framework,  including  reinforcing  ENTSO-E’s 
governance, ensuring the involvement of electricity DSOs in relevant processes and adapting 
the  roles  and  responsibilities  of  NRAs  to  the  new  electricity  market  design.  However,  the 
majority  of  these  changes  were  limited  to  the  electricity  sector  legislation,  creating  a 
regulatory  divergence  between  the  regulatory  framework  for  electricity  and  for  gas.  This 
might lead to detrimental effects and to unnecessary complexity affecting market participants, 
end-consumers and authorities alike. 

  External Coherence 

Coherence with Regulation (EU) 2017/1938 of the European Parliament and of the Council of 25 
October  2017  concerning  measures  to  safeguard  the  security  of  gas  supply  and  repealing 
Regulation (EU) No 994/2010 (Gas SoS Regulation); 

198 

http://www.acer.europa.eu/official_documents/acts_of_the_agency/sd052005/supporting%20document%20to%20acer%2
0recommendation%2005-2014%20-
%20%20energy%20regulation%20a%20bridge%20to%202025%20conclusions%20paper.pdf 

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Guaranteeing  the  security  of  gas  supply  in  a  spirit  of  solidarity  is  one  of  the  principles 
inspiring  the  provisions  of  the  Third  Package  (see  Recital  1  of  gas  directive  and  gas 
Regulation). 

Guaranteeing the security of gas supply is a guiding objective behind quite a number of new 
provisions introduced by the Third Package in 2009, such as: 

 

the need for common minimum standards for public service requirements, which take 
into account, in particular, the security of supply concerns (Recital 44 Gas Directive); 
  creating  the  conditions  for  new  investments  needed  to  guarantee  the  security  of  gas 

 

 

 

supply (Articles 17, 22 Gas Directive); 
the need for increased cooperation between Member States, NRAs and TSOs, essential 
for the SoS; 
the  need  to  assess  the  independence  of  network  operation,  the  level  of  the 
Community’s and individual Member States’ dependence on energy supply from third 
countries,  and  the  treatment  of  both  domestic  and  foreign  trade  and  investment  in 
energy in a particular third country (see Recital 22; Article 11 Gas Directive); 
the  need  to  take  into  account  the  expected  the  impact  of  new  infrastructures  on  the 
security  of  supply,  which  would  justify  granting  exemptions  to  the  mandatory  third 
party access to certain cross border infrastructures (Article 36 Gas Directive).  

At  the  time  of  the  legislative  proposal  (in  2007),  Member  States  had  just  finalised  the 
transposition and implementation of Directive 2005/67 of 26 April 2004 concerning measures 
to  safeguard  security  of  natural  gas  supply  (transposition  deadline  was  19  May  2006).  This 
directive  had  established  the  grounds  for  Member  States  coordination  within  a  ‘Gas 
Coordination Group’ and had defined a ‘Community mechanism’ in case of supply disruption. 

Directive  2004/67  was  later  repealed  and  replaced  by  Regulation  (EU)  No  994/2010  of  the 
European  Parliament  and  of  the  Council  of  20  October  2010  concerning  measures  to 
safeguard security of gas supply, which in turn was repealed and replaced by the current rules 
on security of gas supply, the Gas SoS Regulation. 

The  Explanatory  Memorandum  to  the  Third  Package  refers  to  the  scope  of  the  obligations 
contained in Directive 2004/67/EC, which required Member States to report on the security of 
gas supply situation and on the regulatory framework to enhance investment in infrastructure. 
On this basis, the Third Package strengthened these basic obligations, e.g. by foreseeing the 
need for ENTSOG to make system adequacy forecasts for every summer and winter as well as 
for the long term (winter and summer outlooks and TYNDP). 

The  Third  Package  recognised  the  limitations  of  Directive  2004/67,  which  set  up  a 
coordination  platform,  but  did  not  foresaw  regional  cooperation  in  case  of  severe  supply 
disruptions. In view of the fact that the Directive’s effectiveness was still to be examined (as 
per  Article  10  of  Directive  2004/67),  the  Third  Package  did  not  envisage  amending  it,  but 
limited itself to introduce the obligation for Member States to cooperate in order to promote 
regional and bilateral solidarity (Article 6, on ‘Regional solidarity’). 

Such  regional  cooperation  was  meant  to  cover  situations  resulting  or  likely  to  result  in  the 
short  term  in  a  severe  disruption  of  supply  affecting  a  Member  State  and  would  cover:  (a) 
coordination of national emergency measures; (b) identification and development of the 
necessary  energy  interconnections;  (c)  the  conditions  and  practical  modalities  for 

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mutual  assistance.  In  addition,  the  Commission  might  adopt  Guidelines  for  regional 
cooperation in a spirit of solidarity. These guidelines were never adopted. 

Instead,  the  Gas  SoS  Regulation  translated  into  concrete  provisions  what  such  regional 
solidarity would mean in practice, by identifying the main gas supply corridors and – on this 
basis – creating joint risk groups within which Member States work together to identify and 
assess all risk factors related to the relevant gas supply corridor. The starting point of the work 
of the joint risk groups is the EU wide simulation to be carried out by ENTSOG (which plays 
an important role under the Gas SoS Regulation as well)199. 

The  Gas  SoS  Regulation  also  introduced  the  concept  of  ‘solidarity  protected  customer’ 
(Article 2(6)) and put in place a mechanism to guarantee that in case of emergency, the scarce 
gas  available  be  shared  to  guarantee  the  needs  of  households  and  other  users  considered  as 
solidarity  protected.  The  legal,  technical  and  financial  arrangements  to  make  ‘solidarity 
gas’ possible are to be agreed bilaterally between Member States200. During the discussions of 
these arrangements (currently still under preparation) Member States encountered a number of 
difficulties,  in  particular  related  to  the  interaction  between  the  normal  functioning  of  the 
internal  market  rules  and  the  introduction  of  ad  hoc  measures  resulting  from  the  solidarity 
arrangements, as well as on finding the appropriate price mechanism for the ‘solidarity gas’.  

Another  difficulty  raised  concerns  the  role  and  responsibility  of  the  National  Regulatory 
Authority  in  monitoring  the  respect  of  the  bilateral  solidarity  arrangements  in  case  of 
emergency. The role of the NRA and ACER on security of supply is not clearly defined in the 
Third  Package,  but  Article  41(1)  requires  the  NRA  to  be  responsible  for  (a)  fixing  or 
approving, in accordance with transparent criteria, transmission or distribution tariffs or their 
methodologies;  (b)  ensuring  compliance  of  transmission  and  distribution  system  operators, 
and  where  relevant,  system  owners,  as  well  as  of  any  natural  gas  undertakings,  with  their 
obligations  under  the  gas  Directive  and  other  relevant  Community  legislation,  including  as 
regards  cross-border  issues;  (c)  cooperating  in  regard  to  cross-border  issues  with  the 
regulatory authority or authorities of the Member States concerned and with the Agency; and 
(d) monitoring the implementation of rules relating to the roles and responsibilities of TSOs, 
DSOs,  suppliers  and  customers  and  other  market  parties  pursuant  to  Regulation  (EC)  No 
715/2009; at  the same time, the Gas SoS Regulation requires Member States to  designate a 
‘Competent authority’ for the implementation of the Regulation, which only in some cases is 
the NRA. 

The Gas  Directive kept  some provisions that  existed already in  the Second  Package (and in 
earlier texts) that were directly meant to accommodate the need for ad hoc action to prevent 
potential gas supply disruptions and to manage emergencies. 

199 
200 

See Article 7 and Annex I of the Regulation. 
See  Commission  Recommendation  (EU)  2018/177  of  2  February  2018  on  the  elements  to  be  included  in  the 
technical, legal and financial arrangements between Member States for the application of the solidarity mechanism 
under  Article  13  of  Regulation  (EU)  2017/1938  of  the  European  Parliament  and  of  the  Council  concerning 
measures to safeguard the security of gas supply (C/2018/0551) http://data.europa.eu/eli/reco/2018/177/oj 

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This is the case of Article 5 (‘Monitoring of security of supply’), which, to the extent that it 
included  reporting  obligations,  was  deleted  in  2018  by  Regulation  (EU)  2018/1999 
(Governance Regulation). As explained in the Fitness check that preceded the Commission’s 
proposal, this reporting obligation was considered as overlapping with the obligations under 
the gas SoS Regulation201. 

Special  attention  deserves  Article  46  of  the  Gas  Directive,  on  ‘Safeguard  measures’202. 
This article reflects the consideration that, in case of crisis, Member States should be able to 
derogate  to  the  internal  market  rules,  subject  to  some  requirements.  The  provisions  of  this 
article were also superseded by the evolution of the lex specialis on security of supply, which 
foresees  the ex-ante identification in  the national emergency plans of any  non-market  based 
measure  to  be  applied  in  case  of  emergency,  as  well  as  the  appropriate  governance  for 
notifying such measures in case of emergency and monitoring the impact and justification of 
such  measures  (see  Articles  10,  11  and  12  of  the  Gas  SoS  Regulation).  Under  Article 
41(1)(t),  the  NRA  shall  have  the  duty  to  monitor  the  implementation  of  these  safeguard 
measures.  

The  provisions  of  the  Third  Package  on  security  of  supply  in  general,  and  on  emergency 
preparedness  in particular, are therefore based on a legal  set  up that  evolved dramatically  – 
based  on  the  experience  –  already  at  the  end  of  2010  and  which  strengthened  in  2017  the 
regional  approach  to  security  of  gas  supply,  and  translated  into  concrete  obligations  the 
solidarity principle that in the meantime has been enshrined in the Treaty itself. 

On  their  turn,  the  current  rules  on  Security  of  Gas  Supply  (in  the  sense  of  emergency 
preparedness),  rely  on  the  consideration  that  the  security  of  gas  supply  is,  as  a  matter  of 
principle,  guaranteed  by  well-functioning,  competitive,  transparent,  integrated  and  well 
interconnected gas markets. This is clearly stated in its Article 1: ‘This Regulation establishes 
provisions aiming to safeguard the security of gas supply in the Union by ensuring the proper 
and  continuous  functioning  of  the  internal  market  in  natural  gas  (‘gas’),  by  allowing  for 

201  

202  

‘The obligation in Article 5 of the Gas Directive to monitor the security of gas supply was assessed by the study to 
result in mediocre median annual costs for MS of EUR 16 503, which are mainly due to costs for equipment and 
software (EUR 15 000) 121 and on median 10 man-days per year are needed for the fulfilment of the obligation. 
The  benefits  were  evaluated  as  high  but  he  study  also  identified  overlaps  of  the  indicators  reported  for  this 
obligation with MS reporting obligations to Eurostat 122 as well as overlaps with the reporting obligation contained 
in Article 41(1e) of the directive. Nevertheless and due to the comparatively lower costs and high benefits of the 
obligation  reported,  the  study  assessed  a  high  score  for  all  Better  Regulation  criteria  but  EU  added  value  with  a 
medium result. The internal interviews by the Commission did not entirely support these good results concerning 
benefits  but  confirmed  the  significant  overlaps  with  the  reports  provided under  Article  41(1e) of  the  directive  as 
well as with the obligations under the Security of Gas Supply Regulation. Furthermore, the public consultation also 
identified overlaps of the obligation with the Security of Gas Supply Regulation.’ Fitness check accompanying the 
proposal https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52016SC0397&from=EN 
‘1.  In  the  event  of  a  sudden  crisis  in  the  energy  market  or  where  the  physical  safety  or  security  of  persons, 
apparatus  or  installations  or  system  integrity  is  threatened,  a  Member  State  may  temporarily  take  the  necessary 
safeguard measures. 
2. Such measures shall cause the least possible disturbance to the functioning of the internal market and shall be no 
wider in scope than is strictly necessary to remedy the sudden difficulties which have arisen. 
3. The Member State concerned shall, without delay, notify those measures to the other Member States, and to the 
Commission, which may decide that the Member State concerned must amend or abolish such measures, insofar as 
they distort competition and adversely affect trade in a manner which is at variance with the common interest.’ 

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exceptional  measures  to  be  implemented  when  the  market  can  no  longer  deliver  the  gas 
supplies required, including solidarity measure of a last resort, and by providing for the clear 
definition  and  attribution  of  responsibilities  among  natural  gas  undertakings,  the  Member 
States  and  the  Union  regarding  both  preventive  action  and  the  reaction  to  concrete 
disruptions of gas supply.’ 

To achieve its objectives, the Regulation introduces minimum standards on infrastructure and 
supply,  and  adds  to  the  internal  market  rules  those  tools  that  are  needed  to  identify  risks 
(national  and  regional  risk  assessments),  prevent  them  from  happening  (preventive  action 
plans)  and  take  the  appropriate  measures  to  remove  or  limit  the  impact  in  case  of  crisis 
(emergency  plans).  A  main  novelty  of  the  2017  Regulation  was  the  so  called  solidarity 
mechanism,  which  obliges  Member  States  –  under  some  conditions,  where  a  neighbouring 
country is in emergency state – to reduce the consumption of gas by non-solidarity protected 
customers  in  order  to  supply  the  necessary  gas  to  the  solidarity  protected  customers  of  the 
neighbouring Member State. 

The rationale behind the current EU gas SoS rules is summarised in Recital 31 of the Gas SoS 
Regulation,  as  follows:  ‘This  Regulation  lays  down  security  of  supply  standards  that  are 
sufficiently harmonised and cover at least the situation that occurred in January 2009 when 
gas  supply  from  Russia  was  disrupted.  Those  standards  take  account  of  the  difference 
between  Member  States,  public  service  obligations  and  customer  protection  measures,  as 
referred  to  in  Article  3  of  Directive  2009/73/EC.  Security  of  supply  standards  should  be 
stable, so as to  provide the necessary legal certainty, should be clearly defined, and should 
not  impose  unreasonable  and  disproportionate  burdens  on  natural  gas  undertakings.  They 
should  also  guarantee  equal  access  for  the  Union  natural  gas  undertakings  to  national 
customers.  Member  States  should  establish  measures  that  will,  in  an  effective  and 
proportionate  manner,  ensure  that  natural  gas  undertakings  comply  with  such  a  standard, 
including  the  possibility  to  establish  fines  on  suppliers,  where  they  consider  it  to  be 
appropriate.’ 

While  the  Gas  SoS  Regulation  takes  duly  into  account  the  existence  of  the  Third  Package 
rules, the fact is that the latter – and in particular the subsequent network codes and guidelines 
– does no longer reflect the mechanisms of the security of supply rules. 

A total of 21 definitions in Article 2 of the Gas SoS Regulation refer to those in Article 2 of 
Directive 2009/73. Only five definitions are new; they are needed for some notions that were 
introduced  by  the  SoS  rules  in  2010  and  2017  (therefore  not  taken  into  account  in  the  Gas 
Directive).  These  five  ‘new’  definitions  concern:  ‘essential  social  service’  (Article  2(4)), 
‘protected  customer’  (Article  2(5)),  ‘solidarity  protected  customer’  (Article  2(6)), 
‘competent  authority’  (Article  2(4))  and  ‘emergency  supply  corridors’.  These  ad  hoc 
notions seem therefore meant only for the purposes of the security of supply Regulation, but – 
to  the  extent  that  some  of  them  may  justify  some  intervention  in  the  market  –,  they  might 
need to be taken into consideration within the internal market rules, and – in particular – when 
developing network codes and guidelines. 

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This is the case e.g. of the definition of protected customers, that determines that appropriate 
preventive measures are foreseen to guarantee the supply to these customers in specific cases 
that  may  impact  the  gas  supply  (so  called  ‘supply  standard’)203.  Article  2(5)  leaves  some 
room  for  manoeuver  to  Member  States  when  identifying  the  group  of  protected  customers. 
The  definition  of  these  at  national  level  is  important,  though,  because  it  may  determine  the 
declaration of an  ‘emergency state’  by a Member State and the introduction of  ‘non-market 
based measures’. The Regulation requires that such measures be clearly defined, transparent, 
proportionate,  non-discriminatory  and  verifiable,  shall  not  unduly  distort  competition  or  the 
effective functioning of the internal market in gas and shall not endanger the security of gas 
supply  of  other  Member  States  or  of  the  Union  (Article  8(1)).  But  these  requirements  are 
mainly appropriate for an ex-ante check of the relevant national preventive action plans and 
preventive  plans.  In  case  of  market  tightness,  the  different  scope  of  the  group  of  ‘protected 
customers’  in  different  Member  States  may  imply  the  introduction  of  non-market  based 
measures at an early stage. 

Closely  linked  to  the  supply  standard  (as  well  as  to  the  infrastructure  standard  defined  in 
Article 5) is also the notion of public service obligation. The Regulation (Recital 31) refers 
to  the  provisions  in  Article  3  of  the  Gas  Directive.  Member  States  have  to  indicate  in  their 
National  Preventive  Action  Plans  the  existing  PSOs  related  to  the  security  of  supply  and 
briefly describe them. This  should include clearly  who has to  comply with  such obligations 
and  how,  as  well  as  how  and  when  those  PSOs  would  be  triggered,  if  applicable.  In  its 
opinions  on  some  national  plans,  the  Commission  has  highlighted  its  doubts  on  some 
preventive measures, their potential impact on cross border trade and on the internal market in 
general and their potential lack of justification from the security of supply point of view. 

Article 11 of the Gas SoS Regulation deals with  the procedure for declaring a crisis, and in 
particular  the  three  crisis  levels:  early  warning,  alert  level  and  emergency  level;  as 
mentioned, the latter justifies the adoption of non-market based measures. The declaration of 
emergency level by one Member State may trigger the solidarity mechanism (Article 13), 
which may lead a neighbouring Member State to reduce the gas supply to its non-solidarity 
protected customers and share the available  gas  with  the solidarity  protected customers in  a 
first  Member  State.  The  needed  ‘solidarity  gas’  may  be  obtained  through  market  based 
mechanisms, such as ad hoc tenders or interruptibility contracts; if needed, non-market based 
measures should be applied, including enforced load shedding. 

Several  provisions  thus  of  the  Gas  SoS  Regulation  may  therefore  have  an  impact  on  the 
normal  functioning  of  the  internal  market,  where  the  security  of  supply  is  at  stake.  They 
require clear responsibilities at national level and clear technical rules in order for everyone to 
be able to react when needed.  

203  

(a) extreme temperatures during a 7-day peak period occurring with a statistical probability of once in 20 years; (b) 
any period of 30 days of exceptionally high gas demand, occurring with a statistical probability of once in 20 years; 
(c)  for  a  period of  30  days  in  the  case  of  disruption  of  the  single  largest  gas  infrastructure  under average  winter 
conditions (Article 6(1)). 

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Despite  the  close  link  between  security  of  supply,  market  rules  and  system  operation,  the 
Third Package and the  network codes and guidelines developed over the past years do 
not duly take into consideration the evolution of the security of supply rules since 2009. 

Commission Regulation (EU) No 312/2014 establishing a network code on gas balancing of 
Transmission  Networks  sets  out  gas  balancing  rules,  including  network-related  rules  on 
nomination  procedures,  imbalance  charges,  settlement  processes  associated  with  the  daily 
imbalance  charge  and  operational  balancing  between  transmission  system  operators’ 
networks.  It  applies  to  balancing  zones  within  the  borders  of  the  Union.  However,  its 
Article 2(4) clarifies that ‘this Regulation shall not apply in emergency situations where the 
transmission system operator shall implement specific measures defined under the applicable 
national rules and on the basis of Regulation (EU) No 994/2010 of the European Parliament 
and  of  the  Council  of  20  October  2010  concerning  measures  to  safeguard  security  of  gas 
supply, as appropriate.’ 

Only Commission Regulation (EU) 2015/703 establishing a Network code on interoperability 
and  data  exchange  rules  contains,  in  its  Article  6  (on  ‘Rules  for  flow  control’,  point  14)  a 
reference to the fact that ‘a transmission system operator may decide to alter the quantity of 
gas or the gas flow direction or both, if this is needed, in order to: (a) comply with provisions 
laid down in national or Union safety legislation applicable to the interconnection point; (b) 
comply  with  requirements  laid  down  in  Emergency  Plans  and  Preventive  Action  Plans 
developed in accordance with Regulation (EU) No 994/2010 of the European Parliament and 
of the Council (7); (c) react in case the operator's system is affected by an exceptional event.’ 

Conclusion  

The Third Package, and in particular its Article 6, on regional solidarity, represented an 
important step forward that contained the embryo of subsequent EU rules on security of 
gas supply. Its provisions were quickly superseded by Regulation (EU) No 994/2010 and 
further developed by the Gas SoS Regulation (EU) 2017/1938.  

Coherence  with  Directive  (EU)  2018/2001  of  the  European  Parliament  and  of  the 
Council  of  11  December  2018  on  the  promotion of  the  use  of  energy  from  renewable 
sources (Renewable Energy Directive) 

Recast  RES  Directive  has  introduced  more  detailed  rules  for  the  authorisation,  certification 
and licensing of renewable energy that that should be implemented in objective, transparent, 
non-discriminatory and  proportionate  manner  and should take into  account  particularities of 
individual  renewable  energy  technologies.  Directive 2012/27/EU  on  energy  efficiency 
provides  for  guarantees  of  origin  for  proving  the  origin  of  electricity  produced  from  high-
efficiency cogeneration plants. Guarantees of origin issued for the purposes of this Directive 
have the sole function of showing to a final customer that a given share or quantity of energy 
was produced from renewable sources. Guarantees of origin which are currently in place for 
renewable  electricity  are  under  recast  Directive  extended  to  cover  also  renewable 
gases. Extending the guarantees of origin system to energy from non-renewable sources is an 
option  for  Member States. This  should  provide  a  consistent  means  of  proving  to  final 
customers the origin of renewable gas such as biomethane and should facilitate greater cross-
border  trade  in  such  gas. It  is  now  also  possible  to  create  guarantees  of  origin  for  other 
renewable gas, such as hydrogen. Furthermore, the directive introduces a legal framework for 

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renewable  energy  communities  empowering  SMEs,  local  authorities  and  citizens  located  in 
proximity  of  the  production  installations  to  take  control  over  their  renewable  energy 
production and supply.  

Coherence with Directive (EU) 2018/2002 of the European Parliament and of the Council 
of  11  December  2018  amending  Directive  2012/27/EU  on  energy  efficiency  (Energy 
Efficiency Directive)  

Provisions  under  Articles  9-11  (for  electricity)  of  the  EED  have  been  transferred  to  the 
Electricity  Directive  as  part  of  the  Clean  Energy  for  all  Europeans  Package  in  2018,  which 
allowed to address the existing overlaps in relation to metering and billing rules between the 
two Directives.  The  amended EED  requires assessing the need to  do the  same by end 2021 
where appropriate for the provisions related to gas. 

1.9.  EU value added 

This  section  aims  to  determine  value  resulting  from  the  Third  Package  (as  determined  by 
‘Effectiveness’  and  ‘Efficiency’  Sections)  compared  to  what  could  have  been  achieved  by 
Member  States  at  national  and/or  regional  levels.  It  includes  the  added  value  of  the 
institutional bodies established at EU level by the Third Package: ENTSOG and ACER.  

  Value added of EU market framework 

  What is the additional value resulting from the Third Package  compared to what 

could be achieved by Member States at national and/or regional levels? 

Unbundling  

The legal and functional unbundling of TSOs that were vertically integrated with production 
and  supply  activities,  provided  for  under  the  Second  Package,  did  not  succeed  in  ensuring 
equal access to the networks for all suppliers. Reinforced common rules on TSO unbundling 
introduced by the Third Package in order to foster competition on the network could only be 
adopted at EU level. Common unbundling rules were needed to ensure a level playing field.  

With  regard  to  DSOs,  the  large  majority  of  the  Member  States  have  not  set  unbundling 
requirements  beyond  those  of  the  Gas  Directive,  demonstrating  that  the  intervention  was 
necessary  in  order  to  structure  the  EU  energy  sector  in  such  way  so  as  to  pursue  the  wider 
objectives of the internal market, to promote competition and economic growth.  

Access to cross-border infrastructure  

At the time the Third Package was adopted, the legal framework did not allow for a proper 
and efficient regulation of the cross border issues relating to gas network access. The fact that 
access to cross border interconnectors was often granted in a preferential manner showed that 
rules were insufficient despite the principle of non-discriminatory access which was  already 
included  in  Article  18  of  the  Second  Package.  This  is  why  the  Third  Package  aimed  at  a 
modification  of  existing  EU  legislation  and  at  the  creation  of  new  frameworks  for  cross-
border  co-operation  which  could  legally  and  practically  only  be  achieved  at  the  European 
level.  The  challenges  could  not  be  addressed  as  efficiently  by  individual  Member  States. 
Fostering  a  more  efficient  and  integrated  EU  gas  market  and  ensuring  a  more  co-ordinated 
policy response to security of supply clearly required harmonised and coordinated approaches 
by all Member States. 

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The  reduction  of  price  spreads  between  Member  States  as  a  result  of  an  increase  of  cross-
border trade clearly shows that the Third Package has meant a major step in regulating cross-
border  interconnectors.  This  is  clearly  an  issue  that  could  only  be  regulated  at  EU  level. 
Additionally, the requirement to have at least a virtual reverse flow possibility, meaning that 
gas  could  be  traded  in  both  directions  even  if  this  was  not  possible  from  a  physical 
perspective  efficiently led to  additional cross-border capacity without significant  investment 
needs204. 

Similarly, as Member States’ networks became increasingly interconnected via infrastructure, 
there  was  a  need  for  more  cooperation  between  neighbouring  TSOs.  This  could  only  be 
achieved  by  supranational  measures.  This  is  especially  true  as  regards  the  need  for  a 
coordinated  approach  to  infrastructure development  in  particular with  relevance for security 
of  supply.  This  has  called  for  the  development  of  ENTSOG  and  the  establishment  of  a 
TYNDP. The coordination rules for TSOs and NRAs introduced by the Third Package were 
needed  to  avoid  fragmented  uncoordinated  decisions,  which  could  hamper  the  effective 
functioning of the internal market.  

In  addition,  the  more  technical  network  codes  led  to  a  further  harmonisation  on  access  to 
cross-border  infrastructure  by  introducing  a  harmonised  allocation  methodology  by  way  of 
auctions  to  allocate  capacity  and  by  requiring  the  standardised  offer  of  so-called  bundled 
capacity  products  that  enabled  a  transport  of  gas  between  the  market  areas’  virtual  trading 
points instead of virtually stopping at the border and handing the gas over there.  

Price regulation 

The  regulation  of  retail  prices  of  gas  for  industrial  consumers  has  been  largely  successfully 
tackled  since  the  Second  Package.  Furthermore,  a  considerable  amount  of  Member  States 
have  liberalised  price  regulation  for  households  and  SMEs.  In  turn,  the  phase  out  of  price 
regulation has contributed to increased competition at the retail market level, a decline in the 
average  share  of  the  three  largest  suppliers  and  a  widening  of  consumer  choice.  However, 
despite  considerable  progress  made,  price  regulation  continues  to  be  in  place  in  many 
Member States (see Section 6.1.1.). 

Consumer empowerment and protection  

Metering and billing; access to data and switching 

In a single market for energy, there is a strong case for suppliers being subject to similar if not 
identical  obligations  and  rules,  and  for  consumers  to  enjoy  the  same  basic  rights  and  be 
provided with comparable and recognisable information wherever they live and wherever they 
purchase  their  energy  from.  More  generally,  the  delivery  of  a  New  Deal  for  energy 
consumers205 as part of the Energy Union includes providing consumers with frequent access 

204  

205  

Virtual reverse flow means a netting of nominations between both flow directions. In case it is not possible to use 
an interconnector physically in both directions, network users could use the interconnection point up to a level of 
the  usage  on  the  main  direction.  Only  the  net  sum  of  the  transport  wishes  of  all  network  users  would  then  be 
transported by the respective transmission system operators.  
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52015DC0339 

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to  partially  standardised,  meaningful,  accurate  and  understandable 
information  on 
consumption  and  related  costs.  Guaranteeing  certain  minimum  standards  in  terms  of  the 
frequency and content of billing and billing information therefore contributes to realising the 
Energy Union and meeting EU goals on energy efficiency and greenhouse gas reductions. In 
addition to minimum standards for billing, the guarantee of equal standards regarding further 
rights that facilitate switching (e.g. transparent comparison tools, minimum switching times or 
absence of termination fees) would bring considerable benefits to consumers across the EU. 

The provisions addressing consumer information, and access to data, in the Gas Directive are 
essential  for  protecting  consumers  in  the  internal  energy  market  at  the  retail  level,  and 
empowering them at the same time by enabling for them choices. They play an important role 
in ensuring the benefits of the internal market in energy can be enjoyed by all consumers, and 
help to create a level playing field for suppliers and other retail market actors across the EU. 
Whereas there are currently still very few if any examples of cross-border supply in the retail 
market, a common base of energy consumer rights is a precondition for that to develop over 
time.  The  delivery  of  such  cross-border  services  could  be  further  facilitated  by  setting  up, 
and  accordingly  mandating  that  as  it  is  currently  the  case  for  electricity,  interoperable 
arrangements  within  the  EU  for  the  easy,  safe  and  secure  access  and  exchange  of  data 
among eligible parties, while fostering the development of novel energy services and products 
that benefit EU consumers and businesses alike.  

While  some  Member  States  had  already  been  protecting  their  vulnerable  energy  customers 
and energy poor households prior to the EU intervention, others have taken action as a result 
of  the  EU  intervention.  The  introduction  of  the  concept  of  the  ‘vulnerable  customer’  and 
‘energy  poverty’  by  some  Member  States  has  been  clearly  instrumental  to  the  adoption  of 
measures contributing to addressing the issue. 

Conclusions 

Overall, it can be concluded that the subjects covered by the examined legislation such 
as  unbundling,  cross-border  cooperation,  interconnectors,  are  topics  that  legally  and 
practically  could  only  be  regulated  at  EU  level.  Similarly,  cooperation  between 
neighbouring  TSOs  and  NRAs  needed  to  avoid  fragmented  uncoordinated  decisions. 
Regulation could only happen at supranational level.  

Only a common EU legislative approach to metering and billing and overall to consumer 
protection and empowerment provisions would consistently safeguard the level playing 
field  for  suppliers  and  provide  equal  rights  for  energy  consumers.  It  also  facilitates 
providing cross-border services.  

  What is the value added of ENTSOG and ACER? 

The regulatory framework and rule-making process for energy policy has been enriched in the 
Third  Energy  Package  by  creating  ACER  and  ENTSOG.  ACER  provides  a  framework  for 
institutionalised  cooperation  between  national  regulators.  ENTSOG,  in  turn,  constitutes  a 
cooperation platform for transmission system operators.  

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Both  ACER  and  ENTSOG  have  become  important  partners  in  discussions  on  regulatory 
issues and fulfil a useful task in the coordination of NRAs and TSOs, respectively. They are 
both  crucial  actors  in  the  development  process  of  the  network  codes.  In  its  Communication 
Delivering  the internal  electricity market  and making  the most of  public intervention206,  the 
Commission underlined that ACER and the ENTSOs have played a key role in the progress 
towards a functioning internal energy market. In 2014, the Commission made an Evaluation 
on the first years of the functioning of ACER and has concluded that the agency has become a 
credible  and  respected  institution  playing  a  prominent  role  in  the  EU  regulatory  arena  and 
focusing on the right priorities207. 
An  external  evaluation  of  ACER  was  conducted  in  2014208,  followed  in  2016  by  the 
Evaluation  of  the  internal  energy  market209  and  the  Impact  Assessment210  for  the  Clean 
Energy Package, which  further assessed the impacts  of the  ACER  regulation. These  reports 
concluded  that  ACER’s  governance  and  management  structure  is  widely  considered  to  be 
appropriate  for  the  Agency’s  current  role.  The  analyses  also  concluded  that  the  Agency’s 
working methods represent significant value added thanks to numerous informal interactions 
with  associations  and  other  stakeholders.  Also  their  on-going  publishing  of  all  relevant 
documents  is  highly  appreciated  from  the  market  participants.  In  2014  the  vast  majority  of 
stakeholders  consulted  for  this  ACER  Evaluation  reported  the  Agency  to  be  understaffed. 
However, the Agency was able to carry out most of the activities planned in the work plans. 
These  reports  also  concluded  that  deliverables  produced  by  ACER  bring  value  to  all 
stakeholders  by  informing  them  of  key  market  and  regulatory  developments.  Stakeholders’ 
view that ACER is understaffed was highlighted again in 2020 by a report from the European 
Court of Auditors211. 
The Commission212 assessed in 2021, based on a report by an independent expert, whether the 
financial and human resources available to ACER allow it to fulfil its role under the ACER 
Regulation  of  working  towards  an  internal  energy  market  and  of  contributing  to  energy 
security to the benefit of consumers in the Union. This assessment213 stated that for ACER to 
be properly resourced for its tasks under current EU legislation, 25 additional posts are needed 
for strengthening its legal expertise, reinforce teams working on electricity market integration 
and for implementing Regulation (EU) 1227/2011 (REMIT). The required additional financial 

206  
207  
208  

209  
210  
211  

212  

213  

https://ec.europa.eu/energy/sites/ener/files/documents/com_2013_public_intervention_en_0.pdf 
https://ec.europa.eu/energy/sites/ener/files/documents/20140122_acer_com_evaluation.pdf 
Commission  Evaluation  of  22.01.2014  of  the  activities  of  the  Agency  for  the  Cooperation  of  Energy  Regulators 
(ACER) under Article 34 of Regulation (EC) 713/2009 – C(2014) 242 final. 
SWD/2016/0412 final - 2016/0379. 
SWD/2016/0410 final - 2016/0379. 
European  Court  of  Auditors  2020  Special  Report:  Future  of  EU  agencies  –  Potential  for  more  flexibility  and 
cooperation. 
The revised ACER Regulation (Article 33(10) of the ACER Regulation 2019/942) introduced the obligation that 
the Commission shall assess whether the financial and human resources available to ACER allow it to fulfil its role 
under this Regulation of working towards an internal energy market and of contributing to energy security to the 
benefit of consumers in the Union. 
Commission  Opinion of  05.10.2021  on  the  draft  programming  document  of  the  European  Union Agency  for  the 
Cooperation of Energy Regulators for the period 2022  – 2024 and on the sufficiency of the financial and human 
resources available to the Agency – C(2021)7024.  

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resources, including for 15 of the 25 additional posts, can be covered by income from fees for 
ACER tasks under (REMIT). 

As  regards  ENTSOG,  improving  security  of  supply  by  strengthening  incentives  for 
investment in transmission and distribution capacities required a tighter cooperation between 
national TSOs. Through the setting up of ENTSOG, the Third Package made this cooperation 
easier  and  smoother.  Such  an  EU-wide  structure  could  only  be  created  thanks  to  EU 
intervention.  

However, the implementation of the Third Package has highlighted the existence of a number 
of shortcomings concerning the framework applicable to ACER and the ENTSOs. See notably 
Section 6.1.1. (reference to increased TSO cooperation Section) on the need to reinforce the 
independence and transparency requirements applicable to ENTSOG and the possible conflict 
of interest in ENTSOG’s role. 

In some instances, fragmented national  regulatory  oversight  has proved  to  be inefficient for 
cross-border  issues  related  to  the  gas  system.  The  lack  of  a  stronger  governance  and 
regulatory  framework  for  cross-border  issues  constituted  a  barrier  for  the  integration  of  the 
energy markets214. In this regard, there was consensus among market parties and stakeholders 
that  ACER  should  indeed  be  enabled  to  more  efficiently  oversee  the  development  of  the 
internal  energy  market  and  deal  with  cross-border  issues,  both  in  the  electricity  and  gas 
sectors.  Therefore, ACER’s oversight  role was strengthened in  the  recast ACER Regulation 
and  recast  Electricity  Directive  as  far  as  ENTSO-E,  the  EU  DSO  entity  and  the  Regional 
Coordination Centres are concerned.  

Overall,  ACER  and  ENTSOG  have  become  key  partners  in  discussions  on  regulatory 
issues  and  fulfil  a  useful  task  in  the  coordination  of  NRAs  and  TSOs,  respectively. 
However,  a  number  of  shortcomings  concerning  their  framework  have  been  identified 
which need to be resolved.  

  Assessing the case for continuing EU-intervention  

  To what extent do the objectives addressed by the Third Package continue to require 

EU-intervention?  

Despite the positive developments generated by the examined legislation, there is still limited 
coordination  between  national  TSOs,  often  restricted  to  very  specific  subjects  or  situations. 
Similarly,  without  further  harmonisation  and  legislation  at  EU  level,  existing  regulatory 

214  

Study for the ITRE Committee of the European Parliament ‘Energy Union: Key Decisions for the Realisation of a 
Fully  Integrated  Energy  Market’,  15  March 2016  ‘In  several  regional or  EU-level  projects  (e.g. market  coupling 
projects,  (…))  national  authorities,  TSOs,  regulators  and  energy  exchanges  of  different  Member  States  need  to 
cooperate. However, as they are primarily responsible for their own national gas and electricity system and market 
they  are  not  always  sufficiently  motivated  to  also  take  supranational  interests  into  account.  […]  This  leads  to 
complex  and  slow  decisional  and  implementation  processes  for  most  cross-border  projects,  resulting  in  delayed 
implementations  (e.g.  the  intra-day  markets’  coupling  project).’  In  this  context,  different  stakeholders  argue  for 
stronger governance at the EU level. For example, EPEX Spot states the need to accompany the electricity target 
model by appropriate governance architecture at European level, applicable on Market Coupling activities, which 
will be crucial to ensure an efficient day-to-day operation of such complex mechanisms. 
http://www.europarl.europa.eu/RegData/etudes/STUD/2016/578968/IPOL_STU(2016)578968_EN.pdf 

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barriers and uncertainties are likely to lower the use of renewable gases and their cross-border 
trade, which might be compensated by higher natural gas imports. 

Indeed, the increasing contribution that decentralised production of renewable gas can provide 
to  the  decarbonisation  of  the  gas  system  calls  for  continued  EU  action  to  improve  the 
functioning  of  the  internal  gas  market  and  enable  maximum  cross-border  trading  and  cost-
efficient integration to happen also for decentrally produced gases.  

In  view  of  the  current  efforts  at  European  and  national  level  to  promote  use  of  renewable 
hydrogen as a replacement for fossil fuels, Member States could be incentivised to adopt rules 
on the transport of hydrogen dedicated pipelines at  national  level.  This  creates the risk of a 
fragmented  regulatory  landscape  across  the  EU,  which  could  hamper  the  integration  of 
national hydrogen networks and markets, thereby preventing reaping the cost benefits of trade 
in  hydrogen.  Harmonising  rules  for  hydrogen  networks  at  a  later  stage  (i.e.  after  national 
legislation is in place) would lead to increased administrative burden for Member States and 
higher  regulatory  costs  for  companies,  especially  where  long-term  investments  in  hydrogen 
production and transport infrastructure are concerned. 

National  policy  interventions  in  the  gas  sector  have  direct  impact  on  neighbouring  Member 
States.  This  even  more  than  in  the  past  as  the  increasing  cross-border  trade,  the  spread  of 
decentralised  generation  and  more  enhanced  consumer  participation  increases  spillover 
effects.  No  State  can  effectively  act  alone  and  the  externalities  of  unilateral  action  have 
become  more  important.  This  clearly  calls  for  a  continuation  of  EU  action  to  reach  the 
objectives of the Third Energy Package. 

Conclusions 

7. 
In this Evaluation, the Commission services have assessed if the Third Gas Package is fit for 
purpose  by  examining  its  performance  against  five  criteria:  relevance,  effectiveness, 
efficiency, coherence and EU added value. The results of the Evaluation will be used by the 
Commission  to  inform  future  decisions  in  relation  to  EU  energy  policy.  In  particular,  this 
Evaluation  provides  the  basis  for  the  Impact  Assessment  for  the  initiative  to  review  the 
existing EU gas market rules.  

The main results of the Evaluation can be summarised as follows: 

Effectiveness 

The  various  public  consultations  conducted,  as  well  as  the  studies  used,  provide  a  good 
picture of the effectiveness of the analysed legislation. Based on these elements it can be 
concluded that the reinforcement of unbundling requirements has had a positive effect on 
competition  with  new players entering the  gas market.  However, in  some Member States 
the incumbent still holds a dominant position. Market integration has improved with a clear 
increase in cross-border trade since 2009. Cooperation between TSOs and regulators in the 
cross-border  context  has  improved,  but  might  prove  to  be  insufficient  in  view  of  future 
challenges towards the decarbonisation of the gas sector, notably in regards of cross-border 
gas quality management and market mergers. On the retail side, competition still needs to 
significantly improve to ensure that the full benefits of market integration are passed on to 
EU consumers. Our Evaluation has identified price regulation as one of the major reasons 
for status quo or little progress in this area. Moreover, consumers are still deprived from the 
necessary  tools  to  get  actively  involved  in  the  market,  as  gas  smart  metering  remains 
limited,  and  still  challenging  to  prove  its  economic  feasibility,  and  the  current  measures 

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ineffective when it comes to non-discriminatory access to data and to sufficient information 
sharing.  Consumer  protection  provisions  in  the  analysed  legislation  prove  to  only  be 
partially fit for purpose. Member States have defined the notion of vulnerable consumers 
and  adopted  measures  to  protect  them.  However,  their  protection  is  uneven  between 
Member States. Energy poverty is growing across the EU.  

Efficiency  

There  is  limited  quantitative  information  available  at  the  EU  scale  to  underpin  an 
assessment  of  administrative  burden  and,  more  generally,  of  efficiency  of  the  legislation 
analysed. Overall, it can be concluded that the new rules of the Third Energy Package have 
generated  additional  administrative  costs  for  undertakings  and  regulators.  However  these 
are  not  perceived  as  too  heavy  by  stakeholders  and  appear  to  be  counterbalanced  by  the 
benefits they generate notably through the increase in competition in the sector and welfare 
gains mainly based on change to gas-to-gas competitive pricing.  

Relevance 

Gas markets have changed significantly in the last twelve years. The market-oriented rules 
of  the  Third  Energy  Package  are  still  highly  pertinent  to  cope  effectively  with  the 
challenges of the new market. Market-based energy prices that are able to take into account 
the rapid changes of demand enable more market based and hence more efficient allocation 
of resources as well as gas flow changes in case of scarcity, improving security of supply.  

However,  the  existing  rules  are  not  able  to  cater  to  the  decarbonisation  of  the  energy 
system  nor  to  the  emergence  of  new  promising  energy  carriers  and  market  realities. 
Different  or  additional  rules  are  needed  to  ensure  in  particular  the  emergence  of  markets 
and  infrastructure  for  renewables  and  low  carbon  gases,  notably  hydrogen.  Given  the 
expected  similarities  between  the  characteristics  of  the  future  hydrogen  market  and  the 
existing gas market, its future regulatory framework can build upon the existing principles 
that regulate the current gas market. Regarding the institutional framework, it appears that 
the challenges the EU energy system will be facing in the medium to long term cannot be 
addressed and optimally managed by individual TSOs focusing on a single energy vector, 
rendering the current legal framework concerning system planning unsuitable.  

In  the  area  of  retail  markets  and  consumer  empowerment,  the  objective  of  enabling 
consumers  to  actively  participate  in  the  market  will  remain  the  key  multi-dimensional 
challenge. Firstly, further progress is needed in the area of billing information, comparison 
tools  and  consumers’  ability  to  easily  switch  suppliers  or  easily  and  safely  access  their 
consumption  data  or  make  it  available  to  third  parties  of  their  choice.  In  consequence, 
smart  metering  deployment  –  a  key  development  facilitating  consumer  empowerment  in 
the above-mentioned areas – remains a very relevant policy area, but nevertheless its cost-
effectiveness  and overall feasibility  continues  to  be more challenging than for  electricity. 
Also, the functions of DSOs need further definition and enhanced regulatory oversight in 
order  to  deploy,  inter  alia,  non-discriminatory  management  of  consumer  data.  Progress 
towards  lifting  regulated  prices  blocking  competition  and  consumers’  choice  should  also 
continue. Last, but not least, consumer vulnerability will remain relevant as some drivers of 
vulnerability are permanent.  

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Coherence 

General  speaking,  the  Third  Energy  Package  provisions  are  working  together  well. 
However,  the  Commission  has  spotted  several  provisions  which  would  need  to  be  either 
deleted  because  obsolete  or  never  used  or  modified  because  unclear  or  confusing. 
Intervention will be for instance required to harmonise the different provisions concerning 
energy security in the gas sector. 

Amendments will also prove necessary in view of a further alignment and harmonisation of 
Gas  rules  with  the  regulatory  framework  developed  in  the  Clean  Energy  Package  for  the 
Electricity sector. 

EU-added value 

Overall,  the  needs  and  rationale  for  EU  level  action  through  the  gas  legislation  remain 
valid. The transnational nature of the subjects covered such as cross-border cooperation and 
interconnectors justify EU level action as an effective way to achieve the objectives of the 
Third  Energy  Package.  These  are  topics  which  legally  and  practically  could  only  be 
regulated  at  EU  level.  Similarly  cooperation  between  neighbouring  TSOs  and  NRAs  are 
needed  to  avoid  fragmented  uncoordinated  decisions.  ACER  and  ENTSOG  have  become 
key partners in discussions on regulatory issues and fulfil a useful task in the coordination 
of NRAs and TSOs, respectively. EU-wide framework for introducing competition on retail 
markets and enabling consumers’ choice is beneficial for providing level playing field for 
energy  producers  and  suppliers  as  well  as  to  benefit  the  consumers.  It  also  facilitates 
providing cross-border services.  

The current regulatory framework for gas does not anticipate the deployment of hydrogen 
as an independent  energy  carrier via dedicated hydrogen networks. There are no rules on 
the operation of new hydrogen networks or the repurposing of natural gas networks for the 
future  transport  of  hydrogen.  Apart  from  a  potential  use  of  the  regulated  natural  gas 
network for hydrogen transport, similarities between the expected hydrogen market and the 
existing  gas  market  (large  number  of  producers  and  consumers;  reliance  on  networks  for 
transport  and  market  access,  consumption  and  production  in  different  Member  States), 
provides  a  useful  indication  for  the  types  of  competition  concerns  and  possible  market 
failures that may arise in a cross border hydrogen network, and that justify EU regulation.  

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8. 

ANNEX 1 – PROCEDURAL INFORMATION 

For a detailed description of the procedural information, please refer to Annex 1 of the Impact 
Assessment.  

ANNEX 2 – STAKEHOLDER CONSULTATION 

For  a  detailed  description  and  summary  of  the  stakeholder  consultations  used  for  this 
Evaluation, please refer to Annex 2 of the Impact Assessment.  

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ANNEX  3  –  TABLE  OF  SYNERGIES  BETWEEN  EVALUATION  AND  IMPACT  ASSESSMENT  AS 
WELL AS RELEVANT CONNECTED LEGAL ACTS WHICH REQUIRE REVISION 

Areas 

Articles in 
existing acts 

Where covered 
in the 
Evaluation 

Where covered 
in the Impact 
Assessment 

Relevant Legal 
Act to be 
revised 

Directive 
2009/73/EC 

Article  1:  Scope  – 
Include new gases 

Subject 
matter, scope 
and 
definitions 

Article 2: 
Definitions  

Regulation 
715/2009 

Article 1: Scope  

Article 2: 
Definitions 

Directive 
2009/73/EC 

Article  13:  review 
the 
of 
tasks 
transmission, 
storage 
LNG 
operators 

and/or 
system 

Article  25:  review 
tasks of DSOs 

Article  47  and  48 
level  playing 
– 
field  –  PSOs 
, 
take-or-pay delete 

Regulation 
715/2009 

Article  4  ,  5  ,  8: 
review  ENTSOG- 
DSOs tasks  

Article  13:  tariffs 
to 
for 
access 
cross-
network, 
subsidisation 

Promotion of 
market 
integration 
for renewable 
and low 
carbon gases 

Chapter 1, 
paragraph 1.1 

Chapter 6, 
paragraphs 6.3.1, 
6.3.3  

Chapter 1, 
paragraphs 
1.2,1.4,1.5 

Chapter 4, 
paragraphs 4.1, 
4.2 

Chapter 7, 
paragraph 7.5 

Gas Directive 
and Gas 
Regulation 

Chapter 1, 
paragraph 1.1 

Chapter 6, 
paragraphs 6.3.1, 
6.3.4  

Problem Area II 

Chapter 2, 
paragraphs 2.1, 
2.2 

Chapter 5, 
paragraphs 5.1, 
5.2 

Chapter 6, 
paragraphs 6.1, 
6.2, 6.7 

Chapter 7, 
paragraphs 7.1, 
7.2, 7.7 

Chapter 8, 
paragraphs 8.1, 
8.2, 8.5 

Chapter 9, 
paragraphs 9.1, 
9.2 

Gas Directive 
and Gas 
Regulation  

TEN-E 
Regulation 

Renewables 
Energy 
Directive 

Energy Effiency 
Directive 

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Areas 

Articles in 
existing acts 

Where covered 
in the 
Evaluation 

Where covered 
in the Impact 
Assessment 

Relevant Legal 
Act to be 
revised 

Directive 
2009/73/EC 

Article 3: PSOs 
(links to SOS, 
regulated prices 
and RES PSOs) 

Article 5 and 6: 
Alignment with 
SOS Regulation  

Article 41(1)t: 
Duties and powers 
of the regulatory 
authority – 
monitoring the 
implementation of 
safeguard 
measures 

Article 46: 
Safeguard 
measures 

Regulation 
715/2009 

Article 8: review 
tasks of ENTSOG 
on cybersecurity 

Directive 
2009/73/EC 

Article 7.4: 
unbundling and 
market mergers, 
NRAs oversight 
and certification in 
merged markets 

Regulation 
715/2009 

Article 12: 
regional 
cooperation of 
TSOs 

Directive 
2009/73/EC 

Security of 
supply and 
risk 
preparedness 

Regional 
cooperation 
and market 
mergers 

Gas quality 

Chapter 1, 
paragraph 1.1 

Chapter 3, 
paragraph 3.2.1; 

Chapter 6, 
paragraphs 6.3.4, 
6.4.2 

Problem Area III 

Chapter 2, 
paragraphs 2.2, 
2.3 

Chapter 5, 
paragraphs 5.2.1, 
5.3 

Chapter 6, 
paragraphs 6.2 

Chapter 7, 
paragraph 7.5.1 

Chapter 8, 
paragraph 8.2 

Gas Directive 
and Gas 
Regulation  

Security of 
Supply 
Regulation 

Renewables 
Energy 
Directive 

Chapter 6, 
paragraphs 6.1.1, 
7.3.2 

Problem Area III  

Chapter 2, 
paragraph 2.2.1.2 

Gas Directive 
and Gas 
Regulation 

Chapter 6, 
paragraph 6.7 

Electricity 
Directive 

Chapter 1, 
paragraph 1.1  

Problem Area I, 
II 

Gas Directive 
and Gas 

64 

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Areas 

Articles in 
existing acts 

Where covered 
in the 
Evaluation 

Where covered 
in the Impact 
Assessment 

Relevant Legal 
Act to be 
revised 

Chapter 6, 
paragraph 6.3.2 

Chapter 6, 
paragraphs 6.1.2, 

Regulation 

6.2 

Chapter 6, 
paragraph 6.3.2 

Problem Area II  

Chapter 2, 
paragraph 2.2.1.5 

Chapter 5, 
paragraph 5.2 

Gas Directive 
and Gas 
Regulation 

Renewables 
Energy 
Directive 

Article 8: 
technical rules –
gas quality  

Article 13: review 
tasks of TSOs 

Article 25: review 
tasks of DSOs 

Article 41: review 
duties and powers 
of the regulatory 
authority  

Regulation 
715/2009 

Article 8: review 
tasks of ENTSOG 
and areas for 
network codes  

Article 18: review 
TSO level 
transparency 
requirements and 
include DSO level 
transparency 
related to gas 
quality 

Directive 
2009/73/EC 

Article 13: review 
tasks of system 
operators 

Article 36: Include 
new criteria for 
LNG new 
infrastructure 

Regulation 
715/2009 

Article 15 – TPA 
for Storage and 
LNGs  

Article 18, 19: 
transparency of 

LNG 

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Areas 

Articles in 
existing acts 

Where covered 
in the 
Evaluation 

Where covered 
in the Impact 
Assessment 

Relevant Legal 
Act to be 
revised 

LNG and storages 
DSOs – include 
transparency 
platforms 

Network 
Planning 

Directive 
2009/73/EC 

Article 14, 18, 20, 
21, 22, 23, 35 and 
41: Network 
planning of ISO 
and ITO amend 
and expand to 
other TSOs, 
connection rules, 
refusal of access  

Directive 
2009/73/EC 

Article 3: PSO 

Article 45: 
consumers, energy 
poverty 

Article 28 – closed 
networks, energy 
communities  

Annex I – 
consumer 
protection 

Directive 
2009/73/EC 

Article 40, 41, 42, 
43, 44 – powers of 
NRAs Gas 
Directive 

Regulation 
715/2009 

Article 9  – ACER  

Consumer 
empowerment 
and 
protection 

Regulatory 
oversight 

(‘mirroring’) 

Problem Area III  

Chapter 2, 
paragraph 2.3 

Chapter 5, 
paragraphs 5.1, 
5.3 

Chapter 1, 
paragraph 1.1 

Chapter 6, 
paragraph 6.3.3 

Chapter 6, 
paragraph 6.3 

Chapter 7, 
paragraph 7.3 

Chapter 8, 
paragraph 8.3 

Problem Area IV  

Chapter 2, 
paragraph 2.4 

Chapter 5, 
paragraph 5.4 

Chapter 6, 
paragraph 6.4 

Chapter 7, 
paragraph 7.4 

Chapter 8, 
paragraph 8.4 

Chapter 4, 
paragraph 3.2, 
3.3 

Chapter 9, 
paragraph 9.5 

Chapter 6, 
paragraphs 6.1.2, 
6.3.5 

Chapter 2, 
paragraphs 2.1, 
2.2  

Chapter 6, 
paragraph 6.5.1 

66 

TEN-E 
Regulation 

Renewables 
Energy Directive 

Electricity 
Directive 

Gas Directive 
and Gas 
Regulation 

Electricity 
Directive 

Gas Directive, 
Gas Regulation 
and ACER 
Regulation 

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  EN 

 
 
 
 
 ANNEX  4  –  SPECIFIC  ASPECTS  OF  RETAIL  MARKET  COMPETITION  AND  CONSUMER  GAS 
PRICES, PRODUCTS AND SERVICES 

1.  Market concentration 

The  figures  below  show  a  high  concentration  in  retail  gas  markets  for  households  in  the 
majority of the Member States, measured by the concentration ratio CR3215. 

Figure  5:  Market  shares  of  three  largest  gas  suppliers  for  households  by  metering  points  and  number  of 
suppliers for households with a market share above 5% by metering points 

The  decline  in  average  market  share  of  the  three  largest  supplier  has  declined  continuously 
between 2011 and 2015 from 87.1% to 84.5%, with a slight increase in 2016 to 84.6%. 

Figure 6: Market share of the three largest suppliers in the market for households – Gas (by metering points, in %) 

215  

2017 CEER Retail Markets Monitoring Report, p. 27. 

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2.  Market services and products 

Although low prices are the most commonly thought  of way  for firms  to  attract  consumers, 
firms may also seek to distinguish their products by other means. These may include quality 
of  service,  convenience,  an  environmentally  sustainable  product,  or  any  other  non-price 
aspect  that  adds  value  for  consumers.  The  diversity  of  products  available  in  a  market  is 
therefore also a good indication of the health of competition. 

By the end of 2014, in total, almost one quarter of gas offers were marketed as green. Dual-
fuel  offers  (electricity  and  gas),  comprised  more  than  35%  of  all  offers  on  PCTs  in 
Amsterdam,  Brussels,  Dublin,  Lisbon,  London and Paris  – capitals  with  traditionally higher 
consumption  of  gas.  And  at  the  end  of  2014,  12%  of  all  gas  offers  presented  in  the  PCTs 
across  Europe  included  an  additional  service216,  up  from  4%  and  7%  respectively  from  just 
the previous year217. 

Despite these early strides made by green offers on the gas market by the end of 2014, more 
recent  data  suggests  a  downwards  trend  between  2018  and  2019  in  availability  of  fixed, 
mixed, variable, online and green offers (Figure 7). 

Figure 7: Number of Member States where the offer is available 

216  

217  

Free-of-charge services and/or products enticing consumers into a contract (i.e. supermarket points or 
similar,  membership  points,  air  miles,  gifts  in  kind,  free  insurance  cover,  maintenance  services);  or 
payable  services  and/or  products  complementing  the  electricity  and  gas  offers  against  additional 
payment (insurance, boiler maintenance, home insulation, etc.). 
Source: ACER Database. 

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3.  Retail price regulation 

Distortive retail price regulation continues to remain in place in different forms across various 
Member States in the EU, with some Member States intervening in consumers’ energy prices. 
Figure 8 shows the level of price intervention in both electricity and gas across the EU. 

Figure 8: Existence of price intervention in electricity and in natural gas in 2019 

Artificially low regulated prices (even without pushing them below costs) limit market entry 
and innovation, prompt consumers to disengage from the switching process and consequently 
hinder competition in retail markets. In addition, they may increase investor uncertainty and 
impact the long-term security of supply. Furthermore, regulated prices (even when set above 
costs)  can  act  as  a  pricing  focal  point  which  competing  suppliers  are  able  to  cluster  around 
and  –  at  least  in  markets  featuring  strong  consumer  inertia  –  can  also  considerably  dilute 
competition and foreclose markets as indicated in Figure 9 below. 

Figure 9: Performance indicators – Market foreclosure by price regulation 

69 

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4.  Supplier of last resort schemes 

In case of supplier’s bankruptcy, consumers tend to pay more than before they were served by 
a SoLR. Indeed, Figure  10 below confirms that gas prices in the context of a SoLR scheme 
tend,  on  average,  to  be  higher  than  the  prices  paid  by  consumers  served  by  non-SoLR 
suppliers in the majority of Member States218.  

Figure 10: SoLR energy price compared to conventional energy prices in EU Member States and Norway – 2018 

In  addition,  all  but  seven  Member  States  intervene  in  price  setting  of  the  SoLR  in  some 
fashion (Figure 11).  

Figure 11: Entity determining the energy price for SoLR in EU Member States and Norway – 2018 (number of 
Member States) 

218 

2018 ACER Market Monitoring Report – Consumer Empowerment Volume, p. 13. 

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5.  Switching 

Existing consumer rights  

Consumer rights related to switching were already strengthened to an extent through the Third 
Energy Package. The Gas Directive currently grants consumers the right to switch suppliers 
within three weeks  (Article 3(6)) and  free of charge  (Annex  I, point 1(e)). Customers can 
freely  withdraw  from  contracts  if  they  do  not  accept  modified  contractual  conditions 
(Annex I, point 1(b)). Members States must ensure that eligible customers are able to  easily 
switch to new a supplier (Recital 3).  

Switching rates 

The  following  figure  shows  that  while  external  switching  rates  have  generally  increased 
since 2013, the comparison does not show a clear trend. In some countries, switching rates 
for gas household customers in 2018 were higher than the average from 2013 to 2017, while 
in others it is the other way around.  

Figure 12: Switching rates for gas household customers in 2018 and annual average 2013-2017 (%; by metering 
points) for selected countries219 

With  regard  to  internal  switching220,  less  data  is  available  but  CEER’s  2018  Market 
Monitoring  Report  suggests  that,  as  for  external  switching,  rates  across  MS  differ 
considerably221. 

Monitoring Report on the Performance of European Retail Markets in 2018, p. 31. 
Change of product or contract with the same supplier (renegotiation/choosing a different option). 
CEER  Monitoring 
https://www.ceer.eu/documents/104400/-/-/5c492f87-c88f-6c78-5852-43f1f13c89e4 

Performance 

European 

Report 

Retail  Markets 

on 

of 

71 

219  
220  
221  

EN 

in 

2018. 

  EN 

 
 
 
                                                 
 
Consumer satisfaction  

In  the  Market  Monitoring  Survey  2020,  82%  of  consumers  indicated  trust  in  gas  services 
market and 89% reported a positive experiences of making purchases in the market, with no 
notable differences between countries222.  

Price comparison tools 

Regarding the comparability of utility offers for natural gas, the following graph from the 
European Barriers in Retail Energy Markets study shows that the top performer is Portugal, 
as  many  reliable  comparison  websites  are  available,  and  this  is  reflected  in  customers’ 
opinions  as  well.  Austria,  Ireland,  France,  Estonia  and  Germany  are  also  amongst  the  best 
performers223.  

Figure 13: Performance indicators – comparability of offers 

Technical switching times 

Although  the  duration  of  24  hours  may  not  be  viable  in  the  gas  sector  due  to  its  technical 
specificities, a shorter period could be considered and embedded in the Gas Directive to speed 
up the process of switching. 

222  

223  

Market  Monitoring  Survey  2020,  Gas  Services,  available  at:  EURO_COMMISSION_Dashboard_20_19-036243-
01-12_Finale_Slide 2 (europa.eu) 
Market barrier retail study, p. 56. 

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6.  Billing  

The information to be provided in consumer bills is partly regulated in the Gas Directive. 
These  requirements  are  of  general  nature,  as  they  do  not  address  comprehensively  all  the 
information that consumers should receive in their bills for gas supply. Under the Directive, 
consumers are currently entitled to receive all relevant consumption data (Article 3(6)) and 
transparent  information  on  applicable  prices  and  tariffs  and  on  standard  terms  and 
conditions,  in  respect  of  access  to  and  use  of  gas  services  (Annex  I,  point  1(c)).  A  wide 
choice of payment methods should be available to consumers (Annex I, point 1(d)(2)). 

Additional  requirements  relating  to  natural  gas  are  included  in  the  Energy  Efficiency 
Directive224, which  grants final  customers  the right to  receive all  their  bills  and billing 
information  for  energy  free  of  charge,  as  well  as  access  to  their  consumption  data  in  an 
appropriate way and free of charge (Article 11). It requires bills and billing information to be 
reliable, accurate and based on actual consumption. Annex VII of the EED provides minimum 
requirements for billing and billing information for natural gas. 

In  comparison,  electricity  bills  and  billing  information  must  display,  among  others,  a 
breakdown  of  the  price,  availability  and  the  benefits  of  switching,  information  on 
customers’  rights  with  regard  to  dispute  settlement,  on  historical  consumption225, 
disclosure of energy source and a link to PCTs. These measures are essential for enabling 
consumer engagement, incentivising energy savings and boosting market competition. 

7.  Vulnerable customers and energy poverty 

The uneven level  of protection regarding  energy  poverty  across the EU Member States was 
more  pronounced  when  the  Third  Energy  Package  was  fully  in  force  where  obligations  for 
measures in the Gas Directive suffer from caveats and are not accompanied by any common 
definition  or  a  requirement  for  defining  the  concept  at  national  level.  Essentially,  the  Third 
Energy  Package  referred  to  energy  poverty  as  a  type  of  consumer  vulnerability.  This 
categorisation  led  for  several  years  to  an  incorrect  expectation  that  a  single  set  of  policy 
measures from Member States can address both problems simultaneously.  

In 2019, the co-legislators agreed to make energy poverty a key concern of the Clean Energy 
for  all  Europeans  Package,  designed  to  facilitate  a  fair  energy  transition.  It  build  on  the 
requirements  of  the  Gas  Directive  to  push  for  an  increase  in  structural  remedies  to  the 
problem and ensure that energy poverty is addressed as exhaustively and as comprehensively 
as possible in the mix of energy policy measures implemented under the NECPs, as required 
by new governance framework226.  

224  

225  

226  

Directive  (EU)  2018/2002  of  the  European  Parliament  and  of  the  Council  of  11  December  2018  amending 
Directive 2012/27/EU on energy efficiency. 
Though  information  on historical  consumption  is  to be  included in bills  for  natural  gas,  according  to  the  Energy 
Efficiency Directive Art. 10, as specified in the previous paragraph.  
SWD(2020) 960 final EU Guidance on Energy poverty accompanying the Commission Recommendation, dated 14 
October 2021. 

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Articles 28 and 29 of the new Electricity Directive follow the same wording as Article 3(3) 
and (4) of the Gas Directive, however, a significant new element is that it requires the number 
of households in energy poverty to be quantified and suggests possible criteria227. 

In light of the role of the Governance framework in tracking of energy poverty policies and 
measures across Member States, a first assessment of the final NECPs gives a recent overview 
of situations as recorded in 2020. 
The  iterated  EU-wide  assessment  issued  on  17  September  2020228  concluded  that,  overall, 
energy poverty could have figured more prominently. The more pressing requirement was the 
need  to  start  energy  poverty  assessments  by  indicating  the  number  of  households  in  energy 
poverty  as  well  as  their  main  characteristics  (composition,  income  levels,  etc.)  and  their 
potential geographic concentration.  In concrete  areas of energy policy, Member States were 
recommended  to  further  elaborate  on  the  role  of  public  bodies’  buildings  and  explore  more 
deeply the ways in which energy efficiency policies could address energy poverty in the final 
plans.  Furthermore,  Member  States  were  communicated  that  national  strategies  to  tackle 
energy poverty could benefit from a more structured approach ensuring better safeguards for 
consumer empowerment, protection and awareness. Some NECPs did not include the mention 
of an existing, or plans for the future design of, a dedicated regulatory framework addressing 
the issue of energy poverty. 

Elaborating  on  the  assessments  carried  out  of  each  individual  the  plans,  the  Commission’s 
Energy  Poverty  Guidance229  summarised  that  Member  States  have  adopted  different 
approaches  to  the  definitions  of  energy  vulnerability  and  energy  poverty.  Most  have  not 
defined  energy  poverty;  public  interventions  (such  as  helping  households  that  receive 
subsistence  allowances  to  pay  their  energy  bills)  are  based  on  criteria  unrelated  to  energy. 
However, several countries have used indicators described as ‘proxies’, to define the problem. 
At the same time, many of them take the view that there is not necessarily an energy poverty 
issue. Accordingly, they treat energy poverty not as an energy policy issue, but rather as part 
of  general  poverty,  which  they  tackle  through  general  social  policy  measures,  with  varying 
degrees of importance being attached to energy efficiency. These countries include Denmark, 
Estonia, Finland, Germany, Luxembourg, the Netherlands, Slovenia and Sweden. 

227  
228  

229  

Low income, high expenditure of disposable income on energy, and poor energy efficiency of dwellings. 
Communication  from  the  Commission  to  the  European  Parliament,  the  European  Council,  the  Council,  the 
European  Economic  and  Social  Committee  and  the  Committee  of  the  Regions  –  An  EU-wide  assessment  of 
National  Energy  and  Climate  Plans  –  Driving  forward  the  green  transition  and  promoting  economic  recovery 
through integrated energy and climate planning (COM/2020/564 final). 
SWD(2020) 960. 

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Figure 14: Measures in place to protect vulnerable consumers in EU MS and Norway – 2019 (number of MS)230 

MS most frequently apply restrictions to disconnection due to non-payment in order to protect 
vulnerable consumers. Some MS also maintain special energy prices for such groups. Other 
measures  –  such  as  (non)earmarked  social  benefits  to  cover  energy  costs,  exemptions  from 
parts  of  the  energy  costs  (especially  funding  contributions  to  renewable  energy  or  energy 
efficiency)  or  (partial)  grants  for  replacing  old  appliances  with  new,  more  energy  efficient 
ones – have gained popularity in a few countries. 

230  

ACER Market Monitoring Report 2019 – Energy Retail and Consumer Protection Volume. 

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75