Resort: Security of Supply

FNB Gas welcomes the opportunity to comment on the consultation launched on June 24, 2024 to determine the amendment to resolution BK9-18/608 of 23.03.2019 regarding the requirements for the conversion of annual performance prices into performance prices for capacity rights during the year and requirements for the appropriate determination of network tariffs pursuant to Section 15 para. 2 to 7 GasNEV (BEATE 2.0.) and for the repeal of resolution BK9-20/608 of 16.10.2020 (“BEATE 2.1”).

The transmission system operators (TSOs) thank you for the opportunity to comment on an extension of the determination of volatile costs for various aspects of natural gas transportation (“VOLKER” – Ref. Bund BK9-22/606-1).

FNB Gas welcomes the opportunity to comment in the consultation launched on March 12, 2024 to determine the calculation of multipliers, discounts for interruptible capacities, discounts at LNG terminals and seasonal factors.

In principle, FNB Gas welcomes the draft bill of the Federal Ministry of the Interior and Homeland for the implementation of Directive (EU) 2022/2557 and to strengthen the resilience of operators of critical facilities (KRITIS-DachG) of December 21, 2023 as an important step towards a uniform federal legal framework to increase the analogous protection and resilience of critical infrastructures.

The past year and a half has brought to light that the protection of Critical Infrastructure (CIP), especially gas infrastructure, is essential for maintaining economic and social life as well as national security.

In principle, FNB Gas supports the proposal of the Federal Ministry of the Interior and for Home Affairs regarding the draft law on the implementation of the CER Directive and on strengthening the resilience of critical facilities (KRITIS-Dachgesetz – KRITIS-DachG).

In accordance with the requirements of Section 78 para. 1 No. 1 in conjunction with. § 79 para. 1 No. 1 TKG, transmission system operators (TSOs) are required to provide data on the telecommunications structure they operate to the Federal Network Agency’s (BNetzA) Central Information Service (CIS). This data is then published in the Infrastructure Atlas (ISA).

The TSO Gas considers it necessary to avoid the publication of sensitive infrastructure data, which exposes Germany’s critical infrastructure to unnecessary risks, or at least to be more sparing with the publication of such data, unless there is an overriding public interest in the publication of such data.

A corresponding provision could be made by exempting the aforementioned critical infrastructures from the publication requirement under the TKG by reference in the KRITIS-DachG.

The complete statement of the FNB Gas is available in the downloads.

The transmission system operators support the political efforts to secure energy supplies in Germany, particularly in the winter of 2022/2023 and the winter of 2023/2024, by making further changes to the energy industry framework.

From the point of view of the TSOs, there is still considerable need for improvement in some areas, especially with regard to the LNG Act. This involves the inclusion of further indirect LNG connection pipelines as well as further measures for the onward transmission of LNG volumes in the German transmission system. Without an inclusion of these measures in the scope of the LNG Act, the start of the realization of these measures is only possible with a considerable time delay.

The so-called Gas Storage Act (Act on the Introduction of Level Requirements for Gas Storage Facilities), which came into force on April 30, 2022, provides for minimum levels for German gas storage facilities based on reporting dates. In the future, unused storage capacities must be made available by the operator of the gas storage facility to the market area manager Trading Hub Europe (THE) if storage customers do not use them in accordance with the fill level specifications. In this context, extensive obligations were imposed on THE to take measures to ensure sufficient filling of the gas storage facilities. To cover the costs associated with the new obligations, the Act introduced a new storage levy. The levy is to be settled by THE vis-à-vis the balancing group manager and will be levied for the first time on 01.10.2022. THE had submitted a concept with a proposed methodology for structuring the storage levy to the Federal Network Agency for approval on May 30, 2022. The TSOs commented on this methodology as part of the BNetzA’s consultation process.

The transmission system operators expressly welcome the efforts of the legislator to enable the integration of liquefied natural gas (LNG) into the existing gas supply network in Germany as quickly as possible.

Accelerating the procedures for constructing and commissioning the LNG terminals will be crucial to ensuring that LNG can make a key contribution to reducing dependency on Russian natural gas in the near future and thus secure gas supplies in Germany.

TSOs point out that not only the construction of the LNG terminals and the direct connection pipeline may fall within the scope of the law. Rather, to enable effective integration into the existing gas supply network, pipelines, associated facilities, compressor station expansions, and gas pressure regulating and metering stations (GDRMs) that directly serve to transport the injected LNG volumes in the German gas supply network must also be included in the scope of the law. Otherwise, LNG volumes cannot be made available throughout Germany and the accelerated expansion will not achieve its goal of ensuring security of supply.

The amendment of the Energy Security Act is absolutely necessary against the background of the current crisis situation in the energy sector.

Transmission system operators (TSOs) welcome the introduction of the digital platform for natural gas to better manage gas reduction at companies. The platform is a central and exclusive instrument of the Federal Network Agency (BNetzA) to manage gas supply according to economic and other political criteria in the event of a gas shortage. Against this backdrop, the amount of the compensation payable pursuant to Sec. 15 para. 2 EnSiG, limited to up to 25,000 euros or up to 10,000 euros, should be reconsidered. It seems questionable, given the current market situation and the economic impact of reductions in gas volumes for energy-intensive industries under discussion, whether this sum is a motive for large companies to comply with the authority’s instructions and acts as a deterrent.

The TSOs consider the unclear demarcation or interplay between the TSOs’ grid stabilization measures pursuant to Section 16 (1) to be a key shortcoming of the draft law. 2 EnWG and the measures taken by the federal load dispatcher under the EnSiG to reduce gas purchases. The TSOs point out that the regulations pursuant to Section 16 para. 2 EnWG were not introduced to cope with a prolonged gas shortage situation, but were given to the transmission system operators exclusively to maintain system and network stability.

In the event of such a gas shortage situation having a supraregional or even nationwide impact, situations are not unlikely in which the TSOs have already taken network stabilization measures pursuant to Section 16 para. 2 EnWG must apply, but the BNetzA does not yet necessarily act as a federal load dispatcher. At this point, the TSOs are responsible and, in the event of a supraregional gas shortage, can only make non-discriminatory cuts on a “pro-rata” basis. The TSOs believe it is urgently necessary to anchor the legally secure, swift transfer of responsibility to the Federal Network Agency as the federal load distributor, and thus also of liability, in the current draft legislation. Early instruction by the TSO to reduce gas purchases from connected end users by the BNetzA can ensure a consistent transition to the federal load dispatcher and help close a liability gap for TSOs until the federal load dispatcher is in place.

Also, the provisions set forth in § 16 para. 2 EnWG for a storage instruction are still not sufficiently specifically regulated against the background of the new Gas Storage Act. Here, within the framework of the legislation, it is essential to consider the interaction with the Act on the Introduction of Level Requirements for Gas Storage Facilities and the minimum storage levels and processes for the release of storage quantities by Trading Hub Europe GmbH (THE) provided for therein, on the one hand, and the authority of the transmission system operators to issue instructions to storage operators or storage customers pursuant to Section 16 para.2 EnWG, on the other hand, should be clarified.

In addition to the additional statutory tasks for the market area manager (THE) already provided for in the recently adopted Storage Act, the proposed legislation on the EnSiG (pursuant to section 2a (2) and section 2b (1) EnSiG-E) provides for further new tasks. The FNB considers this task performance by THE to be sensible and purposeful. With the imposition of these new statutory tasks, however, it must be equally ensured by law that THE, as a privately organized company (GmbH), is remunerated at market rates for the tasks to be assumed and that the costs of setting up and operating the platform, as well as its own expenses for procuring the quantities pursuant to Section 2 EnSiG, can be apportioned. However, there is no statutory provision to this effect, so that appropriate and required adequate remuneration is not ensured.

The TSOs welcome the fact that, in future, decommissioning of gas storage facilities will have to be notified and approved by the Federal Network Agency (BNetzA) (Section 35h EnWG). However, it remains unclear whether the regulation also covers conversions of gas storage facilities from L-gas to H-gas. Against the backdrop of the new storage law, the TSOs see a risk that, due to the legally defined minimum filling level, L-gas storage operators may decide early on to switch to H-gas due to higher yield expectations for H-gas storage. To secure the supply of L-gas, there must be no distortions here. Therefore, a conversion of storage facilities from L- to H-gas should also have to be approved by the BNetzA.

In addition, the regulation so far only applies to gas storage facilities connected to the transmission system, but the handling of storage facilities in the DSO network should also be addressed, as these can also contribute to relieving the load on the TSO network. For gas storage facilities connected to the DSO network, a notification requirement would appear to make sense.

Further notes:

Regarding § 3 para. 6 No. 3 EnSiG-E:

The new provision in § 3 para. 6 No. 3 EnSiG-E lacks a responsibility provision for anyone who determines that fulfillment of the obligations cannot be achieved by market-based measures, cannot be achieved in a timely manner, or can only be achieved by disproportionate means.

Regarding § 14 para. 1 No. 2 and No. 3 EnSiG-E:

§ 14 para. 1 No. 2 EnSiG-E is, in the opinion of the FNB, too broad, as the large number of media – without, for example, concrete naming of the exact references – means that there is an obligation to review that goes beyond the normal scope for the companies that may be affected. It would be advisable here to limit the announcement channels in such a way that a review is still possible in the course of normal business operations.

The possibility of dispensing with a written confirmation of an orally communicated administrative act pursuant to Art. § 14 para. 1 No. 3 EnSiG-E appears critical in order to maintain legal certainty. It is questionable whether this option will be used at all, since the authority bears the risk of having to prove the content of the orally communicated administrative act.