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August 11, 2022

Position on Initial Impact Assessment in relation to Gas Networks – Revision of EU rules

The Intelligent Energy Association together with RomCapital Invest SA has organized a roundtable on the European Commission’s intention to review regulatory acts with an impact on the internal gas market with the participation of the main stakeholders from the gas industry.

We hereby submit, the conclusions drawn at this meeting on Romanian issues:

  1. Postpone the establishment of firm obligations to facilitate the entry into the market of low-carbon and renewable gas and remove any unjustified regulatory barriers to the gas network in its entirety
  • The gas network in Romania is the oldest gas network in Europe being built in different historical stages and at different technological levels.
  • Pressure regimes in both the transmission and distribution networks show high differences between European countries.
  • Over 50% of the existing network has an outdated lifespan and still needs investments.
  • The policy of increasing the degree of connection of the population to natural gas resources should be aligned with a possible strategy by the central authorities for the injection of alternative gaseous fuels into the natural gas transmission and distribution networks

From this point of view, until a clear strategic direction is drawn up, we consider it necessary for the State authorities to consider any measures to adapt existing or new networks to low-carbon gaseous fuels.

The need to rethink the policy is also based on the argument of exerting an additional pressure on the budgets of operators in Romania that could induce syncope in the efficient management of the infrastructure, due to the need to implement simultaneously:

  • network extensions, fully supported by the operators, in accordance with the amendments introduced in national legislation;
  • maintenance and repair operations, i.e. capital repairs, legal obligations assumed with the acquisition of the operation licence;
  • the start of pilot projects to test the possibility of injecting hydrogen into the networks.
  • There is a need for a firm political assumption regarding the prospect of hydrogen use in the residential sector in Romania in order to be able to move to a research stage of the applicability of this energy vector to the existing infrastructure

At this level, we consider that a minimum set of regulations are needed, such as, but not limited to, the revision of supply standards and network performance standards.

  • In the future, in order to generate a business model focused on the applicability of hydrogen in Romania, it will be necessary to rethink the model of remuneration of operation

Specifically, at this time, investments in infrastructure capable of transportation and distribution of hydrogen are assimilated to high-risk infrastructure, meaning that, in order to increase investment appetite in this segment, appropriate financial incentives for distribution operators are needed.