Draft Report on Interoperability and Security of Supply Regulation

The recommendations developed in this report take into account the specific situation of the natural gas sector and the gas transmission network, the current legal and regulatory framework in BiH and its entities, the legal framework on the EU level relevant for BiH (as a Contracting Party to the Energy Community), and the practical experiences with both regulatory issues and structures in other European countries. In doing so, this project task aims at strengthening the knowledge and capabilities of the regulatory authorities and gas sector stakeholders in BiH in the area of interconnections of transmission networks. Interoperability represents a key element of non-discriminatory network access, which is a precondition for the establishment and development of a functioning gas market. Interoperability has a financial impact on network users and the financial viability of Transmission System Operators (TSOs). Interoperability and security of supply requirements for network operators and different network users may also influence the attractiveness of natural gas in relation to other alternative fuels, such as electricity or oil. Furthermore, transparent and efficient contractual arrangements and procedures at Interconnection Points enable network users to better understand their potential of IPs and set appropriate signals for an efficient use of the transmission network infrastructure. Recent evaluations by the Energy Community Secretariat have identified a number of areas of non-compliance of the gas sector legislation in BiH with the respective legal framework on the EU level, including provisions in the area of interoperability and security of supply regulations. Developing and applying efficient and non-discriminatory access in line with the European framework would therefore not only help to address the above issues, but would also ensure the compliance of BiH with its obligations as a Contracting Party to the Energy Community. The EU Network Code on Interoperability and Data Exchange is a key element of the EU's gas market legislation. The code sets out the requirements for interoperability and data exchange between different gas transmission networks and operators. The code is based on the principle of non-discrimination and aims to ensure that all network users have equal access to the transmission network. The code defines interoperability as the technical possibility of ensuring a safe flow of natural gas between different pipelines or networks, possibly built according to different technical specifications and operated by different operators. It also covers the need for harmonized processes and arrangements for managing the exchange of natural gas between network users across these boundaries during daily market operations. The code sets out specific requirements for interoperability, including the need for common data exchange formats and procedures for managing the exchange of natural gas between network users. It also requires that network operators provide access to their transmission networks on a non-discriminatory basis and that they ensure that their networks are compatible with the networks of other operators. The code also sets out requirements for the security of supply, including the need for network operators to have emergency plans in place to deal with disruptions to the supply of natural gas. It also requires that network operators have risk assessment and preventive action plans in place to identify and mitigate potential risks to the supply of natural gas. The current situation in BiH is that the gas transmission network is not fully interoperable with the networks of other operators in the region. The network is also not fully compliant with the EU's gas market legislation, including the EU Network Code on Interoperability and Data Exchange. This has resulted in a number of issues, including difficulties in accessing the transmission network and ensuring the security of supply. The report reviews the situation in neighboring Croatia and Serbia, which have made significant progress in implementing the EU's gas market legislation, including the EU Network Code on Interoperability and Data Exchange. The report also analyzes the current situation in BiH, describing the key elements of the gas transmission network and the relevant provisions related to interoperability and security of supply regulation in the legal and regulatory framework. The report presents a summary of the findings and recommendations to resolve identified gaps in the legal and regulatory framework in BiH. The recommendations are based on the analysis of the current situation in BiH and the experiences of other European countries. They aim to ensure that the gas transmission network in BiH is fully interoperable with the networks of other operators in the region and that it is fully compliant with the EU's gas market legislation.