Source - EC Study Distribution Grid NDP Tariffs and Connections 2025

EC Study on Distribution Grid NDP, Tariff Structures, and Grid Connections (August 2025) — A comparative EU study commissioned by DG Energy examining distribution network development planning practices, tariff structures for DER integration, and grid connection approaches (including flexible/conditional connection agreements) across EU member states.

Full title: Tariff structures for distribution networks with distributed energy resources: a comparative study on network development planning and grid connection practices
Lead author: Anne Kesselring (Fraunhofer ISI); co-authors from Fraunhofer IEG, Guidehouse (Marian Bons), REKK (László Szabó)
Client: European Commission, DG Energy, Unit C.4 (Retail Markets, Digitalisation, Energy Efficiency); EC contact: Zuzana Sadlova
Publication: August 2025
Reference: ISBN 978-92-68-31938-3; doi: 10.2833/9351025; catalogue ref: MJ-01-25-121-EN-N

Summary

The study covers three main areas: (1) DNDP practices across EU member states, including how DSOs plan for flexibility and anticipatory investments; (2) tariff structures for DER injection and extraction, with comparative analysis across member states; (3) flexible/conditional connection agreement (FCA) practices and the EU-wide landscape of conditional grid connections. Each area includes a comparative EU landscape, individual country factsheets, and policy recommendations. Raw document at raw/tariff-structures-MJ0125121ENN-extracted.txt.

Key findings — DNDPs and anticipatory investments

Sweden is confirmed as 1 of 4 EU countries quantifying flexibility needs in DNDPs (alongside Denmark, Portugal, and Slovenia). Portugal has the most advanced flexibility quantification, using probabilistic analysis.
Ei does not formally approve DNDPs in a binding sense — the study confirms Sweden’s model as ex-post scrutiny (right to request amendments and conduct tillsyn), not ex-ante approval. This is a relevant distinction in the EU comparative table.
EC formal definition of anticipatory investments (June 2025): the study provides the most recent EC-level formal definition: “investments into grid infrastructure assets that proactively address network development needs beyond the ones corresponding to reinforcements relating to currently existing grid connection requests, that are justified in network development plans.”
TOTEX is identified as the key structural regulatory reform for addressing CAPEX bias — consistent with Ei‘s RP5 reform direction. Ireland is cited as an EU best-practice example for performance-based incentives that encourage cost-effective (including non-wire) solutions.

Key findings — tariff structures

Swedish injection charges — EU leading practice

Sweden’s generator/prosumer injection charge design is identified as a leading EU example:

Cost recovery level: ~16% of total distribution costs are recovered via injection charges in the regional grid (>10 kV) — among the highest in the EU among countries reviewed
Locational mechanism: charges are based on distance-to-transmission × subscribed production capacity × unit price, plus a voltage-level component — creating geographic differentiation that signals the cost of connecting generation at different grid locations
Loss remuneration: producers connected at 130 kV who reduce network losses receive remuneration (payment for positive grid impact) — a two-directional tariff signal
Small prosumer exemption: consumers drawing ≤63 A / ≤43.5 kW are exempt from injection charges — protecting small prosumers while maintaining the locational signal for larger generators

Economic caveat (Neon/Consentec 2025, cited by the study): locational injection charges carry three distortions — (1) location choice distortion for renewable generators; (2) redistribution of costs to consumers; (3) cross-border effects when charges differ across interconnected markets. The study acknowledges these without recommending against injection charges.

Swedish hybrid cost recovery model (from 1 January 2027)

Sweden is transitioning to a hybrid tariff cost allocation model from 2027:

Energy-based costs: recovered using incremental cost methodology
Capacity-based costs: recovered using forward-looking cost methodology
Customer-related costs: recovered using average cost methodology
Residual costs: recovered via fixed fee

Swedish standalone storage exemption

Non-PHES standalone storage (batteries, not pumped hydro) is exempt from higher-grid-level subscription charges in Sweden, conditional on the DSO retaining operational control over the storage asset.

Regulatory model — ex-post, no ex-ante NRA approval

Swedish DSOs set tariffs without ex-ante NRA approval — Ei exercises ex-post supervision (tillsyn) rather than pre-approving tariff designs. This is the basis for Ei’s 2026 hemställan for förhandsprövning authority.

Net metering

Sweden uses 15-minute net metering for prosumer settlements — aligned with the 15-minute imbalance settlement period introduced March 2025.

Key findings — flexible/conditional connection agreements (FCAs)

EU-wide landscape — predominantly temporary

Across EU member states, FCAs / Villkorade Avtal equivalents are predominantly applied as temporary solutions:

Directive 2024/1711 Art. 6a explicitly allows FCAs to be permanent solutions where grid reinforcement is not efficient
In practice, no EU member state has systematically deployed permanent FCAs — temporary use (bridge to reinforcement) is the dominant pattern in all countries reviewed
The practical barrier is regulatory confidence: permanent FCAs require long-term capacity commitments that DSOs and regulators are reluctant to make without operational experience

Chicken-and-egg problem for permanent FCAs

The study identifies a structural barrier across all EU countries: confidence requires data, but without confidence the experience that generates data is never accumulated. DSOs are reluctant to offer permanent FCAs without evidence they work well; they cannot accumulate that evidence without deploying permanent FCAs at scale.

The EC’s recommendation is that a model-based study on the costs and benefits of permanent vs. temporary FCA designs would help break this cycle — providing analytical evidence as a substitute for operational experience where the latter is absent.

Sweden in EU context

Sweden is identified as having one of the more advanced FCA frameworks in the EU, but remains in the temporary-dominant pattern. E.ON’s overbooking model (connecting at 130% capacity, using FCAs for the remaining 30%) is among the most operational implementations in Europe. The Art. 6a national framework (transposition deadline 17 July 2026) will be Sweden’s first formal statutory basis for FCAs, including the permanent option.

Relevance to wiki

Distribution Network Development Plan: EC anticipatory investment definition (June 2025); confirms Sweden 1 of 4 EU countries with quantified flexibility; Ei non-binding DNDP scrutiny confirmed
Ei: confirms ex-post tariff regulation; injection charges as EU leading practice (16%, locational mechanism); hybrid 2027 model; standalone storage exemption; no ex-ante NRA approval; TOTEX direction validated
Villkorade Avtal: EU-wide FCA landscape (predominantly temporary); permanent option available but unused; chicken-and-egg barrier; EC recommendation for model-based study
Glossary: EC formal definition of anticipatory investments (June 2025)
Distribution System Operator: TOTEX reform as structural prerequisite; Ireland as performance-incentive best practice