The European Commission (‘Commission’) adopted the Affordable Energy Action Plan in February 2025 1 , with measures aiming to decrease energy costs for citizens and businesses, most of them to be delivered in the short-term. The Action Plan examined the factors driving up energy prices and identified energy supply costs and taxation as well as network and system costs as key areas to address in order to help reduce the energy bills for European consumers. The Commission followed up on this Plan with several initiatives, including Guidelines on future-proof network charges 2 , the European Grids Package 3 , the Citizens Energy Package 4 and the Strategic Roadmap for digitalisation and AI in the energy sector 5 .

In light of events in the Middle East, on 19 March 2026 the European Council called on the Commission to urgently present targeted measures for concrete actions to lower all components of electricity prices.

The Commission responded with the publication of AccelerateEU 6 , explaining the need to reduce energy costs by accelerating the deployment of homegrown clean energy and increasing the rate of electrification. This should be combined with further upgrading the electricity system through measures on the construction of new grid infrastructure, the use of existing infrastructure and taxation.

This proposal supports the objective of AccelerateEU by improving the design of network charges to ensure the cost efficiency of transmission and distribution networks and incentivise both system operators and system users to make better use of the existing infrastructure. In addition, it introduces taxation measures, to ensure, among other goals that electricity is taxed less than natural gas. The proposal also clarifies the role of national regulatory authorities when it comes to ensuring efficient, transparent and non-discriminatory access to transmission and distribution networks 7 , including in situations of grid congestion which may require the application of measures ensuring maturity and progress of grid connection requests, as well as setting out prioritisation conditions.

Network charges

The common electricity market is one of the cornerstones for competitiveness and prosperity in our Union. The Union is dedicated to pursuing decarbonisation while increasing energy affordability and security. This is pivotal for the competitiveness of European industries, as outlined in the Clean Industrial Deal 8 , which also addresses the need to support strategic autonomy, secure vital supply chains and maintain economic prosperity. However, in recent years, and over two crises, the Union has been facing rising energy costs, which puts our competitiveness at risk. 

The European electricity network is the most interconnected in the world and a fundamental pillar of the European electricity market. Rising electricity demand, the increasing electrification of end uses, the decentralisation of electricity production and the accelerated deployment of renewables will require significant investment in modernising and expanding the electricity network, and the optimisation of the way electricity grids are designed and operated. At times where a lot of electricity is generated by renewables, low or negative electricity prices – which have become more regular over recent years 9 – reflect the need for the system to be more flexible. This is crucial to exploit the potential of renewables sources and avoid cost-inefficient curtailment, while incentivising consumption at times and locations in which the cheapest energy sources are available and the costs for the operation of the system are minimised.

The electricity system’s costs are covered by network charges. They finance the physical upgrade of grids, the maintenance and the operation of the system. This is essential for the deployment of renewables, electrification and new industrial and business demand. Network charges have, in recent years, represented, on average, between 24 and 29% 10 of the electricity bill for households (with the other main factors being the price of the energy commodity, taxes and levies and carbon costs). While the energy component of the electricity price is expected to decrease, grid costs are expected to become an even larger item on electricity bills. The European Union Agency for the Cooperation of Energy Regulators (ACER) estimates that to build a decarbonised EU energy system, investments of an unprecedented level will be needed in the electricity transmission and distribution grids 11 . This would double and even triple the annual investment rates of the past decades. Rising system costs may lead to a significant increase in total grid costs over time of up to by 60% by 2050 compared to 2022.

Making the best use of the existing grid infrastructure, and a smart and efficient design of network charges, will be instrumental in increasing the infrastructure’s efficiency and optimising overall system costs. In particular, network charges that incentivise system efficiencies can reduce overall system operating costs and the network charges component of the energy bill, for example by decreasing re-dispatching needs and costs, or by lowering peak demand and thereby grid investment needs 12 . 

Therefore, it is important to ensure that network charges incentivise system operators to operate the grid efficiently, to use flexibility and to develop smart electricity grids and use non-wire solutions like grid-enhancing technologies, while maintaining the incentive to invest in the grid and ensuring a level playing field. Grid users should be incentivised to behave in a system-friendly way, adjusting their energy use or shifting it towards times and places in which the cheapest energy sources are available and when it is the most cost efficient for the overall system. To achieve this, the Affordable Energy Action Plan has suggested putting forward a legislative proposal on network charge design. For this reason, the President of the Commission announced on 16 March 2026 that the Commission will prepare a legislative proposal to improve the productivity of grid infrastructure.

This proposal addresses concerns about rising energy costs, since they are driven not only by high and volatile prices but also by rising system costs. It does so by improving the design of network charges to ensure cost efficiency of transmission and distribution networks and by ensuring that the necessary incentives are provided to both system operators and system users to lower system costs, including through better use of the existing infrastructure.

The proposal is putting forward stronger incentives for system operators to increase cost-effectiveness as well as to enable timely grid access, provide incentives for grid users to adapt their consumption behaviour, encourage enhanced transparency and oblige regulatory authorities to set performance indicators to increase efficient grid use and system efficiency. All these measures should help ensure that network charges reflect the true costs imposed on the system and further support efficient grid use.

The proposal allows for special cost-reflective network charge regimes to apply to specific categories of system users based on their consumption pattern, such as energy-intensive industries, and data centres. It combines this option with safeguards to avoid adverse effects on affordability for households and SMEs.

To make these changes operational, the proposal needs to be combined with tertiary legislation on a common structure and harmonised methodology on network charges, similar to existing legislation in the gas sector.

Smart meters and smart electricity grids

To improve grid infrastructure efficiency, the electricity system must be equipped with the technical and digital capabilities to monitor the grid status and optimise grid usage close to real-time, and to incentivise or steer grid users to optimise their grid use, especially when coupled with PV installation and home batteries and/or dynamic tariffs. This may further reduce system costs notably by reducing peak demands. These capabilities enable system operators to respond faster and more efficiently, making better use of the existing infrastructure, and allow system users to react to price signals. To achieve this, a broader enabling framework is required combining smart metering systems, smart and digitalised grids and more effective re-use of electricity grid data. Without such enabling conditions, the scope for consumers, aggregators, suppliers and system operators to respond to price signals, including from smart network charges to provide flexibility and optimise system operation remains structurally limited.

For this reason, the proposal on network charges is accompanied by limited but targeted measures on smart meters and smart electricity grids. It introduces a minimum Union-wide deployment obligation for smart metering systems to ensure that, in each Member State, at least 50 % of final customers will be equipped with smart meters by 2030. This proportion should be progressively increased to at least 75 % of final customers by 2033 to strengthen the technical basis for active consumer participation and more granular system visibility. For Member States with deployment levels below 30 % at the date of entry into force of this Regulation, a limited extension for the deadline of the 50 % target would be appropriate.
This approach reflects the current state of play across the Union, with overall smart meter penetration at around 60 % in 2024 13 and fifteen Member States already exceeding 80 % coverage, in line with the deployment levels set out in Annex II of Directive (EU) 2019/944 14 , demonstrating that higher penetration rates are achievable, while others remain significantly below this threshold or have not yet initiated large-scale deployment. This uneven rollout undermines the effective functioning of the internal market and the development of innovative products and services. At the same time, the proposed deployment obligation should create a sufficient uptake across the Union to support more efficient use of the existing electricity network infrastructure and enable consumers to understand and manage their energy consumption and costs better. In addition, the proposal clarifies that cost-benefit assessments under Directive (EU) 2019/944 will apply only to deployment beyond the 75 % level, ensuring a consistent Union-wide approach while preserving flexibility for further deployment based on economic considerations. It also provides for the development of common smart electricity grid indicators to support a more consistent monitoring of the uptake of smart and innovative grid solutions and to strengthen the link between network regulation, performance and efficient use of existing infrastructure. Most importantly, it establishes a targeted framework to improve the exchange and secure re-use of electricity grid data. It also supports the efficient, secure and flexible operation of the electricity system, and the development of innovative digital and data-driven tools, including artificial intelligence applications, capable of improving grid performance and optimisation. This in direct response to the President’s call for grid operators to improve the productivity of the existing infrastructure by making full use of innovative technologies. 15  

Taken together, these measures are intended to ensure that the incentives created through smart network charges can be translated into concrete operational efficiencies and lower overall system costs.

Taxation

The electrification of the European economy is a strategic imperative for the Union’s competitiveness, energy security, and decarbonisation objectives. Achieving a more electrified and climate-neutral energy system requires substantial investments in electricity grids and infrastructure. Network charges and energy taxation together constitute the main regulatory cost drivers embedded in electricity bills and, as such, are inextricably linked levers in incentivising electrification. Addressing network charges in isolation, without simultaneously aligning the principles of taxation of electricity with EU electrification, would undermine the coherence and effectiveness of Union energy policy. Only by acting on both elements in a coordinated manner can this proposal structurally reduce the cost of electricity for consumers and meaningfully advance the Union’s electrification goals.

In line with the objectives of the Affordable Energy Action Plan and AccelerateEU, reforming network charges should be accompanied by targeted measures on the taxation of electricity and, more specifically, the incentives for electrification embedded therein, or risk falling short of achieving the objective of durably reducing the cost drivers of electricity bills. Such an approach would therefore have a significant adverse impact on affordability for Union consumers and on the competitiveness of the Union economy.

To that end this proposal also aligns the principles on taxation of electricity with EU energy, environment and climate policies thus contributing to the EU efforts to reduce emissions. To increase the electrification of the European energy system, as detailed in AccelerateEU, incentives for the use of natural gas over electricity in Member State taxation systems should be reversed.

In addition to this broader measure, this proposal includes a tailored and more targeted possibility to reduce electricity taxation for energy intensive industries, so that the taxes on electricity for these users may be further decreased and the incentive for electrification enhanced.

These measures will ensure that final energy costs for consumers are reduced and that regulation of energy costs is better aligned with European electrification objectives.

The principles on taxation of energy as laid out in this amendment to Regulation (EU) 2019/943 (the Electricity Regulation) focus on the implementation of the EU provisions imposing a minimum rate on electricity and natural gas and regulating the possibility granted to Member States to apply reduced taxation rates on electricity used by energy intensive industries as set by Council Directive 2003/96/EC. In line with the objectives of this Directive, Member States remain free to set their energy tax levels, provided they follow the provisions in the Directive, while the principles in the Electricity Regulation will enable existing differences in the electrification incentives in energy taxation frameworks of Member States to be reduced.

This proposal introduces limited and targeted amendments to the Electricity Regulation which are strictly necessary to achieve the proposal’s objectives. Further possible modifications of that Regulation are entirely outside of the scope and aims of the present proposal. The Commission will constructively engage with the co-legislators, in order to ensure that the legislative process on the present proposal fully preserves its essential scope and does not distort it.

Grid connection measures in case of network congestion

Timely electricity network access is crucial for the competitiveness and decarbonisation of the European industry, automotive and transport sectors – for example recharging pools – and digitalisation of the economy including the establishment of data centres. It is also a crucial condition for fulfilling the goals of the Clean Industrial Deal, Accelerate EU and achieving climate neutrality by 2050. It is also critical for fulfilling housing needs and related basic societal needs. Delays in grid connections slow down the clean transition and European economic growth. Grid connection queues are present in at least 16 Member States based on the evidence collected in 2025. 16  This is why tackling grid connection queues is becoming increasingly urgent throughout the EU.

While the long-term solution to the challenge of insufficient network capacity is the accelerated build out of grids in a forward-looking manner, more short-term solutions can be advanced in parallel to ensure timely grid connection of clean energy generation and electrified loads. Building on existing legal framework, the Commission put forward a Guidance on efficient and timely grid connections 17 (“Guidance”) as part of the European Grids package. The Guidance provided concrete recommendations for coordinated network planning involving society and industry, more efficient utilisation of existing grids, including through design of network tariffs, connection charges or flexibility, and finally, transparency of grid hosting capacity and connection procedures. Concerning the grid connection procedures, the Guidance stresses the need to move away from first-come first-served allocation of network capacity towards a system considering maturity and progress of grid connection requests, as well as their impacts on congestion, or environmental, social or economic considerations.

This legal proposal implements the provisions of the Guidance related to efficient and non-discriminatory grid connection procedures in case of congestion in the EU legal framework, further specifying the existing rules under the Article 6 of the Directive (EU) 2019/944 by making explicit mention of the option to prioritise sectors or network users within a sector or the option to consider impacts on network congestion, economic, social or environmental considerations as long as these are based on transparent and non-discriminatory criteria. Existing legislation also does not explicitly cover maturity and progress criteria to tackle speculative or immature connection requests. Clarification is necessary to enable full implementation of the Guidance provisions as well as to clarify the role of regulatory authorities in setting the network access conditions, in line with existing provisions of Articles 6 and 59 of the Directive (EU) 2019/944. At the same time, the proposal leaves space to consider national conditions by leaving full discretion over selection of respective measures to the national regulatory authority. They must however ensure that other measures addressing grid congestion, implementing the existing EU legal framework, like cross-sectorial network planning involving stakeholders, flexible connection agreement or use of non-wire and digital solutions to ensure network efficiency, are in place.

This proposed initiative aligns with the objectives of increasing electrification while ensuring affordability as laid down in AccelerateEU and the Clean Industrial Deal. Hence, this proposal also aligns with the objective of the Electrification Action Plan 18  which is the acceleration of electrification in the energy sector to ensure cost-efficient and secure energy transition and decreasing import dependency. The electrification action plan includes horizontal actions to achieve indicative electrification objectives as well as sector-specific actions targeting transport, buildings and industry. Efficient network charges as well as grid use and development is critical for the success of the Action Plan.

The proposal’s objectives to reduce costs for consumers, improve the competitiveness of EU industry, and boost renewables and low-carbon investment are consistent with the framework of the European Green Deal and the Clean Industrial Deal, and in line with current initiatives. The proposal responds to the issues that were identified in the Commission’s Action Plan for Affordable Energy in February 2025, i.e., that high energy costs put the competitiveness of European companies at risk and represent a significant burden for consumers.

It is therefore imperative to ensure that an efficient use of the energy system, supported by an appropriate tax structure, plays an important role in enabling electricity users to benefit from more predictable and lower energy costs.

The proposed initiative is strongly linked to and works well with the legislative proposals put forward in the European Grids Package. It aims to make the best use of existing grid infrastructure to reduce the cost of grid to what is necessary. Therefore, it complements the European Grids Package, which aims to make the planning of new grid infrastructure more efficient and cost-effective. This includes giving priority consideration to alternatives to network development like non-wire, smart and digital solutions or non-fossil flexibility such as demand response and storage in the network planning both at national and Union levels. The proposal strengthens the regulatory framework for the deployment of non-wire, smart and digital solutions and their use in system operation on a national level, while the European Grids Package focuses more prominently on cross-border infrastructure. It does so by ensuring that such solutions are promoted whenever they can improve the usable capacity, flexibility and reliability of electricity networks in a cost-efficient manner. It reinforces the policy direction already taken under the European Grids Package to give priority in network planning to non-wire solutions alongside non-fossil flexibility. On grid access, the legal proposal is fully consistent with the goals of the European Grids Package by implementing the provisions of the Guidance on efficient and timely grid connections related to efficient and non-discriminatory grid connection procedures in case of congestion management in the EU legal framework, hence reinforcing ongoing work on Guidance implementation.

In line with the objectives of the Citizens Energy Package 19 to empower consumers and strengthen their participation in the energy market, the proposal also seeks to reduce final energy costs for consumers by providing the right incentives to use European grids in an optimal way. This is consistent with findings of the report on market-based electricity supply prices and promoting remuneration of flexibility in retail contracts 20 under the Citizens Energy Package implementation set, which highlights the importance of smart meter rollout. The proposal delivers on this by increasing observability of the grid via smart meters, thereby enabling more active consumer participation and facilitating demand-side flexibility, while helping to protect consumers against rising energy costs and to safeguard the competitiveness of European industries. To this end, it introduces a Union-wide baseline for smart meter deployment, aimed at achieving sufficient uptake to support more responsive system operation and improved use of network capacity. In parallel, it clarifies that the role of cost-benefit assessments is limited to deployment beyond that baseline, ensuring a consistent approach across the Union while maintaining flexibility for Member States.

It is also consistent with the Union’s broader digital and energy policy framework, including the Regulation on harmonised rules on fair access to and use of data (the Data Act) 21 , the Regulation on harmonised rules on fair access to and use of data (the AI Act) 22 and existing electricity market legislation 23 on data management and interoperability. The proposal complements those instruments by addressing sector-specific needs linked to electricity grid data exchange and the development of innovative digital and AI-based solutions for electricity grid system operation and optimisation. At the same time, it ensures alignment with Union rules on data protection, cybersecurity, transparency and lawful data use and supports the development of European digital and AI-based solutions for critical energy infrastructure, thereby contributing to the Union’s strategic autonomy. It also contributes to the objectives of the Cloud and AI Development Act (CADA), notably by improving the use of existing infrastructure, hence enabling more timely grid connections and thereby timely deployment of cloud and AI infrastructure, including data centres.

Furthermore, the proposal is also consistent with the European Climate Law, as it supports emissions reductions through improved energy efficiency, demand-side flexibility and the integration of renewable energy sources, contributing to a more decarbonised and resilient energy system.

This proposal also delivers on the political commitment made by President von der Leyen, who announced in her letter to the Heads of State and Government ahead of the March 2026 EU Council, dated 16 March 2026, that there is clear scope to reduce electricity taxation, including through legislation. This can be done by ensuring that electricity is taxed more favourably than gas and by facilitating reductions on the taxation of electricity used by energy-intensive businesses.

The proposal is based on Article 194(2) of the Treaty on the Functioning of the European Union (TFEU), which provides the legal basis for proposing measures aiming inter alia to ensure the functioning of the energy market, promote energy efficiency and energy saving and the development of new and renewable forms of energy 24 . In the field of energy, the Union has a shared competence pursuant to Article 4(2)(i) TFEU.

The proposal also includes targeted taxation measures, which are purely ancillary to the main energy system objective ensuring the functioning of the energy market as listed in Article 194(2) TFEU. Specifically, the taxation measures are designed to support the achievement of this objective by complementing and reinforcing the objective of increasing the cost-effectiveness of network charges with targeted measures aiming at lowering electricity costs for consumers, thereby increasing its affordability, ensure a level playing field between energy consumers across the EU and support the EU’s electrification objectives. These measures consist of general principles and clarifications and complement the existing EU harmonised framework as set out in Council Directive 2003/96/EU.

The need for EU action

The growing share of low-cost, variable and decentralised electricity from renewables across the Union combined with the goal of increased electrification to secure energy autonomy, puts more stress on European grids. This requires significant grid investments, which translate into higher grid costs, at least in a short-term horizon until the demand fully materializes and the costs are spread across wider consumer base. Households and businesses across the Union have been exposed to these higher costs, affecting affordability and competitiveness.

This is an issue of Union-wide relevance, requiring a consistent legal framework within the Union, which can only be addressed with action at Union level. Uncoordinated national policies on the principles for transmission and distribution tariffs may distort the internal market to the extent that generation, energy storage services or consumers will be under very different incentives to participate in the market. The incentives for the use of electricity over natural gas in national taxation systems should be streamlined at Union level to ensure consistent price signals across the EU energy market, supporting a unified approach to electrification and by extension energy security.

The current rules leave national regulatory authorities (NRAs) a significant margin for implementation. This has created strongly diverging network charge regimes between different Member States. However, the increased integration of EU electricity markets requires closer coordination between national actors. National policy interventions in the electricity sector have a direct impact on neighbouring Member States due to grid interconnections. A common approach is needed for a functioning electricity system, efficient cross-border trade and investment and a faster, better coordinated energy transition towards a more integrated and energy-efficient energy system based on renewable generation.

In addition, making network charges more system-friendly should be supported by common enabling conditions across the Union. Smart meters, smart electricity grids and effective electricity grid data exchanges make it easier for both system operators and grid users to respond to price signals and use the existing infrastructure more efficiently. A minimum level of smart meter deployment across the Union supports these conditions by ensuring sufficient uptake for interoperable solutions, while leaving further deployment subject to cost-benefit assessments at national level. Without a more coordinated Union framework in these areas, national approaches would remain fragmented, slowing down the development of innovative and data-driven solutions at Union level. A pan-EU system of electricity grid data reuse is needed to enable the development, testing and scaling of innovative digital solutions for EU grid operation and management. These solutions depend on access to sufficiently diverse, high-quality and interoperable grid data across systems and Member States.

Concerning grid connection measures in case of network congestion, the proposal clarifies the scope of application of existing rules under Article 6 of Directive (EU) 2019/944 in situations of grid congestion, by enabling regulatory authorities to adapt national conditions and measures as they see fit to reflect the specific situation in a given Member States or grid area. The proposal does not lead to impacts from subsidiarity angle as it fully maintains the responsibility of national regulatory authorities.

The amendments proposed strike a balance between the obligations and flexibility left to the Member States on how to achieve cost-efficient grid charges, efficient and timely grid access, roll out smart meters, establish smart electricity grids and facilitate data exchanges and reuse of data for innovation purposes.

Additionally, the proposals in this Regulation align with the objectives set out in Council Directive (EU) 2003/96, including the proper functioning of the internal market.

Ensuring an appropriate and comprehensive framework for energy costs covering network charges and taxes at Union level is more efficient than individual Member States taking action unilaterally, as it avoids a fragmented approach that might lead to unduly high network charges or distortive differences in tax structures. The measures proposed to address the shortcomings identified will be more far reaching and cost-effective, if driven by a common legal and policy framework. In addition, actions at Member State level would only be possible within the constraints of the existing Union-wide framework for network charges as set out in the Electricity Regulation and would not be able to achieve the necessary changes to that framework.

At the same time, the proposal puts forward a coherent framework to promote non-wire, smart and digital solutions across all electricity system levels. This requires a minimum level of smart meter deployment to support active consumer participation and more efficient network use, a structured Union process through ACER recommendations and progress reporting to anchor smart electricity grid indicators in regulatory practice, and a coordinated and interoperable approach to electricity grid data exchange and reuse for innovation purposes.

The proposed provisions on grid connection measures in case of network congestion are necessary to provide clarity on the application of Article 6 of Directive (EU) 2019/944 in case of grid congestion, by providing a right to regulatory authorities to establish measures and conditions for priority consideration of economic, social, environmental and network impacts, maturity and progress of grid access applicants, and to differentiate between sectors and within sectors or groups of network users, as necessary, and based on transparent and non-discriminatory criteria.

Likewise, supporting these changes by simultaneously addressing energy taxation system inconsistencies at Union level would ensure their effectiveness across all Member States.

Consequently, the objectives of this initiative cannot be achieved by Member States on their own. This is where action at Union level provides added value.

The proposed amendments to the Electricity Regulation are considered proportionate.

To provide stronger incentives for the efficient use of European grids, the proposed measures introduce, among other things, enhanced transparency rules and the use of performance indicators by national regulatory authorities. The newly introduced transparency rules may lead to an increased administrative burden and higher costs, in particular as regards the additional elements that national administrations will need to make publicly available. However, the impact of this will be limited because the additional elements requiring transparency are kept to a minimum and are in line with those elements that have been flagged by ACER in its latest best practices report, published on 26 March 2025. 25  Moreover, their impact is necessary and proportionate for achieving the objectives of increasing comparability of tariff-setting, enhancing the understanding of system users as regards the tariffs payable by them, enabling them to adjust their behaviour to a system-friendly one, and ultimately reducing system costs.

The proposed measures on non-wire, smart and digital solutions are proportionate because they do not impose a uniform technological model or a centralised EU system for smart electricity grids and data exchange. They are limited to what is necessary to steer more cost-effective grid operation:

This complemented by a baseline level of smart meter rollout, while leaving deployment beyond that level to Member States on the basis of cost-benefit assessments.

The proposal therefore combines only those common Union rules that are necessary to reduce fragmentation and support the internal market by giving Member States, regulatory authorities and system operators great flexibility with its implementation. It limits further harmonisation to implementing acts and only where uniform technical and governance requirements are needed.

The taxation principles do not exceed what is necessary to achieve the objective of aligning energy taxation systems with the amendments to network charges, and to provide flexibility to promote the electrification of energy intensive businesses.

Concerning the provisions of the proposal on grid connection measures in case of network congestion, these leave full discretion to national regulatory authorities in line with their exclusive competence to fix or approve conditions for access to the grid, hence being fully proportionate and aligned with the objective of enabling efficient grid access.

Finally, the overall package of measures proposed is considered appropriate given the overarching imperative of ensuring affordable electricity prices and competitiveness of European companies.

The proposal will amend the Electricity Regulation. Given that the proposal aims to add a limited set of new provisions and amend a limited set of existing provisions in this instrument, the recourse to an amending act is adequate. On 2 July 2025, the Commission issued a draft notice with guidelines on future proof network charges for reduced system costs 26 . In that notice the Commission proposes a design of tariff methodologies for network charges to incentivise the use of flexibility and investments to optimise the use of existing grid, deliver grid expansion at least cost and ensure a fair and cost-reflective allocation of grid charges while encouraging European competitiveness, deeper electrification and decarbonisation. However, to achieve these objectives, it is of utmost importance that the relevant design principles are implemented in all Member States. This can only be achieved through legally binding instruments, such as the measures of this proposal.

The principles on taxation of energy as laid out in this amendment of the Electricity Regulation focus on the application of the EU provisions imposing a minimum rate on electricity and natural gas and providing practical guidance on the making use of the possibility for Member States to apply reduced taxation rates to electricity used by intensive industries as set by Council Directive 2003/96/EC. In line with the objectives of this Directive, Member States remain free to set their energy tax levels, provided they follow the provisions in the Directive, while the principles in this Regulation will enable existing differences in the electrification incentives in energy taxation frameworks of Member States to be reduced.

This proposal is part of the Commission’s response to the energy crisis triggered by the conflict in the Middle East and the closure of the Strait of Hormuz. Although in recent years, the Union greatly accelerated the energy transition towards an efficient, flexible and interconnected system that is based on homegrown and clean energy sources, it remains dependent on fossil fuel imports. Over half (57%) of the energy consumed in Europe is from imported fossil fuels.

Rising prices have been the immediate consequence of the conflict and this has driven up fossil fuel costs for the Union by 500 million EUR/day. There is no immediate threat to the security of supply, although stocks of some fuels are tight. The Union is in the process of reducing the share of fossil fuels in its electricity production, but gas and oil continue to dominate in heating, industry and transport and are a key input to industrial value chains (e.g. chemicals, plastics and fertilisers). This leaves European households and businesses, notably SMEs and energy-intensive industries, and their employees, exposed to global price spikes. Moreover, the possible effects of the crisis on GDP growth and inflation are significant and its impact is likely to be felt for at least several months and go well beyond the energy sector, with economic, employment and social ramifications.

In this context, swift Union action is needed to avoid significant harm to EU electricity consumers, in particular to decrease electricity bills and the EU dependence on fossil fuels. In March 2026 the European Council called on the Commission ‘to urgently present targeted measures – across all components of electricity prices – for concrete actions to lower electricity prices and to address excessive volatility in the short term, including for energy-intensive sectors, taking into account the different situations across Member States’ 27 . The Commission responded with the AccelerateEU Communication 28 , which announced the adoption of a legislative proposal on two significant components of the electricity bill, i.e. network charges and taxation, in May 2026.

Therefore, due to the need for urgent action and adoption of this proposal within an extremely compressed timeframe, the Commissioner responsible for better regulation has granted a specific derogation from carrying out an impact assessment and dedicated stakeholder consultations prior to the adoption of this proposal. In line with the principles of better regulation as set out in the Communication 29 on ‘A simpler, clearer and better enforced EU rulebook’, a staff working document has been prepared to accompany the proposal.  The staff working document sets out the explanation and rationale behind the Commission’s proposal as well as the way in which the measures presented therein will increase the cost-effectiveness of the grid operation and foster electrification, ultimately reducing system costs. In addition, the staff working document presents the available evidence of relevance for the proposed measures.

However, this initiative drew upon the conclusions of recent public consultations on the European Grids Package as well as the Strategic Roadmap for Digitalisation and AI in the energy sector. Under the European Grids Package consultation, 76% of respondents agreed that further measures are needed to increase the efficiency of the existing grid, with 62% of respondents also agreeing that enhancing the visibility and quantified benefits of digital, innovative, and grid-enhancing technologies is also needed.

According to the study mandated by the European Commission, 30 at least 16 Member States face grid connection queues as of mid-2025. Some countries are rarely affected due to slower electrification or uptake of renewable energy sources, while others are experiencing severe grid congestion. Other analysis 31 noted some queues were 30 times the amount of the peak load in 2024, pointing to the presence of speculative and immature requests in the queue. The existence of speculative and immature requests hindering timely grid access was also confirmed under a targeted stakeholder consultation under the European Grids package, running between 25 June and 25 July 2025. Among the respondents which represented system operators, regulatory authorities, Member States, energy market stakeholders as well as representatives of civil society, 66 % agreed that there is a problem with speculative and immature requests in their geography and in the EU, and 56 % agreed that grid capacity is locked due to non-maturing requests. Moreover, 82 % of respondents agreed or partly agreed that measures contributing to relieving congestion in the grid as part of the grid connection procedures could be helpful. Slightly lower number of respondents (71 %) agreed or partly agreed with added value of measures considering contribution of connection requests to clean transition, services of general interest or based on other criteria.

Under the Open Public Consultation from the Strategic Roadmap for digitalisation and AI in the energy sector, most participants agree or strongly agree that a Union-wide initiative for the development of AI foundation models would accelerate the deployment of digital and AI solutions in the energy system. According to this group of surveyed participants, there is strong confidence in fostering collaboration to accelerate the adoption of digital tools and AI solutions in the energy sector. About 60% of participants agreed with deploying AI foundation models, but most of these (45%) included a caveat: caution should be exercised. AI foundation models should be explored in specific use cases – such as grids -, with clear safeguards and governance in place. Building partnerships, in particular collaboration between grid operators, academia, and research was ranked as main action (next to funding and financing) that would most effectively strengthen the Union’s capacity to innovate with smart energy systems. In terms of additional measures, the respondents clearly aligned in identifying collaborative environments as key. “Support for creating ecosystems/hubs that bring together developers and energy players to build AI-based solutions, applications, foundational models, etc.” received 81 mentions. Giving regulatory clarity and importance in upcoming legislation were frequently mentioned among the most effective actions for developing a coordinated framework to advance AI and digital technologies in the energy sector.

The Commission plans to further engage with stakeholders, to ensure the successful implementation of this Regulation.

The proposed amendments to the Electricity Regulation focus on what is considered necessary to achieve the objective of addressing rising system costs by incentivising system operators and system users to act in a system-friendly and cost-efficient way. They do not constitute a full revision of this instrument.

The proposal to make network charges more cost-efficient may increase administrative requirements for national administrations, but they are proportionate as explained above. At the same time, the envisaged economic impact would benefit businesses and consumers by contributing to lower energy bills. The impact on national administration is considered minimal compared to the current framework, as the economic gains of the reform would outweigh any short- or long-term administrative reorganisation costs.

For smart electricity grid indicators, the proposal builds on existing regulatory practice. National regulatory authorities are already required under Directive (EU) 2019/944 to monitor and assess smart electricity grid development, and ACER and the Council of European Energy Regulators (CEER) have already developed analytical work in this area. The proposal therefore does not create an entirely new reporting logic but rather structures and streamlines existing practice at Union level in order to support more coherent monitoring and regulatory follow-up.

For smart metering systems, the proposal builds on the existing framework under Directive (EU) 2019/944 by introducing a minimum level of deployment across the Union, while maintaining the role of cost-benefit assessments for deployment beyond that level, thereby clarifying and refining the current approach without introducing a new regulatory mechanism.

For grid data exchange between system operators, the proposal builds further on existing but more general cooperation and data-sharing obligations in the electricity acquis, in particular on cooperation in network planning and operation between transmission system operators (TSOs) and distribution system operators (DSOs). It makes those obligations more operational and purpose-driven by specifying that data exchange must support the development and effective use of smart electricity grids and innovative data-driven solutions for system operation, thereby reducing legal ambiguity and fragmentation rather than creating a new layer of obligations.

For the framework supporting the controlled re-use of electricity grid data for research and innovation, the proposal builds on bottom-up initiatives already being developed by grid operators and their representative bodies. It does not impose mandatory participation but provides a clearer legal and governance framework around voluntary cooperation that is already emerging in practice to enable reaching scale, legal certainty and common safeguards across the Union.

The proposed amendments regarding taxation reduce the regulatory burden for energy intensive businesses and national administrations via the removal of certain pre-conditions for the application of lower excise rates. Changes in taxation rates due to the amendments in this proposal can be implemented at national level via targeted changes to the domestic framework in regular (fiscal) legislative processes and do not influence the regulatory burden.

Concerning the proposed provisions on grid connection measures in case of congestion, the proposal fully builds on Article 6 the Directive (EU) 2019/944 and on the Guidance on efficient and timely grid connections and clarifies the existing responsibility of national regulatory authorities to set conditions for non-discriminatory and transparent third-party grid access, hence not leading to any additional administrative burden.

No negative impact on fundamental rights has been identified.

The budgetary impact associated with this proposal concerns the resources of ACER and the Commission which are described in the Legislative Financial Statement accompanying the proposal. Essentially, for the new tasks to be carried out by ACER, two additional full-time equivalents (FTEs) will be required for ACER from 2026 onwards, as well as corresponding financial resources. The Commission’s workload will increase by 5 FTEs.

The Commission will monitor the compliance of Member States and other actors with the measures that should ultimately be adopted and take enforcement measures when required. The Commission will also liaise with ACER and national regulatory authorities.

Moreover, to facilitate the implementation of the measures ultimately adopted, the Commission will be available for bilateral meetings and calls with Member States for specific questions.

The amendments to the existing principles for transmission and distribution network tariffs provide further details on current and additional criteria for ensuring a cost-efficient use of electricity grids. They further empower the Commission to adopt delegated acts in the form of guidelines on a common structure and harmonised methodology on transmission and distribution tariffs, including detailed conditions under which regulatory authorities may introduce separate network charge regimes for specific categories of system users as well as harmonised rules on the procedural and substantive requirements for public consultations on relevant draft tariff methodologies.

The amendments require regulatory authorities to promote non-wire, smart and digital solutions to support a more cost-effective use of existing infrastructure before resorting to conventional grid expansion.

The amendments further establish a structured Union-level framework for smart electricity grid indicators to enable smart electricity grids and innovative data-driven solutions for monitoring, optimisation and coordination of network operation. ACER is tasked with issuing a recommendation on a limited set of indicators and with publishing regular Union-level progress reports, while the Commission is empowered to adopt implementing acts.

The proposed amendments also introduce a clearer; more operational obligation for transmission and distribution system operators to manage and exchange grid data in a way that enables the development, deployment and effective use of smart electricity grids.

The amendments create a framework for voluntary cooperation between system operators, jointly facilitated by the European Network of Transmission System Operators for Electricity ENTSO-E and the EU DSO Entity, to develop, test, integrate and deploy innovative digital tools for grid operation and optimisation. They formalise the key governance, access, cybersecurity, compliance and lifecycle-management elements needed for such cooperation. They also allow the Commission to issue an opinion on the proposed arrangement and to adopt implementing acts establishing common requirements on data models, formats, interfaces, transparency and risk management. The purpose is to provide a sector-specific legal basis for the lawful, secure and controlled reuse of electricity grid data for research and innovation in the public interest, including advanced analytics and AI-based solutions.

The amendments introduce a minimum Union-wide deployment requirement for smart metering systems, requiring Member States to ensure coverage of at least 50 % of final customers by 31 December 2030 and at least 75 % by 31 December 2033, with a possibility for a limited extension of the deadline for reaching the targets in duly justified cases.
It clarifies that cost-benefit assessments under Directive (EU) 2019/944 may continue to apply but only beyond the 75 % threshold.

The proposal concerning the excise taxation of electricity determines that the minimum level of taxation for electricity shall be lower than the minimum level of taxation applicable to natural gas. Additionally, the conditions to apply a reduced rate of up to zero of taxation for electricity for use by energy intensive businesses shall be deemed to be met, given the positive environmental and climate impact of the uptake of electricity and its role in the achievement of the EU’s Net-Zero targets.

(1)High electricity costs are adversely affecting households and businesses across the Union, thereby undermining the competitiveness of the internal market and social cohesion. While the cost of the commodity cost component in the electricity bill is determined by supply and demand regulatory cost components of electricity bills, namely network charges and taxation may be further aligned with the Union energy and climate objectives. To provide tangible relief to electricity consumers, it is necessary to adopt a coherent set of measures targeting those components of electricity bills.

Legislative proposal on amending Regulation (EU) 2019/943 to future-proof electricity bills in the European Union

Policy area: Energy

Activity: Action Plan for Affordable Energy

The main aim of the legal proposal in the area of network charges is to make the transition towards a more system-friendly network charge design and network operation mandatory for national regulatory authorities, while supporting the broader Union objective of accelerating electrification and ensuring that the regulatory cost structure of electricity consumption is aligned with EU energy, climate and competitiveness objectives.

This would include stronger incentives for system operators to increase cost-effectiveness as well as to enable timely grid access, incentives for grid users to adapt their consumption behaviour, enhanced transparency and an obligation on regulatory authorities to set performance indicators in order to increase efficiency in the use of the grid and increase system efficiency. All these proposals should help ensure that network charges reflect the true costs imposed on the system and support further an efficient use of the grid. In parallel, the proposal seeks to ensure that the combined effect of network charges and electricity taxation supports electrification, contributes to lower electricity costs for consumers and industry, and strengthens the competitiveness of the Union economy.

The legal proposal introduces targeted supporting measures to accelerate smart meter deployment, require system operators to exchange grid data for smart grid purposes, and establish a voluntary EU-level framework for the secure reuse of electricity data to develop and test innovative digital tools for grid optimisation — all aimed at improving the productivity of existing grid infrastructure and reducing overall system costs. These measures are complemented by targeted principles on electricity taxation, aimed at ensuring that taxation frameworks do not discourage electrification and that electricity is taxed more favourably than competing fossil fuels, notably natural gas, in line with the objectives of AccelerateEU, the Affordable Energy Action Plan and the Union’s decarbonisation objectives.

The proposal also seeks to contribute to reducing final electricity costs for consumers and energy-intensive industries by enabling a more coherent interaction between network charge design and the incentives embedded in Member States’ electricity taxation frameworks, while fully respecting the competences of Member States under Council Directive 2003/96/EC.

Finally, the proposal provides a clarification concerning right of regulatory authorities to adopt grid connection measures in case of network congestion, by a way of adopting measures and setting conditions for non-discriminatory, objective and transparent third-party access with possible consideration of impacts of grid connection requests on network congestion, economic, social or environmental considerations, and taking into account their maturity and progress. Regulatory authorities may also adopt conditions to prioritise economic sectors or group of users, as well as set conditions for treatment of users within the sectors or group of users while ensuring that other measures addressing grid congestion are duly implemented.

For further information see Explanatory Memorandum.

The following specific objectives (SOs) focus on those which are addressed by provisions which require additional resources for the Commission (DG ENER and DG JRC):

SO1: Improve the efficiency, security and flexibility of electricity system operation by establishing a purpose-driven legal obligation for transmission and distribution system operators to exchange grid data in a harmonised manner, enabling the development, deployment and effective use of smart electricity grids and innovative data-driven solutions for network monitoring, optimisation and coordination.

SO2: Enable the development, testing and deployment of innovative digital tools for grid operation and optimisation by requiring grid operators to establish a voluntary Union-level framework for the secure and controlled reuse of electricity grid data for research and innovation purposes, providing the legal certainty, framework and common technical requirements. Enable the Commission to adopt implementing acts setting out guidelines to enable the lawful, secure and controlled reuse of electricity grid data for research and innovation public-interest purposes.

SO3: Enable the Commission to adopt an implementing act setting out guidelines on a harmonised methodology on tariffs, thereby contributing to more coherent regulatory approaches across the Union.

SO4: Enable the Commission to adopt an implementing act on smart grid indicators, thereby contributing to more coherent regulatory approaches across the Union.

SO5: The proposal introduces a limited new task for the Commission related to Article 18b on smart metering systems. This task consists essentially in following up the implementation by Member States of the minimum deployment requirement for smart metering systems and monitoring the application of the clarification that cost-benefit assessments may only apply beyond the minimum level of coverage.

SO6: Proposal clarifies rights of regulatory authorities concerning adoption of grid connection measures in case of congestion, to ensure grid connection procedures are timely and efficient and support electrification. There is no requirement for the Commission or ACER in this relation, hence there are no financial impacts on the Commission or ACER. To this end, financial impacts on EU institutions are not further assessed as fulfilment of this SO remain fully in hands of national regulatory authorities.

The proposal entails new requirements for the Commission (DG ENER and DG JRC, which are linked to the achievement of SO1 and SO2:

Requirement 1 (linked to SO1 and SO2): To support the grid operators in their data exchange activities, the Commission will, on the one hand, develop adequate energy data exchange provisions in the relevant instruments such as, for example, the Demand Response Network Code (Article 18a(4)), and, on the other hand, overseeing the implementation of the new framework for electricity grid data exchange for innovation purposes, under which ENTSO for Electricity, the EU DSO Entity, and participating TSOs and DSOs are required to establish and communicate the governance, participation rules, technical and operational measures, cybersecurity safeguards, lifecycle management arrangements, and testing and validation frameworks of the coordinated arrangement (Article 18a(5)). The Commission is required to assess those elements, deliver an opinion within three months, and monitor how that opinion has been taken into account. The JRC provides technical and scientific support for the development of the voluntary secure electricity data exchange framework under Article 18a(5). This includes the provision of guidelines on testing and validation approaches, and essential cybersecurity requirements.

Requirement 2 (linked to SO2): The Commission is empowered to adopt implementing acts setting out guidelines to enable the lawful, secure and controlled reuse of electricity grid data for research and innovation public-interest purposes supporting the operation and optimisation of the electricity system (Article 61(5b)). This includes technical and legal preparation, stakeholder consultation, drafting and implementation follow-up. The JRC will be involved in providing technical input for the preparation of these implementing acts including on data models, ontologies, interfaces, interoperability architectures and technical specifications.

Requirement 3 (SO3): The Commission is empowered to adopt an implementing act setting out guidelines on a harmonised methodology on tariffs pursuant to Article 18. This task supports the development of a more coherent and harmonised regulatory framework across Member States.

Requirement 4 (SO4): The Commission is empowered to adopt an implementing act on smart grid indicators pursuant to Article 18a. For that purpose, the Commission will need to assess ACER’s recommendation on smart grid indicators, prepare and manage stakeholder consultations and interservice coordination, draft the implementing act where appropriate, and support its adoption and subsequent review. These tasks support the development of a more coherent and harmonised regulatory framework across Member States.

Requirement 5 (linked to SO5): The related follow-up task would fall to DG ENER only and is expected to remain limited, given that progress on smart metering deployment is already covered through existing monitoring exercises.

The following specific objectives (SOs) focus on those which are addressed by provisions which require additional resources for ACER:

SO6: Promote the uptake of smart and innovative grid technologies and digital solutions in transmission and distribution networks by establishing smart grid indicators, thereby supporting the digitalisation and modernisation of electricity infrastructure.

SO7: Strengthen Union-level monitoring of the development and uptake of smart grid solutions and the efficient use of electricity infrastructure by publishing regular progress reports, thereby improving regulatory oversight and evidence-based decision-making.

SO8: Further strengthen the objective of increasing efficiency in the use of the grid and increase system efficiency, through assisting regulatory authorities in setting performance indicators as regards the efficient operation and development of the network.

SO9: Further strengthen the objective of increasing efficiency in the use of the grid and increase system efficiency, through carrying out efficiency comparisons among transmission system operators.

S10: Contributing to the objective of achieving harmonisation in tariff-setting methodologies, through developing a recommendation addressed to the Commission on a proposal for a harmonised methodology on tariffs, prior to the Commission adopting an implementing act on the topic.

The proposal entails new requirements for ACER, which are linked to the achievement of SO6, SO7, SO8, SO8 and S10:

Requirement 6 (linked to SO6): ACER is required, in close cooperation with the ENTSO for Electricity, the EU DSO Entity and relevant stakeholders, to issue a recommendation addressed to regulatory authorities on smart grid indicators to measure the uptake of smart and innovative grid technologies and digital solutions in transmission and distribution networks (Article 18a(2)).

Requirement 7 (linked to SO7): ACER is required to publish a Union-level progress report assessing the development and uptake of smart grid solutions and the efficient use of electricity infrastructure (Article 18a(3)). This report is to be published at least every three years following the publication of ACER’s recommendation on smart grid indicators.

Requirement 8 (linked to SO8): ACER is tasked with assisting regulatory authorities in determining performance indicators (Article 18(7)).

Requirement 9 (linked to SO9): ACER is tasked with publishing a report on the efficiency comparison among transmission system operators and their costs, by the first day of the month following 12 months after the date of entry into force of the Regulation and every four years thereafter (Article 18(7)).

Requirement 10 (linked to S10): ACER is tasked with issuing a recommendation addressed to the Commission on a proposal for a harmonised methodology on tariffs (Article 61(5a)).

The resources will allow the Commission (DG ENER and DG JRC) and ACER to carry out the tasks necessary to fulfil their mandate under EU legislation as per the requirements under this proposal.

The proposal is expected to strengthen the cost-efficient, secure and digital operation of the electricity system by improving the regulatory framework for smart electricity grids, electricity grid data exchange and smart metering systems. The resources linked to the proposal are intended to ensure effective implementation of these new elements and to deliver tangible benefits for regulatory authorities, system operators, market participants and electricity users.

The Commission (DG ENER and JRC)

Requirement 1 and 2: Tasking the Commission with responsibilities related to the implementation of the provisions on electricity grid data exchange is expected to deliver a more coherent Union-wide framework for the uptake of smart and digital grid solutions. This should support more consistent monitoring of progress across Member States, better identification of best practices, and a stronger basis for regulatory incentives encouraging efficient grid operation and development. In particular it is expected to facilitate the development, testing and scaling of innovative digital and AI-based solutions for grid operation and optimisation, thereby improving grid observability, system efficiency and the integration of renewable energy sources, demand response and non-fossil flexibility.

Requirement 3: Tasking the Commission with the preparation and adoption of an implementing act on harmonised methodology on tariffs to support a more harmonised and predictable framework for national regulatory implementation. This should reduce fragmentation in national approaches, improve legal certainty for regulatory authorities and system operators, and strengthen the effectiveness of the broader reform in lowering system costs.

Requirement 4: Tasking the Commission with the preparation and adoption of an implementing act on smart grid indicators is expected to support a more harmonised and predictable framework for national regulatory implementation. This should reduce fragmentation in national approaches, improve legal certainty for regulatory authorities and system operators, and strengthen the effectiveness of the broader reform in lowering system costs. In addition, common implementing rules on grid data reuse are expected to support secure and interoperable innovation across the Union, to the benefit of electricity system operators and users.

Requirement 5: Tasking the Commission (DG ENER) with following up the implementation of Article 18b on smart metering systems is expected to support a more consistent application of the minimum deployment requirement for smart metering systems across Member States. This includes monitoring Member States’ compliance with the minimum level of deployment and the application of the clarification that cost-benefit assessments may only apply beyond that minimum level of coverage. This should contribute to greater legal certainty, improve the rollout of smart metering systems, and support a more effective and harmonised framework for consumer participation and system efficiency, to the benefit of consumers, system operators and regulatory authorities.

ACER

Requirement 6: Entrusting ACER with the development of a recommendation on smart grid indicators is expected to promote a more coherent approach to measuring digitalisation and innovation in electricity networks across the Union. This should improve the monitoring of progress, support the wider deployment of smart and innovative grid technologies and digital solutions, and contribute to a more efficient and modern use of electricity infrastructure, to the benefit of transmission and distribution system operators, regulatory authorities and network users.

Requirement 7: Tasking ACER with reporting on progress in the development and uptake of smart grid solutions and the efficient use of electricity infrastructure is expected to strengthen Union-level monitoring of smart grid deployment and infrastructure efficiency. This should support better-informed regulatory oversight and contribute to a more efficient and modern use of electricity infrastructure, to the benefit of transmission and distribution system operators, regulatory authorities and network users.

Requirement 8: Tasking ACER with assisting regulatory authorities in determining performance indicators is expected to improve the transparency, consistency and evidence base of regulatory oversight across the Union. This should support better-informed regulatory decisions and strengthen incentives for efficient network operation and investment, to the benefit of regulatory authorities, system operators and electricity users.

Requirement 9: Tasking ACER with carrying out and publishing an efficiency comparison among transmission system operators and their costs is expected to help identify good practices and inefficiencies across transmission system operators. This should strengthen benchmarking across the Union and support more efficient network operation and investment decisions, to the benefit of regulatory authorities, system operators and electricity users.

Requirement 10: Tasking ACER with issuing a recommendation to the Commission on a proposal for a harmonised methodology on tariffs is expected to support greater consistency and predictability in tariff-setting approaches across Member States. This should contribute to a more harmonised regulatory framework, reduce fragmentation in national approaches, and support a clearer and more coherent basis for network tariff design, to the benefit of regulatory authorities, system operators and market participants.

Please see Explanatory Memorandum as regards monitoring progress and achievements of the initiative.

The Commission (DG ENER and DG JRC)

Requirement 1: DG ENER is tasked with overseeing the implementation of the electricity grid data exchange framework for innovation purposes, including coordinating the overall implementation process with ACER, ENTSO for Electricity, the EU DSO Entity, TSOs, DSOs, Member States and other relevant stakeholders, and ensuring coherence with the broader Union framework (Article 18a(5)). In addition, the Commission is required to receive, assess and follow up on the elements communicated by ENTSO for Electricity, the EU DSO Entity and participating TSOs and DSOs concerning governance, participation rules, technical and operational measures, cybersecurity safeguards, lifecycle arrangements and testing frameworks, deliver a Commission opinion within three months, and monitor how that opinion has been taken into account. Dedicated resources would in particular support overall coordination of the implementation process with ACER, ENTSO for Electricity, the EU DSO Entity, system operators, Member States and other stakeholders; preparation of the Commission opinion under Article 18a(5); policy and legal follow-up, including on ACER recommendations and data governance, cybersecurity, AI and critical infrastructure issues; and stakeholder engagement, monitoring and possible future updates of the implementing framework.

The JRC provides technical and scientific advice for the development of the voluntary secure electricity data exchange framework under Article 18a(5). This includes the provision of guidelines on testing and validation approaches, and essential cybersecurity requirements. Where appropriate JRC could contribute to the formulation of timely, policy relevant use cases related to electricity grid planning, operation and optimisation. The JRC would also provide technical input for the implementing acts under Article 61.5b, supporting the technical assessment of the voluntary secure electricity grid data exchange framework under Article 18a(5).

Requirement 2: The Commission is empowered to adopt implementing acts setting out guidelines to enable the lawful, secure and controlled reuse of electricity grid data for research and innovation public-interest purposes supporting the operation and optimisation of the electricity system pursuant to Article 18a (Article 61(5b)). This includes technical and legal preparation, stakeholder consultation, drafting and implementation follow-up. This task requires a combined effort from DG ENER and the JRC, the latter in providing technical input for the preparation of these implementing acts including on data models, ontologies, interfaces, interoperability architectures and technical specifications. These resources would cover in particular preparing, drafting and steering the adoption of implementing acts under Article 61.5a and 5b, including interservice consultation and consultation of Member States under the relevant comitology procedure.

Requirement 3: The Commission may adopt an implementing act setting out guidelines on a harmonised methodology on tariffs pursuant to Article 18 (Article 61(5a)). This task requires analytical, regulatory and coordination capacity within DG ENER. These required resources would cover in particular policy and legal follow-up.

Requirement 4: The Commission may adopt an implementing act on smart grid indicators pursuant to Article 18a (Article 61(5a)). This task requires analytical, regulatory and coordination capacity within DG ENER. These required resources would cover in particular policy and legal follow-up.

Requirement 5: No separate human resources are considered necessary for DG ENER in relation to Article 18b, given that progress on smart metering deployment is already covered through existing monitoring exercises.

ACER

Requirement 6: ACER is required, in close cooperation with transmission and distribution system operators and relevant stakeholders, to issue a recommendation addressed to regulatory authorities on smart grid indicators to measure the uptake of smart and innovative grid technologies and digital solutions in transmission and distribution networks (Article 18a(2)). This recommendation is to be issued by one year after the entry into force of the Regulation and constitutes a one-off task.

Requirement 7: ACER is required to publish a Union-level progress report assessing the development and uptake of smart grid solutions and the efficient use of electricity infrastructure (Article 18a(3)). This report is to be published at least every three years following the publication of ACER’s recommendation on smart grid indicators and constitutes a recurring task.

For Requirements 6 and 7 combined ACER thus requires additional staff to lead and conduct the expert work including initial recommendation and regular monitoring on both TSOs and DSOs, as well as to assist on data collection and other clerical tasks inherent to this activity.

Requirement 8: ACER is tasked with assisting regulatory authorities in determining performance indicators (Article 18(7)).

Requirement 9: ACER is tasked with publishing a report with efficiency comparison among transmission system operators and their costs, by first day of the month following 12 months after the date of entry into force of this Regulation and every four years thereafter (Article 18(7)).

Requirement 10: ACER is tasked with issuing a recommendation addressed to the Commission on a proposal for a harmonised methodology on tariffs (Article 61(5a)).

For Requirements 8, 9 and 10, ACER requires additional staff resources for horizontal support and overhead, as well as an operational budget for specialised consultancy and developments.

An EU-level framework for energy costs, including network charges, is more effective than separate national measures because it avoids fragmentation. Member States alone cannot achieve the necessary reforms within the limits of the existing EU framework under the Electricity Regulation. A common legal and policy framework also enables more ambitious and cost-effective action.

The proposal establishes a coherent EU approach for non-wire, smart, and digital solutions across electricity systems, including minimum smart metering deployment, stronger consumer participation, ACER-led smart grid indicators, and interoperable grid data exchange.

The proposed measures are proportionate because they introduce only the measures necessary to improve grid efficiency, transparency, and electrification incentives without imposing a uniform technological model or excessive administrative burden. Since the initiative mainly adds and adjusts provisions in existing EU legislation, an amending act is the appropriate legal instrument.

Experience from the implementation of the existing electricity market framework has shown that increasing electrification, the rapid deployment of renewables and the growing digitalisation of the electricity system require a more system-oriented and efficient approach to the operation and use of electricity networks. Existing regulatory frameworks have not always provided sufficiently strong incentives for efficient grid use, flexibility, timely grid access or the deployment of smart and digital solutions.

Recent policy initiatives, including the Action Plan for Affordable Energy, the European Grids Package and AccelerateEU, also highlighted the need for a more coherent approach to the regulatory components contributing to electricity costs, including network charges and taxation, in order to support electrification, affordability and competitiveness objectives.

Previous experience with the implementation of Union electricity market legislation has furthermore shown that increasingly technical and data-intensive regulatory frameworks require adequate technical, regulatory and monitoring capacity at Union level, including within ACER and the Commission.

The proposal aligns with the objectives detailed in AccelerateEU and the Clean Industrial Deal.

The proposal’s objectives to protect consumers, improve competitiveness of EU industry and boost renewables and low carbon investment are also wholly consistent with the framework of the European Green Deal, the Clean Industrial Deal and coherent and complementary to current initiatives. It responds to the issues that were identified in the Commission’s Action Plan for Affordable Energy in February 2025, namely that high energy costs put at risk the competitiveness of European companies and represent a significant burden for consumers. It is therefore imperative to ensure an efficient use of the energy system, supported by an appropriate structure of taxes, will play an important role to enable electricity users to benefit from more predictable and lower energy costs.

The proposed initiative is strongly linked and complementary to the legislative proposals brought forward in the Grids Package, which is a key deliverable under the Clean Industrial Deal and the Action Plan for Affordable Energy, being part of the 2025 Commission Work Program.

The Commission proposal for the new Multiannual Financial Framework (MFF) 2028-2034 highlights “the vital importance of a genuine Energy Union and well integrated EU infrastructure networks”, which is reflected in a substantially increased budget proposed for the Connecting Europe Facility (CEF) for Energy.

The FTE are needed for additional tasks being performed by ACER while existing tasks will not decrease in the foreseeable future.

As far as legally possible, additional FTEs requested for ACER will be financed from a relevant programme envelope under the same MFF heading, subject to the agreement on the MFF 2028-2034.

N.A.

According to its financial regulation, ACER has to provide, in the context of its Programming Document, an annual Work Programme including details on resources, both financial and human, per each of the activities carried out.

ACER reports monthly to DG ENER on budget execution, including commitments, and payments by budget title, and vacancy rates by type of staff.

In addition, DG ENER is directly represented in the governance bodies of ACER. Through its representatives in the Administrative Board, DG ENER will be informed of the use of the budget and the establishment plan at each of its meetings during the year.

Finally, also in line with financial rules, ACER is subject to annual requirements for reporting on activities and the use of resources through the Administrative Board and its Annual Activity Report.

The tasks directly implemented by DG ENER, where appropriate with support from the JRC, will follow the annual cycle of planning and monitoring, as implemented in the Commission and the executive agencies, including reporting the results through the Annual Activity Report of DG ENER and the JRC.

Regarding requirements falling within the scope of the Commission, these tasks will be carried out primarily by DG ENER, with scientific and technical support from the JRC. Subject to implementation needs, some supporting activities may be carried out through public procurement, including expert studies, technical support, workshops, prototyping or validation exercises. In such cases, procurement would be implemented under direct management in full compliance with the Financial Regulation. The control strategy for these expenditures would follow the Commission’s standard ex ante and ex post legal, financial and operational controls.

Regarding requirements falling within the scope of ACER, the Agency is best placed to carry out the tasks related to the preparation of recommendations and Union-level progress reports on smart grid indicators. While ACER will have to develop new expertise, it is nevertheless most cost-effective to allocate the new tasks under this proposal to an existing agency which already works on similar tasks.

DG Energy

The elements directly managed by DG Energy may be subject to the usual risks affecting public procurement procedures. These risks are considered low level as regards legality and regularity of the expenditure. Appropriate and effective controls are in place at corporate and DG level. Concerning performance, the main risk are wrong estimates as regards the workload created by this proposal, given that it introduces new tasks. This risk needs to be accepted, since, as experience has shown, if additional resources needs are not included in the initial proposal, it is very difficult to remedy this situation later on.

DG JRC

As part of the risk assessment process for its scientific activities, the JRC identifies potential risks, evaluates their level and plans necessary mitigating actions and identifies existing controls. The key risk identified refers to a) the estimation of the related workload for the new tasks associated to this proposal (the workload for some of the tasks might be underestimated); b) insufficient quantity or quality of the data to support the various new tasks. For a) the risk needs to be accepted; mitigation measures include careful staff planning throughout the duration of the activities to ensure appropriate expertise. For b) the actions include an early participation in designing and framing the data collection processes, as well as early identification, within each task requiring data intense activities, of the potential barriers to get access to the data of interest and early communication with DG ENER and relevant stakeholders to raise the issue of data availability.

ACER

As regards new tasks for ACER, the proposal includes several new tasks which mitigates this risk, since while the workload of some future tasks may be underestimated, others may be overestimated, providing scope for possible future redeployment.

DG Energy and DG JRC

The tasks assigned for DG Energy will be implemented following already existing control system and the cost of control ratio is expected to remain stable (5 to 6% of the funds managed based on recent exercises).

ACER

The allocation of additional tasks for the existing mandate of ACER is not expected to generate specific additional controls at Agency level, therefore, the ratio of control costs over value of funds managed will remain unaltered for ACER.

DG Energy

DG Energy adopted a revised Anti-fraud Strategy in 2020 and, in 2023, a revised action plan covering the years 2023-2025. DG Energy is is currently revising its AFS for the years 2026-2028, in accordance with the OLAF methodology. The Energy AFS are based on the Commission Antifraud Strategy and on a specific risk assessment carried out internally to identify the areas most vulnerable to fraud, the controls already in place and the actions necessary to improve DG Energy’s capacity to prevent, detect and correct fraud.

DG JRC

The JRC Anti-Fraud Strategy, along with its accompanying Action Plan, was adopted in 2020 and modified in 2024 to revise and update the plan for the period 2025-2027. The updated plan includes three new actions: an awareness-raising campaign focusing on Commission ethics issues and anti-fraud measures, with relevant examples tailored for JRC scientific staff, launched in the first half of 2025; an expanded training programme featuring thematic sessions on topics such as conflict of interest, authorship, the use of AI, whistleblowing and reporting channels, among others; updated Sharepoint pages dedicated to ethics issues and anti-fraud measures. These new actions complement the ongoing efforts from the 2021-2024 Action Plan and JRC participation in the Commission Antifraud Strategy Action Plan. The JRC values its cooperation with OLAF, the internal control team, and other stakeholders in our collective efforts to combat fraud.

ACER

ACER applies the anti-fraud principles of decentralised EU Agencies, in line with the Commission approach and the Guidelines by OLAF of 2024 for decentralised agencies and JUs. In December 2024 the Agency adopted a new Anti-Fraud Strategy, repealing Decision 15/2021 of the Administrative Board of the Agency. The new strategy, spanning the period 2025-2027, is based on the following strategic objectives: optimise existing fraud prevention measures, enhance timeliness and accuracy of existing detection systems, strengthen investigation protocols, and optimise corrective actions for swift recoveries.

Requirement 6: ACER is required, in close cooperation with transmission and distribution system operators and relevant stakeholders, to issue a recommendation addressed to regulatory authorities on smart grid indicators to measure the uptake of smart and innovative grid technologies and digital solutions in transmission and distribution networks (Article 18a(2)). This recommendation is to be issued by one year after the entry into force of the Regulation and constitutes a one-off task.

Requirement 7: ACER is required to publish a Union-level progress report assessing the development and uptake of smart grid solutions and the efficient use of electricity infrastructure (Article 18a(3)). This report is to be published at least every three years following the publication of ACER’s recommendation on smart grid indicators and constitutes a recurring task.

For Requirements 6 and 7 combined ACER thus requires additional staff to lead and conduct the expert work including initial recommendation and regular monitoring on both TSOs and DSOs, as well as to assist on data collection and other clerical tasks inherent to this activity.

Requirement 8: ACER is tasked with assisting regulatory authorities in determining performance indicators (Article 18(7)).

Requirement 9: ACER is tasked with publishing a report with efficiency comparison among transmission system operators and their costs, by first day of the month following 12 months after the date of entry into force of this Regulation and every four years thereafter (Article 18(7)).

Requirement 10: ACER is tasked with issuing a recommendation addressed to the Commission on a proposal for a harmonised methodology on tariffs (Article 61(5a)).

For Requirements 8, 9 and 10, ACER requires additional staff resources for horizontal support and overhead, as well as an operational budget for specialised consultancy and developments.