ECRB report maps reforms to modernise Energy Community electricity network tariffs
As Energy Community–EU electricity market integration advances, a new report identifies reforms needed to modernise transmission and distribution tariffs to support larger, more integrated electricity markets and the energy transition.
The Energy Community Regulatory Board (ECRB) has released its 2025 Best Practice Report on electricity network tariff methodologies, reviewing developments across Contracting Parties since 2022 and identifying priorities for further reforms, informed by the latest ACER report on European tariff practices. Well-designed electricity network tariff methodologies play a key role in determining how the costs of operating and expanding electricity grids are recovered and shared fairly among users in order to encourage investment in infrastructure, support efficient electricity flows across integrated markets, and enable the integration of emerging technologies central to a decarbonised electricity grid.
Regional progress in this area is encouraging, with almost all Contracting Parties having updated their transmission and distribution tariff frameworks since 2022. Incentive-based regulation remains the dominant approach across the region, with most national regulatory authorities linking network tariffs to efficiency and performance targets for grid operators. At the same time, the report highlights several areas for further regulatory development:
Investment and innovation: Regulators should consider allowing anticipatory investments in distribution grids where justified, enabling network operators to expand infrastructure ahead of growing demand for new connections. Dedicated support mechanisms may also be needed to help distribution system operators attract the capital required to modernise networks. In addition, regulators are invited to assess incentives for innovation and research and development that could improve energy efficiency, enhance network flexibility, and facilitate the integration of emerging system users.
Improving cost recovery: The report recommends moving towards more cost reflective tariff structures: capital and infrastructure costs should be recovered primarily through capacity-based charges, while energy-based charges should cover variable costs such as network losses. Regulators are also encouraged to assess whether electricity producers feeding power into the grid should contribute to network costs. In addition, net-metering schemes for prosumers — which can shift grid costs onto other consumers — should be gradually phased out for new users from 1 January 2027, in line with the Electricity Directive.
Time-of-use network tariffs can help improve the efficiency and flexibility of the electricity system by encouraging consumers to shift electricity use to periods of lower demand. Such tariffs are already applied in Bosnia and Herzegovina, Montenegro and Serbia. The ECRB encourages regulators across the Energy Community to assess the potential benefits of introducing similar network tariff structures.
Regulatory role: While legislation sets the overall principles for tariff regulation, national regulatory authorities are responsible for approving tariff methodologies, including the regulatory model and tariff design. Ensuring that regulators retain these powers in national legislation is essential. The report also highlights the potential of regulatory sandboxes and similar innovation schemes, which allow market participants to test new approaches and help regulators adapt tariff frameworks to emerging technologies and market developments.
Methodology & review: To keep pace with evolving market conditions while ensuring regulatory predictability, regulators are encouraged review tariff methodologies regularly — approximately every five to six years — ensuring that tariff design reflects changing network conditions while avoiding unnecessary complexity or cross-subsidisation between users.
Transparency and stakeholder engagement: Regulators are encouraged to ensure sufficient consultation periods for major changes, communicate clearly how stakeholder feedback is considered, and strengthen dialogue with experts and market participants when developing tariff frameworks.
Under Article 18 of the Energy Community Electricity Regulation (Regulation (EU) 2019/943), the ECRB is mandated to publish this report every two years. The 2025 edition is the second in the series, following the first publication in 2023. Prepared with contributions from regulatory authorities across Contracting Parties, it reflects the ECRB’s commitment to strengthening regulatory frameworks and supporting the energy transition in the Energy Community.