Under Action 2 and 3 in the EU Electrification Action Plan, the Commission has proposed changes to network charges to incentivise electrification. This will provide for flexible and system-friendly use of the grid, including storage installations, to accelerate smart meter deployment, and to improve the electricity-to-gas price ratio from the network charges side.
The proposal, through amending Regulation (EU) 2019/943[1], seeks to future-proof electricity bills by reducing system costs and fostering electrification and digitalisation. It consists of five parts; tariff methodology, benchmarking, smartening the grid, grid connection prioritisation and electricity taxation. The amended regulation was released as part of the EU Package on July 17th, 2026.
The amendments place greater emphasis on time-of-use (ToU) tariffs to encourage consumers and businesses to shift electricity demand away from peak periods and locational investment signals only for connections to support investment where grid capacity is most needed. The European Commission retain the option to develop further tariff rules through an implementing act.
The initial reaction from the electricity sector is broadly supportive of these principles, while maintaining that tariff design should remain primarily a national competence. Key priorities for the sector include ensuring that network operators can recover operating costs, using locational signals for connection charges to encourage efficient investment, reducing peak demand and incorporating ToU elements into tariffs. The sector also stresses that the growing integration of data centres should be managed in a way that supports efficient grid use without transferring additional costs onto other electricity consumers.
The proposed tariff methodology amendments strengthen the governance and transparency of network charges under Article 18, covering core tariff principles, the use of special tariffs, state funding, updates on the publication of information, and public consultation. In addition, performance indicators would be established to enable comparisons between network operators, while ACER will develop a report on best practices and assist the Commission in developing the performance indicators. The National Regulatory Authorities (NRAs), the Commission for the Regulation of utilities (CRU) in Ireland, are in turn expected to take these practices into account when setting tariffs. Overall, the approach aims to make network charging more transparent, consistent and performance-oriented, while encouraging greater efficiency across Member States.
The principles for tariff methodologies include the design of network charges applied to system users and the determination of the remuneration that transmission and distribution system operators receive through those network charges. Article 18 (2) has been replaced with text outlining 14 new principles, including the following:
(b) Inter-TSO compensation;
(d) Reflectivity;
(e) & (f) Appropriate incentives;
(g) Reduction of peak load;
(h) Time-of-use tariffs;
(j) No disincentive to third-party access;
(m) Cross-zonal trading; and
(n) Storage tariffs.
The proposed framework seeks to ensure that DSO tariffs reflect both capital and operational expenditure, including anticipatory investment, while encouraging efficient network development over both the short and long term. NRAs would establish common performance indicators, including Smart Grid Indicators under Article 18a, and provide incentives for DSOs to optimise existing networks through flexibility services, non-wire solutions, smart grids and digitalisation. These measures are intended to facilitate the integration of renewable energy by supporting non-fossil flexibility, innovation and more efficient use of existing grid infrastructure. However, Article 18(2) seeks to combine principles relating to both tariff methodology and revenue regulation, which Eurelectric, the representative body for the Electricity in Europe, notes would require alignment across the wider electricity value chain and therefore, a more targeted and pragmatic textual amendment may be the most practical approach.
Flexibility of Data Centres
The EU Package also introduces three key measures to enhance the flexibility of data centres within the energy system: earlier grid access, special tariff regimes, and the development of a methodology to assess flexibility potential.
The provisions under Article 18d and Recital 28 allow NRAs to manage grid access more proactively. This includes the ability to deter speculative grid connection requests, ensure project maturity, and prioritise system users based on their contribution to alleviating network congestion, as well as their broader economic, environmental, and social benefits.
The package also enables the introduction of special tariff regimes under Article 18(3) and Recital 10, allowing differentiated network tariffs for certain users such as energy-intensive industries and data centres. These tariffs must remain cost-reflective, meaning NRAs must demonstrate that such users have a proportionally different impact on overall network costs. This is line with the new LEU Connection Policy, published by the CRU in December 2025, that also incorporates cost-reflective connection charges. The Policy seeks to ensure that new data-centre connections are accompanied by the generation and/or storage capacity needed to match their maximum import demand, helping to ensure that the additional system costs associated with large new loads are appropriately addressed rather than falling disproportionately on other network users. The framework also encourages tariffs that incentivise optimal siting and consumption patterns of data centres, as well as investments in flexibility services, energy storage, and clean energy integration.
The third aspect is the Electrification Action Plan complements these regulatory measures by addressing knowledge gaps in industrial flexibility. It commits the European Commission to supporting the development of a methodology by 2027 to assess flexibility potential across industrial processes, including data centres. In parallel, the Commission will evaluate long-duration flexibility needs for 2030, 2040, and 2050, identifying priority use cases, deployment barriers, and investment requirements. Together, these actions aim to better integrate data centres into a flexible, decarbonised energy system while supporting long-term planning and policy development.
EAI looks forward to contributing to Eurelectric advocacy on the electrification plan and working with the relevant stakeholders at a national level to increase the rate of electrification through progressive policies and incentives.
[1] eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=SWD:2026:600:FIN