Cross-border exchanges in electricity

Outline of the Community (European Union) legislation about Cross-border exchanges in electricity

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Energy > Internal energy market

Cross-border exchanges in electricity (from 2011)

Document or Iniciative

Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003 (Text with EEA relevance).

Summary

This Regulation aims at laying down rules for cross-border exchanges in electricity with a view to improving competition and harmonisation in the internal market for electricity.

Certification of transmission system operators

National regulatory authorities shall send the European Commission notification of decisions concerning the certification of a transmission system operator. The Commission then has a period of two months to deliver its opinion to the national regulatory authority. The authority then adopts the final decision concerning the certification of the transmission system operator. This decision and the Commission’s opinion are published.

European Network of Transmission System Operators (ENTSO) for electricity

Creation of the ENTSO for Electricity

The European Network of Transmission System Operators (ENTSO) for electricity is responsible for managing the electricity transmission system and for allowing the trading and supplying of electricity across borders in the Community. By 3 March 2011, the transmission system operators for electricity shall submit to the Commission and to the Agency for the Cooperation of Energy Regulators the draft statutes for the ENTSO for electricity, a list of members and draft rules of procedure.

Tasks of the ENTSO concerning network codes

The Commission shall consult the Agency for the Cooperation of Energy Regulators and the ENTSO for Electricity in order to establish an annual list of the priorities which are to contribute to developing network codes. These codes shall be developed using a non-binding framework guideline submitted to the Commission by the Agency. The codes include rules and procedures relating in particular to:

• network security and reliability;
• data interexchange;
• technical and operational exchanges;
• transparency rules;
• harmonised transmission tariff structures;
• energy efficiency.

Tasks of the ENTSO for Electricity

The ENTSO for Electricity is responsible for adopting:

• common network operation tools;
• a ten-year network development plan;
• recommendations relating to the coordination of technical cooperation between Community transmission system operators;
• an annual work programme;
• an annual report;
• annual summer and winter generation supply outlooks.

Costs and financing

The costs related to the activities of the ENTSO for electricity shall be borne by the transmission system operators. They shall establish regional cooperation within the ENTSO for electricity and publish a regional investment plan every two years, on which investments may be based.

Transmission system operators shall receive compensation for costs incurred as a result of hosting cross-border flows of electricity on their networks. The compensation shall be paid by the operators of national transmission systems from which cross-border flows originate. The costs shall be established on the basis of forecasted costs.

Charges for access to networks shall also be applied by operators.

Information and congestion management

Transmission system operators shall put in place information exchange mechanisms to ensure the security of networks in the context of congestion management.

Network congestion problems shall be addressed with non-discriminatory solutions based on market mechanisms which give economic signals to the market participants and transmission system operators.

New interconnectors may, upon request, be exempted, for a limited period of time, from the general provisions governing congestion management on condition that:

• their installation increases competition in electricity supply;
• the level of risk necessitates the exemption;
• the interconnection must be owned by a natural or legal person;
• charges are levied on users of the interconnection;
• the exemption must not be to the detriment of competition or the effective functioning of the internal market, or the efficient functioning of the of the regulated system to which the interconnector is linked.

This Regulation repeals Regulation (EC) No 1228/2003 as from 3 March 2011.

Context

The 1997 Commission Communication “An Energy Policy for Europe” highlighted the importance of creating an internal market for electricity and the implementation of fair competition between the various operators. As the rules and measures in force were not sufficient for achieving these objectives, it was necessary to adopt new provisions.

References

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Regulation (EC) No 714/2009	3.9.2009	–	OJ L211 of 14.8.2009

Related Act

Commission Regulation (EU) No 838/2010 of 23 September 2010 on laying down guidelines relating to the inter-transmission system operator compensation mechanism and a common regulatory approach to transmission charging (Text with EEA relevance).

This Regulation establishes an inter-transmission system operator compensation mechanism (ITC mechanism) for the costs caused by hosting cross-border flows of electricity. The transmission system operators contribute to the ITC fund in proportion to the absolute value of net flows onto and from their national transmission system. Furthermore, this Regulation lays down the annual average transmission charges paid by electricity producers.