Tag Archives: Energy grid

Natural gas transmission networks

Outline of the Community (European Union) legislation about Natural gas transmission networks

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

Natural gas transmission networks (from 2011)

Document or Iniciative

Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 (Text with EEA relevance).

Summary

This Regulation aims at laying down rules for natural gas transmission networks, gas storage and liquefied natural gas (LNG) facilities. It concerns access to infrastructures, particularly by determining the establishment of tariffs (solely for access to networks), services to be offered, allocation of capacity, transparency and balancing of the network.

Certification of transmission system operators

National regulatory authorities shall send the European Commission notification of decisions relating to 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 gas

Creation of the ENTSO for Gas

By 3 March 2011, the transmission system operators for gas shall submit to the Commission and to the Agency for the Cooperation of Energy Regulators the draft statutes for the ENTSO for Gas, a list of members and draft rules of procedure.

Tasks of the ENTSO for Gas concerning network codes

The Commission shall consult the Agency for the Cooperation of Energy Regulators and the ENTSO for Gas 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 interchange;
technical and operational exchanges;
transparency rules;
harmonised transmission tariff structures;
energy efficiency.

Tasks of the ENTSO for Gas

The ENTSO for Gas 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 supply outlooks.

Costs and tariffs

The regulatory authorities shall determine tariffs or methodologies for their calculation. Member States may take decisions relating to tariffs such as fixing auction arrangements.

Third-party access services

Transmission system operators shall offer their services equitably to all network users on a rolling basis in the long and short term.

LNG and storage facility operators must also offer their services according to the procedure described above and make them compatible with the use of interconnected gas transport networks.

Allocation of capacity and congestion management

All market participants must have access to maximum network capacity as well as storage and LNG facilities.

Infrastructure operators shall implement and publish non-discriminatory and transparent congestion-management procedures which facilitate cross-border exchanges in gas on a non-discriminatory basis.

This Regulation repeals Regulation (EC) No 1775/2005 as from 3 March 2011.

Context

The 2002 and 2003 European Gas Regulatory Forums (the Madrid Forums) were at the origin of guidelines on best practice. However, experience acquired has demonstrated that these guidelines should be made legally enforceable. This Regulation is based on the guidelines in order to strengthen the internal market in natural gas.

References

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Regulation (EC) No 715/2009	3.9.2009	–	OJ L211 of 14.8.2009

Internal market in electricity

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Internal market in electricity

Outline of the Community (European Union) legislation about Internal market 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

Internal market in electricity (from March 2011)

Document or Iniciative

Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (Text with EEA relevance).

Summary

This Directive is aimed at introducing common rules for the generation, transmission, distribution and supply of electricity. It also lays down universal service obligations and consumer rights, and clarifies competition requirements.

Rules for the organisation of the sector

The rules for the organisation of the sector are aimed at developing a competitive, secure and environmentally sustainable market in electricity.

Member States may impose on undertakings operating in the electricity sector public service obligations which cover issues of security and security of supply, regularity and quality of service, price, environmental protection and energy efficiency.

Member States shall ensure that all customers have the right to choose their electricity supplier and to change supplier easily, with the operator’s assistance, within three weeks. They shall also ensure that customers receive relevant consumption data.

Electricity suppliers are obliged to inform final customers about:

the contribution of each energy source;
the environmental impact caused;
their rights in the event of a dispute.

Member States shall put in place an independent mechanism (energy ombudsman or consumer body) to manage complaints or disputes efficiently.

Member States are also obliged to ensure the monitoring of security of supply. They shall define technical safety criteria to ensure the integration of their national markets at one or more regional levels. In addition, the national regulatory authorities are to cooperate with the Agency for the Cooperation of Energy Regulators to guarantee the compatibility of regulatory frameworks between regions.

Generation

Member States shall define criteria for the construction of generating capacity in their territory taking account of aspects such as:

the security and safety of electricity networks;
the protection of health and public safety;
the contribution made towards the Commission’s “20-20-20” objectives.

Transmission system operation

From 3 March 2012, Member States must unbundle transmission systems and transmission system operators.

An undertaking must first be certified before being officially designated as a transmission system operator. A list of transmission system operators designated by Member States shall then be published in the Official Journal of the European Union.

Transmission system operators are mainly responsible for:

ensuring the long-term ability of the system to meet demands for electricity;
ensuring adequate means to meet service obligations;
contributing to security of supply;
managing electricity flows on the system;
providing to the operator of any other system information related to the operation, development and interoperability of the interconnected system;
ensuring non-discrimination between system users;
providing system users with the information they need to access the system;
collecting congestion rents and payments under the inter-transmission system operator compensation mechanism.

Distribution network operation

Member States shall designate distribution system operators or require undertakings that own or are responsible for distribution systems to do so.

Distribution system operators are mainly responsible for:

ensuring long-term capacity of the system in terms of the distribution of electricity, operation, maintenance, development and environmental protection;
ensuring transparency with respect to system users;
providing system users with information;
covering energy losses and maintaining reserve electricity capacity.

Member States have the option of putting in place a closed distribution system to distribute electricity within a geographically confined industrial, commercial or shared services site.

Unbundling and transparency of accounts

Member States and the competent authorities have right of access to the accounts of electricity undertakings but shall preserve the confidentiality of certain information.

Electricity undertakings shall keep separate accounts for their transmission and distribution activities.

Organisation of access to the system

Member States shall organise a system of third party access to transmission and distribution systems. The tariffs based on that system shall be published.

Member States shall also lay down criteria for the granting of authorisations to construct direct lines in their territory, on an objective and non-discriminatory basis.

National regulatory authorities

Member States shall designate a regulatory authority at national level. It shall be independent and exercise its powers impartially. It is mainly responsible for:

fixing transmission or distribution tariffs;
cooperating in regard to cross-border issues;
monitoring investment plans of the transmission system operators;
ensuring access to customer consumption data.

Retail markets

Member States shall ensure that contractual arrangements, commitment to customers, data exchange and settlement rules, data ownership and metering responsibility are defined.

Non-household customers may contract simultaneously with several suppliers.

Derogatory measures

A Member State may take the necessary safeguard measures in the event of a sudden crisis in the market or where the safety of persons is threatened. Derogations may also be obtained in the event of operating problems in isolated systems.

This Directive repeals Directive 2003/54/EC with effect from 3 March 2011.

Context

The Communications entitled ‘Prospects for the internal gas and electricity market’ and ‘Sector inquiry into the gas and electricity markets’ emphasised the inadequate framing of the rules and measures in force relating to the internal electricity market. The Commission deemed it important to amend the current rules with a view to ensuring fair competition and supplying electricity at the lowest possible price in order to complete the internal market in energy.

REFERENCES

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Directive 2009/72/EC	3.9.2009	3.3.2011	OJ L211 of 14.8.2009

Internal market in gas

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Internal market in gas

Outline of the Community (European Union) legislation about Internal market in gas

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

Internal market in gas (from March 2011)

Document or Iniciative

Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (Text with EEA relevance).

Summary

This Directive aims at introducing common rules for the transmission, distribution, supply and storage of natural gas. It concerns mainly natural gas, liquefied natural gas (LNG), biogas and gas from biomass.

Rules for the organisation of the sector

The rules for the organisation of the sector are aimed at creating a competitive, secure and environmentally sustainable market in natural gas.

Member States may impose on undertakings operating in the gas sector public service obligations which cover issues of security and security of supply, regularity and quality of service, price, environmental protection and energy efficiency.

Member States shall ensure that all customers have the right to choose their gas supplier and to change supplier easily, with their operator’s assistance, within three weeks. They shall also ensure that customers receive relevant consumption data.

Member States are responsible for monitoring security of supply issues and in particular those related to the balance of supply and demand on the national market, available supplies, maintenance of the networks and the measures to be taken in the event of supply problems. Regional or international cooperation may be put in place to ensure security of supply.

Member States shall ensure the integration of national markets at one or more regional levels, as a first step towards the integration of a fully liberalised internal market. The gas islands in isolated regions shall also be integrated. In this context, the national regulatory authorities shall cooperate with the Agency for the Cooperation of Energy Regulators.

Transmission, storage and LNG

From 3 March 2012, Member States shall unbundle transmission systems and transmission system operators.

In addition, Member States shall designate one or more storage and LNG system operators responsible for:

operating, maintaining and developing transmission systems, storage and/or LNG facilities with due regard to the environment;
ensuring non-discrimination between system users;
providing information to any other transmission system operator, any other storage system operator, any other LNG system operator and/or any distribution system operator to ensure the interconnection of the transmission and storage of natural gas;
providing system users with the information they need to access the system.

Transmission system operators shall build sufficient cross-border capacity to integrate the European transmission infrastructure. Every year, they shall submit to the regulatory authority a ten-year network development plan indicating the main infrastructure that needs to be built or modernised as well as the investments to be executed over the next ten years.

Distribution and supply

Member States shall designate distribution system operators or require undertakings which own or are responsible for distribution systems to do so.

Distribution system operators are mainly responsible for:

ensuring the long-term capacity of the system in terms of the distribution of gas, operation, maintenance, development and environmental protection;
ensuring transparency with respect to system users;
providing system users with information;
covering energy losses and maintaining reserve capacity.

The distribution system operator shall be independent in legal terms from other activities not relating to distribution.

Distribution systems responsible for distributing natural gas within a geographically confined industrial, commercial or shared services site may be classified by the competent authorities as closed distribution systems. On this basis, they may be exempted from the requirement to have their tariffs, or the methodologies underlying their calculation, approved in advance.

Unbundling and transparency of accounts

Member States and the competent authorities shall have right of access to the accounts of natural gas undertakings but shall preserve the confidentiality of certain information.

Natural gas undertakings shall keep separate accounts for all of their activities relating to the supply of gas, such as transmission and distribution.

Organisation of access to the system

Member States or the competent regulatory authorities shall define the conditions for access to storage facilities and linepack. They shall take measures to ensure that eligible customers can obtain access to upstream pipeline networks. Moreover, they shall organise a system of third party access to transmission and distribution systems.

Natural gas undertakings may refuse access to the system on the basis of lack of capacity or where access to the system would compromise the performance of their public service obligations. Substantiated reasons shall be given for any such a refusal.

Final provisions

A Member State may take the necessary safeguard measures in the event of a sudden crisis in the market or where the safety of persons is threatened. These measures shall be notified to the other Member States and to the Commission.

This Directive repeals Directive 2003/55/EC as from 3 March 2011.

Context

The 2007 Commission Communications entitled “Prospects for the internal gas and electricity market” and “Sector inquiry into the gas and electricity markets” highlighted the inadequacy of the rules and measures in force relating to the internal market in gas in meeting the objectives laid down for the proper functioning of the internal market. The adoption of new rules was required.

REFERENCES

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Directive 2009/73/EC	3.9.2009	3.3.2011	OJ L211 of 14.8.2009

Community financial aid to trans-European networks

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Community financial aid to trans-European networks

Outline of the Community (European Union) legislation about Community financial aid to trans-European networks

Topics

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

Regional policy > Management of regional policy > Trans-european networks

Community financial aid to trans-European networks

Document or Iniciative

Regulation (EC) No 67/2010 of the European Parliament and of the Council of 30 November 2009 laying down general rules for the granting of Community financial aid in the field of trans-European networks.

Summary

This regulation establishes the conditions and procedures for granting Community aid to projects of common interest in the field of trans-European networks for infrastructures in the fields of telecommunications, transport and energy.

Community aid may only be granted to projects of common interest. Parts of projects are also eligible when they form units which are technically and financially independent.

Community aid for projects can take one or more of the following forms:

co-financing of studies related to projects – except in exceptional cases, the Community contribution may not exceed 50% of the total cost of a study;
subsidies of the interest on loans granted by the European Investment Bank or other public or private financial bodies;
contributions towards premiums for loan guarantees from the European Investment Fund or other financial institutions;
direct grants to investments in duly justified cases;
risk-capital participation for investment funds with a focus on providing risk capital for trans-European network projects and involving substantial investment from the private-sector.

At least 55% of the funding for transport infrastructure projects should be allocated to railways (including combined transport) and a maximum of 25% to roads.

Conditions for financial aid

Community aid may be granted if the following conditions are fulfilled:

there is a financial obstacle to the achievement of a project;
the Community aid must not exceed the minimum necessary for the launch of a project;
except in exceptional circumstances, the total amount of Community aid must not exceed 10% of the total investment cost;
the Community aid must not, in principle, be granted to projects benefitting from other sources of Community funding.

The Commission may establish an indicative multiannual programme by sector to improve the efficiency of the European Union (EU). The programme will consist of projects of common interest in specific fields which require substantial funding over a long period of time. The programme must be reviewed, and if necessary revised, with regard to the effective progress of the projects.

Project selection criteria

Community aid is intended for projects that are potentially economically viable and for which the financial profitability at the time of application is deemed insufficient. The decision to grant Community assistance should also take account of:

the maturity of the project;
the stimulative effect on public and private finance;
the soundness of the financial package;
direct or indirect socio-economic effects, especially on employment;
the environmental consequences.

In particular in the case of cross-border projects, coordination between the various parts of the project must be taken into consideration.

Applications for financial aid

Applications for funding must be submitted to the Commission by the EU country concerned or, with the agreement of the EU country, by the body directly concerned. This regulation stipulates the information required for the assessment and identification of applications, including a provisional timetable and a description of control measures to be put in place by the EU country concerned over the use of the requested funds.

Reduction, suspension and cancellation of aid

The Commission may reduce, suspend or cancel aid for a project if, after examination, there is an irregularity or a failure to comply with one of the conditions, or a significant change in the nature of the project for which the Commission’s approval was not requested.

Except in exceptional circumstances, approved aid will be cancelled by the Commission if the project has not started within two years following the expected start date. The Commission may demand reimbursement of any aid paid if the project in question has not been completed within ten years.

Funding

The financial framework for the implementation of this regulation for the period 2000 to 2006 is EUR 4 874 880 000.

References

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Regulation (EC) No 67/2010	19.2.2010	–	OJ L 27 of 30.1.2010

Green Paper – Towards a secure, sustainable and competitive European energy network

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Green Paper – Towards a secure, sustainable and competitive European energy network

Outline of the Community (European Union) legislation about Green Paper – Towards a secure, sustainable and competitive European energy network

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

Green Paper – Towards a secure, sustainable and competitive European energy network

Document or Iniciative

Green Paper – Towards a secure, sustainable and competitive European energy network. [ final – Not published in the Official Journal].

Summary

Through this Green Paper, the Commission launches a public consultation with a view to developing a new strategic approach to energy networks which aims to achieve the climate and energy objectives of the European Union.

Priorities

The main priority is to improve the Community framework with a view to developing the energy networks of the Member States of the Union and to integrate them better so as to enhance the operation of the internal energy market.

Energy transportation networks make up the keystone of energy policy. For this reason the(TEN-E) should correspond to the new requirements of energy policy with regard to sustainability, supply and competitiveness. Adopted in 1996, they should be amended so that they correspond to the objectives set out in the 2007 Energy Policy for Europe.

The external dimension is also a significant issue for the development of energy networks. The internal energy market depends strongly on imports. New import routes will need to be integrated into the network from:

Central Asia;
the Caspian Sea;
the Middle East;
Africa.

The coordination and management of the networks will be carried out by the future Agency for the Cooperation of Energy Regulators, and by two European Networks of Transmission System Operators. The infrastructure plans will be implemented for a duration of ten years.

There is also an urgent need (in addition to the investments necessary to modernise energy networks and to replace obsolete infrastructures) at European level, for new projects that allow all Member States to be integrated in the internal market and also integrate new technologies. New energy resources must therefore be developed and be accessible across the best interregional connections.

A new approach to energy network development

Energy network development should become a central issue when implementing energy policy.

The 20-20-20 objectives should be implemented effectively through programmes relating to both the public and private sectors. These objectives consist of:

the integration of renewable energy sources in the network;
the transport of energy from resource-rich areas to consumption centres;
the use of technologies for the decentralisation of energy production and intelligent networks;
the use of energy coming from offshore wind farms;
the development of technologies for the transport and storage of CO₂.

European scientific research should direct its work to developing technologies related to energy networks that are able to store and integrate various electricity production sources. The European industrial initiative on electricity grids, for example, forms part of the priorities of the European Strategic Energy Technology Plan. The latter targets the promotion of low-carbon energies in particular.

It also appears fundamental to improve the economic and legal framework for cooperation with supplier and transit third countries in order to guarantee stability of supply.

A fully interconnected European energy network

The third ‘internal energy market’ package will enhance cooperation between transmission system operators (TSOs) and the regulators of the energy sector so as to make the internal energy market more operational.

Cooperation is planned between ENTSO (the European Network of Transmission System Operators for Electricity) and the Agency for the Cooperation of Energy Regulators in order to optimise existing networks.

The New European Transmission System (NETS) project which integrates gas transmission operators across Central and South Eastern Europe is also a promising initiative and could represent a step towards the establishment of a European transmission system operator.

Putting TEN-E at the service of security and solidarity

The Commission is considering the following options to improve the functioning of TEN-E:

determining TEN-E objectives through European energy policy;
extending their scope to the full energy transportation network;
planning TEN-E so as to reflect market forces;
narrowing the focus of intervention of TEN-E to a limited number of strategic projects;
developing exchanges of good practices among Member States;
specifying a European coordinator for large-scale projects;
optimising the management of resources.

The objective will be to update the Community support network, towards a new policy framework for European energy infrastructures equipped with a new instrument for security and energy infrastructures.

Context

At the present time, European energy networks require significant modernisation as well as the development of east-west and north-south connections so as to ensure energy security in the European Union.

17 Consequently, this Green Paper opens a debate on the establishment of a clear and stable legal framework aimed at increasing solidarity and security in the supply of energy in the European Union.

Cross-border exchanges in electricity

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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.