Tag Archives: Energy network

Conditions for access to the gas transmission networks

Conditions for access to the gas transmission networks

Outline of the Community (European Union) legislation about Conditions for access to the 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

Conditions for access to the gas transmission networks

Document or Iniciative

Regulation (EC) No 1775/2005 of the European Parliament and of the Council of 28 September 2005 on conditions for access to the natural gas transmission networks.

Summary

Provisions relating to the conditions for access to the natural gas transmission networks add to the provisions of Directive 2003/55/EC and contribute to completion of the internal gas market.

Complete opening-up of national gas markets, as provided for by Directive 2003/55/EC, has brought about a truly competitive internal gas market within the European Union (EU). In practice, industrial clients and domestic customers have had the freedom to choose their gas supplier since 1 July 2004 and 1 July 2007 respectively.

Effective and non-discriminatory access by third parties to the gas transmission networks is an essential condition for the existence of a genuine internal gas market. With the aim of ensuring a minimum level of harmonisation, Regulation (EC) No 1775/2005 therefore lays down the basic principles.

  • Service conditions for third-party network access

Gas transmission system operators are obliged to offer their services to all users on a non-discriminatory basis. They must therefore offer the same service to different users under identical contractual conditions (nature, duration, etc.). The operator can choose to draw up harmonised transmission contracts or a joint system code.

This does not mean, however, that other transmission system operators are obliged to offer the same contractual conditions, apart from the minimum contractual requirements.

  • Capacity allocation mechanisms and balancing rules

The system operator makes the technical network capacity available to users in its entirety, taking into account system integrity and efficient use of the network. Capacity allocation is performed on the basis of non-discriminatory and transparent mechanisms.

Different rules, both technical and commercial, allow balancing of the network and guarantee its smooth operation.

Therefore, in the event of contractual congestion, i.e. when the level of demand for firm capacity (transmission capacity which the operator has guaranteed by way of a non-interruptible contract) exceeds the system’s technical capacity, the operator may offer the unused capacity of certain users to other users on a short-term basis.

As for users, they have the freedom to freely trade their capacity rights, by selling or subletting their unused capacity. This trade is an essential factor in the development of a competitive internal market and creation of market liquidity.

The transmission system operator also sets fair and transparent technical balancing rules. In order to guarantee continuity of the gas supply, it must in fact ensure that the system pressure is constantly maintained at a certain level, which depends on the balance between the entry and exit of gas in the network. It provides users with relevant information on the balancing status and they then take the necessary corrective measures.

  • Criteria and methodologies for setting network access tariffs

Tariffs set by system operators are transparent and non-discriminatory. They reflect the actual costs borne by them.

The prices take into account not only maintenance of system integrity (guarantee of gas transmission from a technical point of view, in particular in relation to gas pressure and quality) but also its improvement (investment incentives and construction of new infrastructures).

  • Definition of the technical information needed by users and transparency requirements

To encourage effective access to the network, users must have relevant information, particularly on the services offered by the operator, and more specifically the methodology of tariffs, as well as on the technical capacity and available capacity. Users can also use the different commercial possibilities offered by the internal market. System operators publish this information with regard for the confidentiality of commercial information.

Background

The gas regulatory forum, or ” Madrid Forum “, a discussion group for concrete implementation of European regulations in the natural gas market, has enabled definition of guidelines relating to market access conditions. The experience gained from implementation has shown that it is useful to turn these guidelines into legally binding rules.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1775/2005 23.11.2005 OJ L 289, 3.11.2005

Related Acts

Proposal for a Regulation of the European Parliament and of the Council of 19 September 2007 amending Regulation (EC) No 1775/2005 concerning conditions for access to the natural gas transmission networks [COM(2007) 532 final – Not published in the Official Journal].

A third and final legislative package is proposed to complete the opening-up of the European energy markets to competition and creation of the internal energy market.

The internal energy market demonstrates malfunctioning that cannot be corrected effectively by current rules, as stated by the Commission in its sector inquiry. The proposals of the third legislative package go in the same direction as the communication on the prospects for the internal gas and electricity market. The main proposals for amendment of Regulation (EC) No 1775/2005 relate to:

  • formalisation of the European groups of transmission system operators for better coordination and, in particular, the drawing-up of joint market and technical codes;
  • improved market operation, in particular greater transparency, effective access to storage facilities and liquefied natural gas (LNG) terminals.

The Commission proposes five drafts to amend Directives 2003/54/EC and 2003/55/EC relating to the electricity market and the gas market respectively, as well as Regulations (EC) No 1228/2003 and No 1775/2005 on access to the electricity networks and access to the gas networks respectively, and to set up an energy regulators cooperation agency.

Codecision procedure (COD/2007/0196)

Commission Decision 2003/796/EC of 11 November 2003 on establishing the European Regulators Group for Electricity and Gas [Official Journal L 296, 14.11.2003].

Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas and repealing Directive 98/30/EC [Official Journal L 176, 15.7.2003].

 

Trans-European energy networks

Trans-European energy networks

Outline of the Community (European Union) legislation about Trans-European energy 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

Trans-European energy networks

Document or Iniciative

Decision No 1364/2006/EC of the European Parliament and of the Council of 6 September 2006 laying down guidelines for trans-European energy networks and repealing Decision 96/391/EC and Decision No 1229/2003/EC.

Summary

The new guidelines for trans-European energy networks (TEN-E) list and rank, according to the objectives and priorities laid down, projects eligible for Community assistance. They also introduce the concept of ‘project of European interest’.

Defining the objectives of the TEN-E

The interconnection, interoperability and development of trans-European networks for transporting electricity and gas are essential for the effective operation of the internal energy market in particular and the internal market in general. Users should have access to higher-quality services and a wider choice as a result of the diversification of energy sources, at more competitive prices. Closer links should therefore be established between national markets and the EU as a whole. With that in mind, the new Member States are now fully incorporated into the Community TEN-E guidelines.

TEN-E also play a crucial role in ensuring the security and diversification of supply. Interoperability with the energy networks of third countries (accession and candidate countries and other countries in Europe, in the Mediterranean, Black Sea and Caspian Sea basins, and in the Middle East and Gulf regions) is essential.

Access to TEN-E also helps to reduce the isolation of the less-favoured, island, landlocked or remote regions, thus strengthening territorial cohesion in the European Union (EU).

The interconnection of TEN-E also promotes sustainable development, in particular by improving the links between renewable energy production installations and using more efficient technologies, thus reducing losses and the environmental risks associated with the transportation and transmission of energy.

Projects of common interest, priority projects and projects of European interest

Decision 1364/2006/EC lists projects eligible for Community assistance under Regulation (EC) No 2236/95 and ranks them in three categories.

Projects of common interest relate to the electricity and gas networks referred to in the Decision meeting the objectives and priorities laid down in it. They must display potential economic viability. The economic viability of a project is assessed by means of a cost-benefit analysis in terms of the environment, the security of supply and territorial cohesion. Projects of common interest are listed in Annexes II and III to the Decision.

Priority projects are selected from among the projects of common interest. To be eligible, they must have a significant impact on the proper functioning of the internal market, on the security of supply and/or the use of renewable energy sources. Priority projects, which are listed in Annex I to the Decision, have priority for the granting of Community financial assistance.

Certain priority projects of a cross-border nature or which have a significant impact on cross-border transmission capacity are declared to be projects of European interest. Also listed in Annex I, projects of European interest have priority for the granting of Community funding under the TEN-E budget and particular attention is given to their funding under other Community budgets.

A favourable framework for the development of TEN-E

The Community guidelines for TEN-E stress the importance of facilitating and speeding up the completion of projects, in particular projects of European interest.

The Member States must take all measures necessary to minimise delays while complying with environmental rules. The authorisation procedures must be completed rapidly. The third countries involved must also facilitate the completion of projects partly situated on their territory in accordance with the Energy Charter Treaty.

The new guidelines also establish a framework for closer cooperation, in particular for projects of European interest. They provide for an exchange of information and the organisation of coordination meetings between the Member States for implementing the cross-border sections of networks.

The intervention of a European coordinator is provided for where a project of European interest encounters significant delays or implementation difficulties. His or her tasks include facilitating coordination between the various parties involved in implementing the cross-border section of a network and monitoring the progress of the project.

A European coordinator may also intervene in the case of other projects relating to TEN-E at the request of the Member States concerned.

The exceptional nature of the aid

The budget allocated to the TEN-E (around EUR 20 million per year) is mainly intended for financing feasibility studies. Other Community instruments may also step in to part-finance investments, for example the Structural Funds in the convergence regions.

However, such financial assistance is exceptional and may not lead to any distortion of competition. As a rule, the construction and maintenance of energy infrastructure should be subject to market principles.

Background

The establishment and development of trans-European networks, including in the energy sector, are set out in Article 154 of the Treaty establishing the European Community. Articles 155 and 156 of the EC Treaty provide for the adoption of guidelines to define the objectives, priorities and broad lines of measures for them.

The new Community guidelines update the guidelines adopted in 2003, which themselves updated the original guidelines adopted in 1996.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Decision 1364/2006/EC

12.10.2006

OJ L 262 of 22.9.2006