Tag Archives: Gas

Prospects for the internal gas and electricity market

Prospects for the internal gas and electricity market

Outline of the Community (European Union) legislation about Prospects for the internal gas and electricity market

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

Prospects for the internal gas and electricity market

New measures must be added to the existing rules of the internal gas and electricity market in order to guarantee its integral operation. An inventory of the market in fact reveals that there is still malfunctioning and that the current rules do not allow it to be corrected effectively.

Document or Iniciative

Communication from the Commission to the Council and the European Parliament of 10 January 2007 entitled “Prospects for the internal gas and electricity market” [COM(2006) 841 final – Not published in the Official Journal].

Summary

The aim of the European Union (EU) is to set up a truly competitive internal market for gas and electricity to offer consumers a real freedom of choice at fair, competitive prices, to stimulate clean energy production and to improve security of supply.

Although the internal energy market is well established, malfunctioning (identified by the sector inquiry into the gas and electricity markets) persists, preventing both consumers and the economy from getting the full benefit of the advantages of opening up the national gas and electricity markets.

As current rules do not allow effective correction of this malfunctioning, new measures must be taken as the final step in achieving integrated operation of the internal energy market in Europe.

Advantages of creating the internal energy market

The opening of national markets in gas and electricity to competition visibly gives consumers the freedom to choose their energy supplier and, therefore, the opportunity to make savings. It also improves the security of supply by encouraging, on the one hand, investment in facilities, so that interruptions to supply can be prevented, and, on the other hand, diversification of transport routes and energy sources. The existence of a truly competitive energy market also contributes to sustainable development, notably by enabling suppliers of electricity from renewable energy sources to enter the market.

Continued malfunctioning

In practice, the EU is still a long way from achieving its objective of a real internal market in which each consumer has the legal right to choose his supplier and exercise this right simply and effectively armed with the facts, and the current rules do not effectively prevent market malfunctioning.

The legal and functional unbundling of system operators vertically connected to suppliers and producers has proven insufficient to guarantee equal access to the networks. The traditional operators thus maintain their dominant position and new companies wishing to enter the market encounter many problems caused by discriminatory access conditions, lack of available network capacity, a lack of transparent data on the network situation and poor investment.

National regulators do not have the powers or independence necessary for succeeding in their mission. Their powers vary considerably from one Member State to the next, hindering cross-border trade and access to consumers in other Member States.

New set of rules for completion of the internal energy market

  • Provision of non-discriminatory access to the networks through unbundling

Current legal and functional unbundling has proven insufficient in removing the conflict of interests arising from vertical integration. Clearer separation between operation of transmission systems and production or supply activities must be introduced to ensure that operators maintain, operate and develop the networks in the general interest of the network users.

The separation may be based either on complete ownership unbundling, due to transmission system operators being both operators and owners of the system, or on introduction of an independent transmission system operator for maintenance, development and operation of the systems, which remain the property of the vertically integrated companies.

Complete ownership unbundling appears to be the most economically effective way to ensure development of a real internal energy market. Not only does it eliminate the different interests of system operators but also avoids the need for excessively detailed and complex regulations ensuring independence of vertically integrated system operators.

  • Strengthening of the role of regulators at national and Community level

The regulatory framework and therefore the powers of the regulators must be strengthened to ensure the conditions of transparency, stability and non-discrimination necessary for development of competition and for investment.

Better coordination of national regulators at European level is, in addition, needed to mitigate the market segmentation resulting from the regulatory differences between Member States. In this sense, it is possible either to improve the present approach, with the disadvantage of continuing to rely on voluntary agreements between 27 national regulators often with different interests, or to formalise the role of the European Regulators Group for Electricity and Gas (ERGEG) into a European Network of Independent Regulators (ERGEG +), or lastly to set up a new single body at Community level.

  • Cooperation of transmission system operators (TSOs)

To enable free circulation of gas and electricity within the EU, it is essential to establish compatible technical rules and regular exchange of information, increase investment in the network and, in particular, in cross-border interconnections, and move towards regional system operators.

  • Reduction in possibilities for unfair competition

Due to the monopolies held by the traditional operators before liberalisation, the lack of integration and their natural characteristics, in particular low elasticity of demand, the gas and electricity markets are particularly exposed to the risk of dominant positions.

Greater transparency, recourse to the ‘use-it-or-lose-it’ principle, genuine access to gas storage facilities and maintenance of incentives in favour of new storage capacities would facilitate the transition to a more competitive gas and electricity market.

  • Encouragement of investment in electricity power plants and gas infrastructures

Creating a stable environment for investment is a priority. Other factors may also influence investment, such as the award of emission certificates or specific incentive measures, for example for production of electricity from renewable energy sources.

  • Consumer protection

Consumer protection and public service obligations must be an integral part of the process of opening up the gas and electricity markets. An energy consumers’ charter must therefore protect their essential rights: the right to relevant information on the different suppliers and supply possibilities, the right to a straightforward procedure for changing supplier, protection against energy poverty for the most vulnerable consumers, protection against unfair commercial practices, etc.

Background

The internal energy market has been put in place gradually, starting with Directive 96/92/EC laying down rules for the internal market in electricity and Directive 98/30/EC laying down rules for the internal market in natural gas, which were replaced respectively by Directives 2003/54/EC and 2003/55/EC.

The Commission draws conclusions from the review of the internal gas and electricity market drawn up by its sector inquiry, and announces that a third legislative package will be added to the current rules.

Related Acts

Report from the Commission to the Council and the European Parliament – Progress in creating the internal gas and electricity market [COM(2008) 192 final – Not published in the Official Journal].

The report presents the progress made on the internal gas and electricity market since the opening of national markets to competition on the 1st July 2007. Among the main advances it highlights regional initiatives which have stimulated cross-border cooperation.

Three years after the deadline of July 2004 for implementation passed, it nevertheless appears that the requirements of the directives on electricity and gas have not been appropriately implemented in certain Member States.
A notable finding of this report is that regulatory oversight, unbundling and regulated supply tarifs, as well as the communication of Public Service Obligations, are not satisfactory.

Communication from the Commission to the European Council and the European Parliament of 10 January 2007 entitled “An energy policy for Europe” [COM(2007) 1 final – Not published in the Official Journal].

Communication from the Commission of 10 January 2003 entitled “Inquiry pursuant to Article 17 of Regulation (EC) No 1/2003 into the European gas and electricity sectors (Final Report)” [COM(2006) 851 final – Not published in the Official Journal]

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].

Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC [Official Journal L 176, 15.7.2003].

Transparency of gas and electricity prices

Transparency of gas and electricity prices

Outline of the Community (European Union) legislation about Transparency of gas and electricity prices

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

Transparency of gas and electricity prices

Document or Iniciative

Directive 2008/92/EC of the European Parliament and of the Council of 22 October 2008 concerning a Community procedure to improve the transparency of electricity and gas prices charged to industrial end-users (recast) (Text with EEA relevance).

Summary

This Directive aims at establishing a European procedure to ensure transparency of gas and electricity prices charged to end-users.

The procedure is necessary, insofar as this information enables consumers to choose between different energy providers and also between energy sources.

Information provided

The Member States shall ensure that the undertakings that provide industrial end-users with gas and electricity communicate the following information to Eurostat:

  • the prices and terms of sale of gas and electricity to industrial end-users;
  • the price systems in use;
  • the breakdown of consumers and the corresponding volumes by category of consumption to ensure the representativeness of these categories at national level.

Procedures framing gas and electricity prices

Prices reported must be the prices paid by industrial end-users buying natural gas distributed through mains, and buying electricity, for their own use. They are to be expressed in national currency per gigajoule (for gas) and per kilowatt-hour (kWh) (for electricity).

These prices must include all charges payable, such as network charges and energy used, rebates or premiums. Initial connection charges are not to be included.

Three levels of price are to be provided:

  • prices excluding taxes and levies;
  • prices excluding VAT and other recoverable taxes;
  • prices including all taxes, levies and VAT.

These prices are collected twice per year (January and July) whereas the method of calculation and a description of the taxes levied on sales of gas and electricity to end-users are to be transmitted once per year (in January).

Information on the procedures framing gas and electricity prices is to be communicated by an independent statistical body.

This Directive repeals Directive 90/377/EEC.

Reference

Act Entry into force Deadline for transposition in the Member States Official Journal
Directive 2008/92/EC

27.11.2008

OJ L 298 of 7.11.2008

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.

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

Natural gas transmission networks

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 gas

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.

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.

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

Agency for the Cooperation of Energy Regulators

Agency for the Cooperation of Energy Regulators

Outline of the Community (European Union) legislation about Agency for the Cooperation of Energy Regulators

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

Agency for the Cooperation of Energy Regulators

Document or Iniciative

Regulation (EC) No 713/2009 of the European Parliament and of the Council of 13 July 2009 establishing an Agency for the Cooperation of Energy Regulators (Text with EEA relevance).

Summary

This Regulation establishes the Agency for the Cooperation of Energy Regulators with the aim of exercising at Community level the tasks performed by the Member States’ regulatory authorities.

The Agency for the Cooperation of Energy Regulators is a Community body with legal personality. It shall issue opinions on all questions related to the field of energy regulators. It shall participate in the creation of network codes in the fields of electricity and gas and it can make decisions regarding cross-border infrastructure, including derogations from certain provisions in the applicable regulations.

Tasks

Tasks concerning the cooperation of transmission system operators

The Agency is responsible for issuing an opinion on the draft statutes, the list of members and the draft rules of procedure of the ENTSO (European Network of Transmission System Operators) for electricity and gas, and for monitoring the execution of the tasks. The Agency shall play an important role in drafting the framework guidelines which the network codes must comply with. In addition, the Agency shall monitor regional cooperation between transmission system operators in the electricity and gas sectors, and the execution of tasks by the ENTSO for electricity and gas.

Tasks concerning national regulatory authorities

The Agency is responsible for adopting, under certain conditions, individual decisions on technical issues. It may make recommendations with the aim of promoting the exchange of good practice between regulatory authorities and market players. It shall also provide a framework for cooperation between the national regulatory authorities.

The Agency may issue an opinion on whether a decision taken by a regulatory authority complies with the applicable Community rules. If its opinion is not followed, the Agency shall inform the European Commission and the Member State concerned.

The Agency is also responsible for determining, under certain conditions, the terms and conditions for access to and operational security of electricity and gas infrastructure, which connects at least two Member States.

Tasks concerning cross-border infrastructure

The terms and conditions for access applicable to cross-border infrastructure include:

  • a procedure for capacity allocation;
  • a time-frame for allocation;
  • shared congestion revenues;
  • the levying of charges on the users of the infrastructure.

The Agency is responsible for the terms and conditions for access and security only when the national regulatory authorities have not been able to reach an agreement within a period of six months or they have jointly requested it.

The Agency is responsible for monitoring the internal markets in electricity and natural gas, in particular the retail prices of electricity and natural gas.

Organisation

The Agency comprises:

  • an Administrative Board which shall adopt a multi-annual programme;
  • a Board of Regulators which is responsible for providing advice to the Director;
  • a Director, appointed for five years and responsible for managing the Agency;
  • a Board of Appeal.

Financial resources

The revenues of the Agency come from:

  • a subsidy from the general budget of the European Union;
  • fees paid to the Agency;
  • voluntary contributions from Member States;
  • legacies, donations or grants.

Participation of third countries

Third countries which have signed agreements with the Community may participate in the work of the Agency.

Context

To facilitate the consultation of Member States’ regulatory bodies, Commission Decision 2003/796/EC has established an independent consultation group for the electricity and gas sectors (European Regulatory Group for Electricity and Gas or ERGEG). Although the results of its work are positive, it became apparent that Member States need to cooperate under a Community structure in order to strengthen the internal market in gas and electricity.

REFERENCES

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 713/2009

3.9.2009

OJ L211 of 14.8.2009

European Energy Programme for Recovery

European Energy Programme for Recovery

Outline of the Community (European Union) legislation about European Energy Programme for Recovery

Topics

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

Energy > European energy policy

European Energy Programme for Recovery

Document or Iniciative

Regulation (EC) No 663/2009 of the European Parliament and of the Council of 13 July 2009 establishing a programme to aid economic recovery by granting Community financial assistance to projects in the field of energy. [See amending act(s)].

Summary

This Regulation is aimed at setting up a European Energy Programme for Recovery (EEPR) to fund projects in three main areas of the energy sector:

  • gas and electricity infrastructures*;
  • offshore wind energy*;
  • carbon capture and storage*.

This Regulation also establishes a financial instrument, detailed in Annex II, the aim of which is to support initiatives related to energy efficiency and renewable energy.

Gas and electricity infrastructures

The programme finances interconnection projects with the following objectives:

  • security and diversification of sources of energy and supplies;
  • optimisation of the capacity of the energy network and the integration of the internal energy market;
  • development of the network;
  • connection of renewable energy sources;
  • safety, reliability and interoperability of interconnected energy networks.

A list of projects eligible for EEPR assistance is given in Annex I, part A. Proposals corresponding to these projects may be submitted only by Member States and, with the agreement of the Member States concerned, by international organisations, public or private undertakings or bodies.

The European Commission selects proposals which are eligible for EEPR funding mainly on the basis of the technical, financial, environmental or socio-economic criteria laid down in the Regulation. It also determines the amount of aid to be awarded to them.

Offshore wind projects

The offshore wind projects which are eligible for funding are indicated in part B of Annex I to the Regulation. Proposals must be submitted by one or several undertakings acting jointly. They are selected on the basis of the following criteria:

  • the improvement in installations and infrastructures;
  • the construction of infrastructures;
  • the innovative features of the project;
  • the project’s contribution to the Community’s offshore wind grid system.

Carbon capture and storage

A list of projects relating to carbon capture and storage which are eligible for EEPR funding is given in part C of Annex I.

Projects must demonstrate that they have the ability to capture at least 80 % of CO2 in industrial installations. If capture takes place in a power installation, the latter must have an output equivalent to at least 250 MW. Projects may be submitted by one or several undertakings, acting jointly. They must undertake to make the knowledge generated in this field available to other undertakings.

The Commission awards the project to the undertaking which meets appropriate financial and technical criteria, as well as criteria including the complexity of the project and the level of innovation of the installation, and the soundness and adequacy of the management plan.

Financial instrument

The financial instrument aims at supporting the development of projects related to the energy, energy efficiency and renewable energies economy. It facilitates the financing of investments by local, regional and, in sufficiently justified cases, national public administrations.

This instrument may be used for projects such as:

  • the development of public and private buildings which integrate technical solutions which promote energy efficiency and renewable energies;
  • investment in efficient combined heat and power;
  • clean urban transport;
  • energy efficient technologies.

Technical assistance may be granted to local, regional and national authorities in order to support the development of their projects.

One or several financial intermediaries are responsible for putting this instrument in place. The Commission shall ensure that the costs related to these operations are limited.

Budget

A financial envelope of EUR 3 980 million is devoted to the three sub-programmes and the financial instrument, allocated as follows:

  • gas and electricity infrastructure projects receive EUR 2 267 million;
  • offshore wind energy projects receive EUR 565 million;
  • carbon capture and storage projects receive EUR 1 000 million;
  • the financial instrument receives EUR 146 million.

Context

This Programme is introduced in the context of the energy and financial crisis. In response to this dual crisis, in late 2008 the European Commission presented an ‘Economic Recovery Plan’, of which the European Energy Programme for Recovery is a key element.

Key terms of the Act
  • Gas and electricity interconnections: all high-voltage lines, excluding those of distribution networks, and submarine links, provided that this infrastructure is used for interregional or international transmission or connection, any equipment or installations essential for the system in question to operate properly, including protection, monitoring and control systems, high-pressure gas pipelines, excluding those of distribution networks, underground storage facilities connected to high-pressure gas pipelines, reception, storage and regasification facilities for liquefied natural gas (LNG), any equipment or installations essential for the system in question to operate properly, including protection, monitoring and control systems;
  • Offshore wind energy: electric power generated from turbine engines powered by wind and situated in the sea, whether near or far from the shore;
  • Carbon capture and storage: a way of mitigating climate change consisting of the capture of carbon dioxide (CO2) from industrial installations, its transport to a storage site and its injection into a suitable underground geological formation for the purposes of permanent storage.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 663/2009/EC

1.8.2009

OJ L 200, 31.7.2009

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EU) No 1233/2010

30.12.2010

OJ L 346, 30.12.2010

Successive amendments and corrections to Regulation (EC) 663/2009/EC have been incorporated in the basic text. This consolidated versionis for reference purposes only.

Related Acts

Report from the Commission to the Council and the European Parliament of 27 April 2010 on the implementation of the European Energy Programme for Recovery [COM(2010) 191 final – Not published in the Official Journal].

Report from the Commission to the Council and the European Parliament of 20 April 2011 on the implementation of the European Energy Programme for Recovery [COM(2011) 217 final – Not published in the Official Journal].

This Report demonstrates that after the launch phase, the EEPR is now fully in the implementation phase. Considerable progress has been achieved since the publication of the first report on the implementation of the EEPR in April 2010. The EEPR has proved a valuable tool at EU level that has accelerated implementation of major energy projects and played its role as a stimulus to economic recovery.

Security of supply of natural gas

Security of supply of natural gas

Outline of the Community (European Union) legislation about Security of supply of natural gas

Topics

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

Energy > Security of supply external dimension and enlargement

Security of supply of natural gas

Gas consumption in Europe has rapidly increased during the last 10 years. With decreasing domestic production, gas imports have increased even more rapidly, thus creating higher import dependence and the need to address security of gas supply aspects.

Document or Iniciative

Regulation (EU) No 994/2010 concerning measures to safeguard security of gas supply and repealing Council Directive 2004/67/EC (Text with EEA relevance).

Summary

The regulation aims to safeguard the security of gas supply by ensuring both prevention and a coordinated response in the event of a supply disruption and by securing the proper and continuous functioning of the internal gas market.

The regulation establishes a common framework where the security of supply is a shared responsibility of natural gas undertakings, European Union (EU) countries and the Commission. It also provides transparent mechanism, in a spirit of solidarity, for a coordinated response to an emergency at national, regional and EU levels.

Security of supply for protected customers

The regulation sets out a common concept of the customers whose gas supplies have to be protected. All households are protected customers. EU countries may also include as protected customers small and medium-sized enterprises and essential social services (provided that these additional customers do not represent more that 20% of the final use of gas) and/or district heating installations.

Common infrastructure and supply standards

The regulation provides common standards at EU level.

  • Infrastructure standard: EU countries must ensure that by 3 December 2014 at the latest, in the event of a disruption of the single largest infrastructure, they are able to satisfy total gas demand during a day of exceptional high gas demand. The regulation also requires reverse flows to be established in all cross border interconnections between EU countries by 3 December 2013.
  • Supply standard for protected customers: Natural gas undertakings must secure supplies to protected customers under severe conditions: in the event of a seven day temperature peak and for at least 30 days of high demand, as well as in the case of an infrastructure disruption under normal winter conditions.

Risk assessment, preventive action plan and emergency plan

By 3 December 2011, the competent authority shall make a full assessment of the risks affecting the security of gas supply. The risk assessment shall take into account the supply and infrastructure standards, all relevant national and regional circumstances, various scenarios of exceptionally high gas demand and supply disruption and the interaction and correlation of risks with other EU countries.

On the basis of the results of the risk assessment, no later than 3 December 2012, the competent authority shall adopt, make public and notify the Commission of a preventive action plan, containing the measures needed to remove or mitigate the risk identified, and an emergency plan containing the measures to be taken to remove or mitigate the impact of a gas supply disruption.

The risk assessment and the plans shall be updated every 2 years.

The Commission shall assess those plans in consultation with the Gas Coordination Group.

EU and regional emergency

The regulation defines three main crisis levels: early warning level, alert level, and emergency level.

The emergency plan shall build upon these crisis levels.

The Commission plays an important role with regard to the declaration of EU or regional emergency. The Commission may declare an EU or a regional emergency at the request of a competent authority that has declared an emergency. When the request comes from at least two competent authorities, the Commission shall declare an EU or regional emergency.

The Gas Coordination Group

The Gas Coordination Group is established to facilitate the coordination of measures concerning security of gas supply. The Group shall be consulted and shall assist the Commission on security of gas supply issues.

The Group shall be composed of representatives of the EU countries, in particular of their competent authorities, as well as the Agency for the Cooperation of Energy Regulators, the European Network of Transmission System Operators (ENTSO) for gas and representative bodies of the industry concerned and those of relevant customers. The Commission shall chair the Group.

Transparency and information exchange:

During an emergency, the natural gas undertakings concerned shall make available certain information to the competent authority on a daily basis.
In the event of an EU or regional emergency, the Commission is entitled to request that the competent authority provides at least information on the measures planned to be undertaken and already implemented to mitigate the emergency.

By 3 December 2011 at the latest EU countries shall inform the Commission of existing inter-governmental agreements concluded with non-EU countries. EU countries must also notify the Commission when any new such agreements are concluded.

Background

The Council Directive 2004/67/EC established for the first time a legal framework at EU level to safeguard security of gas supply. The Russian-Ukrainian gas crisis in January 2009 demonstrated that the provisions of the directive and their uneven implementation by the EU countries was not sufficient to prepare for, and to respond to a supply disruption, and there was a clear risk that measures developed unilaterally by the EU countries could jeopardise the functioning of the internal market.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EU) 994/2010

2.12.2010

OJ L295 of 12.11.2010