Legal provisions of COM(2003)740 - Measures to safeguard security of electricity supply and infrastructure investment

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dossier COM(2003)740 - Measures to safeguard security of electricity supply and infrastructure investment.
document COM(2003)740 EN
date January 18, 2006


Article 1

Scope

1. This Directive establishes measures aimed at safeguarding security of electricity supply so as to ensure the proper functioning of the internal market for electricity and to ensure:

(a)an adequate level of generation capacity;

(b)an adequate balance between supply and demand;

and

(c)an appropriate level of interconnection between Member States for the development of the internal market.

2. It establishes a framework within which Member States are to define transparent, stable and non-discriminatory policies on security of electricity supply compatible with the requirements of a competitive internal market for electricity.

Article 2

Definitions

For the purposes of this Directive, the definitions contained in Article 2 of Directive 2003/54/EC shall apply. In addition, the following definitions shall apply:

(a)‘regulatory authority’ means the regulatory authorities in Member States, as designated in accordance with Article 23 of Directive 2003/54/EC;

(b)‘security of electricity supply’ means the ability of an electricity system to supply final customers with electricity, as provided for under this Directive;

(c)‘operational network security’ means the continuous operation of the transmission and, where appropriate, the distribution network under foreseeable circumstances;

(d)‘balance between supply and demand’ means the satisfaction of foreseeable demands of consumers to use electricity without the need to enforce measures to reduce consumption.

Article 3

General provisions

1. Member States shall ensure a high level of security of electricity supply by taking the necessary measures to facilitate a stable investment climate and by defining the roles and responsibilities of competent authorities, including regulatory authorities where relevant, and all relevant market actors and publishing information thereon. The relevant market actors include, inter alia, transmission and distribution system operators, electricity generators, suppliers and final customers.

2. In implementing the measures referred to in paragraph 1, Member States shall take account of:

(a)the importance of ensuring continuity of electricity supplies;

(b)the importance of a transparent and stable regulatory framework;

(c)the internal market and the possibilities for cross-border cooperation in relation to security of electricity supply;

(d)the need for regular maintenance and, where necessary, renewal of the transmission and distribution networks to maintain the performance of the network;

(e)the importance of ensuring proper implementation of Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market (6) and Directive 2004/8/EC of the European Parliament and of the Council of 11 February 2004 on the promotion of cogeneration based on a useful heat demand in the internal energy market (7), insofar as their provisions are related to security of electricity supply;

(f)the need to ensure sufficient transmission and generation reserve capacity for stable operation;

and

(g)the importance of encouraging the establishment of liquid wholesale markets.

3. In implementing the measures referred to in paragraph 1, Member States may also take account of:

(a)the degree of diversity in electricity generation at national or relevant regional level;

(b)the importance of reducing the long-term effects of the growth of electricity demand;

(c)the importance of encouraging energy efficiency and the adoption of new technologies, in particular demand management technologies, renewable energy technologies and distributed generation;

and

(d)the importance of removing administrative barriers to investments in infrastructure and generation capacity.

4. Member States shall ensure that any measures adopted in accordance with this Directive are non-discriminatory and do not place an unreasonable burden on the market actors, including market entrants and companies with small market shares. Member States shall also take into account, before their adoption, the impact of the measures on the cost of electricity to final customers.

5. In ensuring an appropriate level of interconnection between Member States, as referred to in Article 1(1)(c), special consideration shall be given:

(a)each Member State’s specific geographical situation;

(b)maintaining a reasonable balance between the costs of building new interconnectors and the benefit to final customers;

and

(c)ensuring that existing interconnectors are used as efficiently as possible.

Article 4

Operational network security

1.
(a)Member States or the competent authorities shall ensure that transmission system operators set the minimum operational rules and obligations on network security.

Before setting such rules and obligations, they shall consult with the relevant actors in the countries with which interconnection exists;
(b)notwithstanding the first subparagraph of point (a), Member States may require transmission system operators to submit such rules and obligations to the competent authority for approval;
(c)Member States shall ensure that transmission and, where appropriate, distribution system operators comply with the minimum operational rules and obligations on network security;
(d)Member States shall require transmission system operators to maintain an appropriate level of operational network security.

To that effect, transmission system operators shall maintain an appropriate level of technical transmission reserve capacity for operational network security and cooperate with the transmission system operators concerned to which they are interconnected.

The level of foreseeable circumstances in which security shall be maintained is defined in the operational network security rules;
(e)Member States shall, in particular, ensure that interconnected transmission and, where appropriate, distribution system operators exchange information relating to the operation of networks in a timely and effective fashion in line with the minimum operational requirements. The same requirements shall, where appropriate, apply to transmission and distribution system operators that are interconnected with system operators outside the Community.

2. Member States or the competent authorities shall ensure that transmission and, where appropriate, distribution system operators set and meet quality of supply and network security performance objectives. These objectives shall be subject to approval by the Member States or competent authorities and their implementation shall be monitored by them. They shall be objective, transparent and non-discriminatory and shall be published.

3. In taking the measures referred to in Article 24 of Directive 2003/54/EC and in Article 6 of Regulation (EC) No 1228/2003, Member States shall not discriminate between cross-border contracts and national contracts.

4. Member States shall ensure that curtailment of supply in emergency situations shall be based on predefined criteria relating to the management of imbalances by transmission system operators. Any safeguard measures shall be taken in close consultation with other relevant transmission system operators, respecting relevant bilateral agreements, including agreements on the exchange of information.

Article 5

Maintaining balance between supply and demand

1. Member States shall take appropriate measures to maintain a balance between the demand for electricity and the availability of generation capacity.

In particular, Member States shall:

(a)without prejudice to the particular requirements of small isolated systems, encourage the establishment of a wholesale market framework that provides suitable price signals for generation and consumption;

(b)require transmission system operators to ensure that an appropriate level of generation reserve capacity is available for balancing purposes and/or to adopt equivalent market based measures.

2. Without prejudice to Articles 87 and 88 of the Treaty, Member States may also take additional measures, including but not limited to the following:

(a)provisions facilitating new generation capacity and the entry of new generation companies to the market;

(b)removal of barriers that prevent the use of interruptible contracts;

(c)removal of barriers that prevent the conclusion of contracts of varying lengths for both producers and customers;

(d)encouragement of the adoption of real-time demand management technologies such as advanced metering systems;

(e)encouragement of energy conservation measures;

(f)tendering procedures or any procedure equivalent in terms of transparency and non-discrimination in accordance with Article 7(1) of Directive 2003/54/EC.

3. Member States shall publish the measures to be taken pursuant to this Article and shall ensure the widest possible dissemination thereof.

Article 6

Network investment

1. Member States shall establish a regulatory framework that:

(a)provides investment signals for both the transmission and distribution system network operators to develop their networks in order to meet foreseeable demand from the market;

and

(b)facilitates maintenance and, where necessary, renewal of their networks.

2. Without prejudice to Regulation (EC) No 1228/2003, Member States may allow for merchant investments in interconnection.

Member States shall ensure that decisions on investments in interconnection are taken in close cooperation between relevant transmission system operators.

Article 7

Reporting

1. Member States shall ensure that the report referred to in Article 4 of Directive 2003/54/EC covers the overall adequacy of the electricity system to supply current and projected demands for electricity, comprising:

(a)operational network security;

(b)the projected balance of supply and demand for the next five-year period;

(c)the prospects for security of electricity supply for the period between five and 15 years from the date of the report;

and

(d)the investment intentions, for the next five or more calendar years, of transmission system operators and those of any other party of which they are aware, as regards the provision of cross-border interconnection capacity.

2. Member States or the competent authorities shall prepare the report in close cooperation with transmission system operators. Transmission system operators shall, if appropriate, consult with neighbouring transmission system operators.

3. The section of the report relating to interconnection investment intentions, referred to in paragraph 1(d), shall take account of:

(a)the principles of congestion management, as set out in Regulation (EC) No 1228/2003;

(b)existing and planned transmission lines;

(c)expected patterns of generation, supply, cross-border exchanges and consumption, allowing for demand management measures,

and

(d)regional, national and European sustainable development objectives, including those projects forming part of the Axes for priority projects set out in Annex I to Decision No 1229/2003/EC.

Member States shall ensure that transmission system operators provide information on their investment intentions or those of any other party of which they are aware as regards the provision of cross-border interconnection capacity.

Member States may also require transmission system operators to provide information on investments related to the building of internal lines that materially affect the provision of cross-border interconnection.

4. Member States or the competent authorities shall ensure that the necessary means for access to the relevant data are facilitated to the transmission system operators and/or to the competent authorities where relevant in the development of this task.

The non-disclosure of confidential information shall be ensured.

5. On the basis of the information referred to in paragraph 1(d), received from the competent authorities, the Commission shall report to the Member States, the competent authorities and the European Regulators Group on Electricity and Gas established by Commission Decision 2003/796/EC (8) on the investments planned and their contribution to the objectives set out in Article 1(1).

This report may be combined with the reporting provided for in point (c) of Article 28(1) of Directive 2003/54/EC and shall be published.

Article 8

Transposition

1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 24 February 2008. They shall forthwith inform the Commission thereof.

When Member States adopt those measures, they shall contain a reference to this Directive or be accompanied by such reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.

2. By 1 December 2007, Member States shall notify the Commission of the text of the provisions of national law which they adopt in the field covered by this Directive.

Article 9

Reporting

The Commission shall monitor and review the application of this Directive and submit a progress report to the European Parliament and the Council by 24 February 2010.

Article 10

Entry into force

This Directive shall enter into force on the 20th day following its publication in the Official Journal of the European Union.

Article 11

Addressees

This Directive is addressed to the Member States.