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Internal market in electricity (from March 2011)

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Internal market in electricity (from March 2011)

In the light of the dysfunction in the internal market in electricity, the European Commission considered it necessary to redefine the rules and measures applying to that market in order to guarantee fair competition and appropriate consumer protection.

ACT

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 have to 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 also have to 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 must put in place an independent mechanism (energy ombudsman or consumer body) to manage complaints or disputes efficiently.

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 must 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.

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 must 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 have to keep separate accounts for their transmission and distribution activities.

Organisation of access to the system

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

Member States must 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 must 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

Contractual arrangements, commitment to customers, data exchange and settlement rules, data ownership and metering responsibility must be 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

2012/148/EU : Commission Recommendation of 9 March 2012 on preparations for the roll-out of smart metering systems [Official Journal L 73 of 13.3.2012]

The European Commission has set out detailed recommendations regarding (i) data protection and security, (ii) methodology for the economic assessment of the long-term costs and benefits for the roll-out of smart metering systems, and (iii) common minimum functional requirements for smart metering systems for electricity.

EU Member States are encouraged to take all necessary measures to follow the recommendation and to draw it to the attention of all stakeholders involved in designing and operating smart grid applications within the EU. By 3 September 2012, in accordance with Directive 2009/72/EC, they had to report to the Commission on the results of their cost-benefit analysis regarding the roll-out of smart metering systems and on the measures and plans they have adopted in relation to this Recommendation.

Last updated: 13.01.2014

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