Internal market in electricity

SUMMARY OF:

Directive 2009/72/EC – rules for the EU’s electricity market

SUMMARY

WHAT DOES THE DIRECTIVE DO?

• It seeks to introduce 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.

KEY POINTS

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.

EU countries 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.

EU countries 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 3 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.

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

EU countries are also obliged to ensure the monitoring of security of supply. They have to 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

EU countries 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, EU countries had to 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 EU countries has to 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

EU countries 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.

EU countries 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

EU countries 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

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

EU countries 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

EU countries 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

An EU country 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.

Directive 2009/72/EC repealed Directive 2003/54/EC with effect from 3 March 2011.

Smart metering - progress to date

In 2012, the European Commission adopted Recommendation 2012/148/EU. This set out detailed recommendations regarding:

• data protection and security,
• the methodology for the economic assessment of the long-term costs and benefits for the roll-out of smart metering systems, as well as
• common minimum functional requirements for smart metering systems for electricity.

In accordance with Directive 2009/72/EC, EU countries reported to the Commission in 2012 on the results of their cost-benefit analyses regarding the roll-out of smart metering systems. The results of this benchmarking exercise were published in a Commission report in 2014.

FROM WHEN DOES THE DIRECTIVE APPLY?

It applies from 3 September 2009. EU countries had to incorporate it into national law by 3 March 2011.

BACKGROUND

For more information, see Market legislation on the European Commission's website

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 (OJ L 211, 14.8.2009, pp. 55–93)

RELATED ACTS

Commission Recommendation 2012/148/EU of 9 March 2012 on preparations for the roll-out of smart metering systems (OJ L 73, 13.3.2012, pp. 9-22)

Report from the Commission: Benchmarking smart metering deployment in the EU-27 with a focus on electricity (COM(2014) 356 final of 17.6.2014)

last update 08.05.2016