Security of supply of electricity

SUMMARY OF:

Directive 2005/89/EC — measures to safeguard security of electricity supply and infrastructure investment

WHAT IS THE AIM OF THE DIRECTIVE?

It aims to safeguard the security of electricity supply to ensure:

the proper functioning of the EU’s internal market for electricity;
an adequate level of interconnection between EU countries;
an adequate level of generation capacity; and
a balance between supply and demand.

KEY POINTS

Subject matter and scope

EU countries must:

define general, transparent and non-discriminatory policies on security of electricity supply compatible with the requirements of a competitive single market for electricity; and
define and publish the role and responsibilities of competent authorities and different players in the market.

When adopting policy implementation measures, they must take certain elements into account, in particular the need to:

ensure the continuity of electricity supplies;
study the internal market and the possibilities for cross-border cooperation in relation to security of electricity supply;
reduce the long-term effects of the growth in electricity demand;
introduce a degree of diversity in electricity generation in order to ensure a reasonable balance between different primary fuels;
promote energy efficiency and the use of new technologies;
continuously renew transmission and distribution networks to maintain performance.

Operational network security

Transmission system operators* must set minimum rules and obligations to ensure the continuous operation of the transmission and, where appropriate, the distribution network under foreseeable circumstances. EU countries may require transmission system operators to submit these rules and obligations to the competent authorities for approval. EU countries must ensure that transmission system operators and, where appropriate, distribution system operators*, comply with these rules.
System operators must set and meet quality of supply and network security performance objectives. Curtailment of supply in emergency situations must be based on predefined criteria and the relevant measures taken in consultation with other transmission system operators concerned.

Balancing supply and demand

The directive includes specific measures necessary to maintain the balance between electricity demand and available generation capacity, to avoid EU countries taking more interventionist measures which are incompatible with competition.
EU countries need to have a clear policy in place to maintain the balance between supply and demand. In particular, they need to:
- encourage the establishment of wholesale markets;
- require network operators to ensure that an appropriate level of generation reserve capacity is maintained;
- facilitate the development of new generation capacity; or
- encourage energy conservation and technology for demand management in real time.

Network investment

Investment is crucial for competition and the future security of electricity supply in the EU. EU countries must set in place systems for providing information to operators which facilitate investment.

Reports

EU countries or their competent authorities, in cooperation with transmission network operators, must prepare reports on security of supply, as required by Directive 2009/72/EC — the internal market in electricity.
These reports must contain information on:
- operational network security, projected balance of supply and demand;
- prospects for security of supply within the medium term; and
- investment intentions of transmission system operators as regards provision of cross-border interconnection capacity.
On the basis of this information, the European Commission prepares a report and sends it to the EU countries, the competent authorities and the Agency for cooperation between EU energy regulators.

FROM WHEN DOES THE DIRECTIVE APPLY?

It has applied since 24 February 2006 and had to become law in the EU countries by 24 February 2008.

BACKGROUND

For more information, see:

Security of electricity supply (European Commission).

KEY TERMS

Transmission system operator: an organisation which is responsible for the transport of energy at national or regional level using fixed infrastructure.

Distribution system operator: an organisation responsible for providing and operating low, medium and high voltage networks for regional distribution of electricity as well as for supply of lower-level distribution systems and directly connected customers.

MAIN DOCUMENT

Directive 2005/89/EC of the European Parliament and of the Council of 18 January 2006 concerning measures to safeguard security of electricity supply and infrastructure investment (OJ L 33, 4.2.2006, pp. 22-27)