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Security of supply of electricity

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Security of supply of electricity

With a view to insuring the functioning of the internal energy market, the largest competitive market for electricity and gas in the world, the European Union (EU) establishes obligations to safeguard security of electricity supply and undertake significant investment in electricity networks. Blackouts in both the EU and US have highlighted the need to define clear operational standards for transmission networks and for correct maintenance and development of the network.

ACT

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.

SUMMARY

Subject matter and scope

This Directive establishes measures aimed at safeguarding security of electricity supply so as to ensure the proper functioning of the EU internal market for electricity, an adequate level of interconnection between Member States, an adequate level of generation capacity and balance between supply and demand.

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

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

  • ensure 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 growth of 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 network operators must set minimum rules and obligations to ensure continuous operation of the transmission and, where appropriate, the distribution network under foreseeable circumstances. Member States may decide that these rules and obligations must be approved by the competent authorities and, where appropriate, also respected by the transmission network operators.

The network 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 provides for specific measures necessary to maintain the balance between electricity demand and available generation capacity, to avoid Member States taking more interventionist measures which are incompatible with competition. They will need to have a clear policy in place to maintain the balance between supply and demand. In particular Member States 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. Member States must lay down a framework for providing information to network operators which facilitates investment.

Reports

Member States or competent authorities, in cooperation with transmission network operators, must prepare a report on security of supply, as provided for in the Directive on the internal electricity market. This report 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 Commission prepares a report and sends it to the Member States, the competent authorities and the European Regulators Group on Electricity and Gas.

References

Act

Entry into force - Date of expiry

Deadline for transposition in the Member States

Official Journal

Directive 2005/89/EC

24.2.2006

24.2.2008

OJ L 33, 4.2.2006.

RELATED ACTS

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 [OJ L 262, 22.9.2006].

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 and amending Directive 92/42/EEC [OJ L 52, 21.2.2004].

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 [OJ L 176, 15.7.2003].

Regulation (EC) No 1228/2003 of the European Parliament and of the Council of 26 June 2003 on conditions for access to the network for cross-border exchanges in electricity [OJ L 176, 15.7.2003].

Commission Communication of 20 December 2001 on European energy infrastructure [COM(2001) 775 final - Not published in the Official Journal]. The Commission lays down the first steps towards a Community-wide effort aiming to resolve bottlenecks in connections between neighbouring countries, ensure effective use of existing infrastructure, and in so far as possible, prevent further congestion. It also outlines priority projects of European interest and underlines that infrastructure development is basically a task for the European gas and electricity industry, whereas the role of public authorities is to provide a stable and reliable regulatory framework which provides appropriate incentives, together with the political and where necessary financial support.

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 [OJ L 283 , 27.10.2001].

Council Regulation (EC) No 736/96 of 22 April 1996 on notifying the Commission of investment projects of interest to the Community in the petroleum, natural gas and electricity sectors [OJ L 102, 25.4.1996].

Last updated: 08.10.2007

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