Internal market for electricity

KEY POINTS

Customer rights

The directive, as amended, clarifies and reinforces existing customer rights and introduces the following new ones:

• the right to to be able to freely choose one or more suppliers and, for that purpose, the right to have more than one metering and billing point covered by the single connection point for their premises;
• the right to minimal barriers with regard to switching and exit fees, except where fixed-price fixed-term contracts are terminated before their end date;
• the right to access to at least one price comparison tool fulfilling certain trust requirements; compliant privately run tools may be issued a trust mark;
• the right to join a citizen energy community while retaining full consumer rights, including the right to leave the community without penalties;
• the right to a fixed-term, fixed-price electricity supply contract and to a dynamic electricity price contract (based on prices in the spot or day-ahead market) from at least one supplier and every supplier with more than 200,000 customers, and the right to be provided information about the opportunities and risks involved;
• the right to an aggregation contract independent of electricity supply;
• the right to produce, consume, store and sell electricity, individually or through an aggregator¹;
• the right to request the installation of a smart meter within four months, while EU Member States must ensure a roll-out of smart metering systems, except where it is not yet considered cost-effective;
• the right of energy-poor or vulnerable customers to targeted protection, but with regulated price-setting only allowed under certain conditions;
• the right of customers facing disconnection to be given information about alternatives, such as payment plans or a moratorium, well in advance.

Billing

• Bills should be clear, correct, concise and presented in a way that makes comparisons easy.
• Billing information should be provided at least every six months or once every three months, if requested, or where the final customer has opted to receive electronic billing; and at least once a month if meters can be read remotely.

Aggregators

Member States must:

• ensure that aggregators can offer aggregation contracts to customers without those customers having to obtain the consent of their supplier;
• ensure the fair participation of aggregators in all electricity markets and that transmission and distribution system operators² treat aggregators equally with other market participants, including when they procure services;
• establish transparent rules assigning roles and responsibilities to all market participants and set out rules for data exchange between market participants;
• establish rules for compensation between aggregators and suppliers where the activation of demand response causes an imbalance; such compensation must strictly cover resulting costs and the calculation of such compensation may take into account the systemic benefits of demand response.

Citizen energy communities

Citizen energy communities:

• are shareholder- or member-controlled entities based on voluntary and open participation, which have the right to engage in generation, distribution, supply, consumption, energy efficiency services or charging services for electric vehicles, or to provide other energy services to its members or shareholders;
• have the right to be connected to distribution grids and be treated in a non-discriminatory manner in terms of regulation or access to all electricity markets;
• have the right to share their own electricity production with their members in accordance with a cost–benefit analysis of distributed energy resources;
• have the right, where so permitted by the Member State in question, to own, establish, purchase or lease distribution networks subject to the applicable regulations.

Access to data and interoperability

• The directive updates rules on access to metering and consumption/generation data by network operators, consumers, suppliers and service providers. Moreover, it envisages that the European Commission will set up, in secondary law, interoperability rules to facilitate the exchange of data.
• Data managers must ensure non-discriminatory access to data from smart metering systems while complying with the data protection rules.

Electromobility

• Member States must establish a regulatory framework to facilitate the connection of electric vehicle recharging points to the distribution network.
• Distribution system operators (DSOs) would only be allowed to own, develop, manage or operate recharging points if no other body has expressed interest in an open tendering procedure, subject to regulatory approval and in line with third-party access rules.

Distribution system operators

DSOs:

• must be independent in legal terms from other activities not relating to distribution;
• are responsible for ensuring the long-term ability of the system to meet demands for the distribution of electricity, including the cost-efficient integration of new electricity generation installations, especially ones that produce electricity from renewable sources, and for providing system users with the information needed for efficient access to and use of the system;
• must publish network development plans setting out the planned investments for the following 5 to 10 years;
• where part of a vertically integrated undertaking, must be independent at least in terms of its legal form, organisation and decision-making from other activities not relating to distribution;
• are not allowed to own, develop, manage or operate storage facilities except where certain specific conditions are met.

Transmission system operators

Transmission system operators³ (TSOs):

• must be unbundled from companies active in the production or supply of electricity or gas, which means that supply companies cannot exercise any rights over a transmission system operator, and vice versa;
• must ensure the long-term ability of the system to meet demands for the transmission of electricity, in close cooperation with neighbouring TSOs and DSOs;
• must manage the secure operation of the system, including keeping the balance between electricity supply and demand;
• are not allowed to own, develop, manage or operate energy storage facilities, under similar conditions to those that apply to DSOs.

National energy regulators

National energy regulators:

• must be independent from government or business interests;
• are in charge of fixing or approving transmission and distribution tariffs or their methodology;
• must cooperate with neighbouring regulators and with the European Union Agency for the Cooperation of Energy Regulators on issues including risk-preparedness, the allocation of cross-border capacity and ensuring an adequate level of interconnector capacities;
• have revised oversight responsibility for regional operating centres and other entities at the regional level.

Flexible connection agreements

Amending Directive (EU) 2024/1711 allows Member States to decide to develop a system for TSOs and DSOs to introduce flexible connection agreements in areas where network capacity availability is limited or non-existent for new connections. The system user connecting through a flexible grid connection must install a power control system that is certified by an authorised certifier.

Energy sharing

Under amending Directive (EU) 2024/1711, Member States must ensure all households, small and medium-sized enterprises, public bodies and, where they so decide, other final customers have the right to participate in shared energy uses as active customers⁴ in a non-discriminatory way, within the same bidding zone or in a more limited geographical area.

Supplier risk management

Amending Directive (EU) 2024/1711 requires Member States’ regulatory authorities, or an alternative independent competent authority designated for the purpose, to ensure that suppliers:

• have in place and implement appropriate hedging strategies, to limit the risk of changes in wholesale electricity supply to the economic viability of their contracts with customers, while maintaining liquidity on and price signals from short-term markets;
• take all reasonable steps to limit their risk of supply failure.

Protection from disconnections

Amending Directive (EU) 2024/1711 requires Member States to ensure that vulnerable customers and customers affected by energy poverty are fully protected from electricity disconnections by taking the appropriate measures, including by prohibiting disconnections or other equivalent action.

Access to affordable energy during an electricity price crisis

Under amending Directive (EU) 2024/1711, the Council of the European Union, following a Commission proposal, may declare an electricity price crisis at the regional or the EU level, if the following conditions are met:

• there are very high average prices in wholesale electricity markets equivalent to at least 2.5 times the average price of the previous five years and at least 180 €/MWh, which are expected to continue for at least six months, not taking into account periods during which an electricity price crisis has been declared at the regional or the EU level in the calculation of the five-year average price;
• there are sharp increases in retail electricity prices of around 70% that are expected to continue for at least three months.

Repeal

Directive (EU) 2019/944 repealed Directive 2009/72/EC as of 1 January 2021.