Conditions for access to the network for cross-border exchanges in electricity (up until March 2011)

The Regulation lays down fair rules for cross-border exchanges in electricity, thus enhancing competition within the internal market in electricity while taking into account the specificities of national and regional markets. The aim is to promote cross-border trade in electricity, which remains underdeveloped compared with other sectors, by laying down basic rules regarding access to networks for cross-border transactions.

ACT

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 [See amending acts].

SUMMARY

The purpose of the Regulation is to stimulate cross-border exchanges in electricity by establishing a compensation mechanism for transit flows of electricity and by introducing harmonised principles on cross-border transmission charges and the allocation of available interconnection capacities between national transmission systems.

Compensation mechanism between operators of transmission systems

Transmission system operators (TSOs) receive compensation for costs incurred as a result of hosting cross-border flows of electricity on their network. This compensation is paid by the operators of national transmission systems from which the cross-border flows originate. Compensation received by TSOs for hosting cross-border flows will be calculated based on the costs of the infrastructure "used" for the flows.

Charges applied by network-operators for access to networks are transparent and take into account the need for network security and reflect actual costs incurred.

Information on interconnection capacities

TSOs install coordination and information exchange mechanisms to ensure security of the networks in the context of congestion management. Network congestion problems are addressed with non-discriminatory solutions, i.e. methods that do not involve a selection between contracts of individual market participants.

General principles of congestion management

Market participants must inform the transmission system operators concerned whether they intend to use allocated capacity a reasonable time ahead of the relevant operational period. Any allocated capacity that will not be used is reattributed to the market in an open, transparent and non-discriminatory manner.

New interconnectors

New direct current interconnectors may, under certain strict conditions, benefit from exemptions. In this context, the Commission has to monitor Member States' decisions regarding exemptions and the restrictive way these measures are to be interpreted.

Guidelines

The guidelines specify in particular:

• details of methods for determining the quantity of cross-border flows hosted and the magnitudes of such flows;
• details of the treatment in the context of the inter-TSO compensation mechanism of electricity flows originating or ending in countries outside the European Economic Area (EEA);
• harmonised, appropriate and efficient locational signals at European level.

Provision of information and confidentiality

Member States and the regulatory authorities provide the Commission, on request, with all necessary information. The Commission fixes a reasonable time limit, taking into account the complexity of the information required and the urgency with which the information is needed. The Commission does not disclose this information which is covered by the obligation of professional secrecy.

Penalties

The Member States lay down the rules on penalties applicable to infringements of the provisions of this Regulation and take all measures necessary to ensure that they are implemented. The Member States notify those provisions to the Commission by 1 July 2004 at the latest.

Last updated: 28.10.2010