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Internal market in electricity (from 2021)

Internal market in electricity (from 2021)

 

SUMMARY OF:

Directive (EU) 2019/944 on common rules for the internal market for electricity

WHAT IS THE AIM OF THE DIRECTIVE?

  • It outlines rules for the generation, transmission, distribution, supply and storage of electricity, together with consumer protection aspects, aiming to create integrated competitive, consumer-centred, flexible, fair and transparent electricity markets in the EU.
  • Among other things, it contains rules on retail markets for electricity, whereas Regulation (EU) 2019/943, which was adopted at the same time, mainly contains rules on the wholesale market and network operation.
  • It repeals Directive 2009/72/EC (see summary Internal market in electricity) as of 1 January 2021.

KEY POINTS

Customer rights

The directive clarifies and reinforces existing customer rights and introduces new ones:

  • right to freely choose a supplier and restrictions on switching and exit fees, except where fixed-price fixed-term contracts are terminated before their end date;
  • right to access to at least one price comparison tool fulfilling certain trust requirements; compliant privately run tools may be issued a trust mark;
  • right to join a citizen energy community while retaining full consumer rights, including the right to leave the community without penalties;
  • right to a dynamic 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 right to be provided information about the opportunities and risks involved;
  • right to an aggregation contract independent of electricity supply;
  • right to produce, consume, store and sell electricity, individually or through an aggregator*;
  • right to request the installation of a smart meter within 4 months, while EU countries must ensure a roll-out of smart metering systems, except where it is not yet considered cost-effective;
  • right of energy-poor or vulnerable customers to targeted protection, but with regulated price-setting only allowed under certain conditions;
  • 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 6 months or once every 3 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

EU countries 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 operators 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 shall strictly cover resulting costs and the calculation of such compensation may take into account the systemic benefits of demand response.

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 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 EU country 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

  • EU countries must establish a regulatory framework to facilitate the connection of electric vehicle recharging points to the distribution network.
  • 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)*:

  • 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 and especially the ones which produce electricity from renewable sources, as well as for providing system users with the information needed for efficient access 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 (TSOs)*:

  • 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.
  • shall 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 as apply to DSOs.

National energy regulators:

Clean energy

This directive is part of the Clean Energy for all Europeans package.

FROM WHEN DOES THE DIRECTIVE APPLY?

It has applied since 1 January 2021.

Directive (EU) 2019/944 revises and replaces Directive 2009/72/EC and has to become law in the EU countries by 31 December 2020.

The original Directive 2009/72/EC had to become law in the EU countries by 2011.

BACKGROUND

For more information, see:

KEY TERMS

Aggregator: a natural or legal person who combines multiple customer loads or generated electricity for sale, purchase or auction in any electricity market.
Distribution system operator: a natural or legal person responsible for operating and developing the electricity distribution system in an area, and its interconnections with other systems, and for ensuring the long-term ability of the system to meet reasonable demands for the distribution of electricity.
Transmission system operator: a natural or legal person who is responsible for operating and developing the electricity transmission system in an area, and its interconnections with other systems, and for ensuring the long-term ability of the system to meet reasonable demands for the transmission of electricity.

MAIN DOCUMENT

Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU (recast) (OJ L 158, 14.6.2019, pp. 125-199)

RELATED DOCUMENTS

Regulation (EU) 2019/941 of the European Parliament and of the Council of 5 June 2019 on risk-preparedness in the electricity sector and repealing Directive 2005/89/EC (OJ L 158, 14.6.2019, pp. 1-21)

Regulation (EU) 2019/942 of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators (OJ L 158, 14.6.2019, pp. 22-53)

Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (OJ L 158, 14.6.2019, pp. 54-124)

Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council (OJ L 328, 21.12.2018, pp. 1-77)

Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (OJ L 328, 21.12.2018, pp. 82-209)

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)

last update 01.10.2019

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