Brussels, 12.11.2020

COM(2020) 707 final

2020/0317(NLE)

Proposal for a

COUNCIL DECISION

on the position to be adopted, on behalf of the European Union, within the EEA Joint Committee concerning an amendment to Annex IV (Energy) to the EEA Agreement

[32017R2195 - Guideline on electricity balancing "EB"]

(Text with EEA relevance)


EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

Reasons for and objectives of the proposal

The draft Decision of the EEA Joint Committee (annexed to the proposed Council Decision) aims to amend Annex IV (Energy) to the EEA Agreement in order to incorporate Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing 1 into the EEA Agreement.

The electricity network codes and guidelines, as established with a basis in the 3rd Energy Package, set out technical rules to facilitate trade within the EU internal electricity market. A fully functioning and interconnected internal energy market is crucial to the objectives of security of supply, increasing competitiveness and ensuring that consumers can purchase energy at affordable prices. Significant electricity interconnections have been established between Norway, as an EEA EFTA State, and EU Member States. It is therefore imperative that the technical rules applicable to trade within the EU internal electricity market are extended to the EEA to ensure legal homogeneity as a basis for trade in electricity.

Commission Regulation (EU) 2017/2195 lays down a detailed guideline on electricity balancing including common principles for procurement and settlement of frequency containment reserves, frequency restoration reserves and replacement reserves and a common methodology for activating reserves. It applies to all transmission system and distribution system operators, regulatory authorities, the Agency for the Cooperation of Energy Regulators (ACER) and the European Network of Transmission System Operators (ENTSO-E) as well as third parties to whom responsibilities have been delegated or assigned or other market participants.

The adaptations appearing in the draft of the annexed Decision of the EEA Joint Committee go beyond what can be considered mere technical adaptations in the sense of the Council Regulation No 2894/94. The Union position shall therefore be established by the Council.

Consistency with existing policy provisions in the policy area

The annexed draft EEA Joint Committee Decision extends the already existing EU policy to the EEA EFTA States (Norway, Iceland and Liechtenstein).

Consistency with other Union policies

The extension of the EU acquis to the EEA EFTA States, through its incorporation into the EEA Agreement is conducted in conformity with the objectives and principles of that Agreement, aiming at establishing a dynamic and homogeneous European Economic Area, based on common rules and equal conditions of competition.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

Legal basis

The legislation to be incorporated into the EEA Agreement is based on Article 194 of the Treaty on the Functioning of the European Union.

Article 1(3) of Council Regulation (EC) No 2894/94 2  concerning arrangements for implementing the EEA Agreement provides that the Council establishes the position to be adopted on the Union’s behalf on such Decisions, on a proposal from the Commission.

Subsidiarity (for non-exclusive competence)

The proposal complies with the subsidiarity principle for the following reason:

The objective of this proposal, namely to ensure the homogeneity of the Internal Market, cannot be sufficiently achieved by the Member States and can therefore, by reason of the effects, be better achieved at Union level.

Proportionality

In accordance with the principle of proportionality, this proposal does not go beyond what is necessary in order to achieve its objective.

Choice of the instrument

In conformity with Article 98 of the EEA Agreement, the chosen instrument is the EEA Joint Committee decision. The EEA Joint Committee shall ensure the effective implementation and operation of the EEA Agreement. To this end, it shall take decisions in the cases provided for in the EEA Agreement.

3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

Ex-post evaluations/fitness checks of existing legislation

Not applicable.

4.BUDGETARY IMPLICATIONS

There are no budgetary implications expected as a result of incorporation of the above mentioned Regulation into the EEA Agreement.

5.OTHER ELEMENTS

Detailed explanation of the specific provisions of the proposal

Adaptation (a) – non applicability to Iceland and Lichtenstein

As the transmission system of Iceland is not connected with other transmission systems, therefore, Commission Regulation (EU) 2017/2195 should not apply to Iceland.

Commission Regulation (EU) 2017/2195 should not apply to Liechtenstein, as due to its small size and the limited number of electricity customers, Liechtenstein does not have an own transmission electricity network.

Adaptation (b) and recital (6) – sensitive information about the electricity system

In Commission Regulation (EU) 2017/2195 there are provisions setting out obligations to provide information to the European Network of Transmission System Operators for Electricity (ENTSO-E) and Agency for the Cooperation of Energy Regulators (ACER). Adaptation (b) makes it possible that respective Transmission System Operators (“TSOs”) and Regulators exchange such information and protect it.

Adaptation (c) and recital (7) – reference to the participation rights of the Norwegian TSO, Nominated Electricity Market Operator (NEMO) and National Regulatory Authority (NRA) in the development and approval of terms, conditions and methodologies

The adaptation and the recital referred to above adapt relevant provisions of Article 4 of Commission Regulation (EU) 2017/2195 concerning participation rights of relevant entities in the development and approval of terms, conditions and methodologies to include Norway.

2020/0317 (NLE)

Proposal for a

COUNCIL DECISION

on the position to be adopted, on behalf of the European Union, within the EEA Joint Committee concerning an amendment to Annex IV (Energy) to the EEA Agreement

[32017R2195 - Guideline on electricity balancing "EB"]

(Text with EEA relevance)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 194 in conjunction with Article 218(9) thereof,

Having regard to Council Regulation (EC) No 2894/94 of 28 November 1994 concerning arrangements for implementing the Agreement on the European Economic Area 3 , and in particular Article 1(3) thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)The Agreement on the European Economic Area 4  ('the EEA Agreement') entered into force on 1 January 1994.

(2)Pursuant to Article 98 of the EEA Agreement, the EEA Joint Committee may decide to amend, inter alia, Annex IV to the EEA Agreement.

(3)Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing 5 is to be incorporated into the EEA Agreement.

(4)Annex IV to the EEA Agreement should therefore be amended accordingly.

(5)The position of the Union within the EEA Joint Committee should therefore be based on the attached draft decision,

HAS ADOPTED THIS DECISION:

Article 1

The position to be adopted, on behalf of the Union, within the EEA Joint Committee on the proposed amendment to Annex IV (Energy) to the EEA Agreement, shall be based on the draft decisions of the EEA Joint Committee attached to this Decision.

Article 2

This Decision shall enter into force on the date of its adoption.

Done at Brussels,

   For the Council

   The President

(1)    OJ L 312, 28.11.2017, p. 6.
(2)    OJ L 305, 30.11.1994, p. 6–8
(3)    OJ L 305, 30.11.1994, p. 6.
(4)    OJ L 1, 3.1.1994, p. 3.
(5)    OJ L 312, 28.11.2017, p. 6.

Brussels, 12.11.2020

COM(2020) 707 final

ANNEX

to the

Proposal for a Council Decision

on the position to be adopted, on behalf of the European Union, within the EEA Joint Committee concerning an amendment to Annex IV (Energy) to the EEA Agreement


[32017R2195 - Guideline on electricity balancing "EB"]


ANNEX

DECISION OF THE EEA JOINT COMMITTEE

No […]

of […]

amending Annex IV (Energy) to the EEA Agreement

THE EEA JOINT COMMITTEE,

Having regard to the Agreement on the European Economic Area (“the EEA Agreement”), and in particular Article 98 thereof,

Whereas:

(1)Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing 1 is to be incorporated in the EEA Agreement.

(2)Commission Regulation (EU) 2017/2195 does not apply to transmission systems on islands which are not connected to other transmission systems via interconnections.

(3)As the transmission system of Iceland is not connected with other transmission systems, Commission Regulation (EU) 2017/2195 should not apply to Iceland.

(4)Due to its small size and the limited number of electricity customers, Liechtenstein does not have an own transmission electricity network. Commission Regulation (EU) 2017/2195 should therefore not apply to Liechtenstein.

(5)References to Transmission System Operators (“TSOs”), regulatory authorities and stakeholders should be understood to include the TSO, regulatory authorities and stakeholders representing Norway.

(6)When jointly developing terms, conditions and methods pursuant to Commission Regulation (EU) No 2017/2195, it is essential that all necessary information is submitted without delay. Close cooperation between TSOs and regulators should ensure that sensitive information, such as detailed information about electrical substations, exact location of underground transmission, information about control systems and detailed vulnerability analyses that can be used for sabotage, is effectively protected in the process of developing terms, conditions or methodologies. To ensure the effective implementation of this Regulation, the same level of cooperation regarding information exchange and protection of sensitive information should be established in the cooperation with Norway.

(7)Input from all main stakeholders in the development of regional or EEA-wide terms, conditions and methodologies, that may become binding through regulatory approval, is crucial for an effective regulatory cross-border framework. The TSOs and other stakeholders should therefore participate in the processes for the development of proposals for terms, conditions and methodologies as set out in the various provisions in this Regulation. The Norwegian TSO should notably participate in the stakeholder decision-making in a similar manner as TSOs representing an EU Member State.

(8)For regional or Union-wide proposals, where the approval of proposals from TSOs requires a decision by more than one regulatory authority, regulatory authorities should consult and closely cooperate in order to reach agreement before the regulatory authorities adopt a decision. The Norwegian regulatory authority should be involved in this cooperation.

(9)As this Regulation has been adopted on the basis of Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003 2 , the adaptation texts elaborated and adopted under Decision of the EEA Joint Committee No 93/2017 of 5 May 2017 3 for the implementation of Regulation 714/2009, in particular the provisions in Art. 1 (1) and (5) thereof, which provide for adaptations concerning the role of the Agency for the Cooperation of Energy Regulators in the EEA context, are relevant for the application of this Regulation in the EEA, notably for Article 5 (6) and (7).

(10)Annex IV to the EEA Agreement should therefore be amended accordingly,

HAS ADOPTED THIS DECISION:

Article 1

The following is inserted after point 51 (Commission Regulation (EU) 2017/1485) of Annex IV to the EEA Agreement:

’52.32017 R 2195: Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing (OJ L 312, 28.11.2017, p. 6).

The provisions of the Regulation shall, for the purposes of this Agreement, be read with the following adaptations:

(a)The Regulation shall not apply to Iceland and Liechtenstein.

(b)The following shall be added to Article 11:

“Agreements between TSOs and / or Regulators may ensure that confidential or sensitive information is effectively protected and help guaranteeing that all information which is necessary to develop the common terms, conditions and methods is submitted without delay.”

(c)In Article 4:

(i) The references to “the population of the Union” in Article 4(3)(b), to “the population of the concerned area” and to “the population of the participating Member States” in Article 4(4)(b) shall be understood as including the population of Norway when considering whether the relevant population threshold for attaining qualified majority is attained.

(ii) The references to “regions composed of more than five Member States” in Article 4(4) and to “regions composed of five Member States or less” in Article 4(5) shall be read as “regions composed of more than four Union Member States and Norway” or as “regions composed of four Union Member States and Norway or less”.

Article 2

The text of Regulation (EU) 2017/2195 in the Icelandic and Norwegian languages, to be published in the EEA Supplement to the Official Journal of the European Union, shall be authentic.

Article 3

This Decision shall enter into force on […], or on the day following the last notification to the EEA Joint Committee under Article 103(1) of the EEA Agreement 4*, whichever is the later.

Article 4

This Decision shall be published in the EEA Section of, and in the EEA Supplement to, the Official Journal of the European Union.

Done at Brussels, […].

   For the EEA Joint Committee

   The President

   […]

   The Secretaries

   To the EEA Joint Committee

   […]

(1)    OJ L 312, 28.11.2017, p. 6.
(2)    OJ L 211, 14.8.2009, p. 15.
(3)    OJ L 36, 7.2.2019, p. 44.
(4) *    [No constitutional requirements indicated.] [Constitutional requirements indicated.]