EU Energy Law, Volume I: Internal Energy Market

1620 Pages·2020·12.995 MB·English

by  Christopher Jones (editor), William-James Kettlewell (editor)

Edited by CHRISTOPHER JONES and WILLIAM-JAMES KETTLEWELL
EU ENERGY LAW
VOLUME I
The Internal Energy Market
EMMANUEL CABAU FIFTH EDITION JAN PAPSCH
FLORIS GRÄPER LENA SANDBERG
ERLENDAS GRIGOROVIC CHRISTOF SCHOSER
BARTEK GURBA MARKELA STAMATI
CHRISTOPHER JONES ERNST TREMMEL
WILLIAM-JAMES KETTLEWELL RUBEN VERMEEREN
KRISTÓF KOVÁCS WILLIAM WEBSTER
YONA MARINOVA
EU ENERGY LAW
VOLUME I
THE INTERNAL ENERGY MARKET
Fifth edition

EU ENERGY LAW
VOLUME I
THE INTERNAL ENERGY MARKET
Fifth edition
Emmanuel Cabau
Floris Gräper
Erlendas Grigorovic
Bartek Gurba
Christopher Jones
William-James Kettlewell
Kristóf Kovács
Yona Marinova
Jan Papsch
Lena Sandberg
Christof Schoser
Markela Stamati
Ernst Tremmel
Ruben Vermeeren
William Webster
Edited by
Christopher Jones and
William-James Kettlewell
CLAEYS & CASTEELS
2021
All views expressed are strictly personal.
The opinions expressed in individual chapters are those of the author(s) in question.
© 2021 by the authors
ISBN 9789077644652 (Print)
ISBN 9789077644669 (ePDF)
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is sourced exclusively from replanted forests.
All rights reserved. This publication, in whole or in part, may not be copied, reproduced nor
transmitted in any form without the written permission of the copyright holder and the publisher.
Applications to copy, transmit or reproduce any part of this work may be made to the publisher.
Published in 2021 by
Claeys & Casteels Law Publishers
Deventer (Netherlands) – Leuven (Belgium)
P.O. Box 2013
7420 AA Deventer
Netherlands
www.claeys-casteels.com
Table
of contents
TABLE OF CONTENTS
Chapter 1
Introduction ....................................................................................1
Christopher Jones
Chapter 2
Creating competition on the generation market ........................................7
Christopher Jones, revised by Ruben Vermeeren
1. Electricity ..............................................................................................................7
1.1 Opening the generation market for competition .............................7
1.2 The authorisation procedure ..............................................................10
1.2.1 Substantive issues ................................................................10
1.2.2 Procedural issues .................................................................13
2. Gas ........................................................................................................................14
Chapter 3
Network regulation and third party access ..............................................19
Floris Gräper & Christof Schoser – revised and updated by Floris Gräper
and Markela Stamati
1. Introduction .......................................................................................................19
2. Duties and responsibilities of transmission and distribution
system operators ................................................................................................24
2.1 General duties ........................................................................................24
2.1.1 Network-related tasks ........................................................24
2.1.2 Confidentiality obligation ................................................31
2.1.3 Balancing ..............................................................................32
2.2 Specific duties and responsibilities of electricity transmission
and distribution system operators .....................................................32
2.2.1 Procurement of energy losses, reserve capacity and
ancillary services ..................................................................33
2.2.2 Flexibility incentives ...........................................................41
2.2.3 Electromobility ...................................................................44
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2.2.4 Energy storage .....................................................................45
2.2.5 Dispatching ..........................................................................46
2.2.6 Data management ...............................................................51
3. Regulated third party access ...........................................................................53
3.1 Connection to the transmission system ...........................................54
3.2 Access and use of transmission and distribution systems .............57
3.2.1 Publication of standard tariffs ..........................................58
3.2.2 Regulation of tariffs ............................................................62
3.2.3 Cost reflectivity ...................................................................65
3.2.4 Level of detail of a tariff methodology ...........................73
3.3 Capacity allocation and congestion management .........................75
3.3.1 Gas ........................................................................................75
3.3.2 Electricity..............................................................................76
4. Negotiated third party access (storage ancillary and ancillary services) 81
5. Transit ..................................................................................................................89
6. Jurisprudence and Commission decisions ...................................................91
6.1 VEMW and others ...............................................................................91
6.2 Citiworks ................................................................................................98
6.3 Sabatauskas ...........................................................................................101
6.4 Swedish Interconnectors ...................................................................103
6.5 DE/DK Interconnector ....................................................................104
7. Direct lines .......................................................................................................106
7.1 Direct lines electricity ........................................................................106
7.2 Direct lines gas ....................................................................................111
Chapter 4
Unbundling of Transmission System Operators ....................................113
Emmanuel Cabau, revised and updated by Lena Sandberg
1. Introduction .....................................................................................................113
1.1 The need for unbundling ...................................................................113
1.2 Unbundling ..........................................................................................115
1.3 The first and second electricity and gas directives ........................116
1.4 The 2005 Sector Inquiry ...................................................................118
1.5 The Third Energy Package: towards ownership unbundling .....122
1.6 The Clean Energy Package ...............................................................123
1.7 Ownership unbundling under EU competition rules.................124
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2. The unbundling options under the Clean Energy Package ....................127
2.1 Background .........................................................................................127
2.2 Unbundling under the Clean Energy Package .............................128
2.2.1 Ownership Unbundling ..................................................128
2.2.2 Independent System Operator (ISO) ...........................129
2.2.3 Independent Transmission Operator (ITO) ..............130
2.2.4 General Principles on the Unbundling Options ........132
2.2.5 ITO+: “Unbundling à la carte” – a fourth
unbundling option............................................................133
2.2.6 Implementation by the Member States ........................134
2.2.7 Exemptions granted by the Commission .....................136
2.2.8 Derogations set out in the Directives ...........................141
2.2.9 Application of the unbundling principles across
the gas and electricity sectors .........................................141
3. Level Playing Field – Intra EU Acquisitions .............................................142
3.1 Acquisition of rights within an ownership unbundled TSO ....143
3.2 General provision on level playing field .........................................145
4. Designation of TSO and the certification procedure..............................146
4.1 Approval and designation of the TSO ...........................................147
4.2 General rules on certification ...........................................................147
4.2.1 Launch and timing of the procedure ............................150
4.2.2 Procedure and timing .......................................................151
4.3 Certification in case of control of an EU transmission
system operator by a company from a non-EU country .............152
4.3.1 Introduction .......................................................................152
4.3.2 Substance and Procedure ................................................156
4.4 Commission Control of Certification By National
Authorities............................................................................................160
5. The unbundling options under under the Clean Energy Package
in detail ..............................................................................................................160
5.1 Ownership unbundling .....................................................................160
5.1.1 Application of unbundling rules to companies
controlling the TSO or supplier ....................................161
5.1.2 The concept of control .....................................................162
5.1.3 The concept of “rights” ....................................................163
5.1.4 The rule in practice ...........................................................164
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Chapter 5
Unbundling of Distribution System Operators .....................................217
Christopher Jones, revised and updated by William-James Kettlewell
1. Introduction ....................................................................................................217
2. Definition of a vertically integrated company ..........................................221
3. Legal unbundling ............................................................................................224
3.1 Definition .............................................................................................224
3.2 Combined network operator ...........................................................225
4. Management unbundling ..............................................................................226
4.1 Introduction ........................................................................................226
4.2 General definition of management unbundling ..........................226
4.3 Independent Management ...............................................................229
4.4 Separation of personal interests ......................................................231
4.5 Autonomy and control over assets by the network operator .....232
4.6 Compliance officer and compliance programme .........................236
4.7 Prohibition to take advantage of vertical integration
to distort competition ........................................................................239
5. Accounting unbundling ................................................................................240
5.1 The requirements of the Directives ................................................240
6. New ‘unbundling’ rules for electricity DSOs ...........................................244
6.1 Citizen Energy Communities ..........................................................245
6.2 Electro-mobility-related services .....................................................246
6.3 Storage services ....................................................................................248
6.4 Aggregation and flexibility services ................................................251
7. Exemptions ......................................................................................................254
7.1 Exemption for small distributors ....................................................254
7.2 Exemption for closed distribution systems ...................................256
7.2.1 Definition of closed distribution systems ...................261
7.2.2 Scope of the derogation ..................................................262
7.2.3 Procedure ...........................................................................263
Chapter 6
National Regulatory Authorities ..........................................................265
Emmanuel Cabau, revised and updated by Kristóf Kovács
1. The need for a strong sector-specific regulator .........................................265
2. Designation of a single regulatory authority .............................................269
2.1 Regional regulatory authorities .......................................................271
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2.2 Small and separated systems .............................................................272
3. Independence of regulatory authorities .....................................................273
3.1 Principle of independence .................................................................274
3.1.1 Organisational requirements and transparency .........276
3.1.2 Personnel requirements ...................................................277
3.2 Rules protecting independence ........................................................279
4. General objectives of the regulatory authorities .......................................282
5. Duties of regulatory authorities ...................................................................285
5.1 General principles applicable to the duties ....................................285
5.2 Content of the duties .........................................................................286
5.2.1 Tariffs ...................................................................................293
5.2.2 Prevention of cross-subsidies ..........................................293
5.2.3 Compliance and enforcement ........................................294
5.2.4 Cooperation and coordination ......................................295
5.2.5 Monitoring .........................................................................295
5.2.6 Reporting and Publication ..............................................297
5.2.7 Consumer protection .......................................................297
5.2.8 Specific duties related to ISOs and ITOs ....................298
5.2.9 Specific duties related to the ENTSO for
Electricity and the EU DSO Entity ..............................298
5.2.10 Specific duties related to the Regional
Coordination Centres ......................................................299
5.3 Additional duties granted by other legal acts ................................299
6. Powers of regulatory authorities ..................................................................301
6.1 Adopting binding decisions ..............................................................304
6.2 Promoting effective competition and ensuring the proper .......305
functioning of the market .................................................................305
6.3 Information provision ........................................................................306
6.4 Penalties ................................................................................................306
6.5 Investigations and instructions ........................................................308
7. Procedural issues .............................................................................................308
7.1 Dispute settlement ..............................................................................308
7.2 Complaints against tariffs or methodologies ................................310
7.3 Judicial review ......................................................................................311
8. Regulatory regime for cross-border issues..................................................313
9. ACER review ..................................................................................................315
10. Conclusion .......................................................................................................318
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