Implementation EU Network codes
The EU Network Codes
The EU Network Codes are sets of rules adopted by the European Union, through the Comitology process, to then be implemented across Member States under the form of EU regulations. When they become law, the network codes will have the same status as any other European regulation and will govern all electricity market transactions with a cross-border impact.
As defined in Regulation (EC) N°714/2009, the network codes have to facilitate the harmonisation, integration and efficiency of the European electricity market. Each network code is an integral part of the drive towards completion of the internal energy market and achieving the European Union’s 20-20-20 energy objectives.
The network codes cover three interrelated areas:
TSOs operate the electricity transmission grid. Generators (who produce electricity) and large customers (who use electricity themselves or sell it on to smaller customers) are connected to and use these grids. The rules setting out the requirements for these users to connect to the transmission grids are covered by the connection codes. The codes are the following: Requirements for Generators (NC RfG), Demand Connection Code (NC DCC) and High Voltage Direct Current (NC HVDC).
To keep an electricity system reliable, sustainable and stable, each TSO makes plans and schedules to be prepared to operate a system in real time. This involves analysing whether there will be enough electricity generation to meet demand and whether the system can handle the resulting flows in a secure way. With increasing interconnection between transmission systems operators, the operational code provides a set of rules and regulations governing how these systems are operated. The codes will cover ‘Operational Security’ (OS), ‘Operational Planning and Scheduling’ (OPS), ‘Load Frequency Control and Reserves’ (LFCR) and ‘Emergency and Restoration’ (E&R). The first three projects of codes (OS, OPS, LFCR) are likely to be grouped into a single text.
The design of a pan-European electricity market will see both electricity and capacity (the available capacity of transmission networks to transport electricity) traded across Europe. Encouraging greater competition, generator diversification and the optimisation of existing infrastructure will all be facilitated by the market codes. The codes are the following: Capacity Allocation & Congestion Management (NC CACM), Forward Capacity Allocation (NC FCA) and Electricity Balancing (NC EB).
For more details, click on the dedicated Entso-e website dedicated to the development of the network codes: networkcodes.entsoe.eu.
Status of the Network Codes
Network codes are a set of rules for electricity drafted by ENTSO-E under a mandate by the European Commission, with guidance from the Agency for the Cooperation of Energy Regulators (ACER). Under development since 2011, a code takes approximately 18 months to be drafted.
Source : DG Energy
Following ACER’s recommendation, each code is submitted to the European Commission for approval through the comitology process, to then be voted into EU law and be implemented in a certain timeframe.
Source : DG Energy
The different network codes are thus currently on various stages in the development or adoption processes.
For more details of the progress of the network codes development, click on the Entso-e website: networkcodes.entsoe.eu.
Adopted Network Codes
Regulation establishing a guideline on Capacity Allocation & Congestion Management (CACM):
This document is published on 25 July 2015 in the Official Journal as regulation (EU) 2015/1222 and becomes binding in the EU Member States as of 14 August 2015. The CACM is labelled “binding guideline” instead of “network code” because it draws new concepts, and provides Europe with a significant leap forward towards completing the internal European market. The CACM will require many steps from the moment it will enter into force until it is fully implemented. These include the elaboration of new tools, geographical zones definitions or new methodologies.
For the official published text of the CACM, click on eur-lex.europa.eu
Regulation establishing a network code on requirements for grid connection of generators (RfG):
This document is published on 27 April 2016 in the Official Journal as regulation (EU) 2016/631 and becomes binding in the EU Member States as of 17 May 2016. The RfG establishes a network code which lays down the requirements for grid connection of power-generating facilities, namely synchronous power-generating modules, power park modules and offshore power park modules, to the interconnected system. This regulation also lays down the obligations for ensuring that system operators make appropriate use of the power- generating facilities' capabilities in a transparent and non-discriminatory manner to provide a level playing field throughout the Union.
For the official published text of the RfG, click on eur-lex.europa.eu
Regulation establishing a Network Code on Demand Connection (DCC):
This document is published on 18 August 2016 in the Official Journal as regulation (EU) 2016/1388 and becomes binding in the EU Member States as of 6 September 2016. The DCC establishes a network code which lays down the requirements for grid connection of: (a) transmission-connected demand facilities; (b) transmission-connected distribution facilities; (c) distribution systems, including closed distribution systems; (d) demand units, used by a demand facility or a closed distribution system to provide demand response services to relevant system operators and relevant TSOs. This Regulation also lays down the obligations for ensuring that system operators make appropriate use of the demand facilities' and distribution systems' capabilities in a transparent and non-discriminatory manner to provide a level playing field throughout the Union.
For the official published text of the DCC, click on eur-lex.europa.eu
Regulation establishing a network code on requirements for grid connection of high voltage direct current systems and direct current-connected power park modules (HVDC):
This document is published on 8 September 2016 in the Official Journal as regulation (EU) 2016/1447 and becomes binding in the EU Member States as of 28 September 2016. The HVDC establishes a network code which lays down the requirements for grid connections of high-voltage direct current (HVDC) systems and DC-connected power park modules. It, therefore, helps to ensure fair conditions of competition in the internal electricity market, to ensure system security and the integration of renewable electricity sources, and to facilitate Union-wide trade in electricity.
For the official published text of the HDVC, click on eur-lex.europa.eu
Regulation establishing a guideline on forward capacity allocation (FCA):
This document is published on 26 September 2016 in the Official Journal as regulation (EU) 2016/1719 and becomes binding in the EU Member States as of 16 October 2016. The FCA establishes a guideline which lays down detailed rules on cross-zonal capacity allocation in the forward markets, on the establishment of a common methodology to determine long-term cross-zonal capacity, on the establishment of a single allocation platform at European level offering long-term transmission rights, and on the possibility to return long-term transmission rights for subsequent forward capacity allocation or transfer long-term transmission rights between market participants.
For the official published text of the FCA, click on eur-lex.europa.eu
For the latest version of the network codes still under development, please consult the ENTSO-E website on network codes: networkcodes.entsoe.eu.
Task Force implementation NCs
The Belgian Federal Public Service Energy (FPS Energy), in the context of his mandate regarding the federal grid code, decided to use the Users’ Group of Elia as a platform to analyse, exchange ideas and make propositions regarding specific legal or technical issues related to implementation of the European Network Codes in the Belgium context, during the coming years, with a particular focus on the federal grid code. This process does not replace the formal processes to adopt or adapt legislative, contractual and/or regulatory documents driven (and to be adopted) by authorities and/or regulators, as for example the regional adoption processes.
Based on the results of the discussions and exchanges in the Users’ Group, a proposal for an amended Federal Grid Code will be prepared. A consultation will take place on the various amendments. The consultation report(s) and the formal proposal regarding the federal grid code will then be submitted to the FPS Energy. In addition the FPS Energy requested to determine a list with other desired adjustments to the federal grid code and deliver this to the FPS Energy. This list may include aspects which may go beyond the scope of the EU Network Codes.
The approach chosen to deal with this massive work is to discuss what the Belgian market actors want to achieve for each topic from a ‘content’ perspective, having in mind how to adapt in the most effective way the federal grid code (and potentially other relevant documents) and to keep technical consistency between federal and regional levels, in order to avoid implementation of potentially divergent regulation. This focus may be achieved by involving the regional and federal regulators early in the process.
In order to function properly and efficiently, the Users’ Group has launched an Task Force to develop practical proposals on a list of selected technical issues. This Task Force Implementation NC reports to the Working Group Belgian Grid
For more details, click on ‘Task Force Implementation NCs’