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EU Energy Policy:
Security of Electricity Supply

Updated: June 2010

Index of this Page:
Directive 2005/89/EC
Directive to Safeguard and Security of Electricity Supply and Electricity Infrastructure Read

Opinion by INFORSE-Europe Read

Proposed Revision of the Guidelines for Trans-European Energy Networks (electricity and gas networks, proposal to promote more interconnectors) Read

Directive 2005/89/EC
The Directive to "safeguard security of supply, infrastructure investments" for electricity was agreed by the EU countries with a legal act of 18/1 2006. The directive entered into force 24/2 2006. The European Parliament had discussed the proposed directive in 2005 and agreed its position 5/7 2005.
The Directive 2005/89/EC of the European Parliament and of the Council of 18 January 2006 concerning measures to safeguard security of electricity supply and infrastructure investment has the aim to ensure the proper functioning of the EU internal market for electricity, an adequate level of interconnection between Member States, an adequate level of generation capacity and balance between supply and demand.

Background
On November 29 2004, the EU energy ministers discussed important parts of the "energy package": they agreed to a "general approach" to the directive "to safeguard security of supply, infrastructure", unfortunately without demand-side measures. The did not agree to the Directive to increase energy efficiency (see below).

On June 10-11 2004, the EU energy ministers discussed the four proposals in the energy package but only on the gas directive was reached a common position . For the guidelines of trans-European networks, the ministers reached "agreement on a general approach on the operative part" of the guidelines, but they have to discuss the issue again after getting the comments from the Parliament.

On December 10, 2003, the EU Commission proposed four measures for energy infrastructure and security of supply. Although, formally, this was the result of the debate on the EU Green Paper for Security of Supply, actually, it appears to be a quick response to the black-outs and shortages of electric power this summer. The proposal includes:

- A directive to safeguard Security of Supply and Infrastructure investments in electricity, proposing to require construction of enough infrastructure to guarantee security of electricity supply; either of power plants or power line interconnections.
- A directive to increase energy efficiency by 1% per year and promote energy services
- A revision of the guidelines for Trans-European Networks on electricity and gas, to promote more interconnectors.
- A Regulation on cross-border trade in gas, to strengthen the gas market.

Read the Directive 2005/89/EC on the Eur-Lex website.

Directive to Safeguard and Security of Electricity Supply and Electricity Infrastructure
The Directive’s purpose is to establish measures to safeguard the security of electricity supply, to guarantee an adequate level of generation capacity; to guarantee an adequate balance between supply and demand and to set up an appropriate level of inter-connection between EU countries. Further, the Directive establishes a framework in which the EU countries are to define policies on security of electricity supply compatible with the internal market for electricity.

The Directive oblige the EU countries to ensure a high level of security of electricity supply by setting up a stable investment climate and by defining the roles and responsibilities of the various authorities. For operational network security, the Directive specifies that the countries must ensure that the transmission system operators set minimum operational rules and obligations on network security. In turn, the distribution system operators are expected to comply with these rules. In particular, the countries shall ensure that interconnected transmission and distribution system operators exchange information relating to the operation of networks.

For maintaining a balance between supply and demand, the EU countries must take appropriate measures to maintain a balance between the demand for electricity and the availability of generation capacity. This shall be done by encouraging the establishment of a wholesale market framework that provides suitable price signals for generation and consumption and by requiring transmission system operators to ensure that an appropriate level of generation reserve capacity is available for balancing purposes and/or to adopt equivalent market based measures.

The Directive states that the countries may take additional measures:

  • That facilitate new generation capacity and the entry of new generation companies to the market.
  • Remove barriers that prevent the use of interruptible contracts.
  • Remove barriers that prevent the conclusion of contracts of varying lengths for both producers and customers.
  • For the adoption of real-time demand management technologies such as advanced metering systems and energy conservation measures.

Regarding network investment the Directive obliges the EU countries to establish a regulatory framework that provides investment signals for both the transmission and distribution system network operators to develop their networks in such a way that they can meet foreseeable demand and that facilitates maintenance as well as the renewal of their networks. Merchant investments in interconnections should be allowed. However, any such investment must be taken in close co-operation between the relevant transmission system operators.

To complement the provisions of the Directive, specific reporting procedures are specified.

The EU countries must bring into force all the necessary provisions by 24 February 2008. By, 1 December 2007, the Member States must inform the Commission of the text of the national laws they will adopt to implement this Directive.



Opinion by INFORSE-Europe

The focus on new infrastructure, in particular on interconnectors, is not necessarily the best way to increase security of supply and energy efficiency. Interconnectors are not the most reliable part of the power system, and can actually decrease security of supply, if failures in one system spread to other power systems, as it was seen in the USA and Canada in 2003, and to a smaller degree in Sweden, Denmark, and Italy later. The construction of new power plants must be part of a general development of a more sustainable energy system, not just a response to a short-term supply problem.

The national provisions for investments in power production and transmission infrastructure must not threaten to bypass Environmental Impact Analysis and public consultations for the infrastructure projects.

The proposal of merchant investments in interconnections must not lead to extra high profit rate for construction of interconnectors. There is not need and no benefits in favouring such supply-side initiatives over demand-side measures of local, renewable supply.

The proposal does not address the problem that new transmission lines also can promote import of power produced on sub-standard power plants including unsafe nuclear power plants. Such import is distorting the market and cannot be relied upon to increase security of supply.

The directives provisions for inclusion of energy conservation measures should be included in national implementation of the directive.

Description
The proposal was (COM 2003 - 740) , the final act is Directive 2005/89/EC

Read the proposals progress in Parliament (enter above reference)



Proposed Revision of the Guidelines for Trans-European Energy Networks (electricity and gas networks, proposal to promote more interconnectors).

See: Trans-European Energy Networks (TEN-E's) with update, INFORSE-Europe's opinion, and descriptions.

Read also comments at www.wwf.org/epo

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