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Exemptions for infrastructure

Exemption decisions

The internal market for electricity and gas

The internal market rules for electricity and gas require regulated third party access for all transmission and distribution infrastructures and for LNG facilities. Operators of such infrastructures must grant third parties (i.e. companies other than their related companies) non discriminatory access and they earn a regulated return on their investment for such assets. Moreover, since 3 March 2011, the operators of such infrastructures are subject to ownership unbundling.

However, some new investments, particularly cross border gas pipelines and LNG terminals, as well as cross border electricity interconnectors can be particularly risky. If, exceptionally, such projects cannot be realised if the rules on third party access, tarification, congestion rents or (since 3 March 2011) ownership unbundling were applied, national regulators may "exempt" them entirely or partially from the respective rules of the EU energy acquis for a timely limited period.

This possibility is however linked to strict conditions (Article 17 of the Electricity Regulation (EC) 714/2009 and Article 36 of the Gas Directive 2009/73/EC). The European Commission is tasked with verifying that these conditions are met in each case. If the Commission finds that (some of) the conditions are not met, it can ask the national authority/ies concerned to amend or to withdraw their decision(s). The Commission's first decisions date back to 2005. On average four decisions are adopted every year.

Gas Criteria for exemptions

Article 36 Directive 2009/73/EC

  • The investment must enhance competition in gas supply and enhance security of supply;
  • The level of risk attached to the investment is such that the investment would not take place unless an exemption was granted;
  • The infrastructure must be owned by a natural or legal person which is separate at least in terms of its legal form from the system operators in whose systems that infrastructure will be built;
  • Charges are levied on users of that infrastructure;
  • The exemption is not detrimental to competition or the effective functioning of the internal gas market, or the efficient functioning of the regulated system to which the infrastructure is connected.

Electricity Criteria for exemptions

Article 17 Regulation (EC) No 714/2009

  • The investment must enhance competition in electricity supply
  • The level of risk attached to the investment is such that the investment would not take place unless an exemption was granted;
  • The interconnector must be owned by a natural or legal person which is separate at least in terms of its legal form from the system operators in whose systems that infrastructure will be built;
  • Charges are levied on users of that infrastructure;
  • Since the partial market opening referred to in Article 19 of Directive 96/92/EC, no part of the capital or operating costs of the interconnector has been recovered from any component of charges made for the use of transmission or distribution systems linked to the new interconnector.
  • The exemption is not detrimental to competition or the effective functioning of the internal electricity market, or the efficient functioning of the regulated system to which the infrastructure is connected.
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