Europe’s cross-border electricity networks are operated according to rules that govern the actions of operators and determine how access is given to users. In the past, these grid operation and trading rules were drawn up nationally, or even sub-nationally. With increased interconnections between countries in the internal energy market, EU-wide rules have become increasingly necessary to effectively manage electricity flows. These rules, known as network codes or guidelines, are Commission Regulations containing legally binding rules. They govern all cross-border electricity market transactions and system operations alongside the EU regulation on conditions for accessing the network for cross-border electricity exchanges.
How network codes and guidelines are developed
The European Commission begins by drafting an 'annual priority list' of areas to be included in the development of network codes for electricity. It does this on the basis of a public consultation and with the input of the Agency for the Cooperation of Energy Regulators (ACER) and the European Network of Transmission System Operators for Electricity (ENTSO-E).
Once the annual priority list is established, ACER develops 'framework guidelines' which set principles for developing specific network codes. These framework guidelines are used by ENTSO-E to prepare a network code which is submitted back to ACER for its opinion.
If ACER deems that the code fulfils its framework guidelines and the EU's internal market objectives, and is fair and balanced, it recommends that the Commission adopt the code.
The ultimate responsibility for the text and content of the network codes lies with the Commission. The Commission studies it and then sends it to an Electricity Cross-Border Committee, made up of specialists from national energy ministries, for an opinion. Once the Committee accepts the draft network code, it is adopted with the approval of the Council of the European Union and the European Parliament.
Sometimes the regulations are adopted as 'guidelines' rather than 'network codes.' These are adopted under a different provision of the Electricity Regulation but they have the same status – they are both legally binding regulations.
Market and trading codes and guidelines
Capacity Allocation and Congestion Management - adopted
The Regulation establishing a guideline on Capacity Allocation and Congestion Management (CACM) entered into force on 15 August 2015. The provisions of CACM govern the establishment of cross-border EU electricity markets in the day-ahead and intraday timeframes, as well as methods for the calculation of interconnection capacity.
Forward Capacity Allocation - adopted
The Regulation establishing a guideline on forward capacity allocation (FCA) entered into force on 17 October 2016. The provisions of FCA establish a framework for the calculation and allocation of interconnection capacity, and for cross-border trading, in forward markets (i.e. timeframes longer than day-ahead).
Balancing - adopted
The Regulation establishing a guideline on electricity balancing (EB) was adopted on 23 November 2017 and will enter into force on 18 December 2017. The EB guideline will set down rules on the operation of balancing markets, i.e. those markets that Transmission System Operators (TSOs) use to procure energy and capacity to keep the system in balance in real time. The guideline's provisions include increasing the opportunities for cross-border trading close to real-time and improve the efficiency of balancing markets in Europe.
Connection and system operation codes and guidelines
Emergency and Restoration - adopted
The Regulation establishing a network code on emergency and restoration (ER) was adopted on 24 November 2017 and will enter into force on 18 December 2017. The ER network code will set down rules relating to the management of the electricity transmission system in emergency, blackout and restoration states. Its provisions are mainly related to bringing the system back to a normal state.
Demand Connection - adopted
The Regulation establishing a network code on demand connection (DCC) entered into force on 7 September 2016. The provisions of DCC set out detailed rules relating to the connection of, principally, new demand facilities to national electricity networks.
Requirements for Generators - adopted
The Regulation establishing a network code on requirement for grid connection of generators (RfG) entered into force on 17 May 2016. The provisions of RfG set out detailed rules relating to the connection of, principally, new power generating installations to national electricity networks.
High-Voltage Direct Current - adopted
The Regulation establishing a network code on requirements for grid connection of high-voltage direct current system and direct current-connected power park modules (HVDC) entered into force on 28 September 2016. The provisions of HVDC set out detailed rules relating to the connection of, principally, new high-voltage direct current systems to national electricity networks.
System Operation - adopted
The Regulation establishing a guideline on electricity transmission system operation (SO) entered into force on 14 September 2017. The provisions of SO establish a framework for the maintenance of the secure operation of the interconnected transmission system in real time.