A fully functioning and interconnected internal energy market is crucial for maintaining security of energy supply, increasing competitiveness and ensuring that all consumers can purchase energy at affordable prices. 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. 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 legally binding European Commission implementing Regulations. They govern all cross-border electricity market transactions and system operations alongside the EU Regulation 714/2009 on conditions for accessing the network for cross-border electricity exchanges.
The Electricity Regulatory Forum, also referred to as the Florence Forum, was set up to discuss the creation of the internal electricity market. Since 1998 the forum has met once per year in Florence, Italy. Its participants include national regulatory authorities, Member State governments, the European Commission, TSOs, electricity traders, consumers, network users, and power exchanges.
Development of network codes and guidelines
Each year, the European Commission draws up an 'annual priority list' of areas to be included in the development of network codes for electricity, with input from a public consultation. The Commission, with further input from the Agency for the Cooperation of Energy Regulators (ACER) and the European Network of Transmission System Operators for Electricity (ENTSO-E), adopts proposals for network codes. The proposals for network codes are checked by an Electricity Cross-Border Committee of specialists from national energy ministries and then adopted with the approval of the Council of the European Union and the European Parliament.
Sometimes the new rules 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 guidelines
Capacity Allocation and Congestion Management
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
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).
The Regulation establishing a guideline on electricity balancing (EB) entered into force on 18 December 2017. The Balancing 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 objectives of the guideline include increasing the opportunities for cross-border trading and the efficiency of balancing markets. The below is the provisional final version of the text, which will be shortly placed on the comitology register, with updates to numbering and referencing where required.
Connection and system operation codes and guidelines
Emergency and Restoration
The Regulation establishing a network code on emergency and restoration entered into force on 18 December 2017. The Emergency and Restoration network code will set down rules relating to the management of the electricity transmission system in the emergency, blackout and restoration states. The main objective of the relevant rules is to bring the system back to the normal state. The below is the provisional final version of the text, which will be shortly placed on the comitology register, with updates to numbering and referencing where required.
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
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
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.
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.