LeX-Ray

The electricity sector in the Union is undergoing a profound transformation, characterised by more decentralised markets with more players, a higher proportion of energy from renewable sources and better interconnected systems. In response, IMER of the European Parliament and of the Council ( 4 ) and CRIMED of the European Parliament and of the Council ( 5 ) aim to upgrade the legal framework governing the Union's internal electricity market, in order to ensure that markets and networks function in an optimal manner, to the benefit of businesses and Union citizens. This Regulation is intended to contribute to the implementation of the objectives of the Energy Union, of which energy security, solidarity, trust and an ambitious climate policy are an integral part.

Well-functioning markets and systems, with adequate electricity interconnections, are the best guarantee of security of electricity supply. However, even where markets and systems function well and are interconnected, the risk of an electricity crisis, as a result of natural disasters, such as extreme weather conditions, malicious attacks or fuel shortages, can never be excluded. The consequences of electricity crises often extend beyond national borders. Even where such crises start locally, their effects can rapidly spread across borders. Some extreme circumstances, such as cold spells, heat waves or cyberattacks, may affect entire regions at the same time.

In a context of interlinked electricity markets and systems, electricity crisis prevention and management cannot be considered to be a purely national task. The potential of more efficient and less costly measures through regional cooperation should be better exploited. A common framework of rules and better coordinated procedures are needed in order to ensure that Member States and other actors are able to cooperate effectively across borders, in a spirit of increased transparency, trust and solidarity between Member States.

Directive 2005/89 of the European Parliament and of the Council ( 6 ) established the necessary measures that the Member States are to take in order to ensure security of electricity supply in general. The provisions of that Directive have largely been superseded by subsequent legislative acts, in particular as regards how electricity markets are to be organised in order to ensure the availability of sufficient capacity, how transmission system operators are to cooperate to guarantee system stability, and as regards ensuring that appropriate infrastructure is in place. This Regulation addresses the specific issue of electricity crisis prevention and management.

Commission Regulations GETSOR ( 7 ) and (EU) 2017/2196 ( 8 ) constitute a detailed rulebook governing how transmission system operators and other relevant stakeholders should act and cooperate to ensure system security. Those technical rules should ensure that most electricity incidents are dealt with effectively at operational level. This Regulation focuses on electricity crises that have a larger scale and impact. It sets out what Member States should do to prevent such crises and what measures they can take should system operation rules alone no longer suffice. Even in electricity crises system operation rules should continue to be fully respected and this Regulation should be consistent with NCEERR.

This Regulation sets out a common framework of rules on how to prevent, prepare for and manage electricity crises, bringing more transparency in the preparation phase and during an electricity crisis and ensuring that measures are taken in a coordinated and effective manner. It requires Member States to cooperate, at regional level and, where applicable, bilaterally, in a spirit of solidarity. It also sets out a framework for the effective monitoring of security of electricity supply in the Union via the Electricity Coordination Group (ECG), which was set up by a Commission Decision of 15 November 2012 ( 9 ) as a forum in which to exchange information and foster cooperation among Member States, in particular in the area of security of electricity supply. Member State cooperation and the monitoring framework are intended to achieve better risk-preparedness at a lower cost. This Regulation should also strengthen the internal electricity market by enhancing trust and confidence across Member States and ruling out inappropriate state interventions in electricity crises, in particular avoiding undue curtailment of cross-border flows and cross zonal transmission capacities, thus reducing the risk of negative spillover effects on neighbouring Member States.

Directive 2016/1148 of the European Parliament and of the Council ( 10 ) lays down general rules on security of network and information systems, while specific rules on cybersecurity will be developed through a network code as laid down in IMER. This Regulation complements Directive 2016/1148 by ensuring that cyber-incidents are properly identified as a risk, and that the measures taken to address them are properly reflected in the risk-preparedness plans.

Council Directive 2008/114 ( 11 ) lays down a process with a view to enhancing the security of designated European critical infrastructure, including certain electricity infrastructure. Directive 2008/114, together with this Regulation, contributes to creating a comprehensive approach to the energy security of the Union.

Decision No 1313/2013/EU of the European Parliament and of the Council ( 12 ) sets out requirements for Member States to develop risk assessments at national level or at the appropriate sub-national level every three years, and to develop and refine their disaster risk management planning at national level or at the appropriate sub-national level. The specific risk prevention, preparedness and planning actions set out in this Regulation should be consistent with the wider, multi-hazard national risk assessments required under Decision No 1313/2013/EU.

Member States are responsible for ensuring the security of electricity supply within their territories, while security of electricity supply is also a responsibility shared among the Commission and other Union actors, within their respective areas of activity and competence. Security of electricity supply entails effective cooperation among Member States, Union institutions, bodies, offices and agencies, and relevant stakeholders. Distribution system operators and transmission system operators play a key role in ensuring a secure, reliable and efficient electricity system in accordance with Articles 31 and 40 of CRIMED. The regulatory authorities and other relevant national authorities also play an important role in ensuring and monitoring the security of electricity supply, as part of their tasks attributed by Article 59 of CRIMED. Member States should designate an existing or new entity as their single competent national governmental or regulatory authority with the aim of ensuring the transparent and inclusive participation of all actors involved, the efficient preparation and proper implementation of the risk-preparedness plans, as well as facilitating the prevention and ex post evaluation of electricity crises and information exchanges in relation thereto.

A common approach to electricity crisis prevention and management requires a common understanding among Member States as to what constitutes an electricity crisis. In particular this Regulation should facilitate coordination among Member States for the purpose of identifying a situation in which the potential risk of a significant electricity shortage or an impossibility to supply electricity to customers is present or imminent. The European Network of Transmission System Operators for Electricity (‘ENTSO for Electricity’) and the Member States should, respectively, determine concrete regional and national electricity crisis scenarios. That approach should ensure that all relevant electricity crises are covered, taking into account regional and national specificities such as the topology of the grid, the electricity mix, the size of production and consumption, and the degree of population density.

A common approach to electricity crisis prevention and management also requires that Member States use the same methods and definitions to identify risks relating to the security of electricity supply and are in a position to compare effectively how well they and their neighbours perform in that area. This Regulation identifies two indicators for monitoring the security of electricity supply in the Union: ‘expected energy non-served’, expressed in GWh/year, and ‘loss of load expectation’, expressed in hours per year. Those indicators are part of the European resource adequacy assessment carried out by the ENTSO for Electricity, pursuant to Article 23 of IMER. The ECG should carry out regular monitoring of the security of electricity supply based on the results of those indicators. The Agency for the Cooperation of Energy Regulators (ACER) should also use those indicators when reporting on Member States' performance in the area of security of electricity supply in its annual electricity market monitoring reports, pursuant to Article 15 of EUACERR of the European Parliament and of the Council ( 13 ) .

To ensure the coherence of risk assessments in a manner that builds trust between Member States in an electricity crisis, a common approach to identifying risk scenarios is needed. The ENTSO for Electricity should therefore, after consulting the relevant stakeholders, develop and update a common methodology for risk identification in cooperation with ACER, and with the ECG in its formation composed only of representatives of the Member States. The ENTSO for Electricity should propose the methodology and ACER should approve it. When consulting the ECG, ACER is to take the utmost account of the views expressed by the ECG. The ENTSO for Electricity should update the common methodology for risk identification where significant new information becomes available.

On the basis of the common methodology for risk identification, the ENTSO for Electricity should regularly draw up and update regional electricity crisis scenarios and identify the most relevant risks for each region such as extreme weather conditions, natural disasters, fuel shortages or malicious attacks. When considering the crisis scenario of a gas fuel shortage, the risk of disruption of the gas supply should be assessed based on the gas supply and infrastructure disruption scenarios developed by the European Network of Transmission System Operators for Gas (ENTSOG) pursuant to Article 7 of MSSGSR of the European Parliament and of the Council ( 14 ) . The ENTSO for Electricity should be able to delegate tasks relating to the identification of regional electricity crisis scenarios to regional coordination centres established pursuant to Article 35 of IMER. Those delegated tasks should be performed under the supervision of the ENTSO for Electricity. Member States should establish and update their national electricity crisis scenarios on the basis of regional electricity crisis scenarios, in principle every four years. Those scenarios should provide the basis for the risk-preparedness plans. When identifying risks at national level, the Member States should describe any risks that they identify in relation to the ownership of the infrastructure relevant for security of electricity supply and any measures taken to address those risks such as general or sector-specific investment screening laws, special rights for certain shareholders, with an indication why they consider such measures to be necessary and proportionate.

A regional approach to identifying risk scenarios and to developing preventive, preparatory and mitigating measures should bring significant benefits in terms of the effectiveness of those measures and the optimal use of resources. Moreover, in a simultaneous electricity crisis, a coordinated and pre-agreed approach would ensure a consistent response and reduce the risk of negative spillover effects that purely national measures could have in neighbouring Member States. This Regulation therefore requires Member States to cooperate in a regional context.

The regional coordination centres should perform the tasks of regional relevance assigned to them in accordance with IMER. To ensure that they can carry out their tasks effectively and act in close cooperation with relevant national authorities with a view to preventing and mitigating larger-scale electricity incidents, the regional cooperation required under this Regulation should build on the regional cooperation structures used at technical level, namely the groups of Member States sharing the same regional coordination centre. The geographical regions of the regional coordination centres are therefore relevant for the identification of the regional electricity crisis scenarios and risk assessments. However, Member States should have the possibility to form subgroups within the regions for the purpose of cooperation with regard to concrete regional measures, or to cooperate in existing regional cooperation forums for that purpose, as the technical ability to provide mutual assistance to each other in an electricity crisis is essential. This is because not all Member States in a larger region will necessarily be able to provide electricity to another Member State in an electricity crisis. Thus, it is not necessary for all Member States in a region to conclude regional agreements on concrete regional measures. Instead, Member States that have the technical ability to provide assistance to each other should conclude such agreements.

IMER provides for the use of a common methodology for the medium to long-term European resource adequacy assessment (from 10-year-ahead to year-ahead), with a view to ensuring that Member States' decisions as to possible investment needs are made on a transparent and commonly agreed basis. The European resource adequacy assessment has a different purpose from the short-term adequacy assessments which are used to detect possible adequacy related problems in short time-frames, namely seasonal adequacy assessments (six months ahead) and week-ahead to at least day-ahead adequacy assessments. Regarding short-term assessments, there is a need for a common approach to the way possible adequacy-related problems are detected. The ENTSO for Electricity should carry out winter and summer adequacy assessments to alert Member States and transmission system operators to risks related to the security of electricity supply that might occur in the following six months. To improve those adequacy assessments, the ENTSO for Electricity should develop a common probabilistic methodology for them, after consulting the relevant stakeholders, and in cooperation with ACER, and with the ECG, in its formation composed only of representatives of the Member States. The ENTSO for Electricity should propose that methodology and updates thereto to ACER, and ACER should approve the proposal and the updates. When consulting the ECG, ACER is to take the utmost account of the views expressed by the ECG. The ENTSO for Electricity should update the methodology where significant new information becomes available. The ENTSO for Electricity should be able to delegate tasks relating to seasonal adequacy assessments to regional coordination centres, while delegated tasks should be performed under the ENTSO for Electricity's supervision.

Transmission system operators should apply the methodology used to prepare seasonal adequacy assessments when carrying out any other type of short-term risk assessment, namely the week-ahead to at least day-ahead generation adequacy forecasts provided for in GETSOR.

To ensure a common approach to electricity crisis prevention and management, the competent authority of each Member State should draw up a risk-preparedness plan on the basis of the regional and national electricity crisis scenarios. The competent authorities should consult stakeholders or representatives of stakeholder groups, such as representatives of producers or their trade bodies or of distribution system operators, where they are relevant for the prevention and handling of an electricity crisis. To that end, the competent authorities should decide on the appropriate arrangements for carrying out the consultation. The risk-preparedness plans should describe effective, proportionate and non-discriminatory measures addressing all identified electricity crisis scenarios. The environmental impact of demand-side and supply-side measures proposed should be taken into account. The plans should provide transparency especially as regards the conditions in which non-market-based measures can be taken to mitigate electricity crises. All envisaged non-market-based measures should comply with the rules laid down in this Regulation. The risk-preparedness plans should be made public, while ensuring confidentiality of sensitive information.

The risk-preparedness plans should set out national, regional and, where applicable, bilateral measures. Regional and, where applicable, bilateral measures are necessary, in particular in the event of a simultaneous electricity crisis, when a coordinated and pre-agreed approach is needed to ensure a consistent response and reduce the risk of negative spillover effects. To that end, before adopting the risk-preparedness plans, competent authorities should consult the competent authorities of the relevant Member States. The relevant Member States are those where there could be negative spillover effects or other impacts on each other's electricity system, whether those Member States are in the same region or directly connected. The plans should take account of the relevant national circumstances, including the situation of outermost regions within the meaning of Article 349 of the Treaty on the Functioning of the European Union, and of some micro-isolated systems that are not connected to the national transmission systems. In that respect, Member States should draw the appropriate conclusions as regards, inter alia, the provisions of this Regulation on identification of regional electricity crisis scenarios and the regional and bilateral measures set out in risk-preparedness plans as well as provisions on assistance. The plans should clearly set out the roles and responsibilities of the competent authorities. National measures should take full account of the regional and bilateral measures that have been agreed and should take full advantage of the opportunities provided by regional cooperation. The plans should be technical and operational in nature, their function being to help prevent the occurrence or escalation of an electricity crisis and to mitigate its effects.

The risk-preparedness plans should be updated regularly. To ensure that the plans are up-to-date and effective, the competent authorities of the Member States of each region should organise biennial simulations of electricity crises in cooperation with transmission system operators and other relevant stakeholders in order to test their suitability.

The template provided for in this Regulation is intended to facilitate the preparation of the plans, allowing for the inclusion of additional, Member State specific information. The template is also intended to facilitate consultation of other Member States in the region concerned and the ECG. Consultation within the region and within the ECG should ensure that measures taken in one Member State or region do not put at risk the security of electricity supply of other Member States or regions.

It is important to facilitate communication and transparency between Member States, where they have concrete, serious and reliable information that an electricity crisis may occur. In such circumstances the Member States concerned should inform the Commission, the neighbouring Member States and the ECG without undue delay, providing, in particular, information on the causes of the deterioration of the electricity supply situation, the planned measures to prevent the electricity crisis and the possible need for assistance from other Member States.

Information exchange in the event of an electricity crisis is essential in order to ensure coordinated action and targeted assistance. Therefore, this Regulation obliges the competent authority to inform the Member States in the region, the neighbouring Member States and the Commission without undue delay when confronted with an electricity crisis. The competent authority should also provide information on the causes of the crisis, the measures planned or taken to mitigate the crisis and the possible need for assistance from other Member States. Where that assistance goes beyond security of electricity supply, the Union Civil Protection Mechanism should remain the applicable legal framework.

In the event of an electricity crisis Member States should cooperate in a spirit of solidarity. In addition to that general rule, appropriate provision should be made for Member States to offer each other assistance in an electricity crisis. Such assistance should be based on agreed, coordinated measures set out in the risk-preparedness plans. This Regulation gives Member States a wide discretion when agreeing on the content of such coordinated measures and thus on the content of the assistance that they offer. It is for Member States to decide and agree on such coordinated measures, taking into account demand and supply. At the same time, this Regulation ensures that, for the purpose of the agreed assistance, electricity is delivered in a coordinated manner. Member States should agree on the necessary technical, legal and financial arrangements for the implementation of the regional and bilateral measures that have been agreed. Under those technical arrangements the Member States should indicate the maximum quantities of electricity to be delivered, which should be re-assessed on the basis of the technical feasibility of delivering electricity once the assistance is required during an electricity crisis. Subsequently, Member States should take all necessary measures for the implementation of the regional and bilateral measures that have been agreed and technical, legal and financial arrangements.

When agreeing on coordinated measures and technical, legal and financial arrangements and otherwise implementing provisions on assistance, Member States should take account of social and economic factors, including the security of Union citizens, and proportionality. They are encouraged to exchange best practices and to use the ECG as a discussion platform through which to identify the available options for assistance, in particular concerning coordinated measures and the necessary technical, legal and financial arrangements, including fair compensation. The Commission may facilitate the preparation of the regional and bilateral measures.

Assistance between Member States under this Regulation should be subject to fair compensation agreed between the Member States. This Regulation does not harmonise all aspects of such fair compensation between Member States. The Member States should therefore agree on provisions on fair compensation before assistance is provided. The Member State requesting assistance should promptly pay, or ensure the prompt payment of, such compensation to the Member State providing the assistance. The Commission should provide for non-binding guidance on the key elements of fair compensation and other elements of the technical, legal and financial arrangements.

In providing assistance under this Regulation, Member States implement Union law and are therefore bound to respect fundamental rights guaranteed by Union law. Such assistance may therefore, depending on the measures agreed between Member States, give rise to an obligation on a Member State to pay compensation to those affected by its measures. Member States should therefore, where necessary, ensure that national compensation rules which comply with Union law, in particular with fundamental rights, are in place. Moreover, the Member State that receives assistance should ultimately bear all the reasonable costs that another Member State incurs as a result of providing assistance pursuant to such national compensation rules.

In the event of an electricity crisis, assistance should be provided even if Member States have not yet agreed on coordinated measures and technical, legal and financial arrangements as required by the provisions of this Regulation on assistance. In order to be able to provide assistance in such a situation in accordance with this Regulation, Member States should agree on ad hoc measures and arrangements in place of the absent coordinated measures and technical, legal and financial arrangements.

This Regulation introduces such an assistance mechanism between Member States as an instrument to prevent or mitigate an electricity crisis within the Union. The Commission should therefore review the assistance mechanism in light of future experience with its functioning, and propose, where appropriate, modifications thereto.

This Regulation should enable electricity undertakings and customers to rely on the market mechanisms laid down in IMER and CRIMED for as long as possible when coping with electricity crises. Rules governing the internal market and system operation rules should be complied with even in electricity crises. Such rules include point (i) of Article 22(1) of GETSOR and Article 35 of NCEERR, which govern transaction curtailment, limitation of provision of cross zonal capacity for capacity allocation or limitation of provision of schedules. This means that non-market-based measures, such as forced demand disconnection, or the provision of extra supplies outside normal market functioning should be taken only as a last resort, when all possibilities provided by the market have been exhausted. Therefore, forced demand disconnection should be introduced only after all possibilities for voluntary demand disconnection have been exhausted. In addition, any non-market-based measures should be necessary, proportionate, non-discriminatory and temporary.

In order to ensure transparency after an electricity crisis, the competent authority that declared the electricity crisis should carry out an ex post evaluation of the crisis and its impact. That evaluation should take into account, inter alia, the effectiveness and proportionality of the measures taken as well as their economic cost. That evaluation should also cover cross-border considerations, such as the impact of the measures on other Member States and the level of the assistance that the Member State that declared the electricity crisis received from them.

The transparency obligations should ensure that all measures that are taken to prevent or manage electricity crises comply with internal market rules and are in line with the principles of cooperation and solidarity which underpin the Energy Union.

This Regulation reinforces the role of the ECG. It should carry out specific tasks, in particular in connection with the development of a methodology for identifying regional electricity crisis scenarios and a methodology for short-term and seasonal adequacy assessments and in connection with the preparation of the risk-preparedness plans, and should have a prominent role in monitoring Member States' performance in the area of the security of electricity supply, and developing best practices on that basis.

It is possible that an electricity crisis extends beyond Union borders to the territory of the Energy Community Contracting Parties. As a party to the Treaty establishing the Energy Community, the Union should promote amendments to that Treaty with the aim of creating an integrated market and a single regulatory space by providing an appropriate and stable regulatory framework. In order to ensure efficient crisis management, the Union should closely cooperate with the Energy Community Contracting Parties when preventing, preparing for and managing an electricity crisis.

Where the Commission, ACER, the ECG, the ENTSO for Electricity, Member States and their competent and regulatory authorities, or any other bodies, entities or persons, receive confidential information pursuant to this Regulation, they should ensure the confidentiality of that information. To that end, confidential information should be subject to Union and national rules in place on the handling of confidential information and processes.

Since the objective of this Regulation, namely to ensure the most effective and efficient risk-preparedness within the Union, cannot be sufficiently achieved by Member States but can rather, by reason of its scale and effects, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality set out in that Article, this Regulation does not go beyond what is necessary to achieve that objective.

Cyprus is currently the only Member State which is not directly connected to another Member State. It should be clarified with respect to certain provisions of this Regulation that, for as long as this situation persists, those provisions, namely provisions on the identification of regional electricity crisis scenarios, on including regional and bilateral measures set out in risk-preparedness plans, and on assistance, do not apply with respect to Cyprus. Cyprus and relevant other Member States are encouraged to develop, with the support of the Commission, alternative measures and procedures in the fields covered by those provisions, provided that such alternative measures and procedures do not affect the effective application of this Regulation between the other Member States.

Directive 2005/89 should be repealed,