News: 20 EU countries not implementing energy single market properly

[tweetmeme http://www.URL.com%5D Brussels, 24 June 2010.  The European Commission has decided to send 35 separate requests to 20 Member States to implement and apply in full various aspects of EU legislation to create a Single Market for gas and electricity. These rules aim at increasing the capacity and transparency of gas and electricity markets. A properly functioning, well regulated, transparent and interconnected market, with market price signals is crucial for ensuring competition and security of supply. An efficient and fully functional EU Single Market in energy will give consumers a choice between different companies supplying gas and electricity at reasonable prices, and it will make the market accessible for all suppliers, especially the smallest and those investing in renewable energies. It will also help the EU to recover from the economic crisis. The Member States in question now have two months to respond to the requests, which take the form of ‘reasoned opinions’ under EU infringement procedures. In the absence of satisfactory responses from the Member States concerned, the Commission may refer them to the EU’s Court of Justice.

The Commission is sending a total of 35 reasoned opinions to the following 20 Member States: Austria, Belgium, Bulgaria, the Czech Republic, Germany, Spain, France, Greece, Hungary, Ireland, Italy, Luxembourg, The Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia, Sweden and the United Kingdom.

Key violations identified by the Commission concern:

–       lack of information provided by electricity and gas transmission system operators, thereby obstructing effective access for supply companies to networks

–       inadequate network capacity allocation systems, preventing best possible use of networks for electricity and gas transmission in Member States

–       lack of coordination and cooperation across borders by electricity transmission system operators and national authorities, which is necessary in order to better allocate network capacity on cross-border interconnections so that the existing electricity grid could best serve regional and European needs

–       inadequate efforts by gas transmission system operators to offer the possibility to network users to enter upstream gas markets (such as from Germany to Poland or from Greece to Bulgaria by offering interruptible reverse flow (also known as ‘backhaul’) services

–       lack of effective enforcement action by the competent authorities in Member States in case of violations of the EU regulations, including the absence of effective penalties at national level

–       lack of adequate dispute settlement procedures for consumers – it is a fundamental premise of the Electricity and Gas Directives that all citizens who enjoy the benefits of the Single Market in energy should also be able to enjoy high levels of consumer protection. A lack of transparent, simple and inexpensive procedures for dealing with their complaints can lead to consumers’ reluctance to take advantage of the Single Market in energy.

Background:

The infringements concern Member States’ failure to respect their legal obligations arising from these two Regulations:

Regulation (EC) No 1228/2003 on conditions for access to the network for cross-border exchanges in electricity (entered into force on 1 July 2004) + Annex of the Regulation (changed by Decision 9 November 2006; entered into force on 29 November 2006);

–       Regulation (EC) No 1775/2005 on conditions for access to the natural gas transmission networks + Annex (Member States had to comply with the Regulation as from 1 July 2006).

These Regulations, directly applicable in Member States, aim at guaranteeing non-discriminatory third parties’ access to the electricity and gas transmission networks. They require transmission system operators to publish information on network availability and capacity and to offer the maximum capacity of the network to the market. Moreover, Member States must lay down the rules on penalties applicable to infringements of the provisions of the Regulation.

In addition, four Member States (Belgium, Poland, Romania and Slovenia), have failed to implement their obligations to establish alternative dispute settlement mechanisms, as laid down in the following Directives:

–       Directive 2003/54/EC on common rules for the internal market in electricity

–       Directive 2003/55/EC on common rules for the internal market in natural gas.

Member States were due to implement these Directives in national law by 1 July 2004. To date, consumers in Belgium, Poland, Romania and Slovenia can still not benefit from transparent, simple and inexpensive procedures for dealing with their complaints as required by these Directives.

A summary of the situation in each Member State concerning implementation of the EU legislation to ensure a Single Market in energy is given below.

AUSTRIA

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against Austria for violating the Electricity and Gas Regulations.

The main concerns with respect to the Electricity Regulation are: network congestion is managed in a way which is not in line with the requirements of the Regulation; there is still no intraday congestion management mechanism at all interconnections nor is there a common co-ordinated congestion management method; moreover, the Transmission System Operator (TSO) does not entirely respect the transparency requirements of the Regulation (e.g. the requirement to publish all relevant data concerning cross border trade).

As regards the Gas Regulation, the main concern is that no interruptible reverse flow capacity (backhaul) is offered at all interconnection points. Moreover, there are no effective, proportionate and dissuasive penalties for violating the Gas Regulation.

Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns.

BELGIUM

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against Belgium for violating the Electricity and Gas Regulations as well as the Electricity and Gas Directives.

The main concerns about the Electricity Regulation are: the information on interconnection capacity is still insufficient; network congestion is managed in a way which is not in line with the requirements of the Regulation; there is still no common co-ordinated congestion management method; moreover, the TSO does not entirely respect the transparency requirements of the Regulation (e.g. the requirement to publish all relevant data concerning cross border trade).

As regards the Gas Regulation, there are no effective, proportionate and dissuasive penalties for violating the Gas Regulation.

Finally, the current Belgian legislation does not seem to provide an alternative dispute settlement mechanism, as required by the Electricity and the Gas Directives. A lack of transparent, simple and inexpensive procedures for dealing with the complaints of consumers can lead to a reluctance of consumers to participate in the internal market.

BULGARIA

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against Bulgaria for violating the Electricity and Gas Regulations.

The main concerns about the Electricity Regulation are: the provisions on network charges are not in line with the requirements of the Regulation; the information on interconnection capacity is still insufficient; network congestion is managed in a way which is not in line with the requirements of the Regulation; there is still no intraday congestion management mechanism at all interconnections nor is there a common allocation procedure.

As regards the Gas Regulation, the main concerns are: no interruptible reverse flow capacity (backhaul) is offered at all interconnection points; the TSO does not entirely respect the transparency requirements of the Regulation; balancing rules and imbalance charges are not in line with the requirements of the Regulation; the TSO does not offer firm and interruptible third party access services.

Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns.

CZECH REPUBLIC

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement case against Czech Republic for violating the Electricity Regulation.

The main concerns about the Electricity Regulation are: there is still no intraday congestion management mechanism at all interconnections, nor is there a common co-ordinated congestion management method. Finally, the national regulatory authorities must take adequate action to ensure compliance with these concerns.

As regards the Gas Regulation, the reply to the Letter of Formal Notice has indicated that the violations identified by the Commission have been properly addressed. Therefore, there are no grounds to continue the gas infringements against the Czech Republic.

DENMARK

In June 2009, the Commission opened infringement procedures against Denmark for violating the Electricity Regulation and for violating the Gas Regulation. Denmark’s reply to both Letters of Formal Notice has indicated that the violations identified by the Commission have been properly addressed. Therefore, there are no grounds to continue the infringements against Denmark.

Estonia

In June 2009, the Commission opened infringement procedures against Estonia for violating the Electricity Regulation (Estonia has a derogation from the Gas Regulation). Estonia’s reply to the Letter of Formal Notice has indicated that the violations identified by the Commission have been properly addressed. Therefore, there are no grounds to continue the infringement against Estonia.

FINLAND

In June 2009, the Commission opened infringement procedures against Finland for violating the Electricity Regulation (Finland has a derogation from the Gas Regulation). Finland’s reply to the Letter of Formal Notice has indicated that the violations identified by the Commission have been properly addressed. Therefore, there are no grounds to continue the infringement against Finland.

FRANCE

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against France for violating the Electricity and Gas Regulations.

The main concerns about the Electricity Regulation are: network congestion is managed in a way which is not in line with the requirements of the Regulation; there is still no intraday congestion management mechanism at all interconnections nor is there a common co-ordinated congestion management method; moreover, the TSO does not entirely respect the transparency requirements of the Regulation (e.g. the requirement to publish all relevant data concerning cross border trade).

As regards the Gas Regulation, the main concern is that no interruptible reverse flow capacity (backhaul) is offered at all interconnection points.

Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns.

GERMANY

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against Germany for violating the Electricity and Gas Regulations.

The main concerns about the Electricity Regulation are: network congestion is managed in a way which is not in line with the requirements of the Regulation; there is still no common co-ordinated congestion management method; moreover, the TSO does not entirely respect the transparency requirements of the Regulation (e.g. the requirement to publish all relevant data concerning cross border trade).

As regards the Gas Regulation, the main concern is that the relevant points of the transmission system have not been approved by the competent authorities.

Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns.

GREECE

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against Greece for violating the Electricity and Gas Regulations.

The main concerns about the Electricity Regulation are: the information on interconnection capacity still is insufficient; network congestion is managed in a way which is not in line with the requirements of the Regulation; there is still no common allocation procedure; the TSO does not entirely respect the transparency requirements of the Regulation (e.g. the requirement to publish all relevant data concerning cross border trade).  Moreover, there are no effective, proportionate and dissuasive penalties for violating the Electricity Regulation.

As regards the Gas Regulation, the main concerns are: no interruptible reverse flow capacity (backhaul) is offered at all interconnection points; the TSO does not entirely respect the transparency requirements of the Regulation; the relevant points of the transmission system have not been approved by the competent authorities; the TSO does not offer firm and interruptible third party access services.

Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns.

HUNGARY

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement case against Hungary for violating the Electricity Regulation.

The main concerns about the Electricity Regulation are: there is still no intraday congestion management mechanism at all interconnections nor is there a common co-ordinated congestion management method. Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns.

As regards the Gas Regulation, the reply to the Letter of Formal Notice has indicated that the violations identified by the Commission have been properly addressed. Therefore, there are no grounds to continue the gas infringements against Hungary.

IRELAND

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against Ireland for violating the Electricity and Gas Regulations.

The main concerns about the Electricity Regulation are: there is still no intraday congestion management mechanism at all interconnections, nor is there a common co-ordinated congestion management method.

As regards the Gas Regulation, the main concerns are: no interruptible reverse flow capacity (backhaul) is offered at all interconnection points; the relevant points of the transmission system have not been approved by the competent authorities.

Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns.

ITALY

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against Italy for violating the Electricity and Gas Regulations.

The main concerns about the Electricity Regulation are: incorrect use of the exemption for new interconnections; there is still no intraday congestion management mechanism at all interconnections nor is there a common co-ordinated congestion management method.

As regards the Gas Regulation, the main concern is that the TSO does not entirely respect the transparency requirements of the Regulation.

Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns. To ensure that rules are effectively applied, also rules on penalties should be laid down.

LATVIA

In June 2009, the Commission opened infringement procedures against Latvia for violating the Electricity Regulation (Latvia has a derogation from the Gas Regulation). Latvia’s reply to the Letter of Formal Notice has indicated that the violations identified by the Commission have been properly addressed. Therefore, there are no grounds to continue the infringement against Latvia.

Lithuania

In June 2009, the Commission opened infringement procedures against Lithuania for violating the Electricity Regulation (Lithuania has a derogation from the Gas Regulation). Lithuania’s reply to the Letter of Formal Notice has indicated that the violations identified by the Commission have been properly addressed. Therefore, there are no grounds to continue the infringement against Lithuania.

LUXEMBOURG

The Commission has decided to continue the infringement case against Luxembourg for violating the Electricity Regulation.

The main concern about the Electricity Regulation is that there is still no common co-ordinated congestion management method. Moreover, the national regulatory authorities (NRA) must take adequate action to ensure compliance with the above mentioned concerns.

THE NETHERLANDS

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against Netherlands for violating the Electricity and Gas Regulations.

For the Electricity Regulation, the Commission has identified the following concerns: the information on interconnection capacity still is insufficient; there is still no common co-ordinated congestion management method; moreover, the TSO does not entirely respect the transparency requirements of the Regulation (e.g. the requirement to publish all relevant data concerning cross border trade).  Moreover, there are no effective, proportionate and dissuasive penalties for violating the Electricity Regulation. Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns

As regards the Gas Regulation, the main concern is that the relevant points of the transmission system have not been approved by the competent authorities.

POLAND

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against Poland for violating the Electricity and Gas Regulations as well as the Electricity and Gas Directives.

The main concerns about the Electricity Regulation are: network congestion is managed in a way with is not in line with the requirements of the Regulation; there is still no intraday congestion management mechanism at all interconnections, nor is there a common co-ordinated congestion management method; moreover, the TSO does not entirely respect the transparency requirements of the Regulation.

As regards the Gas Regulation, the main concerns are: no interruptible reverse flow capacity (backhaul) is offered at all interconnection points; the TSO does not entirely respect the transparency requirements of the Regulation; the relevant points of the transmission system have not been approved by the competent authorities; balancing rules and imbalance charges are not in line with the requirements of the Regulation; the TSO does not offer firm and interruptible third party access services.

Moreover, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns.

Finally, the current Polish legislation does not seem to provide an alternative dispute settlement mechanism, as required by the Electricity and the Gas Directive. A lack of transparent, simple and inexpensive procedures for dealing with the complaints of consumers can lead to a reluctance of consumers to participate in the internal market.

PORTUGAL

As regards the infringement of the Electricity Regulation, Portugal’s reply to the Letter of Formal Notice sent when the Commission opened infringement procedures has indicated that the violations identified by the Commission have been properly addressed. Therefore, there are no grounds to continue the infringement against Portugal.

As regards the Gas Regulation, the main concern is that the TSO does not entirely respect the transparency requirements of the Regulation. Moreover, the national regulatory authorities must take adequate action to ensure compliance with this concern.

ROMANIA

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against Romania for violating the Electricity and Gas Regulations as well as the Electricity Directive.

The main concerns about the Electricity Regulation are: there is still no intraday congestion management mechanism at all interconnections, nor is there a common allocation procedure; moreover, the TSO does not entirely respect the transparency requirements of the Regulation (e.g. the requirement to publish all relevant data concerning cross border trade).

As regards the Gas Regulation, the main concerns are: no interruptible reverse flow capacity (backhaul) is offered at all interconnection points; the TSO does not entirely respect the transparency requirements of the Regulation; the relevant points of the transmission system have not been approved by the competent authorities; balancing rules and imbalance charges are not in line with the requirements of the Regulation; the TSO does not offer firm and interruptible third party access services.

Moreover, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns.

Finally, the current Romanian legislation does not seem to provide an alternative dispute settlement mechanism, as required by the Electricity Directive. A lack of transparent, simple and inexpensive procedures for dealing with the complaints of consumers can lead to a reluctance of consumers to participate in the internal market.

SLOVAKIA

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement case against Slovakia for violating the Electricity Regulation.

The main concerns about the Electricity Regulation are: there is still no intraday congestion management mechanism at all interconnections, nor is there a common co-ordinated congestion management method; moreover, the TSO does not entirely respect the transparency requirements of the Regulation (e.g. the requirement to publish all relevant data concerning cross border trade). Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns.

As regards the Gas Regulation, the reply to the Letter of Formal Notice has indicated that the violations identified by the Commission have been properly addressed. Therefore, there are no grounds to continue the gas infringements against Slovakia.

SLOVENIA

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against Slovenia for violating the Electricity and Gas Regulation as well as the Electricity and Gas Directive.

The main concerns about the Electricity Regulation are: the information on interconnection capacity still is insufficient; there is still no intraday congestion management mechanism at all interconnections nor is there a common co-ordinated congestion management method.

As regards the Gas Regulation, the main concern is that no interruptible reverse flow capacity (backhaul) is offered at all interconnection points.

Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns.

The current Slovenian legislation does not appear to provide an alternative dispute settlement mechanism, as required by the Electricity and the Gas Directive. A lack of transparent, simple and inexpensive procedures for dealing with the complaints of consumers can lead to a reluctance of consumers to participate in the internal market.

SPAIN

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against Spain for violating the Electricity and Gas Regulations.

The main concern about the Electricity Regulation is that there is still no common co-ordinated congestion management method.

As regards the Gas Regulation, the main concern is that no interruptible reverse flow capacity (backhaul) is offered at all interconnection points; the TSO does not entirely respect the transparency requirements of the Regulation; the relevant points of the transmission system have not been approved by the competent authorities; and the TSO does not offer firm and interruptible third party access services.

Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns. To ensure that rules are effectively applied, also rules on penalties should be laid down.

SWEDEN

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against Sweden for violating the Electricity and Gas Regulations.

The main concerns about the Electricity Regulation are: network congestion is managed in a way with is not in line with the requirements of the Regulation; there is still no intraday congestion management mechanism at all interconnections, nor is there a common co-ordinated congestion management method.

As regards the Gas Regulation, the main concern is that the relevant points of the transmission system have not been approved by the competent authorities.

Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns.

UNITED KINGDOM

Some of the violations identified by the Commission when it opened infringement procedures in June 2009 have been properly addressed. Nevertheless, the Commission has decided to continue the infringement cases against the United Kingdom for violating the Electricity and Gas Regulations.

The main concerns about the Electricity Regulation are: the provisions on network charges are not in line with the requirements of the Regulation; the information on interconnection capacity still is insufficient; network congestion is managed in a way with is not in line with the requirements of the Regulation; there is still no intraday congestion management mechanism at all interconnections, nor is there a common co-ordinated congestion management method.

As regards the Gas Regulation, the main concerns are: no interruptible reverse flow capacity (backhaul) is offered at all interconnection points; the relevant points of the transmission system have not been approved by the competent authorities; and the TSO does not offer firm and interruptible third party access services.

Finally, the national regulatory authorities must take adequate action to ensure compliance with the above mentioned concerns.

Citation:  Press Release of the European Commission IP/10/836 and Memorandum of the European Commission MEMO/10/275

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