Last update : 23.07.2018
gas & electricity

EU legislation

The Lisbon Treaty, which came into force on 1 December 2009, contains a chapter on the European Union’s energy policy. At the time, this represented a major first since the Treaty of Rome which created the European Economic Community in 1958, despite cooperation in the area of energy having been one of the cornerstones of the European Union since the European Coal and Steel Community (ECSC) was founded on 23 July 1951.

The European Union’s energy policy aims to promote sustainable, secure and affordable energy, by:

  • Ensuring the efficient operation of the energy market;
  • Ensuring the security of supply of energy in the European Union;
  • Promoting energy efficiency and energy savings, as well as the development of new and renewable energy sources;
  • Promoting the interconnection of energy networks to ensure solidarity between Member States.

 

The internal energy market

The 3rd energy package of 2009

Published in August 2009, the 3rd energy package aims to strengthen integration of the internal electricity and gas markets, and to stimulate competition for the benefit of consumers. Implemented since 3 March via two Directives and three Regulations, it introduced several new developments:

  • In Member States, it strengthened the independence of transmission system operators, who are now required to obtain certification from the national regulatory authorities. It also improved the level of harmonisation between authorities, while increasing their independence and handing them greater powers:
  • At the European level, it created the Agency for the Cooperation of Energy Regulators (ACER). In addition, transmission system operators are now brought together in pan-European organisations, namely ENTSO (European Network of Transmission System Operators) for electricity (ENTSO-E) and gas (ENTSO-G).

Consult the 3rd energy package texts

A 4th energy package to implement the Paris Agreement of 2015

In November 2016, with the “Clean Energy for All European” package, also known as the 4th energy package, the European Commission outlined an ambitious set of reforms. Part of the Energy Union created in February 2015, this weighty package (which runs to over 5,000 pages) aims to:

  • Put energy efficiency first;
  • Achieve global leadership in renewable energies;
  • Provide a fair deal for consumers.

The 4th package, which is intended to enable European to meet its energy and climate targets, includes eight different legislative proposals covering Energy Union governance, electricity market design, rules for the ACER and security of supply.
CRE welcomes the ambitious goals of the 4th package, and supports the proposed reforms to market design and network operation to adapt to renewable generation, which is more variable, more distributed and requires greater flexibility. In June 2017, CRE published 13 detailed factsheets, proposing certain amendments to the draft legislation, notably to ensure better functioning of the ACER, introduce the possibility of launching distinct tender procedures for different renewable energy sources, promote appropriate use of congestion-related income, and affirm the principle of subsidiarity for the study of capacity adequacy and the definition of network usage tariffs.
Read CRE’s official position on the “Clean Energy” package

“Clean Energy” package: texts

"Clean Energy Package for all Europeans"

Nov. 2016

Legislative proposalsElectricity Directive (revision)
Electricity Regulation (revision)
ACER Regulation (revision)
Renewable Energy Directive (revision)
Regulation on risk preparedness in the electricity sector
Regulation on the governance of the Energy Union
Energy efficiency Directive
Energy performance of buildings Directive
Non-legislativeEco-design working plan
Report on energy prices and costs

See all of the legislative proposals currently under negotiation

Targeted amendment of the gas Directive

On 8 November 2017, the EU Commission proposed a targeted amendment of the 2009 Directive. The update aims to extend the application of the core principles of EU energy legislation (third party access, tariff regulation, ownership unbundling and transparency) to all gas pipelines to and from third countries, up to the border of the EU’s jurisdiction.
The text is currently before the European Parliament and the Council.
See the procedure file for this text.

 

Infrastructures: projects of common interest

The guidelines for implementation of European policy priorities in terms of energy infrastructure were laid down by Regulation (EC) N°347/2013, published in April 2013. This text outlines conditions for selecting “projects of common interest” needed to realise strategic trans-European infrastructures. To facilitate the development of cross-border infrastructure projects, it introduces new rules on the allocation of costs and risks, and aims to accelerate procedures for granting permits.
On 14 October 2013, the EU Commission published its first list of projects of common interest (PCIs), containing 248 infrastructure projects, including 132 for electricity and 107 for gas. The projects selected benefit from:

  • Advantages under the European Regulation on trans-European energy infrastructures, providing PCIs with a simplified procedure for obtaining administrative permits which may not exceed three and a half years;
  • An attractive financial framework. Regulators may also decide on incentive measures for PCIs which involve higher risks than other comparable projects. In addition, any project sponsor may request a cross-border allocation of costs between the Member States set to benefit from the project. Finally, if a project’s financial viability is not guaranteed despite its positive regional impact, it will be eligible for European funding grants.

The national energy regulators and the Agency for the Cooperation of Energy Regulators (ACER) are actively involved in the implementation of these guidelines.
The new list of PCIs proposed by the EU Commission in 2017 contains 173 projects, including 110 for electricity and smart grids, 53 for gas, and 6 for oil. For the first time, the list includes four cross-border CO2 transport projects.
See the list of PCIs proposed by the Commission

 

Security of supply

Member States’ obligations in terms of anticipating and managing gas supply crises are laid down in Regulation (EU) n°994/2010 of 20 October 2010, which contains measures to safeguard the security of gas supply. These measures repealed Directive 2004/67/EC of the European Council.
A new draft regulation amending the 2010 text was part of the raft of measures for sustainable energy security presented by the European Commission in February 2016.  With the revision of legislation on intergovernmental agreements (adopted in March 2017), this raft of measures is intended to strengthen transparency in the gas market and make the EU more resistant to gas supply disruptions.
Objectives in terms of security of supply and investment in electric infrastructures are set down in Directive 2005/89/EC of 18 January 2006.

 

Energy-climate: sectoral legislation under negotiation

In 2009, the European Union made a commitment to achieve its 3x20 targets by 2020:

  • Increasing the share of the EU’s primary energy consumption covered by renewables to 20%;
  • Cutting greenhouse gas emissions by 20% (from 1990 levels);
  • Increasing energy efficiency to reduce the EU’s primary energy consumption by 20%.

In October 2014, the European Council adopted a new commitment to reduce European greenhouse gas emissions by at least 40% by 2030.
In its Clean Energy Package for All Europeans of November 2016, the EU Commission proposed to enshrine these targets in sectoral legislation which is currently being negotiated by the European Parliament and the Council of the Union.
Achieving these targets requires greater vigilance and a higher level of involvement by the regulatory authorities, in particular CRE.

Market integrity

Published on 8 December 2011, Regulation (EC) N°1227/2011 on wholesale energy market integrity and transparency (REMIT) strengthened oversight of the wholesale energy markets.

  • It updated the definitions of market manipulation and insider trading, based on financial regulations, in order to apply them to the electricity and gas sectors.
  • It also clarified arrangements for cooperation between energy regulators, competition authorities and financial regulators to coordinate oversight of the European wholesale markets in electricity and gas.

As a precursor in the field of whole energy market oversight, CRE is contributing to the implementation of these new provisions, in coordination with the Agency for Cooperation of Energy Regulators (ACER).

Certain electricity and natural gas derivatives are classed as financial instruments, and are therefore covered by European financial regulations: