ENTSO-E

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Network Codes for Electricity

Welcome to ENTSO-E’s Network Codes Website

Network codes are a set of rules drafted by ENTSO-E, with guidance from the Agency for the Cooperation of Energy Regulators (ACER)[1] , to facilitate the harmonisation, integration and efficiency of the European electricity market. Each network code is an integral part of the drive towards completion of the internal energy market[2], and achieving the European Union’s 20-20-20 energy objectives[3] of:

  • A 20% reduction in EU greenhouse gas emissions from 1990 levels;
  • Raising the share of EU energy consumption produced from renewable resources to 20%;
  • A 20% improvement in the EU’s energy efficiency.

Representing European electricity transmission system operators, ENTSO-E was mandated by the European Commission (EC) to draft these rules for electricity, with sister association ENTSOG drafting the rules for gas. Under development since 2011, each code takes approximately 18 months to complete. Following ACER’s recommendation, each code is submitted to the European Commission for approval through the Comitology process, to then be voted into EU law and implemented across Member States.

For technical legal reasons, it was decided in May 2014 that the regulation on capacity allocation and congestion management (CACM), would be labelled “binding guideline” instead of “network codes”. This was decided to reflect the particular structure of this text. Because it draws new concepts, and provides Europe with a significant leap forward towards completing the IEM, CACM will require many steps from the moment it will enter into force until it is fully implemented. These include the elaboration of new tools, geographical zones definitions or new methodologies.

Changing the CACM label from “network code” to binding guideline will not materially change CACM’s content or affect its legal value. Many other codes should maintain their “network code” label.

In the interest of simplification, the term “network codes” refers, in this document, to all the common rules for electricity markets, as defined in Regulation (EC) N°714/2009. These include documents labelled either “network codes” or “binding guidelines”. In contexts where clarity is of utmost importance, we will use “network codes and related guidelines.

European Electricity Connections, Operations and Markets

The network codes cover three key areas of the European electricity transmission sector:

  • Grid connections: Clean low-carbon renewable electricity generation is on the rise, with wind capacity possibly meeting 14% of European electricity consumption by 2030[4]. However, these energy sources have different technical parameters from traditional fossil fuel sources and so the grid connection rules need to be adapted to get this energy on the grid.  Connection codes cover these challenges.
  • Grid operations: The European electricity system is increasingly integrated, allowing better distribution of electricity resources across all Member States. While European electricity generators, operators and distributors have been working together for decades, a highly integrated pan-European electricity system means consistent operational monitoring and coordination across all the 27 EU countries. Operational codes cover these challenges.
  • Cross-border electricity markets: Cross-border trading through the integration of the European wholesale electricity market, helps ensure security of supply and optimum pricing for the different types of energy. The EC Quarterly Report on European Electricity Markets confirms that 2013 Q2 cross-border physical power flows increased by 4%, compared to Q1 2012[5] – but market integration is not yet complete. The market codes set down rules to harmonise cross-border power trading, creating an equal playing ground for all market participants; in turn leading to more cost efficient  electricity.

Visit the other website sections for
more detailed information on each of the network codes.

 


[1] Agency for the Cooperation of Energy Regulators
[2] http://ec.europa.eu/energy/gas_electricity/internal_market_en.htm
[3] http://ec.europa.eu/clima/policies/package/
[4] http://www.ewea.org/publications/reports/deep-water/
[5]
http://ec.europa.eu/energy/observatory/electricity/doc/20130814_q2_quarterly_report_on_european_electricity_markets.pdf