European Network Codes David Smith Panel Update 25 February 2011
European Network Codes The intent of the Third Energy package was for European Network Codes to be focused on cross border issues, however the regulation wording suggests that: European Network Codes may impact both cross border and associated networks The European Network Codes may result in significant changes to GB Codes 2
European Network Codes Article 8(7) of (EC)715/2009, the Gas Regulation & Article 8(7) of (EC)714/2009, the Electricity Regulation The network codes shall be developed for cross-border network issues and market integration issues and shall be without prejudice to the Member States right to establish national network codes which do not affect cross-border trade. 3
Key aspects of the network code development process 4
European Network Code Development Process ENTSO EU Commission ACER (ERGEG/CEER) ENTSO Work programme Agency Commission Consultation 5
European Network Code Development Process ENTSO EU Commission ACER (ERGEG/CEER) ENTSO Work programme Agency Commission workshops Preparation of draft Network Code Consultation Commission Framework guidelines Consultation & workshops Consultation Agency 6
European Network Code Development Process ENTSO EU Commission ACER (ERGEG/CEER) ENTSO Work programme Agency Commission workshops Preparation of draft Network Code Consultation Commission Framework guidelines Consultation & workshops Consultation Agency Commission Comitology DECC Legally binding Network Code GB Code 7 Change process
European Network Codes - Timeline Start of FG process Start of ENC process Start of Comitology Process Legally Binding Codes Framework Guideline Process European Network Code Process Comitology Process 6 Months 12 Months Undefined Time 8
Alternate Code Route Binding Guidelines There is the potential that in some cases it will not be appropriate for TSOs to write a Network Code, so an alterative route to comitology has been made available Binding Guidelines are regulator lead, and have the same legality as Network Codes EC ACER Guideline Comitology An example of the above process occurred with the Transparency Guidelines It is also an option that the EC can send Binding Guidelines directly to Comitology. EC Guideline Comitology 9
Development process during pilot Framework Guidelines (FG) FG & Impact assessment FG v2 (Dec 10) Jul 10 Mar 11 Network Code (NC) NC v1 NC v2 NC v3? 10
Development process during pilot Framework Guidelines (FG) FG & Impact assessment FG v2 (Dec 10) Jul 10 Mar 11 Network Code (NC) NC v1 NC v2 NC v3? Framework guidelines have moved on but not reflected in Network Code 11
ENTSO-E feedback on pilot exercise Lack of transparency of alignment between Framework Guideline & Network Code Recognised, in future parallel running will not happen Should a further draft code be published or wait? Lack of transparency of how stakeholder feedback has been taken on board for Network Code No formal consultation to date on Network Code, just stakeholder workshops Drafting team do intend to respond to all 3000 stakeholder comments so far Need for a managed system for handling stakeholder comments within the code drafting process A lot to learn from pilot exercise 12
Formal development process 3 rd package go live Framework Guidelines (FG) FG v2 (Dec 10) Final FG Mar 11 Dec 11 Network Code (NC) NC v2 NC v3? Further development Official NC consultation 13
Formal development process 3 rd package go live Framework Guidelines (FG) FG v2 (Dec 10) Final FG Mar 11 Dec 11 Network Code (NC) NC v2 NC v3? Further development Official NC consultation 14
Code Proposal Development Process Stage Project Plan including launch documentation engagement s Joint Working Sessions* engagement Inputs, analysis & proposals Inputs, analysis & proposals First draft Code The ENTSO Endorsement *s Joint Working Sessions bi lateral meetings to meet and discuss with stakeholders be responsive, having due regard to opinions justifying acceptance or rejection Chaired by the ENTSO Consultation 15
Code Finalisation Stage time Consultation response inputs Process consultation responses engagement Proposal refinement Opinion/ Support engagement Final Proposal & Report To ACER input comprises opportunity for all stakeholders to deliver final opinion associations to support or reject 16