European Integration

The EU aims to fully integrate national energy markets in order to give consumers and businesses improved products and services, to increase competition and to provide better security of supply. EU legislation and new rules for the electricity market and grid operation make this possible.

European Policy

The European Union has adopted an Energy Union Framework Strategy which targets five key policy areas:

  • Supply security
  • A fully integrated internal energy market
  • Energy efficiency
  • Climate action
  • Research and innovation

To achieve these goals will require a transformation of Europe's electricity system, including investment in infrastructure that connects the electricity networks together and the creation of a single European electricity market. This will make energy flow more easily, improve energy security, lessen the dependency on imports and prepare networks for increasing levels of renewable energy.

The 2020 Energy Strategy defines the EU's energy priorities between 2010 and 2020. It aims to:

  • Reduce greenhouse gases by at least 20%, as compared to 1990 levels;
  • Increase the share of renewable energy in the EU's energy mix to at least 20% of consumption; and
  • Improve energy efficiency by at least 20%.

With an ever increasing amount of renewable energy and plans for further interconnection, Ireland and Northern Ireland are well on their way to meeting these objectives. As we look towards a future climate neutral economy, more work will have to be done to achieve the agreed targets in the EU 2030 climate & energy framework. These include:

  • At least a 40% reduction in greenhouse gas emissions by 2030, compared to 1990 levels;
  • At least 32% share for renewable energy; and
  • An energy efficiency increase of at least 32.5%.

In September 2020, the European Commission proposed an increase to 55% reduction in GHG emissions which, if adopted, will lead to revised ambitions in both renewable integration and energy efficiency targets. Legislation associated with the 2030 Climate Target Plan (under the EU Green Deal) is currently being developed and is expected in 2021.

European Legislation

The Third Energy Package facilitated the development of a harmonised European internal energy market. It includes two directives and three regulations, which became law on 3 March 2011.

Directives

Directive 2009/72/EC concerning common rules for the internal market in electricity.

Directive 2009/73/EC concerning common rules for the internal market in gas.

Regulations

Regulation (EC) No 713/2009 on the establishment of the Agency for the Cooperation of Energy Regulators ACER.

Regulation (EC) No 714/2009 on conditions for access to the network for cross-border exchange of electricity.

Regulation (EC) No 715/2009 on conditions for access to the natural gas transmission networks.

 

 

Network Codes and the Clean Energy Package

The Third Energy Package of European legislation created a need for European Network Codes to cover grid connections, markets and system operation. These codes are designed to provide a sustainable, secure and competitive electricity market across Europe.

The transmission system operator manages the electricity transmission grid. Producers (who generate electricity) and major customers (who use electricity themselves or sell it on to small customers) are connected to this grid. They must follow certain rules to be able to use it. All the requirements that these users must meet in order to be connected to the transmission grid are set out in three different connection codes, each of which focuses on a particular type of grid user. The codes are:

Requirements for Generators (RfG); Regulation (EU) 2016/631

Demand Connection Code (DCC); Regulation (EU) 2016/1388

High Voltage Direct Current (HVDC); Regulation (EU) 2016/1447

 

The market codes play a crucial role in achieving Europe’s goal of a fully integrated single market for electricity. They lay down harmonised rules to allow not only energy, but also available capacity to be traded between Europe’s national transmission systems.

The market codes are structured around the different time scales in which these trades can take place, namely long-term, day-ahead and intraday, and aim to foster competition, encourage the diversification of generation sources and facilitate the optimisation of the existing infrastructure. The codes are:

Capacity Allocation and Congestion Management (CACM); Regulation (EU) 2015/1222

Forward Capacity Allocation (FCA); Regulation (EU) 2016/1719

Electricity Balancing Guidelines (EBGL);  Regulation (EU) 2017/2195

To keep the electricity system reliable and stable, every transmission system operator draws up plans and schedules to prepare for real time system operation. This involves analysing whether enough electricity will be generated to meet demand and whether the system can safely handle the resulting flows. Against a backdrop of increasing interconnection between transmission system operators, the operations codes provide a set of rules and regulations governing how these systems are operated. The operations codes cover:

System Operation Guideline (SOGL); Regulation (EU) 2017/1485

Emergency and Restoration (E&R); Regulation (EU) 2017/2196

The CEP consists of eight legislative acts, which aims to decarbonise energy and facilitate better outcomes for consumers. It came into force during 2018/19 and covers the following areas: energy performance in buildings; renewable energy; energy efficiency; governance of the energy union; and electricity market design.

Energy Performance in Buildings; Directive (EU) 2018/844

Renewable Energy; Directive (EU) 2018/2001

Energy Efficiency; Directive (EU) 2018/2002

Governance of te Energy Union; Regulation (EU) 2018/1999

Electricity Regulation; Regulation (EU) 2019/943

Electricity Directive; Directive (EU) 2019/944

Risk Preparedness; Regulation (EU) 2019/941

ACER; Regulation (EU) 2019/942

Read more about how EirGrid is working to implement the Network Codes and Clean Energy Package here. For associated decisions and approved methodologies see here.

European Associations

We are a member and play an active role in the following European associations:

ENTSO-E - European Network of Transmission System Operators, represents 41 electricity transmission system operators (TSOs) from 34 countries across Europe. ENTSO-E promotes closer cooperation across Europe’s TSOs to support the implementation of EU energy policy and achieve Europe’s energy & climate policy objectives. Read more at www.entsoe.eu

EUROPEX - A not-for-profit association of European energy exchanges that represents the interests of the exchange based wholesale markets for electrical energy, gas and environmental markets. Read more at www.europex.org

CORESO - The efficient and safe management of the European electricity system requires coordination and organisational structures at regional level. Coreso is one of these regional initiatives. Read more at www.coreso.eu