Transcript Security of Supply – EU Perspective and Legal Framework

faculty of law
groningen centre of energy law
Date 13-05-2011 | 1
Security of Supply – EU
Perspective and Legal
Framework
First EU-Russia Energy Law
Conference,30 and May 2013
Martha Roggenkamp
faculty of law
groningen centre of energy law
Date 13-05-2011 | 2
Concept of Supply Security
› Definition: “Condition in which a nation [..] has
access to sufficient energy resources at
reasonable prices at the foreseeable future free
from serious risk of major disruption of service”
› It distinguishes between ‘access’ to resources
(level of production capacity/availability of
sufficient (primary) energy sources), and
‘access’ to supply systems (reliability of
networks) necessary for supplying consumers
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groningen centre of energy law
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Supply Security in Europe
› In 1950s limited focus on security of energy
supply
› No specific reference in Treaties although the
ECSC recognised the role of cheap energy for
economic development
› The oil crisis in the 1970s led to several
Community actions:
 Obligation to maintain minimum stocks
 Energy efficiency targets (labelling), etc.
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groningen centre of energy law
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The market dominates
› EU Law is based on principles of free
movement and competition
› The ‘Internal Energy Market’ also aims at the
opening up of the electricity and gas market
and the belief that the ‘market would take care
of security of supply’
› Supply security is, however, a possible
exemption on freedom principles (Campus Oil
Case)
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groningen centre of energy law
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Treaty on the Functioning of
the European Union
› Art. 194 TFEU: ‘In the context of the
development of an internal market, and with
regard the need to preserve/improve the
environment, EU energy policy shall ensure (i)
the functioning of the internal market, (ii)
security of energy supply and (iii) promote
renewable forms of energy
› EU energy policy is shared competence but
also depends on cooperation with non-EU
countries (f.ex. Energy Community Treaty)
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Internal Market Directives
› The Electricity and Gas Directives increasingly
focus on Supply Security
 1990s Directives include the option of ‘public
service obligations relating to security of
supply’ and ‘the need for sufficient grid
capacity to meet energy demand’
 The 2003 Directives include monitoring and
reporting obligations, tendering of capacity if
insufficient energy production and network
safety and security
 2009 Directives more focus on network
investments and regional cooperation
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Security of Supply Directives
› Security of Electricity and Gas Supply
Directives (2006/2008) aim at safeguarding
supply and network operations
› Directives illustrate the difference between
electricity and gas sector as electricity
generation is more ‘national’ in scope and
networks operations require precise balancing
› The 2009 Ukraine-Russia gas supply dispute
showed that EU market model does not provide
long term security (investments)
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Regulation on Security of
Gas Supply
› The 2009 Gas Security of Supply Regulation
aims at more market (integration) and more
investments infrastructure
› It is based on principle of solidarity and
responsibility between Member States
› In case of supply interuption effective
advanced action needs to be taken by MS and
market players before Community intervention
› Commission is advised by Gas Coordination
Group
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groningen centre of energy law
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Identifying risks
› All MS need to appoint a Competent Authority
responsible for
 monitoring gas supply developments,
 assessing supply risks,
 establishing preventive action plans to
mitigate risks
 establishing emergency plans which need to
take into account three crisis levels: early
warning level, alert level and emergency level
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groningen centre of energy law
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Common standards
› MS must ensure gas supply to ‘protected
customers’ during extreme weather and
emergency situation(disruption)
› MS must ensure that infrastructure can satisfy
gas demand:
 Emphasis on improving infrastructure (take
into account N-1 standard and 10 year
development plans of ENTSO-G
 Investments in cross-border interconnections
 TSOs responsible for bi-directional gas flows
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groningen centre of energy law
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Emergency response
› Community emergency response if CA/MS has
declared an emergency or at the request of CA
or if Community loses more than 10% daily
gas import from third countries
› Emergency response depends on the crisis
levels and are based on emergency plans
› Distinction is made between market-based and
non-market based measures
 Increase production, interruptable contracts
 Emergency gas stocks, enforced fuel switch
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groningen centre of energy law
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Conclusion
› Supply security depends on access
to/availability of recources and access to
supply networks
› Supply security in EU is primarily based
on market mechanisms (oil, gas and
electricity)
› State/Community intervention only if
really necessary
› Regulatory provisions/requirements are
increasing
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groningen centre of energy law
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Thank you for your attention