Intra-Belgian division of competences and EU influence

Transcription

1 Transfer of Energy 26 October 2017 Intra-Belgian division of competences and EU influence Cedric Degreef & Thierry D hoore

2 Table of Contents Intra-Belgian division of competences 3 Difference between commercial and technical flexibility 6 Impact of EU law and Network Codes 9 New powers for the CREG draft - 12 October 2017

3 SARI 1980 Regions o Regional aspects of energy, among which: Distribution and local transmission of electricity on grids with a tension of maximum 70 kv; Distribution grid tariffs; Renewable energy (except offshore); Rational energy use. o Consultation between Regions and federal level on: Any measure relating to energy that falls outside the powers listed above; Direction and outline of the national energy policy WHAT ABOUT TRANSFER OF ENERGY? Federal level o Matters that require an equal treatment at national level because of their technical and economical indivisibility, namely: Studies on the perspectives of energy supply; The nuclear fuel cycle; Large infrastructures for the storage, transport or production of energy; The transmission (including local transmission) grid tariffs. 64 draft - 12 October 2017

4 Council of State (opinion re ToE Act) o Balancing and demand side on the transmission grid = federal power o Balancing on distribution grid and demand side flexibility with consequences for the distribution grid only = regional power According to Council of State: federal level is competent in so far as it concerns consumers connected to the transmission grid, or FSPs given their portfolio who could have an impact on the balance on the transmission grid o Recognition of lack of technical expertise o As the case may be, cooperation agreement to be entered into ENOVER for energy deliberation between regions and federal level Collaboration agreement between (L)TSO and DSOs in place 65 draft - 12 October 2017

5 Belgian legislature o Need of a legal basis for the right to valorise demand flexibility o Act of 13 July 2017 concerns commercial flexibility federal legislature is competent o Powers of the Regions are not harmed principle of federal loyalty is observed o Grounds in the SARI: Price and income policy, competition law and commercial practices (art. 6, 1, VI, al. 5, 3 and 4 ); Transmission grid tariffs (art. 6, 1, VII, al. 2, d)); and Property law as organized under the Civil Code (remainder power). 66 draft - 12 October 2017

6 Constitutional Court o Judgment of 28 April 2016, no. 56/2016 Annulment procedure against the Walloon decree of 11 April 2014 amending the Walloon Electricity Decree; Except for explicit deviations, the Regions are exclusively competent for the activities of all market players on the distribution grid and the local transmission grid (B.5.1); Technical flexibility is a regional power; does not prevent all forms of reservation/activation of capacity or other forms of commercial flexibility (B.5.4); It is not demonstrated that it would become impossible or excessively difficult at the federal level to exercise its powers (B.6.2). o Commercial flexibility linked to balancing needs for control area security of supply = federal power cf. judgment of 12 July 1995, no. 57/95 (B.12.2 & B.14.2) o Federal grid code 2002 sets out balancing via generation and coordination of significant generation units broader perspective of the security of supply 67 draft - 12 October 2017

7 Alignment needed between concepts! Flexibility as defined by VREG (see also Walloon Act 2014): Commercial flexibility = flexibility, as the case may be via a third party, with free participation in an organized market with market-based prices + flexibility in the context of ancillary services Technical flexibility = flexibility that is imposed by the grid operator in the context of the operation of its grid, as the case may be in return for regulated compensation Commercial flexibility as defined by the Legislature limited to demand side response / ToE Aim = to enable the TSO to assure a permanent balance of the electricity flows resulting from offer and demand in the Belgian control area. + resources for general flexibility + safeguarding continuity of security of supply (Const. 57/95: control on large infrastructures for the storage, transport or production of energy control on security of supply) 68

8 Difference commercial & technical flexibility (2) Considerations/remarks: Balanced powers: Federal power: ToE-rules in relevant markets: principles for the activated flexibility volumes, imbalance correction, data exchange, remuneration Regional power: prequalification requirements, congestion, metering, etc. => When defining ToE-rules, CREG consults regional authorities Quid participation on a voluntary basis? Relationship with FSP ( BRP) Ownership of metering data Commercial approach of technical flexibility not prevented by the Act of 13 July

9 Impact of EU law and Network Codes Context: Third Energy Package: Regulation 714/2009/EC Network Codes Energy is shared power of the European Union and the Member States (art. 194 TFEU) Member States can intervene only if the EU does not exercise its power EU legislation on cross border transport of energy: Regulation 714/2009/EC + Network Codes national aspects of transport of energy remain MS power (subsidiarity principle) Network Codes have direct effect impact on Electricity Act, SARI 1980, regional legislation, national and regional grid codes, etc. Network Codes assign right/grant initiative to TSO to submit for regulatory approval the requirements, T&Cs and methodologies as the case may be, the TSO should work in close cooperation with the DSOs Network Codes provide for the possibility to agree on technical specifications 70

10 Role of Elia re T&Cs & methodologies - collaboration with DSO (1) NC Requirements for Generators (Regulation 2016/631/EU) Relevant TSO proposes maximum capacity thresholds for types B, C and D power-generating modules for approval to relevant regulator/ms after coordination with [ ] DSO, public consultation (art. 5) Type A power-generating modules shall fulfil the following requirements relating to frequency stability: (a) With regard to frequency ranges: (ii) the relevant system operator, in coordination with the relevant TSO, and the power-generating facility owner may agree on wider frequency ranges, longer minimum times for operation or specific requirements for combined frequency and voltage deviations to ensure the best use of the technical capabilities of a power- generating module, if it is required to preserve or to restore system security; (art. 13(1)) NC Demand Connection (Regulation 2016/1388/EU) Transmission-connected demand facilities, transmission-connected distribution facilities and distribution systems shall be capable of remaining connected to the network and operating at the frequency ranges and time periods specified in Annex I. (art. 12(1)) The transmission-connected demand facility owner or the DSO may agree with the relevant TSO on wider frequency ranges or longer minimum times for operation. If wider frequency ranges or longer minimum times for operation are technically feasible, the consent of the transmission-connected demand facility owner or DSO shall not be unreasonably withheld. (art. 12(2)) With regard to transmission-connected distribution systems with a voltage below 110 kv at the connection point, the relevant TSO shall specify the voltage range at the connection point that the distribution systems connected to that transmission system shall be designed to withstand. (art. 13(7)) 71

11 Role of Elia re T&Cs & methodologies - collaboration with DSO (2) NC System Operation (Regulation 2017/1485/EU) Harmonised rules on system operation for transmission system operators ( TSOs ), distribution system operators ( DSOs ) and significant grid users ( SGUs ) should be set out in order to provide a clear legal framework for system operation, (cons. 3) When applying this Regulation, Member States, competent authorities, and system operators shall: (e) respect the responsibility assigned to the relevant TSO in order to ensure system security, including as required by national legislation; (f) consult with relevant DSOs and take account of potential impacts on their system; (art. 4(2)) Each TSO shall agree, with the transmission-connected DSOs and the transmission-connected significant grid users, about voltage ranges at the connection points below 110 kv if those voltage ranges are relevant for maintaining operational security limits. Each TSO shall endeavour to ensure that the voltage remains within the agreed range during the normal state and after the occurrence of a contingency. (art. 27(5)) Each TSO shall agree with each transmission-connected DSO on the reactive power setpoints, power factor ranges and voltage setpoints for voltage control at the connection point between the TSO and the DSO in accordance with Article 15 of Regulation (EU) 2016/1388. To ensure that those parameters are maintained, each transmission-connected DSO shall use its reactive power resources and have the right to give voltage control instructions to distribution- connected SGUs. (art. 29(5)) TSOs and DSOs shall cooperate in order to facilitate and enable the delivery of active power reserves by reserve providing groups or reserve providing units located in the distribution systems. (art. 182) 72

12 Role of Elia re T&Cs & methodologies - collaboration with DSO (3) NC Electricity Balancing (pending) TSOs, working with DSOs where relevant, should be responsible for organising European balancing markets and should strive for their integration, keeping the system in balance in the most efficient manner. To do so, TSOs should work in close cooperation with one another and with DSOs, coordinating their activities as much as possible to deliver an efficient electricity system, across all regions and voltage levels, without prejudice to competition law. (cons. 6) TSO shall be responsible for procuring Balancing Services from Balancing Service Providers to ensure Operational Security. (art. 14) DSOs, TSOs, balancing service providers and balance responsible parties shall cooperate in order to ensure efficient and effective balancing. (art. 15) When developing proposals for terms and conditions for balancing service providers and balance responsible parties, each TSO shall coordinate with the TSOs and DSOs that may be affected by those terms and conditions; (art. 18) The proposals for the following terms and conditions or methodologies shall be subject to approval by each regulatory authority of each concerned Member State on a case-by-case basis: [ ](c) the terms and conditions related to balancing pursuant to Article 18; (art. 5 (4)) 73

13 Impact of EU law and Network Codes (continued) Impact on roles and responsibilities of TSOs, LTSOs, DSOs and their collaboration In parallel: impact on roles and responsibilities of regulators and public authorities (regional, federal, European) and their collaboration 74

14 New power of the CREG? o International impulse vs national restraint when delegating powers to autonomous public bodies (cf. doctoral thesis S. DE SOMER) o Art. 19bis Electricity Act: if no agreement after commercial negotiations, the CREG will apply the standard price for energy transfer Tariff-related power? Council of State: transposition of art. 37(6)(b) Third Electricity Directive Belgian legislature: powers delegated to the CREG are broader no problem: judgment no. 130/2010 Constitutional Court APB subject to judicial and parliamentary supervision? 75 draft - 12 October 2017

15 Conclusion o SARI not explicit on powers regarding balancing and ToE o Interpretation SARI: Federal powers relating to price and income policy, competition law, commercial practices, property law, big infrastructures generation, transmission and storage Determines the scope of ToE-rules to be implemented by CREG Regional competences relating to distribution grids (prequalification, congestion, etc.) Need to consult the regional authorities o Division of competences regarding balancing confirmed by EU network codes 76 draft - 12 October 2017

16 Questions? Cedric DEGREEF Associate Stibbe Thierry D HOORE Company Lawyer Elia System Operator T M E cedric.degreef@stibbe.com T E thierry.dhoore@elia.be 77 draft - 12 October 2017