Explanatory Memorandum to COM(2009)361 - Notification to the Commission of investment projects in energy infrastructure within the EC - Main contents
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| dossier | COM(2009)361 - Notification to the Commission of investment projects in energy infrastructure within the EC. |
|---|---|
| source | COM(2009)361  |
| date | 16-07-2009 |
In the context of the new Energy Policy aiming at securing supply, mitigating climate change and ensuring competitiveness, significant investment in energy infrastructure is crucial. Private economic operators have now a more prominent role for investment in infrastructure. New policy requirements such as targets affecting the fuel mix will alter Member States' policies towards new and modernised energy infrastructure. The Commission has to monitor closely the situation to anticipate any potential problems and bring sufficient transparency to market participants. However, the Commission needs appropriate data on investment projects.
The current regulatory framework imposing on Member States reporting obligations on energy infrastructure is heterogeneous. Relevant and validated data is not sufficiently available for monitoring developments in a cross – sector perspective at EU level. In addition, Council Regulation (EC) No 736/96 on notification to the Commission of investment projects in EU energy infrastructure in the petroleum, natural gas and electricity sectors is no longer enforced consistently and geared to the most recent evolutions of the energy sector.
The overall objective of the revision is to revise and to further strengthen the system laid down in Council Regulation (EC) No 736/96 while easing the administrative burden. The framework for reporting needs to be updated and to be complemented by a regular analysis of the situation which should be discussed with stakeholders and published in order to increase transparency.
There is a high degree of uncertainty related to the realisation of investment projects and the current credit crunch and economic crisis constitute a major additional difficulty for investment projects needed in the energy sector.
EU institutions have adopted an improved framework for investment in EU energy infrastructure, with clear and predictable RES targets and new rules for the internal market. However, they have called for further action. The European Council Action Plan 2007-09 on Energy Policy for Europe has invited the Commission and the Member States to identify investment required to satisfy EU strategic needs in relation to gas and electricity supply and demand. In the wake of the Second Strategic Energy Review adopted in 2008 by the Commission, both the Council of the European Union i and the European Parliament i agreed with the Commission and insisted on promoting investments and improving transparency as well as of intensifying the works on supply and generation adequacy outlooks and network development plans.
A number of provisions exist but they do not provide the Commission with coherent, forward looking information on investment projects and their developments.
Directive **** of the European Parliament and of the Council establishing common rules for the internal market in natural gas and repealing Directive 2003/55/EC;
Council Directive 2004/67/EC concerning measures to safeguard security of natural gas supplies;
Decision No 1364/2006/EC of the European Parliament and of the Council laying down guidelines for trans- European energy networks;
Directive **** of the European Parliament and of the Council establishing common rules for the internal market in electricity and repealing Directive No 2003/54/EC;
Directive 2005/89/EC of the European Parliament and of the Council concerning measures to safeguard security of electricity supply and infrastructure investment;
Council Regulation No 2857/1999/EC defining the investment projects to be communicated to the Commission in accordance with Article 41 of the Euratom Treaty;
Directive 2009/31/EC of the European Parliament and of the Council on the geological storage of carbon dioxide and amending Council Directive 85/337/EEC, European Parliament and Council Directives 2000/60/EC, 2001/80/EC, 2004/35/EC, 2006/12/EC, 2008/1/EC and Regulation (EC) No 1013/2006;
Directive 2009/28/EC of the European Parliament and of the Council on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC;
This proposal is consistent with the objectives of the Union, especially those concerning the establishment of an internal market and the sustainable development of Europe based on balanced economic growth and price stability. The proposal is also consistent with the climate and energy policy, one of the pillars of which is the security of energy supply.
Consultation of interested parties
Consultation methods, main sectors targeted and general profile of respondents
A public consultation to get the views of interested parties (Member States, representatives of industry of all sectors of energy, energy regulators) took place in February - March 2009. The first consultation was based on a questionnaire sent to these parties with a view to learning in particular more about monitoring aspects and the scope, design and impact of a reporting mechanism. A final consultation was carried out during a technical workshop where more detailed aspects have been discussed with consulted parties (14 May 2009).
For most of the respondents, whether Member States or industry representatives, an appropriate monitoring of investment projects into infrastructure in the energy sector is seen as relevant. It is regularly considered as essential for transparency, policy-making and support to specific projects. However, a monitoring instrument is supported on the condition that it remains a transparency tool, provides an added-value and does not represent a high administrative burden. These requirements have been fully taken into account when formulating the current proposal.
DG TREN has met with representatives of the European Network Transmission System Operators for Electricity and for Gas in charge of the preparation of the ten-year investment plan for electricity and for gas networks foreseen by the third internal market package, with data providers who have developed ways of analysing data based on simulation and with a rating agency to get information on credit quality of European utilities active in the energy sector. DG TREN also participated as an observer in several meetings organised by one Member State’s authorities on an indicative planning for future investments for electricity, gas and heat.
No external contractor was involved in preparing the impact assessment or the legislative proposal.
Four options were considered in the accompanying impact assessment, and the outcome can be summarised as follows.
Under this option, policy monitoring is carried out by the Commission on the basis of various data, either data supplied by commercial data providers or possible data notified by Member States or companies under EU energy sector – specific legislation. Council Regulation (EC) No 736/96 is an additional source of data. With no policy change, effective collection of EU-wide relevant data and transparency of data and analysis cannot be guaranteed and monitoring is likely to be difficult because of the sector – specific legislation having incoherent characteristics (frequency, update, confidentiality…) or due to the gaps in data from commercial information providers.
This option would consist in repealing Council Regulation (EC) No 736/96 given the poor implementation of this Regulation and its growing inability to capture the new EU energy system. Assuming that in the longer run markets would balance supply and demand regular monitoring could be replaced by studies that could be conducted on a case by case basis if specific policy decisions would require an analysis of energy related investment projects.
Member States, after possible notification from companies, will notify information to the Commission on investment projects. The scope of notification would cover, with an expansion of the scope and revised thresholds, all infrastructure of interest for energy security and the shift towards a low carbon economy. In order to avoid multiple notifications, it would take into account existing reporting or monitoring obligations provided that equivalent information is made available. Reporting would apply every two years further easing the administrative burden and aligning this obligation with other relevant frameworks. Data and information collected could be made public except where they are commercially sensitive. On the basis of data collected and any other relevant source, the Commission would prepare regular analysis of the future development of the EU energy system in a cross sector perspective with a view to identifying potential gaps and potential problems as well as bringing transparency to market participants. This option provides a balanced and coherent system.
Option 3: Policy monitoring with a fully – fledged reporting mechanism
As under option 2, a global and integrated framework combining reporting and monitoring would be set up under option 3. However, option 3 would set a fully-fledged integrated reporting system. Member States would be obliged to notify and validate all requested information to the Commission, irrespective of other existing notification mechanisms. This option does not comply with the proportionality principle.
Contents
- Legal elements of the proposal
- Budgetary implication
- Grounds for and objectives of the proposal
- General context
- Existing provisions in the area of the proposal
- Consistency with other policies and objectives of the Union
- Consultation of interested parties and impact assessment
- Summary of responses and how they have been taken into account
- Collection and use of expertise
- Impact assessment
- Option 0: Status quo - Policy monitoring without a specific reporting mechanism
- Option 1: Repeal of Council Regulation (EC) No 736/96
- Option 2: Policy monitoring with a complementary reporting mechanism
- Summary of the proposed action
- Legal basis
- Subsidiarity principle
- Proportionality principle
- Choice of instruments
- Additional information
- Review clause
Building on option 2 which provides the best compromise, the proposed Regulation establishes a common framework for the notification to the Commission of data and information on investment projects in energy infrastructure in the petroleum, gas, electricity and bio-fuel sectors and related to carbon dioxide produced by these sectors.
Every two years, Member States or the entity they delegate this task to would be required to collect and notify data and information on investment projects concerning production, transport and storage. To minimise the administrative burden, two elements of flexibility and simplification are introduced:
– Unless otherwise decided by Member States, undertakings would be under an obligation to provide Member States - or the competent entity - information on their investment projects, including decommissioning projects;
– Member States would be exempted from reporting if they already provide equivalent information to the Commission under EU energy sector – specific legislation. This would also be the case if the bodies in charge of network development plans for gas and electricity collect the relevant data. In this case, they would be requested to notify the relevant data to the Commission, with the appropriate comments of Member States if necessary.
Data and information collected (type of investment, planned capacities and major obstacles…) would provide the major trends for investment in EU energy infrastructure. Provision is made to guarantee that data and information notified to the Commission meet generally accepted standards; that data and information are received, stored and processed with the appropriate IT tools and in full compliance with the legal framework on data protection for individuals; that data and information will be made public except where they are commercially sensitive.
On the basis of the data and information received, the Commission will provide a regular and cross – sector analysis of the structural evolution and perspectives of the EU energy system and any other specific analysis needed. This would allow for an identification of potential future demand and supply gaps and obstacles to investment. With these analyses, the Commission will be in a better position to promote best practice and to establish greater transparency for market participants. To develop common views on these issues, the results of these analyses would be discussed with stakeholders and published.
The legal bases for the proposal are Articles 284 of the Treaty establishing the European Community and 187 of the Treaty establishing the European Atomic Energy Community.
This draft proposal aims at strengthening the framework for collection of data and information for the Commission’s tasks. With appropriate data, the Commission and in particular its Market Observatory for Energy will be in a better position to monitor the evolution of the EU energy system, in a cross – sector perspective and at EU level, and the potential problems which could delay or hinder investment projects. Given the interrelations of energy sub sectors (e.g. electricity and gas) and the existence of an internal market, the EU-wide dimension is becoming more and more relevant, thus justifying the role of EU institutions and of the Commission in particular.
The proposal complies with the proportionality principle. This proposal does not go beyond what is necessary in order to achieve the objectives. Member States will continue to have considerable flexibility in choosing the arrangements to collect data.
The instrument proposed is a Regulation as it revises an existing Regulation.
The proposal will have a limited impact on the Community budget, in particular to cover expenditure on information technology and, should the Commission so decide, expenditure on data purchasing of data and reimbursement of experts. No major direct impact is foreseen for the budgets of Member States.
Simplification
By taking account of existing reporting obligations and monitoring mechanisms, this proposal does not add an unnecessary administrative burden but should apply for its reporting part only if equivalent data and information is not provided by sector- specific legislation.
After five years, the Commission will review the reporting and monitoring mechanism laid down by the new Regulation.