Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the internal market for electricity (recast) - Main contents

Document date	24-04-2018
Publication date	25-04-2018
Reference	5834/18
From	General Secretariat of the Council
External link	original article
Original document in PDF

Council of the European Union

Brussels, 24 April 2018 (OR. en)

5834/18

Interinstitutional File: 2016/0379 (COD) i

ENER 37 ENV 57 CLIMA 19 COMPET 58 CONSOM 22 FISC 47 CODEC 128

NOTE

From: General Secretariat of the Council

To: Delegations

No. Cion doc.: 15135/1/16 ENER 418 ENV 758 CLIMA 169 COMPET 637 CONSOM 301

FISC 221 IA 131 CODEC 1809 REV 1 + ADD 1 REV 1 + ADD 2 REV 1

Subject: Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND

OF THE COUNCIL on the internal market for electricity (recast)

Delegations will find in the Annex the four column document concerning the abovementioned

proposal.

___________________ ANNEX

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the internal market for electricity

(recast)

COMISSION PROPOSAL EP PLENARY TEXT COUNCIL GENERAL Compromise proposals

APPROACH (doc. ) (COD 2016/0379 - doc. 15135/1/16

REV 1 + ADD 1 REV 1)

THE EUROPEAN PARLIAMENT THE EUROPEAN PARLIAMENT

AND THE COUNCIL OF THE AND THE COUNCIL OF THE

EUROPEAN UNION, EUROPEAN UNION,

Having regard to the Treaty on the Having regard to the Treaty on the

Functioning of the European Union, Functioning of the European Union, and in particular Article 194 (2) and in particular Article 194 (2) thereof, thereof,

Having regard to the proposal from Having regard to the proposal from the European Commission, the European Commission,

After transmission of the draft After transmission of the draft legislative act to the national legislative act to the national parliaments, parliaments,

Having regard to the opinion of the Having regard to the opinion of the

European Economic and Social European Economic and Social

Committee, Committee,

Having regard to the opinion of the Having regard to the opinion of the

Committee of the Regions, Committee of the Regions,

Acting in accordance with the Acting in accordance with the ordinary legislative procedure, ordinary legislative procedure, Whereas: Whereas:

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• (1) 

  Regulation (EC) No 714/2009 i (1) Regulation (EC) No 714/2009 i of the European Parliament and of of the European Parliament and of the the Council has been substantially Council 1 has been substantially amended several times. Since further amended several times. Since further amendments are to be made, that amendments are to be made, that Regulation should be recast in the Regulation should be recast in the interests of clarity. interests of clarity.

• (2) 

  The Energy Union aims at (2) The Energy Union aims at providing consumers – household providing consumers – household and and business – secure, sustainable, business – with safe, secure, competitive and affordable energy. sustainable, competitive and

Historically, the electricity system affordable energy. Historically, the was dominated by vertically electricity system was dominated by integrated, often publicly owned, vertically integrated, often publicly monopolies with large centralised owned, monopolies with large nuclear or fossil fuel power plants. centralised nuclear or fossil fuel The internal market in electricity, power plants. The internal market in which has been progressively electricity, which has been implemented since 1999, aims to progressively implemented since deliver a real choice for all 1999, aims to deliver a real choice for consumers in the Union , both all consumers in the Union , both citizens and businesses, new business citizens and businesses, new business opportunities and more cross-border opportunities and more cross-border trade, so as to achieve efficiency trade, so as to achieve efficiency gains, competitive prices and higher gains, competitive prices and higher standards of service, and to standards of service, and to contribute contribute to security of supply and to security of supply and sustainability. The internal market in sustainability. The internal market in electricity has increased competition, electricity has increased competition, in particular at the wholesale level, in particular at the wholesale level, and cross-border trade. It remains the and cross-border trade. It remains the foundation of an efficient energy foundation of an efficient energy market. market.

1 Regulation (EC) No 714/2009 i of the European Parliament and of the Council of 13 July 2009 on conditions for access to the network for crossborder exchanges in electricity and repealing Regulation (EC) No 1228/2003 i (OJ L 211, 14.8.2009, p. 15).

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• (3) 

  Europe's energy system is in (3) Europe's energy system is in the the middle of its most profound middle of its most profound change in change in decades and the electricity decades and the electricity market is market is at the heart of that change. at the heart of that change. [ ] This The common goal to decarbonise the change creates and facilitates new energy system creates new opportunities and challenges for opportunities and challenges for market participants. At the same time, market participants. At the same technological developments allow for time, technological developments new forms of consumer participation allow for new forms of consumer and cross-border cooperation. participation and cross-border cooperation.

  (3a) This Regulation is establishing rules to ensure the functioning of the internal energy market while integrating a limited number of requirements related to the development of renewable forms of energy and environmental policy, in particular specific rules for certain renewable power generating facilities, concerning balancing responsibility, dispatch and redispatch as well as a threshold for CO2 emissions of new generation capacity where it is subject to a capacity mechanism.

• (4) 

  State interventions, often

designed in an uncoordinated (4) State interventions, often manner, have led to increasing designed in an uncoordinated manner, distortions of the wholesale have led to increasing distortions of electricity market, with negative the wholesale electricity market, with consequences for investments and negative consequences for cross-border trade. investments and cross-border trade.

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• (5) 

  In the past, electricity AM 1

customers were purely passive, often (5) In the past, electricity (5) In the past, electricity buying electricity at regulated prices customers were purely passive, often customers were purely passive, often which had no direct relation to the buying electricity at regulated prices buying electricity at regulated prices market. In the future, customers need which had no direct relation to the which had no direct relation to the to be enabled to fully participate in market. In the future, customers need market. In the future, customers need the market on equal footing with to be enabled to fully participate in the to be enabled to fully participate in the other market participants. To market on equal footing with other market on equal footing with other integrate growing shares of market participants and be market participants. To integrate renewable energy, the future empowered to manage their energy growing shares of renewable energy, electricity system should make use of consumption. To integrate growing the future electricity system should all available sources of flexibility, shares of renewable energy, the future make use of all available sources of particularly demand response and electricity system should make use of flexibility, particularly demand storage. To achieve effective all available sources of flexibility, response and storage. [ ] It also needs decarbonisation at lowest cost, it also particularly demand side solutions to encourage energy efficiency.

needs to encourage energy efficiency. and storage, and of digitalisation through the integration of innovative technologies with the electricity system. To achieve effective

decarbonisation at lowest cost, it also needs to encourage energy efficiency. The achievement of the internal energy market through the effective integration of renewable energy can drive investments in the long term and can contribute to delivering the objectives of the Energy Union and the 2030 climate and energy framework.

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• (6) 

  More market integration and (6) More market integration and the change towards a more volatile the change towards a more volatile electricity production requires electricity production requires increased efforts to coordinate increased efforts to coordinate national energy policies with national energy policies with neighbours and to use the neighbours and to use the opportunities of cross-border opportunities of cross-border electricity trade. electricity trade.

• (7) 

  Regulatory frameworks have (7) Regulatory frameworks have developed, allowing electricity to be developed, allowing electricity to be traded across the Union. That traded across the Union. That development has been supported by development has been supported by the adoption of several network the adoption of several network codes codes and guidelines for the and guidelines for the integration of integration of the electricity markets. the electricity markets. Those network Those network codes and guidelines codes and guidelines contain contain provisions on market rules, provisions on market rules, system system operation and network operation and network connection. To connection. To ensure full ensure full transparency and increase transparency and increase legal legal certainty, the main principles of certainty, the main principles of market functioning and capacity market functioning and capacity allocation in the balancing, intraday, allocation in the balancing, intraday, day ahead and forward market day ahead and forward market timeframes should also be adopted timeframes should also be adopted pursuant to the ordinary legislative pursuant to the ordinary legislative procedure and incorporated in a single procedure and incorporated in a act. single act.

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(7a) The Balancing Guideline establishes in its Article 13 a process where transmission system operators are able to delegate all or part of their tasks to a third party. The delegating transmission system operators should remain responsible for ensuring compliance with the obligations in this Regulation. Likewise, Member States should be able to assign tasks and obligations to a third party. Such assignment should be limited to tasks and obligations executed at national level (such as imbalance settlement). The limitations to the assignment should not lead to unnecessary changes to the existing national arrangements. However, transmission system operators should remain responsible for the tasks entrusted to them pursuant to Article 40 of the [recast Electricity Directive]. (7b) The Balancing Guideline established in its Articles 18, 30 and 32 that the pricing method for standard and specific products for balancing energy should create positive incentives for market participants in keeping and/or helping to restore the system balance of their imbalance price area, reduce system imbalances and costs for society. Such pricing

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approach should strive for an economically efficient use of demand response and other balancing resources subject to operational security limits. The pricing method used in the procurement of balancing capacity should strive for an economically efficient use of demand response and other balancing resources subject to operational security limits. (7c) The integration of balancing energy markets should facilitate the efficient functioning of the intraday market in order to provide the possibility for market participants to balance themselves as close as possible to real time as set with the balancing energy gate closure times defined in Article 24 of the Balancing Guideline. Only the imbalances remaining after the end of the intraday market should be balanced by transmission system operators with the balancing market. The Balancing Guideline foresees in its Article 53 the harmonisation of the imbalance settlement period to 15 minutes in Europe. Such harmonisation should support intraday trading and foster the development of a number of trading products with same delivery windows.

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(7d) In order to enable transmission system operators to procure and use balancing capacity in an efficient, economic and market-based manner, there is a need to foster market integration. In this regard, the Balancing Guidelines established in its Title IV three methodologies through which transmission system operators may allocate cross-zonal capacity for the exchange of balancing capacity and sharing of reserves, when supported on the basis of a cost-benefit analysis: the co-optimisation process, the market-based allocation process and the allocation based on an economic efficiency analysis. The co-optimisation allocation process should be performed on a dayahead basis whereas the marketbased allocation process could be performed where the contracting is done not more than one week in advance of the provision of the balancing capacity and the allocation based on an economic efficiency analysis where the contracting is done more than one week in advance of the provision of the balancing capacity on the conditions that the volumes allocated are limited and that an assessment is done every year. Once

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a methodology for the allocation process of cross-zonal capacity is approved by the relevant regulatory authorities, early application of the methodology by two or more transmission system operators could take place to gain experience and allow for a smooth application by more transmission system operators in the future. The application of such a methodology, where existing, should nevertheless be harmonised by all transmission system operators in order to foster market integration. (7e) The Balancing Guideline establishes in its Title V that the general objective of imbalance settlement is to ensure that balance responsible parties support the system's balance in an efficient way and to incentivise market participants in keeping and/or helping to restore the system balance. To make balancing markets and the overall energy system fit for the integration of increasing shares of variable renewables, imbalance prices should reflect the real-time value of energy.

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(7f) The guideline on capacity allocation and congestion management sets out detailed guidelines on cross-zonal capacity allocation and congestion management in the day-ahead and intraday markets, including the requirements for the establishment of common methodologies for determining the volumes of capacity simultaneously available between bidding zones, criteria to assess efficiency and a review process for defining bidding zones. Articles 32 and 34 set out rules on review of bidding zone configuration, Articles 41 and 54 set out harmonised limits on maximum and minimum clearing prices for day-ahead and intraday timeframes, Article 59 sets out rules on intraday cross-zonal gate closure times, whereas Article 74 of the guideline sets out rules on redispatching and countertrading cost sharing methodologies. (7g) The guideline on forward capacity allocation sets out detailed rules on cross-zonal capacity allocation in the forward markets, on the establishment of a common methodology to determine longterm cross-zonal capacity, on the establishment of a single allocation platform at European level offering long-term transmission rights, and

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on the possibility to return longterm transmission rights for subsequent forward capacity allocation or transfer long-term transmission rights between market participants. Article 30 of the guideline sets out rules on forward hedging products. (7h) The network code on requirements for generators 2 sets out the requirements for grid connection of power-generating facilities, namely synchronous power-generating modules, power park modules and offshore power park modules, to the interconnected system. It, therefore, helps to ensure fair conditions of competition in the internal electricity market, to ensure system security and the integration of renewable electricity sources, and to facilitate Unionwide trade in electricity. Articles 66 and 67 of the network code set out rules for emerging technologies in electricity generation.

• (8) 

  Core market principles should (8) Core market principles should set out that electricity prices are to be set out that electricity prices are to be determined through demand and determined through demand and supply. Those prices should signal supply. Those prices should signal when electricity is needed, providing when electricity is needed, providing market-based incentives for market-based incentives for investments into flexibility sources investments into flexibility sources

2 Commission Regulation (EU) 2016/631 of 14 April 2016 establishing a network code on requirements for grid connection of generators.

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such as flexible generation, such as flexible generation, interconnection, demand response or interconnection, demand response or storage. storage.

• (9) 

  The decarbonisation of the (9) While decarbonisation of the electricity sector, with renewable electricity sector, with renewable energy becoming a major part of the energy becoming a major part of the market, is a core objective of the market, is one of the goals of the Energy Union. As the Union moves Energy Union [ ] it is crucial that towards the decarbonisation of the the market removes existing barriers electricity sector and increasing to cross-border trade and encourages penetration of renewable energy investments into supporting sources, it is crucial that the market infrastructure, for example, more removes existing barriers to crossflexible generation, interconnection, border trade and encourages demand response and storage. To investments into supporting support this shift to variable and infrastructure, for example, more distributed generation, and to ensure flexible generation, interconnection, that energy market principles are the demand response and storage. To basis for the Union's electricity support this shift to variable and markets of the future, a renewed focus distributed generation, and to ensure on short-term markets and scarcity that energy market principles are the pricing is essential. basis for the Union's electricity markets of the future, a renewed focus on short-term markets and scarcity pricing is essential.

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• (10) 

  Short-term markets will AM 2

improve liquidity and competition by (10) Short-term markets will (10) Short-term markets will enabling more resources to improve liquidity and competition by improve liquidity and competition by participate fully in the market, enabling more resources to participate enabling more resources to participate especially those that are more fully in the market, especially those fully in the market, especially those flexible. Effective scarcity pricing that are more flexible. Effective that are more flexible. Effective will encourage market participants to scarcity pricing will encourage market scarcity pricing will encourage market be available when the market most participants to react to market signals participants to be available when the needs it and ensures that they can and to be available when the market market most needs it and ensures that recover their costs in the wholesale most needs it and ensures that they they can recover their costs in the market. It is therefore critical to can recover their costs in the wholesale market. It is therefore ensure that, as far as possible, wholesale market. It is therefore critical to ensure that, as far as administrative and implicit price caps critical to ensure that administrative possible, administrative and implicit are removed to allow scarcity prices and implicit price caps are removed to price caps are removed to allow to increase up to the value of lost allow scarcity pricing. When fully scarcity prices to increase up to the load. When fully embedded in the embedded in the market structure, value of lost load. When fully market structure, short-term markets short-term markets and scarcity embedded in the market structure, and scarcity pricing will contribute to pricing will contribute to the removal short-term markets and scarcity the removal of other measures, such of other market distortive measures, pricing will contribute to the removal as capacity mechanisms, to ensure such as capacity mechanisms, to of other measures, such as capacity security of supply. At the same time, ensure security of supply. At the same mechanisms, to ensure security of scarcity pricing without price caps on time, scarcity pricing without price supply. At the same time, scarcity the wholesale market should not caps on the wholesale market should pricing without price caps on the jeopardize the possibility for reliable not jeopardize the possibility for wholesale market should not and stable prices for final customers, reliable and stable prices for final jeopardize the possibility for reliable in particular households and SMEs. customers, in particular households, and stable prices for final customers,

SMEs and industrial consumers. in particular households and SMEs.

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• (11) 

  Derogations to fundamental (11) Subject to Union State aid market principles such as balancing rules pursuant to Articles 107, 108 responsibility, market-based and 109 derogations to fundamental dispatch, or curtailment and market principles such as balancing redispatch reduce flexibility signals responsibility, market-based dispatch, and act as barriers to the or [ ] redispatch reduce flexibility development of solutions such as signals and act as barriers to the storage, demand response or development of solutions such as aggregation. While derogations are storage, demand response or still necessary to avoid unnecessary aggregation. While derogations are administrative burden for certain still necessary to avoid unnecessary actors, in particular households and administrative burden for certain SMEs, broad derogations covering actors, in particular households and entire technologies are not consistent SMEs, broad derogations covering with the objective of achieving entire technologies are not consistent market-based and efficient with the [ ] aim of achieving marketdecarbonisation and should thus be based and efficient decarbonisation replaced by more targeted measures. process and should thus be replaced

  by more targeted measures. (12) The precondition for effective AM 3 (12) The precondition for effective competition in the internal market in (12) The precondition for effective competition in the internal market in electricity is non-discriminatory and competition in the internal market in electricity is non-discriminatory and transparent charges for network use electricity is non-discriminatory, transparent charges for network use including interconnecting lines in the transparent and adequate charges for including interconnecting lines in the transmission system. The available network use including interconnecting transmission system. Uncoordinated capacity of those lines should be set lines in the transmission system. The curtailments of interconnector at the maximum levels consistent available capacity of those lines capacities increasingly limit the with the safety standards of secure should be set at the maximum levels exchange of electricity between network operation. consistent with the safety standards of Member States and have become a

  secure network operation. serious obstacle to the development of a functioning internal market in electricity. The available capacity of [ ] interconnectors should therefore be set at the maximum level

  consistent with the safety standards of

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secure network operation including respecting (n-1) security. However, there are some limitations to setting the capacity level in a meshed grid. The level of unscheduled flows should not go beyond what could be expected in a bidding zone without structural congestions. Further, foreseeable problems for ensuring grid security might occur, for example in case of grid maintenance. Also case-by-case grid security issues might occur. Limitations beyond that level can only be accepted for a limited transitional phase which is necessary to adapt the current physical situation in the grids to use the maximum capacity of the interconnectors. The new target benchmark, and if applicable, the linear trajectory towards this level, should ensure that a minimum share of the interconnector capacity is being available for trade or used in the capacity calculation respectively. Loop flows should only be taken into account for calculating capacity to the extent that they would exist without internal congestion. Whereas certain clearly circumscribed limitations in cross-zonal capacity may be justifiable, a clear minimum threshold needs to be put in place,

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preventing excessive use of derogation possibilities and giving a predictable capacity value for market participants. Where a flowbased approach is used, this threshold should determine the minimum share of the thermal capacity of an interconnector to be used as an input for coordinated capacity allocation under the capacity calculation and congestion management guideline.

• (13) 

  It is important to avoid (13) It is important to avoid distortion of competition resulting distortion of competition resulting from the differing safety, operational from the differing safety, operational and planning standards used by and planning standards used by transmission system operators in transmission system operators in Member States. Moreover, there Member States. Moreover, there should be transparency for market should be transparency for market participants concerning available participants concerning available transfer capacities and the security, transfer capacities and the security, planning and operational standards planning and operational standards that affect the available transfer that affect the available transfer capacities. capacities.

• (14) 

  To efficiently steer necessary (14) To efficiently steer necessary investments, prices also need to investments, prices also need to provide signals where electricity is provide signals where electricity is most needed. In a zonal electricity most needed. In a zonal electricity system, correct locational signals system, correct locational signals require a coherent, objective and require a coherent, objective and reliable determination of bidding reliable determination of bidding zones via a transparent process. In zones via a transparent process. In order to ensure efficient operation order to ensure efficient operation and and planning of the Union electricity planning of the Union electricity network and to provide effective network and to provide effective price

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price signals for new generation signals for new generation capacity, capacity, demand response or demand response or transmission transmission infrastructure, bidding infrastructure, bidding zones should zones should reflect structural reflect structural congestion. In congestion. In particular, cross-zonal particular, cross-zonal capacity should capacity should not be reduced in not be reduced in order to resolve order to resolve internal congestion. internal congestion.

(14a) To reflect the divergent principles of optimising bidding zones without jeopardizing liquid markets and grid investments two options should be foreseen to overcome congestions. Member States can choose between a bidding zone split or measures such as grid reinforcement and grid optimisation. The starting point for such a decision should be the identification of long term structural congestions either by the transmission system operator of a Member State or by the bidding zone review. Member States should try to find a common solution first on how to best address congestions. In that course the Member States might adopt multinational or national action plans to overcome congestions. At the end of the implementation of this action plan, Member States should have a possibility to choose whether to opt for a split or whether to opt for covering remaining congestions with remedial actions for which they bear the costs. In the latter

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case they shall not be split against their will, as long as the level of minimum capacity benchmark is reached. The minimum level of capacity that should be used in capacity calculation should be a percentage of the capacity of a critical network element after respecting operational security limits in contingency situation and taking account of the reliability margin. The capacity of the critical network elements should not take into account internal congestions or flows leaving and entering the same bidding zones without being scheduled. A Commission decision on the bidding zone configuration should be possible as a measure of last resort and only amend the bidding zone configuration in those Member States which have opted for a split or which have not reached the minimum level of the benchmark. For Member States adopting an action plan to overcome congestions with measures, a phase-in period for the opening of interconnectors should apply. To this end, Member State should agree on a linear trajectory the starting point of which is the capacity allocated at this border before the implementation of the action plan.

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• (15) 

  Efficient decarbonisation of (15) Efficient [ ] market integration the electricity system via market requires systematically abolishing integration requires systematically barriers to cross-border trade to abolishing barriers to cross-border overcome market fragmentation and trade to overcome market to allow Union energy customers to fragmentation and to allow Union fully benefit from the advantages of energy customers to fully benefit integrated electricity markets and from the advantages of integrated competition. electricity markets and competition.

• (16) 

  This Regulation should lay (16) This Regulation should lay down basic principles with regard to down basic principles with regard to tarification and capacity allocation, tarification and capacity allocation, whilst providing for the adoption of whilst providing for the adoption of guidelines detailing further relevant guidelines detailing further relevant principles and methodologies, in principles and methodologies, in order order to allow rapid adaptation to to allow rapid adaptation to changed changed circumstances. circumstances.

• (17) 

  The management of (17) The management of congestion congestion problems should provide problems should provide correct correct economic signals to economic signals to transmission transmission system operators and system operators and market market participants and should be participants and should be based on based on market mechanisms. market mechanisms.

• (18) 

  In an open, competitive (18) In an open, competitive market, market, transmission system transmission system operators should operators should be compensated for be compensated for costs incurred as a costs incurred as a result of hosting result of hosting cross-border flows of cross-border flows of electricity on electricity on their networks by the their networks by the operators of the operators of the transmission systems transmission systems from which from which cross-border flows cross-border flows originate and the originate and the systems where those systems where those flows end. flows end.

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• (19) 

  Payments and receipts (19) Payments and receipts resulting resulting from compensation between from compensation between transmission system operators should transmission system operators should be taken into account when setting be taken into account when setting national network tariffs. national network tariffs.

• (20) 

  The actual amount payable for (20) The actual amount payable for cross-border access to the system can cross-border access to the system can vary considerably, depending on the vary considerably, depending on the transmission system operator transmission system operator involved involved and as a result of and as a result of differences in the differences in the structure of the structure of the tarification systems tarification systems applied in applied in Member States. A certain Member States. A certain degree of degree of harmonisation is therefore harmonisation is therefore necessary necessary in order to avoid distortions in order to avoid distortions of trade. of trade.

• (21) 

  There should be rules on the (21) There should be rules on the use of revenues flowing from use of revenues flowing from congestion-management procedures, congestion-management procedures, unless the specific nature of the unless the specific nature of the interconnector concerned justifies an interconnector concerned justifies an exemption from those rules. exemption from those rules. (22) To provide for a level playing (22) To provide for a level playing field between all market participants, field between all market participants, network tariffs should be applied in a network tariffs should be applied in a way which does not discriminate way which does not discriminate between production connected at the between production connected at the distribution-level with regard to the distribution-level with regard to the production connected at the production connected at the transmission level, either positively transmission level, either positively or or negatively. They should not negatively. They should not discriminate against energy storage, discriminate against energy storage, and should not create disincentives and should not create disincentives for for participation in demand response participation in demand response or or represent an obstacle to represent an obstacle to improvements improvements in energy efficiency. in energy efficiency.

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• (23) 

  In order to increase (23) In order to increase transparency and comparability in transparency and comparability in tariff-setting where binding tariff-setting where binding harmonization is not seen as harmonization is not seen as adequate, adequate, recommendations on tariff [ ] best practice report on tariff methodologies should be issued by methodologies should be issued by the the European Agency for the European Agency for the Cooperation Cooperation of Energy Regulators of Energy Regulators established by established by [recast of Regulation [recast of Regulation (EC) No (EC) No 713/2009 as proposed by 713/2009 as proposed by COM(2016) COM(2016) 863 i/2] ("the Agency"). 863/2] ("the Agency").

• (24) 

  To better ensure optimum (24) To better ensure optimum investment in the trans-European grid investment in the trans-European grid and address the challenge where and address the challenge where viable interconnection projects viable interconnection projects cannot cannot be built for lack of be built for lack of prioritisation at prioritisation at national level, the use national level, the use of congestion of congestion rents should be rents should be reconsidered and reconsidered and only allowed in contribute [ ] to guarantee order to guarantee availability and availability and maintain or increase maintain or increase interconnection interconnection capacities. capacities.

• (25) 

  In order to ensure optimal (25) In order to ensure optimal management of the electricity management of the electricity transmission network and to allow transmission network and to allow trading and supplying electricity trading and supplying electricity across borders in the Union , a across borders in the Union, a European Network of Transmission European Network of Transmission System Operators for Electricity (the System Operators for Electricity (the ENTSO for Electricity), should be ENTSO for Electricity), should be established. The tasks of the ENTSO established. The tasks of the ENTSO for Electricity should be carried out for Electricity should be carried out in in compliance with Union's compliance with Union's competition competition rules which remain rules which remain applicable to the applicable to the decisions of the decisions of the ENTSO for

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ENTSO for Electricity. The tasks of Electricity. The tasks of the ENTSO the ENTSO for Electricity should be for Electricity should be well-defined well-defined and its working method and its working method should ensure should ensure efficiency, efficiency, transparency and the transparency and the representative representative nature of the ENTSO nature of the ENTSO for Electricity. for Electricity. The network codes The network codes prepared by the prepared by the ENTSO for ENTSO for Electricity are not Electricity are not intended to replace intended to replace the necessary the necessary national network codes national network codes for nonfor non-cross-border issues. Given cross-border issues. Given that more that more effective progress may be effective progress may be achieved achieved through an approach at through an approach at regional regional level, transmission system level, transmission system operators operators should set up regional should set up regional structures structures within the overall within the overall cooperation cooperation structure, whilst ensuring structure, whilst ensuring that results that results at regional level are at regional level are compatible with compatible with network codes and network codes and non-binding tennon-binding ten-year network year network development plans at development plans at Union level. Union level. Member States should Member States should promote promote cooperation and monitor the cooperation and monitor the effectiveness of the network at effectiveness of the network at regional level. Cooperation at regional level. Cooperation at regional regional level should be compatible level should be compatible with with progress towards a competitive progress towards a competitive and and efficient internal market in efficient internal market in electricity. electricity.

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• (26) 

  A robust medium to long-term AM 4

Union level resource adequacy (26) A robust methodology for the (26) A robust medium to long-term assessment should be carried out by long-term Union level resource Union level resource adequacy the ENTSO for Electricity to provide adequacy assessment should be assessment should be carried out by an objective basis for the assessment carried out by the ENTSO for the ENTSO for Electricity to provide of adequacy concerns. The resource Electricity to provide an objective an objective basis for the assessment adequacy concern that capacity basis for the assessment of adequacy of adequacy concerns. In order to mechanisms address should be based concerns at the Union, regional and provide this objective basis for all on the EU assessment. Member State level and the biding types of capacity mechanisms, the

zone levels. The resource adequacy resource adequacy assessment shall concern that capacity mechanisms reflect in its scenarios and address should be based on the EU sensitivities the different types of assessment. Capacity mechanisms capacity mechanisms. The resource

should be allowed to be introduced adequacy concern that capacity only if the Union level resource mechanisms address should be based adequacy assessment, conducted by on [ ] a well coordinated national the ENTSO-E, has identified and European resource adequacy adequacy concerns or if a positive assessment.

decision concerning the implementation plan has been received from the Commission.

• (27) 

  The medium to long-term AM 5 (27) The medium to long-term resource adequacy assessment (from (27) The methodology for the longresource adequacy assessment (from 10 year-ahead to year-ahead) set out term resource adequacy assessment 10 year-ahead to year-ahead) set out in this regulation has a different (from 10 year-ahead to year-ahead) in this regulation has a different purpose than the seasonal outlooks set out in this regulation has a purpose than the seasonal outlooks (six months ahead) as set out in different purpose than the seasonal (six months ahead) as set out in Article 9 [Regulation on risk outlooks (six months ahead) as set out Article 9 [Regulation on risk preparedness as proposed by in Article 9 [Regulation on risk preparedness as proposed by COM(2016) 862 i]. Medium- to longpreparedness as proposed by COM(2016) 862 i]. Medium- to longterm assessments are mainly used to COM(2016) 862 i]. Medium- to longterm assessments are mainly used to assess the need for capacity term assessments are mainly used to assess the need for capacity mechanisms whereas seasonal identify adequacy concerns whereas mechanisms whereas seasonal outlooks are used to alert to risks that seasonal outlooks are used to alert to outlooks are used to alert to risks that might occur in the following six short-term risks that might occur in might occur in the following six

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months that are likely to result in a the following six months that are months that are likely to result in a significant deterioration of the likely to result in a significant significant deterioration of the electricity supply situation. In deterioration of the electricity supply electricity supply situation. In addition, Regional Operational situation. In addition, Regional addition, [ ] Regional Security Centres also carry out regional Coordination Centres also carry out Coordinators also carry out regional adequacy assessments as defined in regional adequacy assessments as adequacy assessments as defined in European legislation on electricity defined in European legislation on European legislation on electricity transmission system operation. These electricity transmission system transmission system operation. These are very short-term adequacy operation. These are very short-term are very short-term adequacy assessments (from weak-ahead to adequacy assessments (from weakassessments (from weak-ahead to dayday-ahead) used in the context of ahead to day-ahead) used in the ahead) used in the context of system system operation. context of system operation. operation.

• (28) 

  Prior to introducing capacity (28) Prior to introducing capacity mechanisms, Member States should mechanisms, Member States should assess regulatory distortions assess regulatory distortions contributing to the related resource contributing to the related resource adequacy concern. They should be adequacy concern. They should be required to adopt measures to required to adopt measures to eliminate the identified distortions eliminate the identified distortions including a timeline for their including a timeline for their implementation. Capacity implementation. Capacity mechanisms should only be mechanisms should only be introduced for the residual concerns introduced for the [ ] concerns that that cannot be addressed through cannot be addressed through removing such distortions. removing such distortions.

  AM 6 (28a) Member States should introduce capacity mechanisms only as a last resort, where adequacy concerns cannot be addressed through the removal of existing market distortions. Before introducing a capacity mechanism which operates within the electricity market and therefore is market

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distortive, Member States should evaluate whether strategic reserves would be sufficient to address their adequacy concerns. Strategic reserves are less distortive since they operate only outside the market and only in rare cases when markets can no longer clear. Strategic reserves can avoid financial consequences to market operators that cannot fulfil their balancing responsibilities and that would consequently bear significant cost.

• (29) 

  Member States intending to (29) Member States intending to introduce capacity mechanisms introduce capacity mechanisms should should derive resource adequacy derive resource adequacy targets targets following a transparent and following a transparent and verifiable verifiable process. Member States process. Member States should have should have the freedom to set their the freedom to set their own desired own desired level of security of level of security of supply.

supply.

• (30) 

  Main principles of capacity (30) Main principles of capacity mechanisms should be laid down, mechanisms should be laid down. building on the environmental and Capacity mechanisms already in place energy State aid principles and the should be reviewed in light of these findings of DG Competition's Sector principles. In case the European and Inquiry on capacity mechanisms. the national resource adequacy Capacity mechanisms already in assessment reveals the absence of any place should be reviewed in light of adequacy concern, no new capacity these principles. In case the European mechanism should be established and resource adequacy assessment no new capacity commitments under reveals the absence of any adequacy mechanisms already in place should concern, no new capacity mechanism be made. The application of the State should be established and no new aid control rules pursuant to Articles

capacity commitments under 107 to 109 TFUE must be complied with at all times.

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mechanisms already in place should be made. The application of the State aid control rules pursuant to Articles

107 to 109 TFUE must be complied with at all times.

• (31) 

  Detailed rules for facilitating AM 7

effective cross-border participation in (31) Detailed rules for facilitating (31) Detailed rules for facilitating capacity mechanisms other than effective cross-border participation in effective cross-border participation in reserve schemes should be laid down. capacity mechanisms other than capacity mechanisms other than Transmission system operators across strategic reserves should be laid down reserve schemes should be laid down. the borders should facilitate in this Regulation. Transmission Transmission system operators across interested generators wanting to system operators across the borders the borders should facilitate interested participate in capacity mechanisms in should facilitate the participation of generators wanting to participate in other Member States. Therefore, they interested generators in capacity capacity mechanisms in other should calculate capacities up to mechanisms in other Member States. Member States. Therefore, they which cross-border participation Therefore, they should calculate should calculate capacities up to would be possible, enable capacities up to which cross-border which cross-border participation participation and check availabilities. participation would be possible, would be possible, enable

National regulatory authorities enable participation and check participation and check availabilities. should enforce the cross-border rules availabilities. National regulatory [ ] Regulatory authorities should in the Member States. authorities should enforce the crossenforce the cross-border rules in the

border rules in the Member States. Member States.

• (32) 

  In view of differences in

national energy systems and (32) In view of differences in technical limitations of existing national energy systems and technical electricity networks, the best limitations of existing electricity approach to achieving progress in networks, the best approach to market integration will often be at a achieving progress in market regional level. Regional cooperation integration will often be at a regional of transmission system operators level. Regional cooperation of should thus be strengthened. In order transmission system operators should to ensure efficient cooperation, a new thus be strengthened. In order to regulatory framework should foresee ensure efficient cooperation, a new stronger regional governance and regulatory framework should foresee regulatory oversight, including by stronger regional governance and strengthening the decision-making regulatory oversight, including by

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power of the Agency for cross-border strengthening the decision-making issues. Closer cooperation of power of the Agency for cross-border Member States could be needed also issues. Closer cooperation of Member in crisis situations, to increase States could be needed also in crisis security of supply and limit market situations, to increase security of distortions. supply and limit market distortions.

• (33) 

  The coordination between (33) The coordination between transmission system operators at transmission system operators at regional level has been formalised regional level has been formalised with the mandatory participation of with the mandatory participation of transmission system operators in transmission system operators in regional security coordinators, which regional security coordinators, which should be complemented by an should be [ ] further developed and enhanced institutional framework via support the increasingly integrated the establishment of regional operation of electricity systems across operational centres. The creation of the Union, ensuring their efficient and regional operational centres should secure performance. take into account existing regional coordination initiatives and support the increasingly integrated operation of electricity systems across the

Union, ensuring their efficient and secure performance.

• (34) 

  The geographical scope of (34) The geographical scope of [ ] regional operational centres should Regional Security Coordinators allow them to play an effective should allow them to play an effective coordination role by optimising the contribution to the coordination of [ operations of transmission system ] the operations of transmission operators over larger regions. system operators over [ ] regions and

  lead to enhanced system security and market efficiency. Regional Security Coordinators should have the flexibility to carry out the tasks in the region as best adapted to the nature of the individual tasks entrusted to them.

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• (35) 

  Regional operational centres AM 8 (35) [ ] Regional Security should carry out functions where (35) Regional coordination centres Coordinators should fulfil tasks their regionalisation brings added should carry out functions where their where their regionalisation brings value compared to functions regionalisation brings added value added value compared to functions performed at national level. The compared to functions performed at performed at national level. The [ ] functions of regional operational national level. The functions of tasks of [ ] Regional Security centres should cover the functions regional operational centres should Coordinators should cover the carried out by regional security cover the functions carried out by functions carried out by regional coordinators as well as additional regional security coordinators as well security coordinators pursuant to the system operation, market operation as additional functions with regional System Operation Guideline 3 as and risk preparedness functions. The importance. The functions carried out well as additional system operation, functions carried out by regional by regional coordination centres market operation and risk operational centres should exclude should exclude real time operation of preparedness functions. The [ ] tasks real time operation of the electricity the electricity system. carried out by [ ] Regional Security system. Coordinators should exclude real

  time operation of the electricity system.

  AM 9 (35 a) In performing their functions, regional coordination centres shall contribute to the achievement of the 2030 and 2050 objectives set out in the climate and energy policy framework.

3 Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a guideline on electricity transmission system operation (OJ L 220,

25.8.2017, p. 1).

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• (36) 

  Regional operational centres (36) [ ] Regional Security should primarily act in the interest of Coordinators should primarily act in system and market operation of the the interest of system and market region over the interests of any single operation of the region over the entity. Hence, regional operational interests of any single entity. Hence, [ centres should be entrusted with ] Regional Security Coordinators decision-making powers to act and to should be entrusted with [ ] powers direct actions to be taken by necessary to support [ ] actions to transmission system operators of the be taken by transmission system system operation region for certain operators of the system operation functions and with an enhanced region for certain functions and with advisory role for the remaining an enhanced advisory role for the functions. remaining functions.

• (37) 

  ENTSO for Electricity should (37) ENTSO for Electricity should ensure that the actions of regional ensure that the actions of [ ] Regional operational centres are coordinated Security Coordinators are across the regions' boundaries. coordinated across the regions'

  boundaries. (38) In order to raise efficiencies in (38) In order to raise efficiencies in the electricity distribution networks the electricity distribution networks in in the Union and ensure close the Union and ensure close cooperation with transmission system cooperation with transmission system operators and ENTSO for electricity, operators and ENTSO for electricity, a European entity of distribution a European entity of distribution system operators in the Union ("EU system operators in the Union ("EU DSO entity") should be established. DSO entity") should be established. The tasks of the EU DSO entity The tasks of the EU DSO entity should be well-defined and its should be well-defined and its working method should ensure working method should ensure efficiency, transparency and efficiency, transparency and representativeness amongst the representativeness amongst the Union Union distribution system operators. distribution system operators. The EU The EU DSO Entity should closely DSO Entity should closely cooperate cooperate with ENTSO for with ENTSO for Electricity on the Electricity on the preparation and preparation and implementation of the

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implementation of the network codes network codes where applicable and where applicable and should work on should work on providing guidance on providing guidance on the integration the integration inter alia of distributed inter alia of distributed generation generation and storage in distribution and storage in distribution networks networks or other areas which relate or other areas which relate to the to the management of distribution management of distribution networks. The EU DSO shall also networks. take due consideration of the

specificities inherent in distribution systems connected downstream with electricity systems on islands which are not connected with other electricity systems via interconnectors.

• (39) 

  Increased cooperation and (39) Increased cooperation and coordination among transmission coordination among transmission system operators is required to create system operators is required to create network codes for providing and network codes for providing and managing effective and transparent managing effective and transparent access to the transmission networks access to the transmission networks across borders, and to ensure across borders, and to ensure coordinated and sufficiently forwardcoordinated and sufficiently forwardlooking planning and sound technical looking planning and sound technical evolution of the transmission system evolution of the transmission system in the Union , including the creation in the Union, including the creation of of interconnection capacities, with interconnection capacities, with due due regard to the environment. Those regard to the environment. Those network codes should be in line with network codes should be in line with framework guidelines, which are framework guidelines, which are nonnon-binding in nature (framework binding in nature (framework guidelines) and which are developed guidelines) and which are developed by the Agency . The Agency should by the Agency. The Agency should have a role in reviewing, based on have a role in reviewing, based on matters of fact, draft network codes, matters of fact, draft network codes, including their compliance with the including their compliance with the

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framework guidelines, and it should framework guidelines, and it should be enabled to recommend them for be enabled to recommend them for adoption by the Commission. The adoption by the Commission. The Agency should assess proposed Agency should assess proposed amendments to the network codes amendments to the network codes and and it should be enabled to it should be enabled to recommend recommend them for adoption by the them for adoption by the Commission. Commission. Transmission system Transmission system operators should operators should operate their operate their networks in accordance networks in accordance with those with those network codes. network codes.

• (40) 

  To ensure the smooth (40) To ensure the smooth functioning of the internal market in functioning of the internal market in electricity, provision should be made electricity, provision should be made for procedures which allow the for procedures which allow the adoption of decisions and guidelines adoption of decisions and guidelines with regard, inter alia, to tarification with regard, inter alia, to tarification and capacity allocation by the and capacity allocation by the Commission whilst ensuring the Commission whilst ensuring the involvement of Member States’ involvement of Member States’ regulatory authorities in that process, regulatory authorities in that process, where appropriate through their where appropriate through their European association. Regulatory European association. Regulatory authorities, together with other authorities, together with other relevant authorities in the Member relevant authorities in the Member States, have an important role to play States, have an important role to play in contributing to the proper in contributing to the proper functioning of the internal market in functioning of the internal market in electricity. electricity.

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• (41) 

  All market participants have an (41) All market participants have an interest in the work expected of the interest in the work expected of the ENTSO for Electricity. An effective ENTSO for Electricity. An effective consultation process is therefore consultation process is therefore essential and existing structures that essential and existing structures that are set up to facilitate and streamline are set up to facilitate and streamline the consultation process, such as via the consultation process, such as via national regulators or the Agency, national regulators or the Agency, should play an important role. should play an important role. (42) In order to ensure greater (42) In order to ensure greater transparency regarding the entire transparency regarding the entire electricity transmission network in electricity transmission network in the the Union, the ENTSO for Electricity Union, the ENTSO for Electricity should draw up, publish and should draw up, publish and regularly regularly update a non-binding update a non-binding Union-wide ten Union-wide ten-year network year network development plan development plan (Union-wide (Union-wide network development network development plan). Viable plan). Viable electricity transmission electricity transmission networks and networks and necessary regional necessary regional interconnections, interconnections, relevant from a relevant from a commercial or commercial or security of supply security of supply point of view, point of view, should be included in should be included in that network that network development plan development plan.

• (43) 

  Experience with the

development and adoption of (43) Experience with the network codes has shown that it is development and adoption of network useful to streamline the development codes has shown that it is useful to procedure by clarifying that the streamline the development procedure Agency has the right to revise draft by clarifying that the Agency has the electricity network codes before right to [ ] approve draft electricity

submitting them to the Commission. network codes before submitting them to the Commission.

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• (44) 

  Investments in major new (44) Investments in major new infrastructure should be promoted infrastructure should be promoted strongly while ensuring the proper strongly while ensuring the proper functioning of the internal market in functioning of the internal market in electricity. In order to enhance the electricity. In order to enhance the positive effect of exempted direct positive effect of exempted direct current interconnectors on current interconnectors on competition and security of supply, competition and security of supply, market interest during the projectmarket interest during the projectplanning phase should be tested and planning phase should be tested and congestion-management rules should congestion-management rules should be adopted. Where direct current be adopted. Where direct current interconnectors are located in the interconnectors are located in the territory of more than one Member territory of more than one Member State, the Agency should handle as a State, the Agency should handle as a last resort the exemption request in last resort the exemption request in order to take better account of its order to take better account of its cross-border implications and to cross-border implications and to facilitate its administrative handling. facilitate its administrative handling. Moreover, given the exceptional risk Moreover, given the exceptional risk profile of constructing those exempt profile of constructing those exempt major infrastructure projects, major infrastructure projects, undertakings with supply and undertakings with supply and production interests should be able to production interests should be able to benefit from a temporary derogation benefit from a temporary derogation from the full unbundling rules for the from the full unbundling rules for the projects concerned. Exemptions projects concerned. Exemptions granted under Regulation (EC) No granted under Regulation (EC) No 1228/2003 i 4 continue to apply until 1228/2003 5 continue to apply until the the scheduled expiry date as decided scheduled expiry date as decided in in the granted exemption decision. the granted exemption decision.

4 Regulation (EC) No 1228/2003 i of the European Parliament and of the Council of 26 June 2003 on conditions for access to the network for cross-border exchanges in electricity (OJ L 176, 15.7.2003, p. 1).

5 Regulation (EC) No 1228/2003 i of the European Parliament and of the Council of 26 June 2003 on conditions for access to the network for cross-border exchanges in electricity (OJ L 176, 15.7.2003, p. 1).

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• (45) 

  To enhance trust in the market, (45) To enhance trust in the market, its participants need to be sure that its participants need to be sure that those engaging in abusive behaviour those engaging in abusive behaviour can be subject to effective, can be subject to effective, proportionate and dissuasive proportionate and dissuasive penalties. The competent authorities penalties. The competent authorities should be given the competence to should be given the competence to investigate effectively allegations of investigate effectively allegations of market abuse. To that end, it is market abuse. To that end, it is necessary that competent authorities necessary that competent authorities have access to data that provides have access to data that provides information on operational decisions information on operational decisions made by supply undertakings. In the made by supply undertakings. In the electricity market, many relevant electricity market, many relevant decisions are made by the generators, decisions are made by the generators, which should keep information in which should keep information in relation thereto available to and relation thereto available to and easily easily accessible by the competent accessible by the competent authorities for a fixed period of time. authorities for a fixed period of time. The competent authorities should, The competent authorities should, furthermore, regularly monitor the furthermore, regularly monitor the compliance of the transmission compliance of the transmission system operators with the rules. system operators with the rules. Small Small generators with no real ability generators with no real ability to to distort the market should be distort the market should be exempt exempt from that obligation. from that obligation.

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• (46) 

  The Member States and the (46) The Member States and the competent national authorities should competent national authorities should be required to provide relevant be required to provide relevant information to the Commission. Such information to the Commission. Such information should be treated information should be treated confidentially by the Commission. confidentially by the Commission. Where necessary, the Commission Where necessary, the Commission should have an opportunity to request should have an opportunity to request relevant information directly from relevant information directly from undertakings concerned, provided undertakings concerned, provided that that the competent national the competent national authorities are authorities are informed. informed.

• (47) 

  Member States should lay (47) Member States should lay down down rules on penalties applicable to rules on penalties applicable to infringements of the provisions of infringements of the provisions of this this Regulation and ensure that they Regulation and ensure that they are are implemented. Those penalties implemented. Those penalties must be must be effective, proportionate and effective, proportionate and dissuasive. dissuasive. (48) Member States and the Energy (48) Member States, [ ] the Energy Community Contracting Parties Community Contracting Parties and should closely cooperate on all other third countries which are matters concerning the development applying this Regulation or are part of an integrated electricity trading of the synchronous grid of region and should take no measures Continental Europe should closely that endanger the further integration cooperate on all matters concerning of electricity markets or security of the development of an integrated supply of Member States and electricity trading region and should Contracting Parties. take no measures that endanger the

  further integration of electricity markets or security of supply of Member States and Contracting Parties.

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• (49) 

  In order to ensure the (49) At the time of adoption of minimum degree of harmonization Regulation 714/2009 i, only few rules required for effective market for the internal electricity market functioning, the power to adopt acts existed at EU level. Since then, the in accordance with Article 290 of the EU internal market has become Treaty on the Functioning of the more complex due to the

European Union should be delegated

to the Commission in respect of areas fundamental change the markets which are fundamental for market are undergoing in particular integration. These should include the regarding deployment of variable geographical area for regional renewable electricity production. cooperation of transmission system Therefore the Network Codes and operators, the amount of Guidelines have become extensively compensation payments between comprehensive addressing both transmission system operators, the technical and general issues. In

adoption and amendment of network order to ensure the minimum degree codes and guidelines, as well as the of harmonization required for application of exemption provisions effective market functioning, the for new interconnectors. It is of power to adopt and amend particular importance that the implementing acts in accordance Commission carry out appropriate with Article 291 of the Treaty on the consultations during its preparatory Functioning of the European Union work, including at expert level, and should be [ ] conferred to the that those consultations be conducted Commission in respect of nonin accordance with the principles laid essential elements of certain specific down in the Interinstitutional areas which are fundamental for Agreement on Better Law-Making of market integration. These should 13 April 2016 . In particular, to include [ ] the adoption and ensure equal participation in the amendment of network codes and preparation of delegated acts, the guidelines, as well as the application

European Parliament and the Council

receive all documents at the same of exemption provisions for new time as Member States' experts, and interconnectors. It is of particular their experts systematically have importance that the Commission carry access to meetings of Commission out appropriate consultations during expert groups dealing with the its preparatory work, including at preparation of delegated acts. expert level, and that those

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consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement on Better Law-Making of 13 April 2016 6 . In particular, to ensure equal participation in the preparation of [ ] implementing acts, the European Parliament and the Council receive all documents at the same time as Member States' experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of [ ] implementing acts. (49a) The empowerment of the Commission to amend network codes and guidelines is limited until 31 December 2027. This interim period shall provide sufficient time for the Commission to carry out a review of the existing network codes and guidelines and if needed propose legislative acts of the Union.

6 OJ L 123, 12.5.2016, p. 1.

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• (50) 

  Since the objective of this (50) Since the objective of this

Regulation, namely the provision of a Regulation, namely the provision of a harmonised framework for crossharmonised framework for crossborder exchanges of electricity, border exchanges of electricity, cannot be sufficiently achieved by cannot be sufficiently achieved by the the Member States and can therefore Member States and can therefore be be better achieved at Union level, the better achieved at Union level, the Union may adopt measures, in Union may adopt measures, in accordance with the principle of accordance with the principle of subsidiarity, as set out in Article 5 of subsidiarity, as set out in Article 5 of the Treaty on European Union. In the Treaty on European Union . In accordance with the principle of accordance with the principle of proportionality, as set out in that proportionality, as set out in that Article, this Regulation does not go Article, this Regulation does not go beyond what is necessary in order to beyond what is necessary in order to achieve that objective. achieve that objective.

HAVE ADOPTED THIS

REGULATION:

• (51) 

  Market rules should enable the integration of electricity from renewable energy sources and provide incentives for increasing energy efficiency. (52) For reasons of coherence and legal certainty, nothing in this Regulation should prevent the application of the derogations emerging from [Article 66] of [Electricity Directive].

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• (53) 

  With regard to balancing markets, efficient and nondistortive price formation in the procurement of balancing capacity and balancing energy requires that balancing capacity does not set the price for balancing energy. This is without prejudice for the dispatching systems using an integrated scheduling process according to the Commission Regulation (EU) 2017/XXXX [Balancing]. HAVE ADOPTED THIS REGULATION:

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Chapter I Subject matter, scope and definitions

Article 1

Subject-matter and scope

This Regulation aims at: AM 10 (a) setting the basis for an efficient This Regulation aims at:

(a) setting the basis for an achievement of the objectives of the

efficient achievement of the European Energy Union and in (a) setting the basis for an efficient objectives of the European Energy particular the climate and energy achievement of the objectives of the Union and in particular the climate framework for 2030 30 by enabling European Energy Union and in and energy framework for 2030 7 by market signals to be delivered for particular the climate and energy enabling market signals to be increased flexibility, efficiency, framework for 2030

8 by enabling

delivered for increased flexibility, decarbonisation, innovation and a market signals to be delivered for decarbonisation and innovation; higher share of renewable energy increased security of supply,

sources. flexibility, sustainability, __________________ decarbonisation and innovation;

30 COM/2014/015 final. (b) setting fundamental principles AM 11

for well-functioning, integrated (b) setting fundamental principles (b) setting fundamental principles electricity markets, which allow nonfor well-functioning cross-border, for well-functioning, integrated discriminatory market access for all integrated and liquid electricity electricity markets, which allow nonresource providers and electricity markets, which allow nondiscriminatory market access for all customers, empower consumers, discriminatory market access for all resource providers and electricity enable demand response and energy resource providers and electricity customers, empower consumers, efficiency, facilitate aggregation of customers, empower consumers, enable demand response and energy distributed demand and supply, and enable competitiveness on the global efficiency, facilitate aggregation of contribute to the decarbonisation of market, demand response, energy distributed demand and supply, [ ] the economy by enabling market storage and energy efficiency, and enable market integration and integration and market-based facilitate aggregation of distributed market-based remuneration of remuneration of electricity generated demand and supply, and contribute to electricity generated from renewable from renewable sources; the decarbonisation of the economy sources;

7 COM/2014/015 final.

8 COM/2014/015 final.

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by enabling market and sectoral integration and market-based remuneration of electricity generated from renewable sources;

(c) setting fair rules for cross(c) setting fair rules for crossborder exchanges in electricity, thus border exchanges in electricity, thus enhancing competition within the enhancing competition within the internal market in electricity, taking internal market in electricity, taking into account the particular into account the particular characteristics of national and characteristics of national and regional markets. This includes the regional markets. This includes the establishment of a compensation establishment of a compensation mechanism for cross-border flows of mechanism for cross-border flows of electricity and the setting of electricity and the setting of harmonised principles on crossharmonised principles on cross-border border transmission charges and the transmission charges and the allocation of available capacities of allocation of available capacities of interconnections between national interconnections between national transmission systems; transmission systems; (d) facilitating the emergence of a AM 12 (d) facilitating the emergence of a well-functioning and transparent (d) facilitating the emergence of a well-functioning and transparent wholesale market with a high level of well-functioning, liquid and wholesale market with a high level of security of supply in electricity. It transparent whole sale market security of supply in electricity. It provides for mechanisms to contributing to a high level of provides for mechanisms to harmonise the rules for cross-border security of supply in electricity. It harmonise the rules for cross-border exchanges in electricity. provides for mechanisms to exchanges in electricity

harmonise the rules for cross-border exchanges in electricity.

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Article 2

Definitions

• 1. 

  For the purpose of this 1. For the purpose of this

Regulation, the definitions contained Regulation, the definitions contained in Article 2 of Directive [recast of in Article 2 of Directive [recast of Directive 2009/72/EC i as proposed by Directive 2009/72/EC i as proposed by COM(2016) 864 i/2], in Article 2 of COM(2016) 864 i/2], in Article 2 of Regulation (EU) No 1227/2011 i of Regulation (EU) No 1227/2011 i of the the European Parliament and of the European Parliament and of the Council 9 , in Article 2 of Council 11 , in Article 2 of Commission Commission Regulation (EU) No Regulation (EU) No 543/2013 i 12 and 543/2013 10 and in Article 2 of in Article 2 of [Recast Renewable [Recast Renewable Energies Energies Directive] apply [with the Directive] apply. exception of the definition of

‘interconnector’ which shall be replaced by the following:— ‘interconnector’ means a transmission line which crosses or spans a border between Member States and which connects the national transmission systems of the Member States.]

9 Regulation (EU) No 1227/2011 i of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency (OJ L 326, 8.12.2011, p. 1).

10 Commission Regulation (EU) No 543/2013 i of 14 June 2013 on submission and publication of data in electricity markets and amending Annex I to Regulation (EC) No 714/2009 i of the European Parliament and of the Council (OJ L 163, 15.6.2013, p. 1).

11 Regulation (EU) No 1227/2011 i of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency (OJ L 326, 8.12.2011, p. 1).

12 Commission Regulation (EU) No 543/2013 i of 14 June 2013 on submission and publication of data in electricity markets and amending Annex I to Regulation (EC) No 714/2009 i of the European Parliament and of the Council (OJ L 163, 15.6.2013, p. 1).

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• 2. 

  In addition, the following 2. In addition, the following definitions shall apply: definitions shall apply: (a) ‘regulatory authorities’ means (a) ‘regulatory authorities’ means the regulatory authorities referred to the regulatory authorities referred to in Article 57(1) of [recast of in Article 57(1) of [recast of Directive Directive 2009/72/EC i as proposed by 2009/72/EC as proposed by COM(2016) 864 i/2] ; COM(2016) 864 i/2] ; (b) ‘cross-border flow’ means a (b) ‘cross-border flow’ means a physical flow of electricity on a physical flow of electricity on a transmission network of a Member transmission network of a Member State that results from the impact of State that results from the impact of the activity of producers and/or the activity of producers and/or customers outside that Member State customers outside that Member State on its transmission network; on its transmission network; (c) ‘congestion’ means a situation AM 13 (c) ‘congestion’ means a situation in which all requests from market (c) ‘congestion’ means a situation in which all requests from market participants to trade between two in which all requests from market participants to trade between [ ] bidding zones cannot be participants to trade [ ] cannot be network areas cannot be accommodated because they would accommodated because they would accommodated because they would significantly affect the physical flows significantly affect the physical flows significantly affect the physical flows on network elements which cannot on network elements which cannot on network elements which cannot accommodate those flows ; accommodate those flows ; accommodate those flows; (d) ‘new interconnector’ means an (d) ‘new interconnector’ means an interconnector not completed by 4 interconnector not completed by 4 August 2003; August 2003; (e) 'structural congestion' means AM 14 (e) 'structural congestion' means congestion in the transmission (e) 'structural congestion' means congestion in the transmission system system that is predictable, is congestion in the transmission system that can be unambiguously defined, geographically stable over time, and that is predictable, [ ] geographically is predictable, is geographically stable is frequently reoccurring under stable over time, and frequently over time, and is frequently normal power system conditions; reoccurring under normal power reoccurring under normal power

  system conditions; system conditions;

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(f) 'market operator' means an (f) 'market operator' means an entity that provides a service entity that provides a service whereby whereby the offers to sell electricity the offers to sell electricity are are matched with bids to buy matched with bids to buy electricity; electricity;

(g) 'nominated electricity market (g) 'nominated electricity market operator' or 'NEMO’ means a market operator' or 'NEMO’ means a market operator designated by the competent operator designated by the competent authority to perform tasks related to authority to perform tasks related to single day-ahead or single intraday single day-ahead or single intraday coupling; coupling; (h) 'value of lost load' means an (h) 'value of lost load' means an estimation in €/MWh, of the estimation in €/MWh, of the maximum electricity price that maximum electricity price that customers are willing to pay to avoid customers are willing to pay to avoid an outage; an outage; (i) 'balancing' means all actions (i) 'balancing' means all actions and processes, in all timelines, and processes, in all timelines, through which transmission system through which transmission system operators ensure, in a continuous operators ensure, in a continuous way, way, maintenance of the system maintenance of the system frequency frequency within a predefined within a predefined stability range and stability range and compliance with compliance with the amount of the amount of reserves needed with reserves needed with respect to the respect to the required quality; required quality; (j) 'balancing energy' means (j) 'balancing energy' means energy used by transmission system energy used by transmission system operators to perform balancing; operators to perform balancing; (k) 'balancing service provider' (k) 'balancing service provider' means a market participant providing means a market participant providing either or both balancing energy and either or both balancing energy and balancing capacity to transmission balancing capacity to transmission system operators; system operators;

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(l) 'balancing capacity' means a (l) 'balancing capacity' means a volume of capacity that a balancing volume of capacity that a balancing service provider has agreed to hold to service provider has agreed to hold to and in respect to which the balancing and in respect to which the balancing service provider has agreed to submit service provider has agreed to submit bids for a corresponding volume of bids for a corresponding volume of balancing energy to the transmission balancing energy to the transmission system operator for the duration of system operator for the duration of the the contract; contract; (m) 'balance responsible party' (m) 'balance responsible party' means a market participant or its means a market participant or its chosen representative responsible for chosen representative responsible for its imbalances in the electricity its imbalances in the electricity market; market; (n) 'imbalance settlement period' (n) 'imbalance settlement period' means the time unit for which the means the time unit for which the imbalance of the balance responsible imbalance of the balance responsible parties is calculated; parties is calculated; (o) 'imbalance price' means the (o) 'imbalance price' means the price, be it positive, zero or negative, price, be it positive, zero or negative, in each imbalance settlement period in each imbalance settlement period for an imbalance in each direction; for an imbalance in each direction; (p) 'imbalance price area' means (p) 'imbalance price area' means the area in which an imbalance price the area in which an imbalance price is calculated; is calculated; (q) 'prequalification process' (q) 'prequalification process' means means the process to verify the the process to verify the compliance compliance of a provider of of a provider of balancing capacity balancing capacity with the with the requirements set by the requirements set by the transmission transmission system operators; system operators;

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(r) 'reserve capacity' means the (r) 'reserve capacity' means the amount of frequency containment amount of frequency containment reserves, frequency restoration reserves, frequency restoration reserves or replacement reserves that reserves or replacement reserves that needs to be available to the needs to be available to the transmission system operator; transmission system operator; (s) 'priority dispatch' means the (s) 'priority dispatch' means in selfdispatch of power plants on the basis dispatch model the dispatch of power of criteria different from the plants on the basis of criteria different economic order of bids and, in from the economic order of bids and, central dispatch systems, network in central dispatch model also from constraints, giving priority to the network constraints, giving priority to dispatch of particular generation the dispatch of particular generation technologies; technologies; (t) 'capacity calculation region' (t) 'capacity calculation region' means the geographic area in which means the geographic area in which the coordinated capacity calculation the coordinated capacity calculation is is applied; applied; (u) 'capacity mechanism' means an AM 15 (u) 'capacity mechanism' means an administrative measure to ensure the (u) capacity mechanism' means administrative measure or a market achievement of the desired level of temporary administrative measures based measure to ensure the security of supply by remunerating taken by Member States to fill the achievement of the desired level of [ ] resources for their availability not expected resource adequacy gap for resource adequacy by remunerating including measures relating to electricity supply to match electricity resources for their availability not ancillary services; demand by offering additional including measures relating to

payments to capacity providers that ancillary services and congestion operate in the electricity market, in management ; addition to income obtained by selling electricity on the market in return for the availability of existing capacity or investment in new capacity to guarantee the necessary level of security of supply;

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(v) 'strategic reserve' means a AM 16 [ ]

capacity mechanism in which (v) 'strategic reserve' means a resources are only dispatched in case capacity mechanism in which day-ahead and intraday markets have resources are held outside the failed to clear, transmission system electricity market and are only operators have exhausted their dispatched in case day-ahead and balancing resources to establish an intraday markets have failed to clear, equilibrium between demand and transmission system operators have supply, and imbalances in the market exhausted their balancing resources to during periods where the reserves establish an equilibrium between were dispatched are settled at the demand and supply, and imbalances value of lost load; in the market during periods where

the reserves were dispatched are settled at least at technical price limits or at the value of lost load;

(w) ‘high-efficiency cogeneration’ (w) ‘high-efficiency cogeneration’ means cogeneration meeting the means cogeneration meeting the criteria laid down in Annex II of criteria laid down in Annex II of Directive 2012/27 i/EU of the Directive 2012/27 i/EU of the European Parliament and of the European Parliament and of the Council 13 ; Council 14 ; (x) ‘demonstration project’ means (x) ‘demonstration project’ means a project demonstrating a technology a project demonstrating a technology as a first of its kind in the Union and as a first of its kind in the Union and representing a significant innovation representing a significant innovation that goes well beyond the state of the that goes well beyond the state of the art. art.

13 Directive 2012/27 i/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives

2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC i and 2006/32/EC (OJ L 315, 14.11.2012, p. 1). 14 Directive 2012/27 i/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives

2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC i and 2006/32/EC (OJ L 315, 14.11.2012, p. 1).

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(y) 'market participant' means a natural or legal person, who is generating, buying or selling electricity, demand response or storage services, including the placing of orders to trade, in one or more electricity markets including balancing energy markets. (z) 'redispatching' means a measure, including curtailment, activated by one or several system operators by altering the generation and/or load pattern in order to change physical flows in the transmission system and relieve a physical congestion. (aa) 'countertrading' means a cross zonal exchange initiated by system operators between two bidding zones to relieve physical congestion. (bb) 'power generating facility' means a facility that converts primary energy into electrical energy and which consists of one or more power generating modules connected to a network.

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(cc) 'central dispatching model' means a scheduling and dispatching model where the generation schedules and consumption schedules as well as dispatching of power generating facilities and demand facilities, in reference to dispatchable facilities, are determined by a TSO within the integrated scheduling process. (dd) 'standard balancing product' means a harmonised balancing product defined by all TSOs for the exchange of balancing services as set out in the Balancing Guideline adopted on the basis of Article 18 of the Regulation 714/2009 i. (ee) 'specific balancing product' means a product different from a standard product, the requirements for which are set out in the Balancing Guideline adopted on the basis of Article 18 of the Regulation 714/2009.

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(ff) 'delegated operator' means an entity to whom specific tasks or obligations entrusted to a transmission system operator or nominated electricity market operator under this Regulation or any other Regulation, Directive, Network Code or Guideline have been delegated by that transmission system operator or nominated electricity market operator or have been assigned by a Member State or Regulatory Authority;

Chapter II General rules for the electricity market

Article 3

Principles regarding the operation of electricity markets

• 1. 

  Member States, national AM 17 1. Member States, national regulatory authorities, transmission 1. Member States, national regulatory authorities, transmission system operators, distribution system regulatory authorities, transmission system operators, distribution system operators, and market operators shall system operators, distribution system operators, [ ] market operators and ensure that electricity markets are operators, market operators and third delegated operators shall ensure that operated in accordance with the parties to whom responsibilities have electricity markets are operated in following principles: been delegated or assigned, shall accordance with the following

  ensure that electricity markets are principles: operated in accordance with the following principles:

(a) prices shall be formed based (a) prices shall be formed based on demand and supply; on demand and supply.

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(b) actions which prevent price AM 18 (b) actions which prevent price formation on the basis of demand and (b) actions which prevent price formation on the basis of demand and supply or constitute a disincentive to formation on the basis of demand and supply or constitute a disincentive to the development of more flexible supply [ ] shall be avoided; the development of more flexible generation, low carbon generation, or generation, low carbon generation, or more flexible demand shall be more flexible demand shall be avoided; avoided;

AM 19 Article 3 – paragraph 1 – point b a (new) (ba) the development of more flexible generation, sustainable low carbon generation, and more flexible demand shall be promoted;

(c) customers shall be enabled to AM 20 (c) customers shall be enabled to benefit from market opportunities (c) customers shall be enabled to benefit from market opportunities and and increased competition on retail benefit from market opportunities and increased competition on retail markets; increased competition on retail markets;

markets and be empowered to act as participant in the energy market and the energy transition;

(d) market participation of (d) market participation of consumers and small businesses shall consumers and small businesses shall be enabled by aggregation of be enabled by aggregation of generation from multiple generation generation from multiple generation facilities or load from multiple facilities or load from multiple demand facilities to provide joint demand facilities to provide joint offers on the electricity market and offers on the electricity market and be be jointly operated in the electricity jointly operated in the electricity system, subject to compliance with system, subject to compliance with EU treaty rules on competition; EU treaty rules on competition;

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(e) market rules shall support the AM 21 (e) market rules shall [ ] decarbonisation of the economy by (e) market rules shall support the accompany the decarbonisation of the enabling the integration of electricity decarbonisation of the electricity economy e.g. by enabling the from renewable energy sources and system and thus the economy by integration of electricity from providing incentives for energy enabling the integration of electricity renewable energy sources and efficiency; from renewable energy sources providing incentives for energy

including energy storage and efficiency; providing incentives for energy efficiency;

(f) market rules shall deliver AM 22 (f) market rules shall deliver appropriate investment incentives for (f) market rules shall encourage appropriate investment incentives for generation, storage, energy efficiency free price formation to deliver generation, storage, energy efficiency and demand response to meet market appropriate investment incentives for and demand response to meet market needs and thus ensure security of generation, in particular long-term needs and thus ensure security of supply; investments for a decarbonised and supply;

sustainable electricity system storage, energy efficiency, demand response and facilitate fair competition and thus ensure security of supply;

(g) barriers to cross-border AM 23 (g) barriers to cross-border electricity flows and cross-border (g) barriers to cross-border electricity flows between bidding transactions on electricity markets electricity flows and cross-border zones or Member States and crossand related services markets shall be transactions on electricity markets and border transactions on electricity avoided; related services markets shall be markets and related services markets

removed; shall be avoided; (h) market rules shall provide for AM 24 (h) market rules shall provide for regional cooperation where effective; (h) market rules shall provide for regional cooperation where effective;

strong regional cooperation where effective;

(i) all generation, storage and (i) [ ] safe and sustainable demand resources shall participate on generation, storage and demand [ ] equal footing in the market; shall participate on equal footing in

the market, under the requirements provided for in the EU law;

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(j) all producers shall be (j) all producers shall be directly directly or indirectly responsible for or indirectly responsible for selling selling the electricity they generate; the electricity they generate;

AM 25 Article 3 – paragraph 1 – point j a (new) (ja) electricity generation operators shall bear full financial and legal responsibility deriving from their assets;

(k) market rules shall allow for AM 26 [ ] progress in research and development (k) market rules shall allow for to be realized and used to the benefit progress in research and development of society; into sustainable, secure and lowcarbon

energy sources, technologies or systems to be realized and used to the benefit of society;

(l) market rules shall enable the AM 27 (l) market rules shall enable the efficient dispatch of generation assets (l) market rules shall enable the efficient dispatch of generation assets and demand response; efficient dispatch of generation assets, and demand response;

storage and demand response; (m) market rules shall allow for AM 28 (m) market rules shall allow for entry and exit of electricity (m) market rules shall allow for entry and exit of electricity generation generation and electricity supply entry and exit of electricity and electricity supply undertakings undertakings based on their generation, energy storage and based on their assessment of the assessment of the economic and electricity supply undertakings based economic and financial viability of financial viability of their operations; on their assessment of the economic their operations;

and financial viability of their operations; effective competition and price formation;

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(n) long-term hedging AM 29 (n) [ ] in order to allow market opportunities, which allow market (n) long-term hedging participants [ ] to be protected participants to hedge against price opportunities, which allow market against price volatility risks on a volatility risks on a market basis, and participants to hedge against price market basis, and [ ] mitigate eliminate uncertainty on future volatility risks on a market basis, and uncertainty on future returns on returns on investment shall be mitigate uncertainty on future returns investment, long-term hedging tradable on exchanges in a on investment shall be tradable on opportunities shall be tradable on transparent manner subject to exchanges in a transparent manner exchanges in a transparent manner compliance with EU treaty rules on subject to compliance with EU treaty and long-term supply contracts competition. rules on competition while current shall be negotiable over the counter,

products offered on exchanges subject to compliance with EU treaty should be further expanded and rules on competition. promoted at Union level; Regulatory changes shall take into account effects on both short-term and longterm forward and futures markets and products. (o) market participants have a right to obtain access to the transmission and distribution networks on objective, transparent and non-discriminatory terms.

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AM 30 Article 3 a (new) Just transition The Commission shall support Member States that put in place a national strategy for the progressive reduction of installed coal and other solid fossil fuel generation and mining capacity through all available means, including targeted financial support to enable a “just transition” in regions affected by structural change. The Commission shall assist Member States to address the social, skills and industrial impacts of the clean energy transition. The Commission shall work in close partnership with the actors of coal and carbon-intensive regions, provide guidance, in particular for the access to and use of available funds and programmes, and shall encourage the exchange of good practices, including discussions on industrial roadmaps and re-skilling needs.

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Article 4 Article 4 Balancing responsibility Balance[ ] responsibility

• 1. 

  All market participants shall 1. All market participants [ ] shall aim for system balance and shall be be [ ] responsible for the imbalances financially responsible for they cause in the system. To that imbalances they cause in the system. end, the market participants [ ] They shall either be balance shall either be balance responsible responsible parties or delegate their parties or contractually delegate their responsibility to a balance responsibility to a balance responsible responsible party of their choice. party of their choice. In accordance

  with the Balancing Guideline adopted on the basis of Article 17 and 18 of the Regulation 714/2009 i, each balance responsible party shall be financially responsible for its imbalances and strive to be balanced or help the power system to be balanced.

• 2. 

  Member States may provide 2. Member States may provide [ ] for derogation from balance derogations from [ ] balancing responsibility in respect of: responsibility only in the following

  cases: (a) demonstration projects; (a) demonstration projects for

  emerging technologies as defined in Article 66 and 67 of Regulation (EU) 2016/631 15 ;

(b) generating installations using (b) power generating facility [ ], renewable energy sources or highusing renewable energy sources or efficiency cogeneration with an high-efficiency cogeneration with a installed electricity capacity of less total installed electricity capacity of than 500 kW; less than [ ] 250 kW;

15 Commission Regulation (EU) 2016/631 of 14 April 2016 establishing a network code on requirements for grid connection of generators (OJ L 112, 27.4.2016, p. 1).

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(c) installations benefitting from (c) Without prejudice to support approved by the Commission contracts concluded before [entry under Union State aid rules pursuant into force of the legislation], and to Articles 107 to 109 TFEU, and installations benefitting from support commissioned prior to [OP: entry approved by the Commission under into force]. Member States may, Union State aid rules pursuant to subject to Union state aid rules, Articles 107 to 109 TFEU, and incentivize market participants which commissioned prior to [OP: entry into are fully or partly exempted from force]. Member States may, [ ] balancing responsibility to accept full without prejudice to Articles 107 balancing responsibility against and 108 TFEU, incentivise market appropriate compensation. participants which are fully or partly

exempted from balancing responsibility to accept full balancing responsibility[ ].

AM 31 2a. When a Member State Article 4 – paragraph 2 a (new) chooses to provide a derogation 2a. When a Member State chooses according to Article 4 (2), they need to provide a derogation in to ensure that the financial accordance with Article 4(2), it shall responsibilities of imbalances are ensure that the financial fulfilled by another party. responsibilities for imbalances are fulfilled by another party.

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• 3. 

  From 1 January 2026, point (b)

of paragraph 2 shall apply only to 3. For power generating generating installations using facilities commissioned after 1 renewable energy sources or high January 2026, point (b) of paragraph 2 efficiency cogeneration with an shall apply only to renewable energy installed electricity capacity of less sources or high-efficiency

than 250 kW. cogeneration with an total installed electricity capacity of less than [ ]

150 kW. Member States may apply a lower threshold.

Article 5

Balancing market

• 1. 

  All market participants shall AM 32 [ ] have access to the balancing market, 1. All market participants, be it individually or through including those providing electricity aggregation. Balancing market rules generated from variable renewable and products shall respect the need to sources and demand side response accommodate increasing shares of and storage services shall have full variable generation as well as access to the balancing market, be it increased demand responsiveness and individually or through aggregation. the advent of new technologies. Balancing market rules and products

  shall respect the need to accommodate increasing shares of variable generation as well as increased demand responsiveness and the advent of new technologies.

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• 2. 

  Balancing markets shall be AM 33 2. Balancing markets, including organised in such a way as to ensure 2. Balancing markets shall be prequalification processes, shall be effective non-discrimination between organised in such a way as to ensure organised in such a way as to: market participants taking account of effective non-discrimination between (a) ensure effective nonthe different technical capability of market participants. All generation, discrimination between market generation from variable renewable including from variable renewable participants taking account of the sources and demand side response sources, demand side response and different technical [ ] needs of the and storage. storage shall be enabled to power system, a transparent and

  participate on equal footing in technologically neutral definition of balancing markets, taking account of services and their transparent, the different technical capability. market based procurement, (b) ensure access to all prequalified market participants, be it individual or through aggregation; (c) respect the need to accommodate increasing shares of variable generation as well as increased demand responsiveness and the advent of new technologies.

• 3. 

  Balancing energy shall be AM 34 [ ] procured separately from balancing 3. Balancing energy shall be capacity. Procurement processes procured separately from balancing shall be transparent while at the same capacity. The price of balancing time respecting confidentiality. energy shall not be pre-determined in

  a contract of balancing except where an exemption is applied in accordance with Article 16(6) of the Commission Regulation (EU) 2017/2195 1a . Procurement processes shall be transparent while at the same time respecting confidentiality. _______________ 1a Commission Regulation (EU) 2017/2195 of 23 November 2017

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establishing a guideline on electricity balancing (OJ L 312, 28.11.2017 p. 6).

• 4. 

  Balancing markets shall

ensure operational security whilst 4. Balancing markets shall ensure allowing for maximum use and operational security whilst allowing efficient allocation of cross-zonal for maximum use and efficient capacity across timeframes in allocation of cross-zonal capacity

accordance with Article 15. across timeframes in accordance with Article 15.

• 5. 

  Marginal pricing shall be used AM 35 5. [ ] For standard and specific for the settlement of balancing 5. The settlement of balancing balancing products, the settlement of energy. Market participants shall be energy shall be based on marginal balancing energy shall be based on allowed to bid as close to real time as pricing. On balancing markets, marginal pricing, pay-as-cleared, possible, and at least after the market participants shall be allowed to without prejudice to the Balancing intraday cross-zonal gate closure bid as close to real time as possible, Guideline adopted on the basis of time determined in accordance with and balancing energy gate closure Article 18 of the Regulation Article 59 of Commission Regulation times shall not be before intraday 714/2009. Market participants shall be (EU) 2015/1222 16 . cross-zonal gate closure time allowed to bid as close to real time as

  determined in accordance with Article possible, and [ ] balancing energy 59 of Commission Regulation (EU) gate closure times shall not be 2015/1222 34 before the intraday cross-zonal gate __________________ closure time determined in accordance 34 Commission Regulation (EU) with Article 59 of Commission 2015/1222 of 24 July 2015 Regulation (EU) 2015/1222 17 . establishing a guideline on capacity Transmission system operator allocation and congestion applying a central dispatching management (OJ L 197, 25.7.2015, p. model may define additional rules 24). in accordance with [ ] the

16 Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (OJ L

197, 25.7.2015, p. 24). 17 Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (OJ L

197, 25.7.2015, p. 24).

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Balancing Guideline adopted on the basis of Article 18 of the Regulation 714/2009. 5a. The price of balancing energy shall not be pre-determined [ ] in a contract for balancing capacity. An exemption for specific balancing products may be applied in accordance with the Balancing Guideline adopted on the basis of Article 18 of the Regulation 714/2009. Procurement processes shall be transparent while at the same time respecting confidentiality in accordance with paragraph 4 of Article 40 of the [recast Electricity Directive].

• 6. 

  The imbalances shall be settled 6. The imbalances shall be settled at a price that reflects the real time at a price that reflects the real time value of energy. value of energy and shall be

  calculated in accordance with the Balancing Guideline adopted on the basis of Article 18 of the Regulation 714/2009. 6a. The imbalance price area shall be equal to a bidding zone, except in case of a central dispatching model and in accordance with Balancing Guideline adopted on the basis of Article 18 of the Regulation 714/2009. The imbalance area shall be equal to the scheduling area, except in case of a central dispatching model where imbalance

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area may constitute a part of a scheduling area in accordance with the Balancing Guideline adopted on the basis of Article 18 of the Regulation 714/2009 i.

• 7. 

  The sizing of reserve capacity AM 36 7. The [ ] dimensioning of shall be performed at regional level 7. The sizing of reserve capacity reserve capacity shall be performed [ in accordance with point 7 of Annex shall be performed at regional level in ] by the transmission system I. Regional operational centres shall accordance with point 7 of Annex I. operators in accordance with the support transmission system Regional coordination centres shall System Operation Guideline operators in determining the amount support transmission system operators adopted on the basis of Article 18 of of balancing capacity that needs to be in determining the amount of the Regulation 714/2009 i and may procured in accordance with point 8 balancing capacity that needs to be be facilitated on a regional level. of Annex I. procured in accordance with point 8

  of Annex I. 8. The procurement of balancing AM 37 8. The procurement of balancing capacity shall be facilitated on a 8. The procurement of balancing capacity shall be performed by the regional level in accordance with capacity shall be performed by the transmission system operators, point 8 of Annex I. The procurement transmission system operators. The facilitated on a regional level in shall be based on a primary market procurement shall be based on a accordance with [ ] Balancing and organised in such a way as to be primary market and organised in such Guideline adopted on the basis of non-discriminatory between market a way as to be non-discriminatory Article 18 of the Regulation participants in the prequalification between market participants in the 714/2009. The procurement of process individually or through prequalification process, whether balancing capacity shall be marketaggregation. market participants participate based [ ] and organised in such a

  individually or through aggregation way as to be non-discriminatory subject to technical constraints between market participants in the inherent in managing networks. The prequalification process individually reservation of cross-zonal capacity or through aggregation in accordance for the exchange of balancing with paragraph 4 of Article 40 of capacity shall be limited to 5% of the the [recast Electricity Directive]. available capacity for the exchange of energy of the previous relevant calendar year between the respective bidding zones.

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• 9. 

  The procurement of upward AM 38 9. The procurement of upward balancing capacity and downward 9. The procurement of upward balancing capacity and downward balancing capacity shall be carried balancing capacity and downward balancing capacity shall be carried out out separately. The contracting shall balancing capacity shall be carried out separately, [ ] in accordance with be performed for not longer than one separately. Procurement of balancing the Balancing Guideline adopted on day before the provision of the capacity shall be performed for not the basis of Article 18 of the balancing capacity and the longer than one day before the Regulation 714/2009 i. To the extent contracting period shall have a provision of the balancing capacity possible, and at least for a maximum of one day. and the contracting period shall have a minimum of 40 % of the standard

  maximum duration of one day. products used for balancing capacity, the contracting of

  balancing capacity shall be performed for not longer than one day before the provision of the balancing capacity and the contracting period shall have a maximum of one day. The contracting of the remaining part of the balancing capacity shall be performed for a maximum of one month in advance of the provision of balancing capacity and the contracting period of the remaining part of balancing capacity shall have a maximum period of one month.

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9a. On the request of the transmission system operator the regulatory authority may extend the contracting period of the remaining part of balancing capacity referred to in paragraph 9 to a maximum period of twelve months provided that such decision will be limited in time, and the positive effects in terms of lowering of costs for consumers will exceed the negative impacts on the market. The request shall include: (a) specification of the time period during which the exemption would apply; (b) specification of the volume of balancing capacity for which the exemption would apply; (c) analysis of the impact of such an exemption on the participation of balancing resources; and (d) justification for the exemption demonstrating that such an exemption would lead to lower costs for consumers.

• 10. 

  Transmission system operators AM 39 10. Transmission system operators shall publish close to real-time 10. Transmission system operators shall publish, [ ] as soon as possible information on the current balancing or third parties to whom these but not later than 30 minutes after state of their control areas, the responsibilities have been delegated real-time, the information on the imbalance price and the balancing by the relevant transmission system current [ ] system balance of their [ energy price. operator, Member State or regulatory ] scheduling areas [ ] and the

  authority shall publish close to realestimated [ ] balancing energy time information on the current prices. To the extent that balancing state of their control areas, responsibility for provision of this

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the estimated imbalance price and the information has been assigned or estimated balancing energy price. delegated to a third party, in accordance with the Balancing Guideline adopted on the basis of Article 18 of the Regulation 714/2009Article, those parties will be responsible for meeting the requirements of this Article. AM 40 Article 5 – paragraph 10 a (new) 10a. Member States shall report on the functioning and transparency of, and access to, in particular by small providers, the balancing markets, in particular for the purpose of Article 4, through the reporting procedure on the internal energy market laid down in Article 21 of Regulation .../... [Governance of the Energy Union].

Article 6

Day-ahead and intraday markets

• 1. 

  Transmission system operators 1. Transmission system operators and nominated electricity market and nominated electricity market operators shall jointly organise the operators shall jointly organise the management of the integrated daymanagement of the integrated dayahead and intraday markets based on ahead and intraday markets based on market coupling as set out in market coupling as set out in Regulation (EU) 2015/1222. Regulation (EU) 2015/1222. Transmission system operators and Transmission system operators and nominated electricity market nominated electricity market operators operators shall cooperate at Union shall cooperate at Union level or, level or, where more appropriate, on where more appropriate, on a regional a regional basis in order to maximise basis in order to maximise the the efficiency and effectiveness of efficiency and effectiveness of Union

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Union electricity day-ahead and electricity day-ahead and intraday intraday trading. The obligation to trading. The obligation to cooperate cooperate shall be without prejudice shall be without prejudice to the to the application of the provisions of application of the provisions of Union Union competition law. In their competition law. In their functions functions relating to electricity relating to electricity trading, trading, transmission system transmission system operators and operators and nominated market nominated electricity market operators shall be subject to operators shall be subject to regulatory oversight by regulators regulatory oversight by regulators and and the Agency pursuant to Article the Agency pursuant to Article 59 of 59 of [recast of Directive 2009/72/EC i [recast of Directive 2009/72/EC i as as proposed by COM(2016) 864 i/2] proposed by COM(2016) 864 i/2] and and Articles 4 and 9 of [recast of Articles 4 and 9 of [recast of Regulation (EC) No 713/2009 i as Regulation (EC) No 713/2009 i as proposed by COM(2016) 863 i/2]. proposed by COM(2016) 863 i/2]. 2. Day-ahead and intraday 2. Day-ahead and intraday markets shall markets shall (a) be organised in such a way as AM 41 (a) be organised in such a way as to be non-discriminatory; (a) be [ ] non-discriminatory; to be non-discriminatory; (b) maximise the ability of market (b) maximise the ability of all participants to contribute to avoid market participants to [ ] manage system imbalances; their imbalances; (c) maximise the opportunities for (c) maximise the opportunities for market participants to participate in all market participants to participate cross-border trade as close as in cross-[ ] zonal trade as close as possible to real time across all possible to real time across all bidding bidding zones; zones; (d) provide prices that reflect (d) provide prices that reflect market fundamentals and that market market fundamentals, including the participants can rely on when real time value of energy, and that agreeing on longer-term hedging market participants can rely on when products; agreeing on longer-term hedging

products;

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(e) ensure operational security (e) ensure operational security whilst allowing for maximum use of whilst allowing for maximum use of transmission capacity; transmission capacity; (f) be transparent while at the (f) be transparent while at the same same time respecting confidentiality; time respecting confidentiality and

ensuring trading occurs in an anonymous manner; and;

(g) ensure trades are anonymous; [ ] and

(h) make no distinction between (h) make no distinction between trades made within a bidding zone trades made within a bidding zone and and across bidding zones. across bidding zones. 3. Market operators shall be free AM 42 [ ] to develop products and trading 3. Market operators shall be free opportunities that suit market to develop products and trading participants' demand and needs and opportunities that suit market ensure that all market participants are participants' demand and needs and able to access the market individually ensure that all market participants are or through aggregation. They shall able to access the market individually respect the need to accommodate or through aggregation. They shall increasing shares of variable respect the need to accommodate generation as well as increased increasing shares of variable demand responsiveness and the generation and energy storage as well advent of new technologies. as increased demand responsiveness

and the advent of new technologies

Article 7

Trade on day-ahead and intraday markets

• 1. 

  Market operators shall allow AM 43 1. Nominated electricity market market participants to trade energy as 1. Market operators shall allow operators shall allow market close to real time as possible and at market participants to trade energy as participants to trade energy as close to least up to the intraday cross-zonal close to real time as possible and at real time as possible and at least up to gate closure time determined in least up to 15 minutes before real the intraday cross-zonal gate closure accordance with Article 59 of time across all bidding zones. time determined in accordance with [ Regulation (EU) 2015/1222. ] the capacity allocation and

  congestion management guideline

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adopted on the basis of Article 18 of Regulation (EU) 714/2009 i.

• 2. 

  Market operators shall provide AM 44 2. Nominated electricity market market participants with the 2. Market operators shall provide operators shall provide market opportunity to trade in energy in time market participants with the participants with the opportunity to intervals at least as short as the opportunity to trade in energy in trade in energy in time intervals at imbalance settlement period in both national and cross-border markets in least as short as the imbalance day-ahead and intraday markets. time intervals at least as short as the settlement period in both day-ahead

  imbalance settlement period in both and intraday markets in accordance day-ahead and intraday markets. with the balancing guideline adopted on the basis of Article 18 of Regulation (EU) 714/2009 i.

• 3. 

  Market operators shall provide AM 45 3. Nominated electricity market products for trading in day-ahead and 3. Market operators shall provide operators shall provide products for intraday markets which are products for trading in day-ahead and trading in day-ahead and intraday sufficiently small in size, with intraday markets which are markets which are sufficiently small minimum bid sizes of 1 Megawatt or sufficiently small in size, with in size, with minimum bid sizes of 1 less, to allow for the effective minimum bid sizes of 500 Kilowatt, to Megawatt [ ], to allow for the participation of demand-side allow for the effective participation of effective participation of demand-side response, energy storage and smalldemand-side response, energy storage response, energy storage and smallscale renewables. and small-scale renewables including scale renewables in accordance to

  directly by customers. the methodologies developed in the capacity allocation and congestion management guideline adopted on the basis of Article 18 of Regulation (EU) 714/2009.

ANNEX E 2B EN

• 4. 

  By 1 January 2025, the AM 46

imbalance settlement period shall be 4. By 1 January 2021, the 4. By 1 January 2021, the imbalance

15 minutes in all control areas. imbalance settlement period shall be settlement period shall be 15 minutes

15 minutes in all control areas. in all [ ] scheduling areas unless regulatory authorities have granted

a derogation or an exemption in accordance with the balancing guideline adopted on the basis of Article 18 of the Regulation 714/2009.

Article 8

Forward markets

• 1. 

  In line with Regulation (EU) 1. In line with Regulation (EU)

2016/1719, transmission system 2016/1719, transmission system operators shall issue long-term operators shall issue long-term transmission rights or have transmission rights or have equivalent equivalent measures in place to allow measures in place to allow for market for market participants, in particular participants, [ ] including owners of owners of generation facilities using generation facilities using renewable renewable energy sources, to hedge energy sources, to hedge price risks price risks across bidding zone across bidding zone borders, unless borders. an assessment of the forward

market performed by the competent regulatory authorities on the bidding zone borders shows sufficient hedging opportunities in the concerned bidding zones in accordance with the guideline on forward capacity allocation adopted on the basis of Article 18 of the Regulation 714.

ANNEX E 2B EN

• 2. 

  Long-term transmission rights 2. Long-term transmission rights shall be allocated in a transparent, shall be allocated in a transparent, market based and non-discriminatory market based and non-discriminatory manner through a single allocation manner through a single allocation platform. Long-term transmission platform [ ] according to the rights shall be firm and be provisions of the guideline on transferable between market forward capacity allocation adopted participants. on the basis of Article 18 of the

  Regulation 714/2009 i. 3. Subject to compliance with AM 47 3. Subject to compliance with treaty rules on competition, market 3. Subject to compliance with treaty rules on competition, market operators shall be free to develop treaty rules on competition, market operators shall be free to develop forward hedging products including operators shall be free to develop forward hedging products including for the long-term to provide market forward hedging products including for the long-term to provide market participants, in particular owners of for the long-term to provide market participants, [ ] including owners of generation facilities using renewable participants, in particular owners of generation facilities using renewable energy sources, with appropriate generation facilities using renewable energy sources, with appropriate possibilities to hedge financial risks energy sources, with appropriate possibilities to hedge financial risks from price fluctuations. Member possibilities to hedge financial risks from price fluctuations. Member States shall not restrict such hedging from price fluctuations. Member States shall not restrict such hedging activity to trades within a Member States shall support the liquidity of activity to trades within a Member State or bidding zone. such products, in particular of State or bidding zone.

  exchange-based products that have already been developed, and shall allow them to be traded across bidding zones.

ANNEX E 2B EN

Article 9 Article 9 Price Restrictions [ ] Technical bidding limits

• 1. 

  There shall be no maximum AM 48 1. [ ] Wholesale electricity limit of the wholesale electricity 1. There shall be no maximum [ ] prices and balancing energy prices, price unless it is set at the value of and no minimum limit of the including bidding and clearing lost load as determined in accordance wholesale electricity price [ ]. This prices, shall not be subject to a with Article 10. There shall be no provision shall apply, inter alia, to minimum or maximum limit. This minimum limit of the wholesale bidding and clearing in all timeframes is without prejudice to the technical electricity price unless it is set at a and include balancing energy and price limits which may be applied in value of minus 2000 € or less and, in imbalance prices. the balancing timeframe according the event that it is or anticipated to be to the Balancing Guideline adopted reached, set at a lower value for the on the basis of Article 18 of the following day. This provision shall Regulation 714/2009 i and in the dayapply, inter alia, to bidding and ahead and intraday timeframes as clearing in all timeframes and include set out in the following paragraph. balancing energy and imbalance prices.

• 2. 

  By way of derogation from AM 49 2. [ ] Nominated electricity paragraph 1, until [OP: two years 2. By way of derogation from market operators may apply after entry into force] market paragraph 1, market operators may harmonised limits on maximum and operators may apply limits on apply technical limits on maximum minimum clearing prices for daymaximum clearing prices for dayand minimum bidding limits for dayahead and intraday timeframes in ahead and intraday timeframes in ahead and intraday timeframes in accordance with [ ] the capacity accordance with Articles 41 and 54 accordance with Articles 41 and 54 of allocation and congestion of Regulation (EU) 2015/1222. In the Regulation (EU) 2015/1222 and for management guideline adopted on event that limits are, or are the balancing timeframe in the basis of Article 18 of the anticipated to be, reached, they shall accordance with Regulation (EU) Regulation 714/2009 i. These limits be raised for the following day. 2017/2195. In the event that those shall take into account the

  technical limits are, or are anticipated maximum value of lost load. to be, reached, they shall be Nominated market operators shall automatically adjusted. The technical implement a transparent price limits shall be sufficiently high mechanism to adjust automatically so as not to unnecessarily restrict the technical bidding limits in due trade, and shall be harmonised for time in the event that the set limits the common market area. They shall are expected to be reached. The be returned to initial values after the adjusted higher limits shall remain scarcity situation is over. applicable until further increases under this mechanism are required.

ANNEX E 2B EN

• 3. 

  Transmission system operators 3. Transmission system operators shall not take any measures with the shall not take any measures with the aim of changing the wholesale prices. aim of changing the wholesale prices. All dispatch orders shall be reported [ ] to the national regulatory authority within one day.

• 4. 

  Member States shall identify 4. National regulatory policies and measures applied within authorities or other competent their territory that could contribute to authorities designated by Member indirectly restrict price formation, States shall identify policies and including limiting bids relating to the measures applied within their territory activation of balancing energy, that could contribute to indirectly capacity mechanisms, measures by restrict wholesale price formation, the transmission system operators, including limiting bids relating to the measures intended to challenge activation of balancing energy, market results or to prevent abuse of capacity mechanisms, measures by the dominant positions or inefficiently transmission system operators, defined bidding zones. measures intended to challenge

  market results or to prevent abuse of dominant positions or inefficiently defined bidding zones.

ANNEX E 2B EN

• 5. 

  Where a Member State has 5. Where a national regulatory identified a policy or measure which authority or other competent could serve to restrict price formation authority designated by Member it shall take all appropriate actions to State has identified a policy or eliminate or, if not possible, mitigate measure which could serve to restrict the impact on bidding behaviour. price formation it shall take all Member States shall provide a report appropriate actions to eliminate or, if to the Commission by [OP: six not possible, mitigate the impact on months after entry into force] bidding behaviour. Member States detailing the measures and actions shall provide a report to the they have taken or intend to take. Commission by [OP: six months after

  entry into force] detailing the measures and actions they have taken or intend to take.

  Article 10 Value of lost load

• 1. 

  By [OP: one year after entry AM 50 1. By [OP: one year after entry into force] Member States shall 1. By [OP: one year after entry into force] where required for establish a single estimate of the into force] Member States shall setting a reliability standard in Value of Lost Load (VoLL) for their establish a single estimate of the accordance with Article 20 national territory, expressed in €/MWh. That Value of Lost Load (VoLL) for their regulatory authorities or other estimate shall be reported to the territory, expressed in€/MWh. That competent authorities designated by Commission and made publically estimate shall be reported to the Member States shall establish a single available. Member States may Commission and made publically estimate of the Value of Lost Load establish different VoLL per bidding available. In the case of cross-border (VoLL) for their territory [ ]. That zone if they have several bidding bidding zones, Member States shall estimate shall be [ ] made publically zones in their territory. In establish a common estimate of the available. National regulatory establishing VoLL, Member States VoLL. Member States may establish authorities or other competent shall apply the methodology different VoLL per bidding zone if authorities designated by Member developed pursuant to Article 19(5). they have several bidding zones in States may establish different [ ]

  their territory. In establishing VoLL, estimates per bidding zone if they Member States shall apply the have several bidding zones in their methodology developed pursuant to territory. In case a bidding zone Article 19(5). consists of territories of more than one Member State, the concerned

ANNEX E 2B EN

Member States shall establish a single VoLL for that bidding zone. In establishing VoLL, national regulatory authorities or other competent authorities designated by Member States shall apply the methodology developed pursuant to Article 19(5).

• 2. 

  Member States shall update 2. Member States shall update their estimate at least every five their estimate at least every five years years. or when a significant change is

  observed.

  Article 11 Dispatching of generation and demand response

• 1. 

  Dispatching of power

generation facilities and demand 1. Dispatching of power response shall be non-discriminatory generation facilities and demand and market based unless otherwise response shall be non-discriminatory,

provided under paragraphs 2 to 4. transparent and, unless otherwise provided under Article 11 (2) to

Article 11 (4), market based [ ].

• 2. 

  When dispatching electricity

generating installations, transmission 2. [ ] Without prejudice to system operators shall give priority to Articles 107 to 109 TFEU Member generating installations using States may provide for electricity renewable energy sources or highgenerated [ ] using renewable energy efficiency cogeneration from small sources or high-efficiency generating installations or generating cogeneration from small [ ] power installations using emerging generating facility or power

technologies to the following extent: generating facility using emerging technologies to be granted priority

dispatch up to the following extent:

ANNEX E 2B EN

(a) generating installations using AM 51 (a) [ ] power generating renewable energy sources or high(a) generating installations using facility using renewable energy efficiency cogeneration with an renewable energy sources or highsources or high-efficiency installed electricity capacity of less efficiency cogeneration with an cogeneration with an installed than 500 kW; or installed electricity capacity of less electricity capacity of less than [ ]

than 500 kW; [ ] 250 kW; or (b) demonstration projects for AM 52 (b) demonstration projects for innovative technologies. (b) generating installations which emerging [ ] technologies as defined

are demonstration projects for in the network code on innovative technologies; requirements for generators Member States may apply higher adopted on the basis of Article 6 of limits to local energy communities as Regulation 714/2009 i. established in the Directive (EU) ... [recast of Directive 2009/72/EC i as proposed by COM(2016) 864 i/2].

• 3. 

  Where the total capacity of AM 53 [ ] generating installations subject to 3. A Member State which does priority dispatch under paragraph 2 is not at the time of entry into force of higher than 15 % of the total installed this Regulation grant priority generating capacity in a Member dispatch to any generating

State, point (a) of paragraph 2 shall installations may request to be apply only to additional generating exempted from the provisions of installations using renewable energy paragraph 2 if it can demonstrate to sources or high-efficiency the Commission that all of the cogeneration with an installed following conditions are met: electricity capacity of less than 250 kW.

(a) no priority dispatch exists for installations other than those listed in paragraph 2 is in place; (b) its liquid intraday, wholesale and balancing markets are fully accessible to all market players in accordance with the provisions of this Regulation;

ANNEX E 2B EN

(c) its curtailment rules and congestion management are transparent to all market parties and comply with the provisions of this Regulation; (d) its renewable energy target for 2030 is sufficient for the collective achievement of the Union’s binding overall target for share of energy from renewable sources pursuant to Article 3(2) of [Directive 2009/28/EC i as proposed by COM(2016) 767 i]and the Member State is expected to meet its target The Commission shall approve or reject a request for exemption within six months of receipt of the request. Any exemption granted shall avoid retroactive changes for installations already benefiting from priority dispatch, notwithstanding any agreement between a Member State and an installation on a voluntary basis.

From 1 January 2026, point (a) of From 1 January 2026, point (a) of 3a. For power generating facility paragraph 2 shall apply only to paragraph 2 shall apply only to commissioned as from 1 January generating installations using generating installations using 2026, point (a) of paragraph 2 shall renewable energy sources or highrenewable energy sources or highapply only to power generating efficiency cogeneration with an efficiency cogeneration with an facilities [ ] using renewable energy installed electricity capacity of less installed electricity capacity of less sources or high-efficiency than 250 kW or, if the threshold than 250 kW [ ] . cogeneration with an installed under the first sentence of this electricity capacity of less than [ ] paragraph has been reached, of less 150 kW [ ]. Member States may than 125 kW. apply a lower threshold.

ANNEX E 2B EN

• 4. 

  Generating installations using AM 54 4. [ ] Without prejudice to renewable energy sources or high 4. Without prejudice to contracts concluded before [entry efficiency cogeneration which have paragraph 3 of this Article, into force of the legislation], power been commissioned prior to [OP: generating installations using generating facility using renewable entry into force] and have, when renewable energy sources or highenergy sources or high-efficiency commissioned, been subject to efficiency cogeneration which have cogeneration which have been priority dispatch under Article 15(5) been commissioned prior to [OP: commissioned prior to [OP: entry into of Directive 2012/27 i/EU of the entry into force] and have, when force] and have, when commissioned, European Parliament and of the commissioned, been subject to been subject to priority dispatch under Council or Article 16(2) of Directive priority dispatch under Article 15 (5) Article 15(5) of Directive 2012/27 i/EU 2009/28/EC of the European of Directive 2012/27 i/EU of the of the European Parliament and of the Parliament and of the Council 18 shall European Parliament and of the Council or Article 16(2) of Directive remain subject to priority dispatch. Council or Article 16 (2) Directive 2009/28/EC i of the European Priority dispatch shall no longer be 2009/28/EC of the European Parliament and of the Council 19 shall applicable from the date where the Parliament and of the Council 39 shall [ ] continue to benefit from priority generating installation is subject to remain subject to priority dispatch. dispatch. Priority dispatch shall no significant modifications, which shall Priority dispatch shall no longer be longer be applicable from the date be the case at least where a new applicable from the date where the where the [ ] power generating connection agreement is required or generating installation is subject to facility is subject to significant the generation capacity is increased. significant modifications, which shall modifications, which shall be the case

  be the case at least where a new at least where a new connection connection agreement is required or agreement is required or the the generation capacity is increased. generation capacity is increased. 1. __________________

  35 Directive 2009/28/EC i of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC i and 2003/30/EC (OJ L 140, 5.6.2009, p. 16).

18 Directive 2009/28/EC i of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC i and 2003/30/EC (OJ L 140, 5.6.2009, p. 16).

19 Directive 2009/28/EC i of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC i and 2003/30/EC (OJ L 140, 5.6.2009, p. 16).

ANNEX E 2B EN

• 5. 

  Priority dispatch shall not

endanger the secure operation of the 5. Priority dispatch shall not electricity system, shall not be used endanger the secure operation of the as a justification for curtailment of electricity system, shall not be used as cross-border capacities beyond what a justification for curtailment of crossis provided for in Article 14 and shall border capacities beyond what is be based on transparent and nonprovided for in Article 14 and shall be

discriminatory criteria. based on transparent and nondiscriminatory criteria.

Article 12 Article 12 Redispatching and curtailment Redispatching [ ]

• 1. 

  Curtailment or redispatching

of generation and redispatching of 1. [ ] Redispatching of generation demand response shall be based on and redispatching of demand response objective, transparent and nonshall be based on objective,

discriminatory criteria. transparent and non-discriminatory criteria. It shall be open to all

generation technologies, storage and demand response, including operators located in other Member States unless technically not feasible.

ANNEX E 2B EN

• 2. 

  The resources curtailed or AM 55 2. The resources [ ]redispatched redispatched shall be selected 2. The resources curtailed or shall be selected amongst generation, amongst generation or demand redispatched shall be selected storage or demand facilities [ ] using facilities submitting offers for amongst generation, energy storage, market-based mechanisms and be curtailment or redispatching using and/or demand response facilities financially compensated. [ ] market-based mechanisms and be submitting offers for curtailment or Balancing energy bids used for financially compensated. Nonredispatching using market-based redispatching shall not set the market-based curtailment or mechanisms and be financially balancing energy price in redispatching of generation or compensated. Non-market-based accordance with the Balancing redispatching of demand response curtailment or redispatching of Guideline adopted on the basis of shall only be used where no marketgeneration or redispatching of energy Article 18 of the Regulation based alternative is available, where storage and/or demand response shall 714/2009. all available market-based resources only be used for operational security have been used, or where the number reasons and where no market-based of generation or demand facilities alternative is available or where all (part of 2, moved as 2a) available in the area where suitable available market-based resources have generation or demand facilities for been used, or where the number of the provision of the service are generation, energy storage or demand located is too low to ensure effective facilities available in the area where competition. The provision of suitable generation, energy storage or market-based resources shall be open demand facilities for the provision of to all generation technologies, the service are located is too low to storage and demand response, ensure effective competition. The including operators located in other provision of market-based resources

Member States unless technically not shall be open to all generation feasible. technologies, storage and demand

response, including operators located in other Member States unless technically not feasible.

ANNEX E 2B EN

2a. Without prejudice to Articles 107 to 109 TFEU non-market-based [ ] redispatching of generation or redispatching of demand response [ ] may only be used [ ] subject to the following conditions: (a) no market-based alternative is available, (b) [ ] all available market-based resources have been used, or (c) [ ] the number of generation or demand facilities available in the area where suitable generation or demand facilities for the provision of the service are located is too low to ensure effective competition. [ ] (d) the current grid situation leads to congestion in such a regular and predictable way that marketbased redispatch would lead to regular strategic bidding which would increase the level of internal congestion and the Member State concerned has adopted an action plan to address this congestions or ensures that minimum available capacity for cross-zonal trade is [ ] in accordance with Article 14 (7).

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• 3. 

  The responsible system AM 56 3. The responsible system operators shall report at least once 3. The responsible system operators shall report at least once per per year to the competent regulatory operators shall report at least once per year to the competent regulatory authority on curtailment or year to the competent regulatory authority on [ ] downward downward redispatching of authority, which shall be transmitted redispatching of power generating generating installations using to the Agency, on: facility [ ] using renewable energy renewable energy sources or highsources or high-efficiency efficiency cogeneration and on cogeneration [ ]. measures taken to reduce the need for such curtailment or downward redispatching in the future.

Curtailment or redispatching of generating installations using renewable energy sources or highefficiency cogeneration shall be subject to compensation pursuant to paragraph 6.

(a) the level of development and effectiveness of market-based curtailment or redispatching mechanisms for generation and demand facilities; (b) the reasons, volumes in MWh and type of generation source subject to curtailment or downward redispatching; (c) the measures taken to reduce the need for the curtailment or downward redispatching of generating installations using renewable energy sources or high-efficiency cogeneration in the future including investments in digitalisation of the grid infrastructure and in services that increase flexibility;

ANNEX E 2B EN

(d) requests and contractual arrangements made with generating units for them to operate at a certain level of electricity infeed, the necessity of which the system operators shall justify,, specifying to what extent those services could not be provided by other units. The competent regulatory authority shall publish the data referred to in paragraphs (a) to (d) together with recommendations for improvement where necessary. Curtailment or redispatching of generating installations using renewable energy sources or highefficiency cogeneration shall be subject to compensation pursuant to paragraph 6.

• 4. 

  Subject to requirements 4. Subject to requirements relating relating to the maintenance of the to the maintenance of the reliability reliability and safety of the grid, and safety of the grid, based on based on transparent and nontransparent and non-discriminatory discriminatory criteria defined by the criteria defined by the competent competent national authorities, national authorities, transmission transmission system operators and system operators and distribution distribution system operators shall: system operators shall: (a) guarantee the capability of AM 57 (a) guarantee the capability of transmission and distribution (a) guarantee the capability of transmission and distribution networks to transmit electricity transmission and distribution networks to transmit electricity produced from renewable energy networks to transmit electricity produced from renewable energy sources or high-efficiency produced from renewable energy sources or high-efficiency cogeneration with minimum possible sources, energy storage, demandcogeneration with minimum possible [ curtailment or redispatching. That response or high-efficiency ] redispatching. That shall not prevent shall not prevent network planning cogeneration with minimum possible network planning from taking into

ANNEX E 2B EN

from taking into account limited curtailment or redispatching. That account limited [ ] redispatching curtailment or redispatching where shall not prevent network planning where this is shown to be more this is shown to be more from taking into account limited economically efficient and, [ ] does economically efficient and does not curtailment or redispatching where not exceed 5 % of [ ] the annual exceed 5 % of installed capacities they can demonstrate in a generated electricity in installations using renewable energy sources or transparent way that this is more using renewable energy sources [ ] high-efficiency cogeneration in their economically efficient and does not and which are directly connected to area; exceed 5 % of installed capacities their respective grid, unless

using renewable energy sources, otherwise provided by a Member energy storage, demand-response or State in which electricity from high-efficiency cogeneration in their power generating facility using area; renewable energy sources or highefficiency cogeneration represents more than 50 % of annual gross final consumption of electricity;

(b) take appropriate grid and

market-related operational measures (b) take appropriate grid and marketin order to minimise the curtailment related operational measures in order or downward redispatching of to minimise the [ ] downward electricity produced from renewable redispatching of electricity produced energy sources or high-efficiency from renewable energy sources or cogeneration. high-efficiency cogeneration.

AM 58 Article 12 – paragraph 4 – point b (new)

(ba) ensure that their networks are sufficiently flexible such that they are in a position to manage them.

• 5. 

  Where non-market-based 5. Where non-market-based downward redispatching or downward redispatching [ ] is used, curtailment is used, the following the following principles shall apply: principles shall apply:

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(a) generating installations using AM 59 (a) [ ] power generating facilities renewable energy sources shall only (a) generating installations using using renewable energy sources shall be subject to downward renewable energy sources shall only only be subject to downward redispatching or curtailment if no be subject to downward redispatching redispatching [ ]if no other alternative other alternative exists or if other or curtailment if no other alternative exists or if other solutions would solutions would result in exists or if other solutions would result in disproportionate costs or disproportionate costs or risks to result in significantly disproportionate severe risks to network security; network security; costs or significant risks to network

security; (b) generating installations using AM 60 (b) electricity generated in a [ ] high-efficiency cogeneration shall (b) electricity generated in a highhigh-efficiency cogeneration process only be subject to downward efficiency cogeneration process shall shall only be subject to downward redispatching or curtailment if, other only be subject to downward redispatching [ ] if, other than [ ] than curtailment or downward redispatching or curtailment if, other downward redispatching of [ ] redispatching of generating than curtailment or downward power generating facilities using installations using renewable energy redispatching of generating renewable energy sources, no other sources, no other alternative exists or installations using renewable energy alternative exists or if other solutions if other solutions would result in sources, no other alternative exists or would result in disproportionate costs disproportionate costs or risks to if other solutions would result in or severe risks to network security; network security; disproportionate costs or risks to

network security; (c) self-generated electricity from [ ] generating installations using renewable energy sources or highefficiency cogeneration which is not fed into the transmission or distribution network shall not be curtailed unless no other solution would resolve network security issues;

(d) downward redispatching or (d) downward redispatching [ ] curtailment under letters a to c shall under letters a [ ] and b [ ] it shall be be duly and transparently justified. duly and transparently justified. The The justification shall be included in justification shall be included in the the report under paragraph 3. report under paragraph 3.

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• 6. 

  Where non-market based AM 61 6. Where non-market based [ ] curtailment or redispatching is used, 6. Where non-market based redispatching is used, it shall be it shall be subject to financial curtailment or redispatching is used, it subject to financial compensation by compensation by the system operator shall be subject to financial the system operator requesting the [ ] requesting the curtailment or compensation by the system operator redispatching to the [ ] operator of redispatching to the owner of the requesting the curtailment or the [ ] redispatched generation or curtailed or redispatched generation redispatching to the owner of the demand facility except in the case of or demand facility. Financial curtailed or redispatched generation, generators accepting connection compensation shall at least be equal energy storage or demand facility. agreement in which firm delivery of to the highest of the following Financial compensation shall at least energy is not guaranteed. Financial elements: be equal to the highest of the compensation at least be equal to the

  following elements: highest of the following elements or a combination of them if applying one of the elements would lead to an

  unjustifiably low or unjustifiably high compensation:

(a) additional operating cost (a) additional operating cost caused caused by the curtailment or by the [ ] redispatching, such as redispatching, such as additional fuel additional fuel costs in case of upward costs in case of upward redispatching, or backup heat redispatching, or backup heat provision in case of downward provision in case of downward redispatching or curtailment of [ ] redispatching or curtailment of power generating facility using highgenerating installations using highefficiency cogeneration;

efficiency cogeneration; (b) 90 % of the net revenues from AM 62 (b) [ ] Net revenues from the sale the sale of electricity on the day(b) [ ] net revenues from the sale of electricity on the day-ahead market ahead market that the generating or of electricity on the day-ahead market that the generating or demand facility demand facility would have that the generating or demand facility would have generated without the [ ] generated without the curtailment or would have generated without the redispatching request. Where financial redispatching request. Where redispatching request, including lost support is granted to generating or financial support is granted to financial support where financial demand facilities based on the generating or demand facilities based support is granted to generating or electricity volume generated or on the electricity volume generated demand facilities based on the consumed, lost financial support shall or consumed, lost financial support electricity volume generated or be deemed part of the net revenues. shall be deemed part of the net consumed.. revenues.

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Chapter III Network access and congestion management

S ECTION 1 C APACITY ALLOCATION

Article 13 Article 13 Definition of bidding zones Measures to address congestion and

definition of bidding zones

• 1. 

  Bidding zone borders shall be AM 63 1. Member States shall take all based on long-term, structural 1. The configuration of bidding appropriate measures to address congestions in the transmission zones in the Union shall be designed congestions. Bidding zone borders network and bidding zones shall not in such a way as to ensure liquidity shall be based on long-term, structural contain such congestions. The of day-ahead and intraday markets, congestions in the transmission configuration of bidding zones in the and thus to maximise economic network [ ]. Bidding zones shall not Union shall be designed in such a efficiency and cross-border trading contain such structural congestions way as to maximise economic opportunities while maintaining unless they have no impact, or their efficiency and cross-border trading security of supply. Bidding zone impact on neighbouring bidding opportunities while maintaining borders shall be based on long-term, zones is mitigated through the use security of supply. structural congestions in the of remedial actions and they do not

  transmission network and bidding lead to reductions of cross zonal zones shall not contain such trading capacity. The configuration congestions unless they have no of the bidding zones in the Union impact on neighbouring bidding shall be designed in such a way as to zones, or their impact is mitigated by maximise economic efficiency and in remedial actions. order to maximise cross-border trading opportunities, [ ] with due respect to the provisions in Article 14.

• 2. 

  Each bidding zone should be AM 64 [ ] equal to an imbalance price area. 2. Each bidding zone should be

  equal to an imbalance price area, except where an imbalance price area may constitute a part of a bidding zone.

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• 3. 

  In order to ensure an optimal AM 65 3. In order to ensure an optimal bidding zone definition in closely 3. In order to ensure an optimal bidding zone [ ] configuration [ ] a interconnected areas, a bidding zone bidding zone definition in closely bidding zone review shall be carried review shall be carried out. That interconnected areas, a bidding zone out. That review shall identify all review shall include analysis of the review shall be carried out. That structural congestion and include configuration of bidding zones in a review shall include analysis of the analysis of [ ] different coordinated manner with the configuration of bidding zones in a configurations of bidding zones in a involvement of affected stakeholders coordinated manner with the coordinated manner with the from all affected Member States, involvement of affected stakeholders involvement of affected stakeholders following the process in accordance from all affected Member States, from all [ ] relevant Member States, with Articles 32 to 34 of Regulation following the process in accordance following the process in accordance (EU) 2015/1222. The Agency shall with Articles 32 to 34 of Regulation with [ ] the capacity allocation and approve and may request (EU) 2015/1222. Current bidding congestion management guideline amendments to the methodology and zones shall be assessed based on adopted on the basis of Article 18 of assumptions that will be used in the their ability to create a reliable Regulation (EU) 714/2009 i. All bidding zone review process as well market environment, ensure relevant transmission system as the alternative bidding zone sufficient flexible generation and operators shall submit a proposal to configurations considered. load capacity, which is crucial for the relevant national regulatory

  avoiding grid bottlenecks, balancing authorities for approval. The electricity demand and supply relevant national regulatory securing the long-term security of authorities shall come to an investments and the grid. The unanimous decision on the proposal Agency shall approve and may within [3 month]. In case they do request amendments to the not agree within this time frame, the methodology and assumptions that Agency shall [ ] decide on the will be used in the bidding zone methodology and assumptions that review process as well as the will be used in the bidding zone alternative bidding zone review process as well as the configurations considered. The alternative bidding zone methodology shall take due account configurations considered. The of infrastructure development methodology shall be based on projects that are expected to be structural congestions which are realised within the next 5 years. not expected to be overcome within the next five years, for example taking due account of tangible

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progress on infrastructure development projects, that are expected to be realised within the next five years. 3a. Irrespective of the concrete outcome of the infrastructure development projects, Article 14 shall apply to the calculation of the available capacity for cross-zonal exchanges. Where an action plan is implemented pursuant to paragraph 4a, the threshold referred to in Article 14(7) shall be reached not later than end of 2025.

• 4. 

  The transmission system AM 66 4. The transmission system operators participating in the bidding 4. The transmission system operators participating in the bidding zone review shall submit a proposal operators participating in the bidding zone review shall submit a joint to the Commission regarding whether zone review shall submit a proposal to proposal to the [ ] relevant Member to amend or maintain the bidding the relevant Member States whether States or designated competent zone configuration. Based on that to amend or maintain the bidding zone authorities of the relevant Member proposal, the Commission shall adopt configuration. The relevant Member States [no later than 12 months after a decision whether to amend or States shall be those participating in entry into force of this Regulation, maintain the bidding zone the review pursuant to Article 32(2) specific date to be inserted by OJ]. In configuration, [no later than 6 of Regulation (EU) 2015/1222 and this article, relevant Member States months after entry into force of this those in the same Capacity refer to those Member States Regulation, specific date to be Calculation Region(s) pursuant to participating in the review of the inserted by OP] or by six months Regulation (EU) 2015/1222. Based bidding zone configuration and also after the conclusion of the bidding on the proposal, the relevant Member those in the same capacity zone configuration launched in States shall come to a unanimous calculation region pursuant to the accordance with points (a), (b) or (c) decision within six months on capacity allocation and congestion of Article 32(1) of Regulation (EU) whether to amend or maintain the management guideline adopted on 2015/1222, whichever comes later. bidding zone configuration. Other the basis of Article 18 of Regulation

  Member States, Energy Community (EU) 714/2009. Contracting Parties or other third countries sharing the same

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synchronous area with any Member State may submit comments. The decision shall be reasoned, in accordance with relevant Union law and shall take account of any observations of other Member States, Energy Community Contracting Parties and other third countries sharing the same synchronous area with any Member State, as well as of commitments on addressing existing congestion made by the relevant Member States. The relevant Member States shall notify the Commission and the Agency of their decision and any cross-border agreements entered into by the Member States, the regulatory authorities or the transmission system operators for the purpose of achieving consensus. Agreements entered into by the relevant Member States shall not deviate from coordinated capacity calculation processes as set out in Article 14 of this Regulation nor from the relevant provisions of Regulation (EU) 2015/1222.

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AM 67 Article 13 – paragraph 4 a(new) 4 a. Where the relevant Member States fail to come to a unanimous decision within the deadline referred to in paragraph 4, or where the Member States become aware of the fact that commitments on which a previous unanimous decision was based were not complied with, they shall immediately notify the Commission. The Commission shall initiate a conciliation procedure and shall act as a mediator between the relevant Member States. In the conciliation procedure, the relevant Member States shall, within six months of such initiation, adopt a unanimous decision on whether to amend or maintain the bidding zone configuration. Where the relevant Member States in the conciliation fail to adopt a unanimous decision within six months, the Member State with the internal structural congestion shall have the choice to either amend its bidding zone or establish a roadmap with concrete measures on how to overcome the congestions in its national territory in due time. That Member State shall immediately notify its choice to the Commission.

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For those Member States that choose to amend their bidding zones, the Commission shall adopt a decision within six months of that notification, after a thorough evaluation of all the issues at stake, together with an assessment of all available solutions. 4a. Where structural congestion has been identified by one or more transmission system operator or where the bidding zone review recommends a bidding zone change of one or more Member States, the concerned Member States in cooperation with their transmission system operators have the possibility, within 6 months, to define action plans, national or multinational. These action plans shall contain a concrete timetable for adopting measures to reduce the structural congestions identified within the period of [no later than [4] years after entry into force of this Regulation, specific date to be inserted by OJ], including for example acceleration of network development, more efficient use of existing infrastructure, a review of current system operation practices, increased coordination of system operation with relevant neighbouring transmission system operators, review of regulation

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regarding remedial actions and barriers to increased flexibility and national energy policy measures that shift the location of production and consumption. 4b. Member State implementing the actions plans pursuant to paragraph 4a shall ensure that without prejudice to derogations under Articles 14(7a) and 14(7b), the level of allocated capacity set out in Article 14(7) is achieved in the last year of the action plan, and in no case later than end of 2025, the minimum allocated capacity. Member States shall achieve the capacity referred to in this paragraph by means of an linear trajectory. This linear trajectory and the starting of this trajectory, which shall be either the capacity allocated at this border in the year before implementation of the action plan or the average of the three last years before the action plan, whatever is higher, shall be agreed with the Member States of the same capacity calculation region. For the period when a Member State is implementing an action plan, the Member State shall ensure that the capacity made available for crosszonal trade to be compliant with paragraph 7 is at least equal to the values of the trajectory, including

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by use of remedial actions in the capacity calculation region, but the decisions of the regulatory authorities referred to in paragraphs 7a and 7b are not applicable to such a Member State. Costs of remedial actions required to follow the trajectory or make available cross-zonal capacity at the borders concerned by the action plan shall be borne by the Member State or Member States implementing the action plan. 4c. Six months before the expiry of the action plan, Member States shall decide whether to split their bidding zone to address remaining congestions or whether to address remaining internal congestions with remedial actions for which they shall cover the costs. Yearly during the implementation of the action plan and within six months after the expiry of the action plan, the transmission system operators participating in the bidding zone review shall assess the available cross-zonal capacity calculated in accordance with the methodology referred to in Article 14(7) for the period of the last 12 months, and determine in a report whether the cross-border trade capacity reached the minimum level outlined in Article 14(7). Where a structural

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congestion has been identified pursuant to paragraph 4a but no action plan was defined within 6 months, the relevant transmission system operators shall within twelve months after a structural congestion has been identified assess the available cross-zonal capacity calculated in accordance with the methodology referred to in Article 14(7) for the period of the last 12 months, and determine in a report whether the cross-border trade capacity reached its minimum level outlined in Article 14(7). The assessments under this paragraph shall be continuously reiterated every 24 months for the period of the last 24 months. 4d. For those Member States for which the assessment following paragraph 4c demonstrates that a transmission system operator has not been compliant with the level outlined in Article 14(7) or for those Member States that have opted for a bidding zone split, the relevant Member States shall come to a unanimous decision within 6 months from receiving the report referred in paragraph 4c on whether to maintain or amend the bidding zone configuration. Other Member States may submit comments to the relevant Member

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States who should take account of these comments when coming to their decision. The decision shall be justified, and shall notified to the Commission and the Agency. 4e. Should the relevant Member States fail to come to an unanimous decision within the allowed timeframe, they shall immediately notify the Commission. The Commission may make further proposals and may invite the relevant Member States ] for consultation aiming at fostering a balanced solution within three months. As a measure of last resort, the Commission after consultation with the Agency and the relevant stakeholders shall adopt a decision whether to amend or maintain the bidding zone configuration in and between those Member States that are subject to the decision according to paragraph 4d, by six months after receiving of such a notification. 4f. In case one of the consecutive reassessments referred to in paragraph 4c demonstrates that a transmission system operator has not been compliant with the provisions from Article 14(7c) the procedure under paragraphs 4d and 4e shall apply.

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• 5. 

  The decision referred to in AM 68 5. The decision referred to in paragraph 4 shall be based on the 5. Where the relevant Member paragraph 4d or 4e shall be based on result of the bidding zone review and State chooses to establish a detailed the report identifying structural the transmission system operators' road map with concrete milestones congestion or the result of the proposal concerning its maintenance on how the congestion issues will be bidding zone review and the or amendment. The decision shall be resolved, that Member State shall, transmission system operators' justified, in particular as regards within six months of the Commission proposal in paragraph 4a and the possible deviations from the result of decision, present that roadmap to report in paragraph 4c concerning the bidding zone review. the Commission and other relevant its maintenance or amendment [ ].

  Member States. During the The decision shall be justified, in implementation of the roadmap the particular as regards possible relevant Member State shall deviations from the result of the regularly report to the Commission bidding zone review and shall take on the progress made. account of the positions and commitments of the concerned Member States and the comments provided by other Member States. Irrespective of the concrete progress of the roadmap, the Member State that is implementing a roadmap shall ensure that the cross-border trade capacities are increased every year up to the benchmark level of at least 75% calculated in accordance with Article 14 paragraph 7, which is to be achieved by the end of 2025. The yearly increase shall be achieved by means of a linear trajectory.

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The starting of this trajectory shall be either the capacity allocated at this border in the year before adoption of the roadmap or the average of the three last years before the adoption of the roadmap, whatever is higher. Member States shall be considered to be in compliance with Article 14 paragraph 7 if the capacity made available for cross-zonal trade is at least equal to the values of the linear trajectory. AM 69 Article 13 – paragraph 5 a (new)

5a. The relevant transmission system operators and national regulatory authorities shall assess yearly whether the available crossborder capacity has reached the linear trajectory or, as of the end of 2025, the minimum level outlined in Article 14(7).

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AM 70 Article 13 – paragraph 5 b (new)

5b. For those Member States for which the assessment referred to in paragraph 5a demonstrates that a transmission system operator has not been compliant with the linear trajectory, or as of the end of 2025, with the level outlined in Article 14 (7), the Commission may recommend additional measures and as a measure of last resort, adopt a decision whether to amend or maintain the bidding zone configuration in and between those Member States.

• 6. 

  Where further bidding zone AM 71 6. Where further bidding zone reviews are launched under Article deleted reviews are launched under [ ] the 32(1)(a), (b) or (c) of Regulation capacity allocation and congestion (EU) 2015/1222, the Commission management guideline adopted on may adopt a decision within six the basis of Article 18 of Regulation months of the conclusion of that (EU) 714/2009 the procedure bidding zone review. outlined in this Article shall be

  followed.

• 7. 

  The Commission shall consult AM 72 [ ] relevant stakeholders on its decisions 7. Member States and the under this Article before they are Commission shall consult relevant adopted. stakeholders before adopting a

  decision under this Article.

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• 8. 

  The Commission decision AM 73 8. [ ] Any decision adopted shall specify the date of 8. The decision adopted under according to this Article shall implementation of a change. That this Article shall specify the date of specify the date of implementation of implementation date shall balance the implementation of a change. That a change. That implementation date need for expediency with practical implementation date shall balance the shall balance the need for expediency considerations, including forward need for expediency with practical with practical considerations, trade of electricity. The Commission considerations, including forward including forward trade of electricity may define appropriate transitional trade of electricity. Appropriate and shall not be less than 12 months arrangements as part of its decision. transitional arrangements may be after the decision is published

  defined as part of the decision. unless otherwise agreed with the relevant Member States. The [ ] decision may define appropriate

  transitional arrangements [ ]. AM 74

  Article 13 – paragraph 8 a (new) 8a. Where further bidding zone reviews are launched under point (a), (b) or (c) of Article 32(1) of Regulation (EU) 2015/1222, paragraphs 4 to 8 of this Article shall apply.

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Article 14 General principles of capacity allocation and congestion management

• 1. 

  Network congestion problems

shall be addressed with non 1. Network congestion problems discriminatory market-based shall be addressed with nonsolutions which give efficient discriminatory market-based solutions economic signals to the market which give efficient economic signals participants and transmission system to the market participants and operators involved. Network transmission system operators congestion problems shall be solved involved. Network congestion with non-transaction based methods, problems shall be solved with noni.e. methods that do not involve a transaction based methods, i.e. selection between the contracts of methods that do not involve a individual market participants. When selection between the contracts of taking operational measures to ensure individual market participants. When that its transmission system remains taking operational measures to ensure in the normal state, the transmission that its transmission system remains in system operator shall take into the normal state, the transmission account the effect of those measures system operator shall take into on neighbouring control areas and account the effect of those measures coordinate such measures with other on neighbouring control areas and affected transmission system coordinate such measures with other operators as provided for in affected transmission system

Regulation (EU) 1222/2015 i. operators as provided for in [ ] the capacity allocation and congestion

management guideline adopted on the basis of Article 18 of Regulation (EU) 714/2009.

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• 2. 

  Transaction curtailment 2. Transaction curtailment procedures shall only be used in procedures shall only be used in emergency situations where the emergency situations where the transmission system operator must transmission system operator must act act in an expeditious manner and rein an expeditious manner and redispatching or countertrading is not dispatching or countertrading is not possible. Any such procedure shall possible. Any such procedure shall be be applied in a non-discriminatory applied in a non-discriminatory manner. Except in cases of force manner. Except in cases of force majeure, market participants who majeure, market participants who have been allocated capacity shall be have been allocated capacity shall be compensated for any curtailment. compensated for any curtailment.

  2a. Transmission system operators may decide not to implement the coordinated actions issued by the regional security coordinator of the system operation region or the regional security coordinator himself may reduce the capacities calculated in the coordinated capacity calculation in their coordinated actions where the outcome of the coordinated capacity calculation, carried out pursuant to the capacity allocation and congestion management guideline and paragraphs 3 and 7, would result in a violation of the operational security limits defined by the transmission system operator in accordance with the System Operation Guideline adopted on the basis of Article 18 of Regulation 714/2009, for example in case of insufficient redispatch potential

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within the capacity calculation region. Such a deviation shall be duly justified by the relevant transmission system operators. The relevant transmission system operators shall inform the Regional Security Coordinators and the national regulatory authorities of the capacity calculation region of such deviation without undue delay in accordance with Article 38(2a) of this Regulation. Once a year, the Regional Security Coordinator shall report to the relevant national regulatory authorities and the Agency on the deviations pursuant to this paragraph and shall assess the incidences and analyse, if needed, how to avoid such deviations in the future. If the Agency comes to the conclusion that the prerequisites for a deviation pursuant to this paragraph were not fulfilled are of a structural nature, the Agency shall submit an opinion to the relevant regulatory authority and the Commission. The regulatory authority shall take appropriate action against the transmission system operators if the prerequisites for a deviation pursuant to this paragraph were not fulfilled.

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• 3. 

  The maximum capacity of the AM 75 3. Unless otherwise provided in interconnections and/or the 3. The maximum capacity of the paragraphs 7, 7a, 7b, 7d and 2a the transmission networks affecting interconnections and/or the maximum level of capacity of the cross-border flows shall be made transmission networks affecting crossinterconnections and/or the available to market participants, border flows shall be made available transmission networks affected by complying with safety standards of to market participants, complying cross-border [ ] capacity shall be secure network operation. Counterwith safety standards of secure made available to market participants, trading and redispatch, including network operation. Counter-trading complying with safety standards of cross-border redispatch, shall be used and redispatch, including cross-border secure network operation. Counterto maximise available capacities redispatch, shall be used to maximise trading and redispatch, including unless it is demonstrated that it is not available capacities unless it is cross-border redispatch, shall be used beneficial to economic efficiency at demonstrated that it is not beneficial to optimize available capacities [ ] Union level. to economic efficiency at Union level. and a coordinated and non

  When allocating cost of remedial discriminatory process for crossactions between transmission system border remedial actions shall be operators, regulators shall analyse to applied to enable this, following the what extent unscheduled flows implementation of the releaving and re-entering a bidding dispatching and countertrading cost zone contribute to the congestion sharing methodology in accordance observed between two bidding zones with the capacity allocation and and allocate the counter-trading and congestion management guideline redispatch costs in proportion to adopted on the basis of Article 18 of their contribution to the congestion. Regulation (EU) 714/2009 i.

• 4. 

  Capacity shall be allocated 4. Capacity shall be allocated only only by means of explicit capacity by means of explicit capacity auctions auctions or implicit auctions or implicit auctions including both including both capacity and energy. capacity and energy. Both methods Both methods may coexist on the may coexist on the same same interconnection. For intra-day interconnection. For intra-day trade trade continuous trading shall be continuous trading shall be used used, which may be complemented which may be complemented by by auctions. auctions.

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• 5. 

  The highest value bids, 5. In case of congestion, the whether implicit or explicit in a given valid highest value bids for network timeframe, shall be successful. Other capacity, whether implicit or explicit, than in the case of new offering the highest value for the interconnectors which benefit from (scarce) transmission capacity in a an exemption under Article 7 of given timeframe, shall be successful. Regulation (EC) No 1228/2003 i, Other than in the case of new Article 17 Regulation 714/2009 i or interconnectors which benefit from an Article 59, establishing reserve prices exemption under Article 7 of in capacity-allocation methods shall Regulation (EC) No 1228/2003 i, not be allowed. Article 17 Regulation 714/2009 i or

  Article 59, establishing reserve prices in capacity-allocation methods shall not be allowed.

• 6. 

  Capacity shall be freely 6. Capacity shall be freely tradable on a secondary basis, tradable on a secondary basis, provided that the transmission system provided that the transmission system operator is informed sufficiently in operator is informed sufficiently in advance. Where a transmission advance. Where a transmission system system operator refuses any operator refuses any secondary trade secondary trade (transaction), this (transaction), this shall be clearly and shall be clearly and transparently transparently communicated and communicated and explained to all explained to all the market the market participants by that participants by that transmission transmission system operator and system operator and notified to the notified to the regulatory authority. regulatory authority.

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• 7. 

  Transmission system operators AM 76 7. Transmission system operators shall not limit the volume of 7. Transmission system operators shall not limit the volume of interconnection capacity to be made shall not limit the volume of interconnection capacity to be made available to other market participants interconnection capacity to be made available to [ ] market participants in in order to solve congestion inside available to other market participants order to solve congestion inside their their own control area or as a means in order to solve congestion inside own bidding zone or as a means of of managing flows on a border their own control area or as a means managing flows leaving and rebetween two control areas observed of managing flows on a border entering the same bidding zone even without any transaction, that is between two control areas observed without being scheduled unless to say flows over control areas even without any transaction, that is otherwise provided under caused by origin and destination to say flows over control areas caused paragraph 7a or 7b. within one control area. by origin and destination within one

  control area. Without prejudice to the forth Without prejudice to the subparagraph of Article 13(5), this application of the derogations paragraph shall be considered to be under paragraph 7a and 7b, this complied with if the following paragraph shall be considered to be minimum levels of available capacity complied with if the following for cross-zonal trade, which is minimum levels of available calculated pursuant to the capacity capacity for cross-zonal trade, allocation and congestion which is calculated pursuant to the management guideline adopted on capacity allocation and congestion the basis of Article 18 of Regulation management guideline adopted on (EU) 714/2009 taking account of the basis of Article 18 of Regulation contingencies, are reached: (EU) 714/2009 taking account of N- 1 criterion, are reached: (i) for borders using a (i) For borders using a coordinated net transfer capacity coordinated net transmission approach, if at least 75 % of the net capacity approach, 75% of the net transfer capacity pursuant to transfer capacity pursuant to capacity allocation and congestion capacity allocation and congestion management guideline are made management guideline adopted on available for cross-border trade; the basis of Article 18 of the Regulation 714/2009 i;

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(ii) for borders using a flow-based (ii) For borders using a flowapproach, if on cross-zonal and based approach, 75% of the internal critical network elements remaining available margin on considered in the flow-based internal and cross border critical calculation at least 75 % of the network elements made available thermal capacity after reduction of for cross border flows pursuant to the amount required to secure the N- capacity allocation and congestion 1 principle pursuant to the capacity management guideline adopted on allocation and congestion the basis of Article 18 of the management guideline is used as an Regulation 714/2009 i. input for capacity allocation. The derogations pursuant to paragraph 7a shall not result with a value below this threshold. 7a. Based on a proposal by all transmission system operators of a capacity calculation region , the relevant regulatory authorities by way of derogation from paragraph 7 shall approve the level of total available cross-zonal capacity at each bidding zone border, which shall be used in the capacity calculation methodology, to take account of cross-zonal unscheduled flows to the extent that could be expected without structural congestions in a bidding zone.

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Upon request by a transmission 7b. Upon request by [ ] system operator, the relevant transmission system operators of a regulatory authority may grant a capacity calculation region [ ] the derogation from the first relevant regulatory authorities may

subparagraph where it is necessary

for maintaining operational security grant a derogation from [ ] or where it is beneficial to economic paragraph 7 for foreseeable reasons efficiency at Union level. Such a where it is necessary for maintaining derogation, which may not relate to operational security [ ] other than curtailment of already allocated the ones covered under paragraph capacities pursuant to paragraph 5, 7a, for instance in case of grid shall be limited in time, strictly maintenance measures. Such a

limited to what is necessary, and derogation, which may not relate to avoid discrimination between internal curtailment of already allocated and cross-zonal exchanges. Before capacities pursuant to paragraph 5, granting a derogation, the relevant shall be limited [ ] to one year at a regulatory authority shall consult the time, or up to maximum two years regulatory authorities of other with a significantly decreasing level Member States forming part of an of the derogation each year, strictly

affected capacity calculation region. limited to what is necessary, and

In case a regulatory authority avoid discrimination between internal

disagrees with the proposed

derogation, the Agency shall decide and cross-zonal exchanges. [ ] The on the derogation pursuant to Article justification and reasons for the 6(8)(a) [recast of Regulation (EC) No derogation shall be published. Where 713/2009 as proposed by a derogation is granted, the relevant

COM(2016) 863 i/2]. The justification transmission system operators shall and reasons for the derogation shall develop and publish a methodology be published. Where a derogation is and projects [ ] that shall provide a granted, the relevant transmission long-term solution to the issue that the system operators shall develop and derogation seeks to address. The publish a methodology and projects derogation shall expire when the time that shall provide a long-term limit is reached or, once the solution solution to the issue that the is applied, whichever is earlier. derogation seeks to address. The derogation shall expire when the time limit is reached or, once the solution is applied, whichever is earlier.

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• 8. 

  Market participants shall 8. Market participants shall inform the transmission system inform the transmission system operators concerned a reasonable operators concerned a reasonable time time in advance of the relevant in advance of the relevant operational operational period whether they period whether they intend to use intend to use allocated capacity. Any allocated capacity. Any allocated allocated capacity that will not be capacity that will not be used shall be used shall be reattributed to the reattributed to the market, in an open, market, in an open, transparent and transparent and non-discriminatory non-discriminatory manner. manner. 9. Transmission system operators 9. Transmission system operators shall, as far as technically possible, shall, as far as technically possible, net the capacity requirements of any net the capacity requirements of any power flows in opposite direction power flows in opposite direction over over the congested interconnection the congested interconnection line in line in order to use that line to its order to use that line to its maximum maximum capacity. Having full capacity. Having full regard to regard to network security, network security, transactions that transactions that relieve the relieve the congestion shall never be congestion shall never be denied. denied. 10. The financial consequences of 10. The financial consequences of failure to honour obligations failure to honour obligations associated with the allocation of associated with the allocation of capacity shall be attributed to those capacity shall be attributed to those who are responsible for such a who are responsible for such a failure. failure. Where market participants Where market participants fail to use fail to use the capacity that they have the capacity that they have committed committed to use, or, in the case of to use, or, in the case of explicitly explicitly auctioned capacity, fail to auctioned capacity, fail to trade on a trade on a secondary basis or give the secondary basis or give the capacity capacity back in due time, they shall back in due time, they shall lose the lose the rights to such capacity and rights to such capacity and pay a costpay a cost-reflective charge. Any reflective charge. Any cost-reflective cost-reflective charges for the noncharges for the non-use of capacity use of capacity shall be justified and shall be justified and proportionate. If proportionate. If a transmission a transmission system operator does

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system operator does not fulfil its not fulfil its obligation, it shall be obligation, it shall be liable to liable to compensate the market compensate the market participant participant for the loss of capacity for the loss of capacity rights. rights. Consequential losses shall not Consequential losses shall not be be taken into account for that purpose. taken into account for that purpose. The key concepts and methods for the The key concepts and methods for determination of liabilities that accrue the determination of liabilities that upon failure to honour obligations accrue upon failure to honour shall be set out in advance in respect obligations shall be set out in of the financial consequences, and advance in respect of the financial shall be subject to review by the consequences, and shall be subject to relevant [ ] regulatory authority or review by the relevant national authorities. regulatory authority or authorities.

• 11. 

  When allocating costs of remedial actions between transmission system operators, regulators shall analyse to what extent flows leaving and re-entering a bidding zone without being scheduled contribute to the congestion between two bidding zones observed, and allocate the costs in proportion to the contribution to the congestion in line with re-dispatching and countertrading cost sharing methodology in accordance with the capacity allocation and congestion management guideline adopted on the basis of Article 18 of Regulation (EU) 714/2009 and Article 76 of Commission Regulation (EU) 2017/XYZZ. This shall not apply to the threshold pursuant to paragraph 7a.

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Article 15 Allocation of cross-zonal capacity across timeframes

• 1. 

  Transmission system operators

shall recalculate available cross-zonal 1. Transmission system operators capacity at least after day-ahead and shall recalculate available cross-zonal after intraday cross-zonal gate capacity at least after day-ahead and closure times. Transmission system after intraday cross-zonal gate closure operators shall allocate the available times. Transmission system operators cross-zonal capacity plus any shall allocate the available cross-zonal remaining cross-zonal capacity not capacity plus any remaining crosspreviously allocated and any crosszonal capacity not previously zonal capacity released by physical allocated and any cross-zonal capacity transmission right holders from released by physical transmission previous allocations in the next crossright holders from previous

zonal capacity allocation process. allocations in the next cross-zonal capacity allocation process.

1a. Transmission system operators shall define an appropriate structure for the allocation of cross-zonal capacity across timeframes, including dayahead, intraday and balancing. Such an allocation structure shall be subject to review by the respective regulatory authorities. In drawing up their proposal, the TSOs shall take into account:

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• a) 

  the characteristics of the markets; b) the operational condition, such as the implications of netting firmly declared schedules; c) the level of harmonisation of the percentages and timeframes adopted for the different crosszonal capacity allocation mechanisms in place.

• 2. 

  When cross-zonal capacity is 2. When cross-zonal capacity is available after the intraday crossavailable after the intraday crosszonal gate closure time, transmission zonal gate closure time, transmission system operators shall use the crosssystem operators shall use the crosszonal capacity for the exchange of zonal capacity for the exchange of balancing energy or for operating the balancing energy or for operating the imbalance netting process. imbalance netting process. 3. Transmission system operators 3. Where cross-zonal capacity is shall use the methodologies allocated for the exchange of developed in network codes and balancing capacity or sharing of guidelines on balancing, where reserves pursuant to Article 5(8), applicable, to allocate cross-zonal transmission system operators shall capacity for the exchange of use the methodologies developed in balancing capacity or sharing of [ ] accordance with the balancing reserves pursuant to Article 5(4) and guideline adopted on the basis of (7). Article 18 of the Regulation

  714/2009. 4. Transmission system operators

shall not increase the reliability 4. Transmission system operators margin calculated pursuant to shall not increase the reliability Regulation (EU) 2015/1222 due to margin calculated pursuant to the exchange of balancing capacity or Regulation (EU) 2015/1222 due to the

sharing of reserves. exchange of balancing capacity or sharing of reserves.

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Section 2 Network charges and congestion income

Article 16 AM 77 Article 16 Charges for access to networks Charges for access to networks, use of Charges for connection and access to

networks and reinforcement networks

• 1. 

  Charges applied by network AM 78

operators for access to networks, 1. Charges applied by network 1. Charges applied by network including charges for connection to operators for access to networks , operators for access to networks, the networks, charges for use of including charges for connection to including charges for connection to networks, and, where applicable, the networks, charges for use of the networks, charges for use of charges for related network networks, and, where applicable, networks, and, where applicable, reinforcements, shall be transparent, charges for related network charges for related network take into account the need for reinforcements, shall be fair, costreinforcements, shall be transparent, network security and flexibility and reflective, transparent, take into take into account the need for network reflect actual costs incurred insofar account the need for network security security and flexibility and as they correspond to those of an and flexibility and reflect actual costs reflect actual costs incurred insofar as efficient and structurally comparable incurred insofar as they correspond to they correspond to those of an network operator and are applied in a those of an efficient and structurally efficient and structurally comparable non-discriminatory manner. In comparable network operator and are network operator and are applied in a particular, they shall be applied in a applied in a non-discriminatory non-discriminatory manner. [ ] way which does not discriminate manner. Grid tariffs shall not include Without prejudice to Article 15(1) between production connected at the unrelated costs supporting other and (6) and the criteria in Annex XI distribution level and production policy objectives, such as taxes or of Directive 2012/27 i/EU the method connected at the transmission level, levies, as this would distort used to develop the network charges either positively or negatively. They production, consumption and shall in particular be applied in a shall not discriminate against energy investment decisions. In particular, way which does not discriminate storage and shall not create they shall neutrally support overall between production connected at the disincentives for participation in system efficiency in the long run distribution level and production demand response. Without prejudice through price signals to consumers connected at the transmission level, to paragraph 3, those charges shall and producers and they shall as far either positively or negatively. They not be distance-related. as possible be applied in a way which shall not unduly discriminate either

does not discriminate between positively or negatively against production connected at the energy storage and shall not create distribution level and production disincentives for participation in connected at the transmission level, demand response. Without prejudice

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either positively or negatively. They to paragraph 3, those charges shall not shall not discriminate against energy be distance-related. storage and aggregation and shall not create disincentives for selfgeneration, self-consumption and for participation in demand response. Without prejudice to paragraph 3, those charges shall not be distancerelated.

• 2. 

  Tariffs shall grant appropriate AM 79

incentives to transmission and 2. Tariffs shall grant appropriate 2. Tariff methodologies shall [ distribution system operators, over incentives to transmission and ] reflect appropriate incentives and both the short and long term, to distribution system operators, over fixed costs of transmission and increase efficiencies, including both the short and long term, to distribution system operators. The energy efficiency, foster market increase efficiencies, including energy allowed revenues to be recovered integration and security of supply, efficiency, foster market integration through tariffs shall reflect and support investments and the and security of supply, and global appropriate incentives to related research activities. competitiveness, and support efficient transmission and distribution

investments, in particular in system operators over both the short digitalisation, flexibility services and and long term, to increase efficiencies, interconnections, and the related including energy efficiency, foster research activities. Tariffs shall not market integration, [ ] security of create disincentives for energy supply, and support investments, [ ] storage, demand response or selfthe related research activities and

generation production. facilitate innovation in the consumer's interest.

• 3. 

  Where appropriate, the level of 3. Where appropriate, the level of the tariffs applied to producers and/or the tariffs applied to producers and/or consumers shall provide locational consumers shall provide locational signals at Union level, and take into signals at Union level, and take into account the amount of network losses account the amount of network losses and congestion caused, and and congestion caused, and investment costs for infrastructure. investment costs for infrastructure.

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• 4. 

  When setting the charges for 4. When setting the charges for network access, the following shall network access, the following shall be be taken into account: taken into account:

(a) payments and receipts (a) payments and receipts resulting resulting from the inter-transmission from the inter-transmission system system operator compensation operator compensation mechanism; mechanism;

(b) actual payments made and (b) actual payments made and received as well as payments received as well as payments expected expected for future periods of time, for future periods of time, estimated estimated on the basis of past on the basis of past periods. periods.

• 5. 

  Setting the charges for network 5. Setting the charges for network access under this Article shall be access under this Article shall be without prejudice to charges resulting without prejudice to charges resulting from congestion management from congestion management referred referred to in Article 14. to in Article 14.

• 6. 

  There shall be no specific

network charge on individual 6. There shall be no specific transactions for cross-border trade of network charge on individual

electricity. transactions for cross-[ ] zonal trade of electricity.

• 7. 

  Distribution tariffs shall reflect AM 80

the cost of use of the distribution 7. Transmission and distribution 7. Distribution tariffs shall reflect network by system users including tariffs shall be cost-reflective by the cost of use of the distribution active customers, and may be taking into account the investment network by system users including differentiated based on system users' cost, added value of distributed active customers, and may be consumption or generation profiles. generation, flexibility, digitalisation, differentiated based on system users' Where Member States have demand response, storage and use of consumption or generation profiles. implemented the deployment of the transmission and distribution Where Member States have smart metering systems, regulatory network by system users including implemented the deployment of smart authorities may introduce time active customers, may contain grid metering systems, [ ] time differentiated network tariffs, connection capacity elements and differentiated network tariffs may be reflecting the use of the network, in a may be differentiated based on system introduced, reflecting the use of the transparent and foreseeable way for users' consumption or generation network, in a transparent and

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the consumer. profiles. Where Member States have foreseeable way for the consumer. implemented the deployment of smart

metering systems, competent regulatory authorities shall introduce time differentiated network tariffs, reflecting the use of the network, in a transparent and foreseeable and cost efficient way for the consumer. Member States shall ensure that tariffs are not discriminatory.

• 8. 

  Regulatory authorities shall AM 81

provide incentives to distribution 8. Regulatory authorities shall 8. [ ] The allowed revenues to system operators to procure services provide incentives to distribution be covered through distribution for the operation and development of system operators for the most tariffs may include performance their networks and integrate efficient operation and development targets in order to incentivise innovative solutions in the of their networks and integrate distribution system operators [ ] to distribution systems. For that purpose innovative solutions in the distribution operate their networks as efficiently regulatory authorities shall recognise systems, including through the as possible.

as eligible and include all relevant procurement of services. For that costs in distribution tariffs and purpose regulatory authorities shall introduce performance targets in recognise as eligible and include all order to incentivise distribution relevant costs in distribution tariffs system operators to raise efficiencies, and introduce performance targets in including energy efficiency, in their order to incentivise distribution networks. system operators to raise efficiencies,

including energy efficiency, flexibility and the digitalisation of the distribution networks including the deployment of smart grids and intelligent metering systems, in their networks.

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• 9. 

  By [OP: please add specific AM 82 9. By [OP: please add specific date – three months after entry into 9. By [OP: please add specific date – three months after entry into force] the Agency shall provide a date – three months after entry into force] to mitigate the risk of market recommendation addressed to force] the Agency shall evaluate the fragmentation the Agency shall regulatory authorities on the feasibility on the convergence of provide a [ ] best practice report on progressive convergence of transmission and distribution tariff [ ] transmission and distribution tariff transmission and distribution tariff methodologies. The feasibility study methodologies while leaving methodologies. That shall address at least: sufficient room to take national recommendation shall address at specificities into account. That [ ] least: best practice report shall address at

  least: (a) the ratio of tariffs applied to (a) the ratio of tariffs applied to producers and to consumers; producers and to consumers; (b) the costs to be recovered by (b) the costs to be recovered by tariffs; tariffs; (c) time differentiated network (c) time differentiated network tariffs; tariffs; (d) locational signals; (d) locational signals; (e) the relationship between (e) the relationship between transmission and distribution tariffs, transmission and distribution tariffs, including principles relating to non[ ] discrimination;

(f) methods to ensure (f) methods to ensure transparency transparency in the setting and in the setting and structure of tariffs; structure of tariffs;

(g) groups of network users AM 83 (g) groups of network users subject subject to tariffs, including tariff (g) groups of network users subject to tariffs, including tariff exemptions. exemptions. to tariffs according to characteristics

and forms of consumption, including tariff exemptions The Agency shall update its report at least once every two years.

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AM 84 Article 16 – paragraph 9 a (new) 9a. Regulatory authorities shall adopt a set of indicators for measuring the performance of transmission and distribution system operators, which should at least include all of the following: (a) volume of curtailed energy in MWh, disaggregated per type of generation source; (b) percentage of the length of lines operated under dynamic line ratings; (c) percentage of substations remotely monitored and controlled in real-time; (d) percentage of the length of lines operated under dynamic line ratings; (e) losses in high, medium and lowvoltage grids; (f) the frequency and duration of power interruptions on the grid. By [two years after the entry into force of this Regulation], and every two years thereafter, regulatory authorities shall publish a report on the performance of transmission and distribution system operators, together with recommendations for improvement where necessary.

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• 10. 

  Without prejudice to further [ ] harmonisation by way of delegated acts pursuant to Article 55(1)(k), regulatory authorities shall take the

Agency's recommendation duly into consideration when approving or fixing transmission tariffs or their methodologies in accordance with

Article 59(6)(a) of [recast of

Directive 2009/72/EC i as proposed by

COM(2016) 864 i/2].

• 11. 

  The Agency shall monitor the [ ] implementation of its recommendation and provide a report to the Commission by 31st January each year. It shall update the recommendation at least once every two years.

  Article 17 Congestion income

• 1. 

  Congestion-management 1. Congestion-management procedures associated with a preprocedures associated with a prespecified timeframe may generate specified timeframe may generate revenue only in the event of revenue only in the event of congestion which arises for that congestion which arises for that timeframe, except in the case of new timeframe, except in the case of new interconnectors which benefit from interconnectors which benefit from an an exemption under Article 7 of exemption under Article 7 of Regulation (EC) No 1228/2003 i, Regulation (EC) No 1228/2003 i, Article 17 of Regulation (EC) No Article 17 of Regulation (EC) No 714/2009 i or Article 59. The 714/2009 or Article 59. The procedure procedure for the distribution of for the distribution of those revenues those revenues shall be subject to shall be subject to review by the review by the regulatory authorities regulatory authorities and shall neither and shall neither distort the allocation distort the allocation process in favour

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process in favour of any party of any party requesting capacity or requesting capacity or energy nor energy nor provide a disincentive to provide a disincentive to reduce reduce congestion. congestion.

• 2. 

  Any revenues resulting from AM 85 2. Any revenues resulting from the allocation of interconnection 2. Any revenues resulting from the allocation of interconnection capacity shall be used for the the allocation of interconnection capacity shall be used for the following purposes: capacity shall be used for the following purposes:

  following purposes: (a) guaranteeing the actual (a) guaranteeing the actual (a) guaranteeing the actual availability of the allocated capacity; availability of the allocated capacity; availability of the allocated capacity

  or including firmness compensation; (b) maintaining or increasing (b) maintaining or increasing (b) maintaining or increasing interconnection capacities through interconnection capacities through interconnection capacities through network investments, in particular in optimisation of the usage of existing network investments, in particular in new interconnectors. interconnectors by coordinated new interconnectors and internal

  remedial and countertrading actions lines and internal lines which are or network investments, up to the listed in Ten Years Network target value for transfer capacity at Development Plan of the ENTSO cross-border boundaries. for Electricity as being relevant to reduce interconnector congestion, (c) or if applicable, cross border remedial actions such as redispatch and counter-trading.

If the revenues cannot be efficiently Where the objectives set out in points 2a. [ ] The revenues [ ] may be used for the purposes set out in points (a) and (b) of the first subparagraph used, subject to the approval by the (a) or (b) of the first subparagraph, are fulfilled, the residual revenues regulatory authorities of the they shall be placed on a separate may be used as income to be taken Member States concerned, as internal account line for future use on into account by the national income to be taken into account by these purposes. regulatory authorities when the regulatory authorities when

approving the methodology for approving the methodology for calculating network tariffs and/or calculating network tariffs and/or fixing network tariffs. fixing network tariffs.

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• 3. 

  The use of revenues in AM 86 3. The use of revenues in accordance with points (a) and (b) of 3. The use of revenues in accordance with points (a) [ ] (b) or paragraph 2 shall be subject to a accordance with [ ] paragraph 2 shall (c) of paragraph 2 shall be subject to a methodology proposed by the be subject to a methodology proposed methodology proposed [ ] by the

Agency and approved by the by the Agency and approved by the transmission system operators in

Commission. The Agency's proposal Commission. The Agency's proposal consultation with regulatory shall be submitted to the Commission shall be submitted to the Commission authorities and approved by the by [OP: 12 months after entry into by [OP: 12 months after entry into Agency. The transmission system force] and be approved within six force] and be approved within six operators shall submit the proposal months. months. to the Agency by [OP: 12 months

after entry into force] and the Agency shall decide on it within six months.

The Agency may, at its own initiative [ ] or upon a request from the

Commission update the methodology and the Commission shall approve the updated methodology not later than six months from its submission.

Before submission to the [ ]

Commission, the Agency shall consult on the methodology pursuant to Article 15 [recast of Regulation

(EC) No 713/2009 as proposed by

COM(2016) 863 i/2].

The methodology shall detail as a The methodology shall detail as a 3a. The methodology shall detail as minimum the conditions under which minimum the conditions under which a minimum the conditions under the revenues can be used for points the revenues can be used for [ ] which the revenues [ ] are deemed to (a) and (b) of paragraph 2 and the paragraph 2 and the conditions under have fulfilled the objectives conditions under which, and for how which, and for how long, they may be expressed in points (a) [ ] (b) or (c) long, they may be placed on a placed on a separate internal account of paragraph 2 [ ]. separate internal account line for line for future use on those purposes. future use on those purposes.

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• 4. 

  Transmission system operators AM 87 3b. Transmission system operators shall clearly establish beforehand 4. Transmission system operators shall clearly establish beforehand how how any congestion income will be shall clearly establish beforehand how any congestion income will be used, used, and report on the actual use of any congestion income will be used, and report on the actual use of that that income. On an annual basis, and and report on the actual use of that income. On an annual basis, and by [ by 31 July each year, the national income. On an annual basis, and by ] 1 March each year, the [ ] regulatory authorities shall publish a 31 July each year, the national regulatory authorities shall publish a report setting out the amount of regulatory authorities shall publish a report setting out the amount of revenue collected for the 12-month report setting out the amount of revenue collected for the 12-month period ending on 30 June of the same revenue collected for the 12-month period ending on 31 [ ] December of year and how that revenue was used, period ending on 30 June of the same the [ ] previous calendar year and including the specific projects the year and how that revenue was used, how that revenue was used pursuant income has been used for or the including the specific projects the to paragraph 2, including the amount placed on a separate account income has been used for the amount specific projects the income has been line, together with verification that placed on a separate account line, or used for or the amount placed on a that use complies with this the amount that has been used when separate account line or the amount Regulation and the methodology calculating network tariffs, together that has been used when calculating developed pursuant to paragraph 3. with verification that that use network tariffs, together with

  complies with this Regulation. Where verification that that use complies some of the congestion revenues are with this Regulation and the used when calculating network methodology developed pursuant to tariffs, the report may set out the paragraph 3. In such cases where fulfilment by the transmission system some of the congestion revenues are operator of the commitment and used when calculating network balance sheet criteria pursuant to tariffs, the report shall set out how paragraph 2. the TSOs fulfilled the priority objectives in Article 2 where applicable.

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Chapter IV Resource adequacy

AM 88 Article 18 Resource adequacy and capacity Resource adequacy mechanisms

• 1. 

  Member States shall monitor AM 89 1. Member States shall monitor resource adequacy within their 1. Member States shall monitor resource adequacy within their territory based on the European resource adequacy within their territory [ ] based on the European resource adequacy assessment territory based on the European resource adequacy assessment pursuant to Article 19. resource adequacy assessment pursuant to Article 19 and may

  pursuant to Article 19 and shall perform in addition national publish a report on the results of the resource adequacy assessment monitoring. pursuant to Article 19a.

• 2. 

  Where the European resource AM 90 2. Where the European or the adequacy assessment identifies a 2. Where the European resource national resource adequacy resource adequacy concern Member adequacy assessment identifies a assessments identify a resource States shall identify any regulatory resource adequacy concern Member adequacy concern Member States distortions that caused or contributed States shall identify any regulatory shall identify any regulatory to the emergence of the concern. distortions and/or market failures distortions or market distortions, or

  that caused or contributed to the system bottlenecks such as emergence of the concern. insufficient infrastructure, that caused or contributed to the emergence of the concern.

• 3. 

  Member States shall publish a AM 91 3. Member States shall publish timeline for adopting measures to 3. A Member State with identified roadmap with a concrete timeline eliminate any identified regulatory adequacy concerns shall publish an for adopting measures to eliminate distortions. When addressing implementation plan with a timeline any identified regulatory distortions [ resource adequacy concerns Member for adopting measures to eliminate ] or market distortions, or system States shall in particular consider any identified regulatory distortions bottlenecks. When addressing removing regulatory distortions, and/or market failures. When resource adequacy concerns Member enabling scarcity pricing, developing addressing resource adequacy States shall in particular take into interconnection, energy storage, concerns, the Member States shall account the principles defined in demand side measures and energy build on the principles set out in Article 3 and consider removing efficiency. Article 3 and in particular: regulatory distortions, enabling

  scarcity pricing via free price

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formation , developing interconnections with other Member States, allowing for undistorted market access for all market participants including, but not limited to energy storage, demand side measures and energy efficiency.

(a) remove regulatory distortions;

(b) remove price caps;

(c) introduce an administrative shortage pricing for balancing energy; (d) increase interconnection and internal grid capacity; (e) enable self-generation, energy storage, demand side measures and energy efficiency by removing regulatory obstacles; (f) ensure cost-efficient and marketbased procurement of balancing and ancillary services; (g) remove regulated prices in accordance with Article 5 of Directive (EU) ... [recast of Directive 2009/72/EC as proposed by COM(2016) 864 i/2] . AM 92 Article 18 – paragraph 3 a (new) 3 a. The Member States shall submit the implementation plan to the Commission for review.

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AM 93 Article 18 – paragraph 3 b (new) 3 b. The Commission may decide, within two months of receipt of the implementation plan, whether the measures are sufficient to eliminate the regulatory distortions and/or market failures and may require the Member State to amend the implementation plan accordingly. AM 94 Article 18 – paragraph 3 c (new) 3 c. The Member State shall monitor the application of the implementation plan and shall publish the results in an annual report. AM 95 Article 18 – paragraph 3 d (new) 3 d. The Member State shall submit a report relating to their monitoring of the application of the implementation plan to the Agency for an opinion. AM 96 Article 18 – paragraph 3 e (new) 3 e. The Agency shall submit its opinion under paragraph 3d to the Commission. The Commission shall decide whether the reforms have been sufficiently implemented.

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3a. Where the national resource adequacy assessment identifies a concern with regards to a bidding zone and the European resource adequacy assessment has not identified a concern with regards to the same bidding zone, the body governing the national resource adequacy assessment shall consult the ENTSO for Electricity and request for an opinion of the Agency. To this extend the body governing the national resource adequacy assessment shall, within one month from the publication of the national resource adequacy assessment, submit to the ENTSO for Electricity and the Agency a report reasoning the occurring divergence between the two resource adequacy assessments. Within one months from the date of the submission of the report the ENTSO for Electricity shall provide its assessment on these divergences and within two months from the date of the submission of the report the Agency shall provide an opinion. The concerned Member State shall take due notice of the assessment and the opinion.

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AM 97 Article 18 a (new) General principles for capacity mechanisms 1. To address residual concerns that cannot be eliminated by the measures pursuant to Article 18(3), Member States may, as a last resort and subject this Article and to Union State aid rules, introduce capacity mechanisms 2. Before introducing capacity mechanisms under paragraph, as referred to in paragraph 1, Member States shall conduct a comprehensive study of their possible effects on the neighbouring Member States by consulting, at least, its electrically connected neighbouring Member States and the stakeholders of those Member States. 3. Member States shall assess whether a capacity mechanism in the form of strategic reserve can address the adequacy concerns. Where this is not the case, Member States may implement a different type of capacity mechanism. The parameters determining the amount of capacity procured in the capacity mechanism shall be approved by the national regulatory authority.

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• 4. 

  Member States shall not introduce capacity mechanisms where one or both of the following applies: (a) the European resource adequacy assessment has not identified a resource adequacy concern; (b) the detailed implementation plan as referred to in Article 18(3) has not received a positive decision by the Commission as referred to in Article 18(3b). 5. Where a Member State already applies a capacity mechanism, it shall review that mechanism and shall provide that no new contracts are concluded under that mechanism where one or both of the following applies: (a) the European resource adequacy assessment has not identified a resource adequacy concern; (b) the detailed implementation plan as referred to in Article 18(3) has not received a positive decision by the Commission as referred to in Article 18(3b).

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• 6. 

  Capacity mechanisms shall be temporary. They shall be approved by the Commission for no longer than five years. They shall be phased out or the amount of the committed capacities shall be reduced based on the implementation plan pursuant to Article 18(3). Member States shall continue the application of the implementation plan after the introduction of the capacity mechanism. 7. Generation capacity which has started commercial production after [OP: date of entry into force of this Regulation] shall be eligible to participate in a capacity mechanism only if its emissions are below 550 gr CO2/kWh. With the exception of strategic reserves generation capacity emitting 550 gr CO2/kWh or more shall not be committed in capacity mechanisms after [OP: 5 years after the entry into force of this Regulation]

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Article 19 European resource adequacy assessment

• 1. 

  The European resource AM 98 1. The European resource adequacy assessment shall cover the 1. The European resource adequacy assessment shall cover the overall adequacy of the electricity adequacy assessment shall determine overall adequacy of the electricity system to supply current and resource adequacy concerns by system to supply current and projected projected demands for electricity for assessing the overall adequacy of the demands for electricity for every a ten-year period from the date of electricity system to supply current single year within for a ten-year that assessment, in a yearly and projected demands for electricity period from the date of that resolution. in the Union, within the relevant assessment [ ].

  Member States in the region, for each Member State and down to each bidding zone where relevant, for a ten-year period from the date of that assessment, in a yearly resolution. AM 99 Article 19 – paragraph 1 a (new) 1a. The European resource assessment shall be conducted by the ENTSO for Electricity.

• 2. 

  By [OP: six months after entry 2. By [OP: six months after entry into force of this Regulation], the into force of this Regulation], the ENTSO for Electricity shall submit ENTSO for Electricity shall submit to to the Agency a draft methodology the Electricity Coordination Group for the European resource adequacy and the Agency a draft methodology assessment based on the principles for the European resource adequacy provided for in paragraph 4. assessment based on the principles

  provided for in paragraph 4.

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• 3. 

  Transmission system operators AM 100 3. Transmission system operators shall provide the ENTSO for 3. Transmission system operators shall provide the ENTSO for Electricity with the data it needs to shall provide the ENTSO for Electricity with the data it needs to carry out, every year, the European Electricity with the necessary data. carry out [ ] the European resource resource adequacy assessment. The The transmission system operators adequacy assessment. The ENTSO for ENTSO for Electricity shall carry out shall have the right to request Electricity shall carry out the the assessment every year. relevant data not containing assessment every year. Generators

  commercially sensitive information, and other market participants shall and not already collected by the provide transmission system relevant DSO, from generators and operators with data regarding other market participants. expected utilization of the generation resources, considering the availability of primary resources and appropriate scenarios of projected demand and supply.

• 4. 

  The European resource AM 101 4. The European resource adequacy assessment shall be based Article 19 – paragraph 4 – adequacy assessment shall be based on a methodology which shall ensure introductory part on a methodology which shall [ ] that the assessment: 4. The European resource make possible that the assessment:

  adequacy assessment shall be based on a transparent methodology which shall ensure that the assessment:

(a) is carried out on bidding zone (a) is carried out on each level covering at least all Member respective bidding zone level States; covering at least all Member States; (b) is based on appropriate AM 102 (b) is based on appropriate central scenarios of projected demand and (b) is based on appropriate scenarios of projected demand and supply including an economic scenarios of projected demand and supply including an economic assessment of the likelihood of supply including an economic assessment of the likelihood of retirement, new-build of generation assessment of the likelihood of retirement, new-build of generation assets and measures to reach energy retirement, mothballing, new-build of assets and measures to reach energy efficiency targets and appropriate generation assets and measures to efficiency targets and appropriate sensitivities on wholesale prices and reach energy efficiency and electricity sensitivities on extreme weather carbon price developments; interconnection targets and events, hydrological conditions,

appropriate sensitivities on wholesale wholesale prices and carbon price prices and carbon price developments; developments;

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AM 103 Article 19 – paragraph 4 – point b a (new) (ba) contains a worst case scenario which reflects the exceptionality and different likeliness of the rare events a strategic reserve is designed to address; the generation adequacy gap in such a worst case scenario shall only justify a strategic reserve with a size of not more than 5% of the peak load of the respective Member State; (ba) reflects on how the different types of capacity mechanisms address adequacy concerns;

(c) appropriately takes account of AM 104 (c) appropriately takes account of the contribution of all resources (c) appropriately takes account of the contribution of all resources including existing and future the contribution of all resources including existing and future generation, energy storage, demand including existing and future generation, energy storage, demand response, and import and export generation, energy storage, sectoral response, and import and export possibilities and their contribution to integration, demand response, and possibilities and their contribution to flexible system operation; import and export possibilities and flexible system operation;

their contribution to flexible system operation;

(d) anticipates the likely impact of (d) anticipates the likely impact of the measures referred in Article the measures referred in Article 18(3); 18(3);

(e) includes scenarios without (e) includes scenarios without and existing or planned capacity where applicable with existing or mechanisms; planned capacity mechanisms;

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(f) is based on a market model (f) is based on a market model using, where applicable, the flowusing, where applicable, the flowbased approach; based approach; (g) applies probabilistic (g) applies probabilistic calculations; calculations;

(ga) applies a single modelling tool with the possibility to use it for national scenarios, sensitivities and assumptions;

(h) applies at least the following (h) applies at least the following indicators: indicators referred to in Article 20: – "expected energy not served", – "expected energy not served", and and – "loss of load expectation"; – "loss of load expectation"; (i) identifies the sources of (i) identifies the sources of possible resource adequacy concerns, possible resource adequacy concerns, in particular whether it is a network in particular whether it is a network or or a resource constraint, or both. a resource constraint, or both.

AM 105 Article 19 – paragraph 4 – point i a (new) (ia) respects real network development. (j) ensures that national characteristics of generation, demand flexibility and storage, the availability of primary resources and the level of interconnection are properly taken into consideration;

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• 5. 

  By [OP: six months after entry 5. By [OP: six months after entry into force of this Regulation], the into force of this Regulation], the ENTSO for Electricity shall submit ENTSO for Electricity shall submit to to the Agency a draft methodology the Agency a draft methodology for for calculating: calculating:

(a) the value of lost load; (a) the value of lost load;

AM 106 Article 19 – paragraph 5 – subparagraph 1 a (new) The methodology shall be based on a transparent, objective and verifiable criteria.

(b) the "cost of new entry" for (b) the "cost of new entry" for generation, or demand response; and generation, or demand response; and (c) the reliability standard (c) the reliability standard [ ] expressed as "expected energy not referred to in Article 20 served" and the "loss of load expectation".

• 6. 

  The proposals under AM 107 6. The proposals under paragraphs paragraphs 2 and 5 and the results of 6. The proposals under paragraphs 2 and 5 for the draft methodology, the European resource adequacy 2 and 5 of this Article, the scenarios the scenarios, sensitivities and assessment under paragraph 3 shall and assumptions on which they are assumptions on which they are be subject to prior consultation and based, and the results of the European based, and the results of the European approval by the Agency under the resource adequacy assessment under resource adequacy assessment under procedure set out in Article 22. paragraph 1a of this Article shall be paragraph 3 shall be subject to prior

  subject to prior consultation and consultation with Member States, approval by the Agency under the the Electricity Coordination Group procedure set out in Article 22. and relevant stakeholders and approval by the Agency under the procedure set out in Article 22.

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Article 19a National resource adequacy

assessments 1. National resource adequacy assessment shall be based on the methodology referred in Article 19(2) in particular provisions provided in paragraph 4 (b) to (j); however, may provide additional scenarios, sensitivities and assumptions taking into account national considerations. The national resource adequacy assessment shall use the same modelling tools as used by the ENTSO for Electricity for the European resource adequacy assessment and the same input data and other data to reflect national scenarios, sensitivities and assumptions. In addition, national resource adequacy assessment, when assessing foreign contribution to the security of supply of the bidding zones they cover, shall apply the values for foreign contribution subject to provisions of Article 21.

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1a. In addition to the national resource adequacy assessment performed pursuant to paragraph 1, Member States may perform a second assessment using different modelling tools than those used by the ENTSO for Electricity for the European resource adequacy assessment while following the remaining requirements of paragraph 1. 2. National resource adequacy assessments and, where applicable, the assessment of ENTSO for Electricity and the opinion of the Agency pursuant to paragraph 3a of article 18 shall be made publicly available.

Article 20 Reliability standard

• 1. 

  When applying capacity AM 108 1. When applying capacity mechanisms Member States shall 1. When applying capacity mechanisms Member States shall have a reliability standard in place mechanisms Member States shall have a reliability standard in place indicating their desired level of have a reliability standard in place. A indicating their desired level of security of supply in a transparent reliability standard shall indicate the security of supply in a transparent manner. necessary level of security of supply manner.

  of the Member State in a transparent manner. In the case of cross-border bidding zones, such reliability standards shall be established jointly by the relevant authorities.

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• 2. 

  The reliability standard shall 2. The reliability standard shall be be set by the national regulatory set by the [ ] Member State or a authority based on the methodology competent authority designated by pursuant to Article 19(5). the Member State based on the

  methodology pursuant to Article 19(5) 3. The reliability standard shall 3. The reliability standard shall be be calculated using the value of lost calculated using at least the value of load and the cost of new entry over a lost load and the cost of new entry given timeframe. over a given timeframe and be

  expressed as "expected energy not served" and the "loss of load expectation".

• 4. 

  The parameters determining AM 109 4. When applying capacity the amount of capacity procured in deleted mechanisms the parameters the capacity mechanism shall be determining the amount of capacity approved by the national regulatory procured in the capacity mechanism authority. shall be approved by the [ ] Member

  State or another competent authority designated by the Member State.

  Article 21 Cross-border participation in capacity mechanisms

• 1. 

  Mechanisms other than 1. Mechanisms other than strategic reserves shall be open to strategic reserves and where direct participation of capacity technically feasible, strategic providers located in another Member reserves, shall be open to direct State provided there is a network cross-border participation of capacity connection between that Member providers located in another Member State and the bidding zone applying State [ ] pursuant to the provisions the mechanism. of this Article.

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• 2. 

  Member States shall ensure 2. Member States shall ensure that that foreign capacity capable of foreign capacity capable of providing providing equivalent technical equivalent technical performance to performance to domestic capacities domestic capacities has the has the opportunity to participate in opportunity to participate in the same the same competitive process as competitive process as domestic domestic capacity. capacity. In the case of capacity

  mechanisms in operation as of the [date of entry into force], Member States may allow direct participation in the same competitive process of interconnectors as foreign capacity for a maximum of four years after [entry into force] or two years following the approval of the methodologies referred to in paragraph 10 of this Article, whatever happens earlier. Member States may apply following requirements to the foreign capacity: (a) the capacity is located in a Member State with a direct network connection between that Member State and the Member State applying the mechanism, (b) the capacity is not participating in another capacity mechanism for which the capacity needs to be available,

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• 3. 

  Member States shall not 3. Member States shall not restrict restrict capacity which is located in capacity which is located in their their territory from participating in territory from participating in capacity capacity mechanisms of other mechanisms of other Member States. Member States.

• 4. 

  Cross-border participation in 4. Cross-border participation in [ market-wide capacity mechanisms ] capacity mechanisms shall not shall not change, alter or otherwise change, alter or otherwise impact impact cross-zonal schedules and cross-zonal schedules and physical physical flows between Member flows between Member States which States which shall be determined shall be determined solely by the solely by the outcome of capacity outcome of capacity allocation allocation pursuant to Article 14. pursuant to Article 14. 5. Capacity providers shall be AM 110 5. Capacity providers shall be [ ] able to participate in more than one 5. Capacity providers shall be able subject to non-availability mechanism for the same delivery to participate in more than one payments in case of nonperiod. They shall be subject to nonmechanism for the same delivery availability. In case capacity availability payments in case of nonperiod. They shall be subject to nonproviders participate in more than availability, and subject to two or availability payments in case of nonone mechanism for the same delivery more non-availability payments availability, and subject to two or period, they shall be subject to [ ] where there is concurrent scarcity in more non-availability payments where multiple non-availability payments two or more bidding zones where the there is concurrent scarcity in two or when they are unable to fulfil capacity provider is contracted. more bidding zones where the multiple commitments.

  capacity provider is contracted. Capacity providers shall be able to participate with no more than their available maximum capacity.

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• 6. 

  Regional operational centres AM 111 6. Where capacity mechanisms established pursuant to Article 32 6. Regional coordination centres are applied, Transmission System shall annually calculate the established pursuant to Article 32 Operators [ ] shall annually calculate maximum entry capacity available shall annually calculate the maximum the maximum entry capacity available for the participation of foreign entry capacity available for the for the participation of foreign capacity taking into account the participation of foreign capacity capacity [ ] based on the expected availability of taking into account the expected methodology referred in point (a) of interconnection and the likely availability of interconnection and the paragraph 10 and taking into concurrence of system stress between likely concurrence of system stress account the recommended values the system where the mechanism is between the system where the calculated by the Regional Security applied and the system in which the mechanism is applied and the system Coordinators pursuant to Article foreign capacity is located. A in which the foreign capacity is 34(q), 38 and 39, the level of calculation is required for each located. A calculation is required for physical interconnection between bidding zone border. each bidding zone border. Member States, expected availability

  of interconnection and the likely concurrence of system stress between the system where the mechanism is applied and the system in which the foreign capacity is located. A calculation is required for each bidding zone border.

• 7. 

  Member States shall ensure 7. Member States shall ensure that that the entry capacity referred to in the entry capacity referred to in paragraph 6 is allocated to eligible paragraph 6 is allocated to eligible capacity providers in a transparent, capacity providers in a transparent, non-discriminatory and market-based non-discriminatory and market-based manner. manner.

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• 8. 

  Any difference in the cost 8. [ ] If there are capacity of foreign capacity and domestic mechanisms open for cross-border capacity arising through the participation in two neighbouring allocation referred to in paragraph 7 Member States, any revenues shall accrue to transmission system arising through the allocation referred operators and be shared between to in paragraph 7 shall accrue to them according to the methodology transmission system operators and be referred in point (b) of paragraph 10. shared between them according to the Transmission system operators shall methodology referred in point (b) of use such revenues for the purposes paragraph 10 or a common set out in Article 17(2). methodology approved by both

  relevant regulatory authorities. If the neighbouring Member State is not applying a capacity mechanism, the share of revenues shall be approved by the competent national authority of the Member State where the capacity mechanism is implemented after seeking the opinion of the regulatory authorities of the neighbouring Member States. Transmission system operators shall use such revenues for the purposes set out in Article 17(2).

• 9. 

  The transmission system 9. The transmission system operator where the foreign capacity is operator where the foreign capacity is located shall: located shall: (a) establish whether interested (a) establish whether interested capacity providers can provide the capacity providers can provide the technical performance as required by technical performance as required by the capacity mechanism in which the the capacity mechanism in which the capacity provider intends to capacity provider intends to participate and register the capacity participate and register the capacity provider in the registry as eligible provider in the registry as eligible capacity providers. capacity providers.

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(b) carry out availability checks as (b) carry out availability checks [ ] appropriate.

(c) be notified by the respective capacity provider without delay about its participation in foreign capacity mechanism (d) notify to the transmission system operator in the Member State applying the capacity mechanism the information received under paragraph 9a to 9c.

• 10. 

  By [OP: twelve months after 10. By [OP: twelve months after entry into force of this Regulation] entry into force of this Regulation] the the ENTSO for Electricity shall ENTSO for Electricity shall submit to submit to the Agency: the Agency: (a) a methodology for calculating (a) a methodology for the maximum entry capacity for calculating by the Regional Security cross-border participation as referred Coordinator and transmission to in paragraph 6; system operators the maximum entry

  capacity for cross-border participation as referred to in paragraph 6;

(b) a methodology for sharing (b) a methodology for sharing the the revenues referred to in paragraph revenues referred to in paragraph 8; 8;

(c) common rules to carry out (c) common rules to carry out availability checks referred to in availability checks referred to in point point (b) of paragraph 9; (b) of paragraph 9; (d) common rules to determine (d) common [ ] principles to when a non-availability payment is determine when a non-availability due; payment is due; (e) terms of the operation of the (e) terms of the operation of the registry as referred to in point (a) of registry as referred to in point (a) of paragraph 9; paragraph 9;

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(f) common rules to identify (f) common rules to identify capacity eligible to participate as capacity eligible to participate as referred to in point (a) of paragraph referred to in point (a) of paragraph 9. 9.

The proposal shall be subject to prior The proposal shall be subject to prior consultation and approval by the consultation and approval by the Agency under the procedure set out Agency under the procedure set out in in Article 22. Article 22. 11. The Agency shall verify 11. The [ ] national regulatory whether the capacities have been authorities concerned shall verify calculated in line with the whether the capacities have been methodology as referred to in point calculated in line with the (a) of paragraph 10. methodology as referred to in point

(a) of paragraph 10. 12. National regulatory authorities 12. [ ] Regulatory authorities shall shall ensure that cross-border ensure that cross-border participation participation in capacity mechanisms in capacity mechanisms is organised is organised in an effective and nonin an effective and non-discriminatory discriminatory manner. They shall in manner. They shall in particular particular provide for adequate provide for adequate administrative administrative arrangements for the arrangements for the enforcement of enforcement of non-availability non-availability payments across payments across borders. borders.

• 13. 

  Allocated capacities as 13. Allocated capacities as referred referred to in paragraph 7 shall be to in paragraph 7 shall be transferable transferable between eligible capacity between eligible capacity providers. providers. Eligible capacity providers Eligible capacity providers shall shall notify any transfer to the notify any transfer to the registry as registry as referred to in point (a) of referred to in point (a) of paragraph 9. paragraph 9.

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• 14. 

  No later than [OP: two years 14. No later than [OP: two years after the entry into force of this after the entry into force of this Regulation] the ENTSO for Regulation] the ENTSO for Electricity shall set up and operate Electricity shall set up and operate the the registry as referred to in point (a) registry as referred to in point (a) of of paragraph 9. The registry shall be paragraph 9. The registry shall be open to all eligible capacity open to all eligible capacity providers, providers, the systems applying the the systems applying the mechanisms mechanisms and their transmission and their transmission system system operators. operators.

  Article 22 Approval procedure 1. Where reference is made to 1. Where reference is made to this this Article, the procedure set out in Article, the procedure set out in paragraphs 2 to 4 shall be applicable paragraphs 2 to 4 shall be applicable to the approval of a proposal to the approval of a proposal submitted by the ENTSO for submitted by the ENTSO for Electricity. Electricity. 2. Prior to submitting the 2. Prior to submitting the proposal, the ENTSO for Electricity proposal, the ENTSO for Electricity shall conduct a consultation process shall conduct a consultation process involving all relevant stakeholders, involving all relevant stakeholders, [ ] national regulatory authorities and regulatory authorities and other other national authorities. national authorities and shall take the

  results of a consultation process duly into consideration.

• 3. 

  Within three months from the 3. Within three months from the date of receipt, the Agency shall date of receipt, the Agency shall either either approve the proposal or amend approve the proposal or amend it. In it. In the latter case, the Agency shall the latter case, the Agency shall consult the ENTSO for Electricity consult the ENTSO for Electricity before adopting the amended before adopting the amended proposal. The adopted proposal shall proposal. The adopted proposal shall be published on the Agency's website be published on the Agency's website at the latest three months after the at the latest three months after the date date of receipt of the proposed of receipt of the proposed documents. documents.

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• 4. 

  The Agency may request 4. The Agency may request changes to the approved proposal at changes to the approved proposal at any time. Within six months from the any time. Within six months from the request, the ENTSO for Electricity request, the ENTSO for Electricity shall submit to the Agency a draft of shall submit to the Agency a draft of the proposed changes. Within a the proposed changes. Within a period period of three months from the date of three months from the date of of receipt of the draft, the Agency receipt of the draft, the Agency shall shall amend or approve the changes amend or approve the changes and and publish it on its website. publish it on its website.

  Article 23 Design principles for capacity mechanisms

• 1. 

  To address residual concerns AM 112 1. To address residual concerns that cannot be eliminated by the 1. Any capacity mechanism shall: that cannot be eliminated by the measures pursuant to Article 18(3), measures pursuant to Article 18(3), Member States may introduce Member States may introduce capacity mechanisms, subject to the capacity mechanisms, subject to the provisions of this Article and to the provisions of this Article and [ ] Union State aid rules. without prejudice to the Union State

  aid rules pursuant to Articles 107 to 109 TFEU.

  (a) not create undue market distortions and not limit cross-border trade; (b) not go beyond what is necessary to address the adequacy concern; (c) select capacity providers by means of a transparent, non-discriminatory and market-based process; (d) be technology neutral; (e) provide incentives for capacity providers to be available in times of expected system stress;

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(f) ensure that the remuneration is determined through a market-based process; (g) set out the required technical conditions for the participation of capacity providers in advance of the selection process; (h) be open to participation of all resources, including storage and demand side management that are capable of providing the required technical performance; (i) apply appropriate penalties to capacity providers when not available in the event of system stress; (j) ensure that capacity contracts for existing installations are rewarded for a maximum length of 1 year.

• 2. 

  Where a Member State wishes AM 113 2. Where a Member State wishes to implement a capacity mechanism, 2. Capacity mechanisms in the to implement a capacity mechanism, it it shall consult on the proposed form of strategic reserves shall: shall consult on the proposed mechanism at least with its mechanism at least with its directly electrically connected neighbouring electrically connected neighbouring Member States. Member States based on a

  comprehensive study on the possible effects on those Member States.

  (a) be held outside the market; (b) be dispatched only where dayahead and intraday markets have failed to clear and transmission system operators have exhausted their balancing resources to establish an equilibrium between demand and supply;

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(c) ensure that during periods where strategic reserves were dispatched, imbalances are settled at the technical price limit applied by the market operators pursuant to Article 9 or at the value of lost load, whichever the higher. (d) be limited to maximum emissions of 200kg/CO2/kW for the electricity production per year The electricity generated, or the load reduction achieved by resources in the strategic reserve shall not be sold through wholesale electricity markets. 2a. When a capacity mechanism is designed as a strategic reserve, resources in the strategic reserve shall only be dispatched in case transmission system operators are likely to exhaust their balancing resources to establish an equilibrium between demand and supply. This requirement is without prejudice to activating resources ahead of actual dispatch in order to respect their ramping constraints and operating requirements. During periods where resources in the strategic reserve were dispatched imbalances in the market shall be settled at least at the bidding limit pursuant to Article 9. The resources taking part in the strategic reserve shall not get remunerated through wholesale electricity markets or balancing markets.

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• 3. 

  Capacity mechanisms shall not AM 114 3. Capacity mechanisms shall: create unnecessary market distortions 3. In addition to the requirements and not limit cross-border trade. The laid down in paragraph 1, capacity amount of capacity committed in the mechanisms other than strategic mechanism shall not go beyond what reserves shall: is necessary to address the concern.

  (a) be constructed so as to ensure that the price paid for availability automatically tends to zero when the level of capacity supplied is expected to be adequate to meet the level of capacity demanded; (b) remunerate the participating resources merely for their availability and ensure that the remuneration does not affect decisions of the capacity provider whether or not to generate; (c) ensure that capacity obligations are transferable between eligible capacity providers. (a) not create unnecessary market distortions and not limit cross [ ] zonal trade; (b) be market-based; (c) be open to participation of all resources that are capable of providing the required technical performance in a technology neutral manner and through fair and transparent rules, including but not limited to participation of storage, energy efficiency and demand response;

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(d) be temporary, but are permitted, in accordance with state aid rules, as long as the relevant resource adequacy assessment identifies a resource adequacy concern; (e) [ ] not go beyond what is necessary to address the resource adequacy concern.

• 4. 

  Generation capacity for which AM 115 4. In the design of a capacity a final investment decision has been mechanism, Member States shall made after [OP: entry into force] deleted apply the following requirements shall only be eligible to participate in regarding CO2 emission limits: a capacity mechanism if its emissions are below 550 gr CO2/kWh.

Generation capacity emitting 550 gr

CO2/kWh or more shall not be committed in capacity mechanisms 5 years after the entry into force of this

Regulation.

(a) Generation capacity emitting more than 550 gr CO2/kWh of energy or more than 700 kg CO2 on average per year per installed kW for which a final investment decision has been made after [OP: date of entry into force] shall not receive payments or commitments for future payments under a capacity mechanism as of 31 December 2025.

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(b) Generation capacity emitting more than 550 gr CO2/kWh of energy or more than 700 kg CO2 on average per year per installed kW for which a final investment decision has been made before [OP: date of entry into force] shall not receive payments or commitments for future payments under a capacity mechanism as of 31 December 2030, except for contracts with a remaining duration of not more than 5 years concluded before 31 December 2030. Between 31 December 2025 and 31 December 2030, the capacity receiving remuneration for this participation should be reduced by 5% per year. (c) The emission limit of 550 gr CO2/kWh of energy and the limit of 700 kg CO2 on average per year per installed kW shall be calculated based on the design efficiency of the generation unit as provided by an accredited certification organisation.

• 5. 

  Where the European resource AM 116 [ ] adequacy assessment has not identified a resource adequacy deleted concern, Member States shall not apply capacity mechanisms.

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5a. When designing capacity mechanisms, Member States shall include a provision allowing for efficient phase-out of a capacity mechanism within 4 years in case the resource adequacy concern is no longer present. This phase-out can be an administrative cessation of the mechanism, with a reasonable advance notice, or provisions in the design of the mechanism which would lead to the suspension of associated economic incentives when there is no adequacy concern.

Article 24 Existing mechanisms

Member States applying capacity AM 117 1. Member States applying mechanisms on [OP: entry into force Member States applying capacity capacity mechanisms on [OP: entry of this Regulation] shall adapt their mechanisms on [OP: entry into force into force of this Regulation] shall mechanisms to comply with Articles of this Regulation] shall adapt their adapt their mechanisms to comply 18, 21 and 23 of this Regulation. mechanisms to comply with Articles with Articles 18, 21 and 23 of this

18, 18a, 21 and 23 of this Regulation. Regulation without prejudice to commitments or contracts,

concluded before that date, and without prejudice to the Union State aid rules pursuant to Articles 107 to 109 TFEU, including state aid decisions taken thereafter before that date.

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Chapter V Transmission system operation

Article 25 European network of transmission system operators for electricity

• 1. 

  Transmission system operators 1. Transmission system operators shall cooperate at Union level shall cooperate at Union level through through the ENTSO for Electricity, the ENTSO for Electricity, in order to in order to promote the completion promote the completion and and functioning of the internal functioning of the internal market in market in electricity and cross-border electricity and cross [ ] zonal trade trade and to ensure the optimal and to ensure the optimal management, coordinated operation management, coordinated operation and sound technical evolution of the and sound technical evolution of the European electricity transmission European electricity transmission network. network. 2. In performing its functions

under EU law, the ENTSO for 2. In performing its functions

Electricity shall act for the European under EU law, the ENTSO for good and independent from Electricity shall [ ] contribute to the individual national interests or the efficient and sustainable achievement national interests of transmission of the objectives set out in the policy system operators, and shall contribute framework for climate and energy to the efficient and sustainable covering the period from 2020 to achievement of the objectives set out 2030, in particular by contributing to in the policy framework for climate the efficient integration of electricity and energy covering the period from generated from renewable energy 2020 to 2030, in particular by sources and to increases in energy contributing to the efficient efficiency while maintaining system integration of electricity generated security.

from renewable energy sources and to increases in energy efficiency.

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Article 26 Establishment of the ENTSO for Electricity

• 1. 

  The transmission system 1. The transmission system operators for electricity shall submit operators for electricity shall submit to the Commission and to the Agency to the Commission and to the Agency the draft statutes, a list of members the draft statutes, a list of members and draft rules of procedure, and draft rules of procedure, including including the rules of procedures on the rules of procedures on the the consultation of other consultation of other stakeholders, of stakeholders, of the ENTSO for the ENTSO for Electricity to be Electricity to be established. established. 2. Within two months of the day 2. Within two months of the day of the receipt, the Agency, after of the receipt, the Agency, after formally consulting the organisations formally consulting the organisations representing all stakeholders, in representing all stakeholders, in particular the system users, including particular the system users, including customers, shall provide an opinion customers, shall provide an opinion to to the Commission on the draft the Commission on the draft statutes, statutes, list of members and draft list of members and draft rules of rules of procedure. procedure. 3. The Commission shall deliver 3. The Commission shall deliver an opinion on the draft statutes, list an opinion on the draft statutes, list of of members and draft rules of members and draft rules of procedures procedures taking into account the taking into account the opinion of the opinion of the Agency provided for Agency provided for in paragraph 2 in paragraph 2 and within three and within three months of the day of months of the day of the receipt of the receipt of the opinion of the the opinion of the Agency. Agency. 4. Within three months of the day 4. Within three months of the day of receipt of the Commission's of receipt of the Commission's favourable opinion, the transmission favourable opinion, the transmission system operators shall establish the system operators shall establish the ENTSO for Electricity and adopt and ENTSO for Electricity and adopt and publish its statutes and rules of publish its statutes and rules of procedure. procedure.

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• 5. 

  The documents referred to in 5. The documents referred to in paragraph 1 shall be submitted to the paragraph 1 shall be submitted to the Commission and to the Agency in Commission and to the Agency in case of changes thereof or upon case of changes thereof or upon

reasoned request of the Commission reasoned request of the Commission or of the Agency. The Agency and or of the Agency. The Agency and the the Commission shall deliver an Commission shall deliver an opinion opinion in accordance with in accordance with paragraphs 2 to 4. paragraphs 2 to 4.

Article 27 Tasks of the ENTSO for Electricity

• 1. 

  The ENTSO for Electricity shall : 1. The ENTSO for Electricity shall:

(a) elaborate network codes in the (a) elaborate network codes in the areas set out in Article 55(1) with a areas set out in Article 55(1) with a view to achieving the objectives set view to achieving the objectives set out in Article 25 . out in Article 25 (b) adopt and publish a non(b) adopt and publish a nonbinding Union-wide ten-year network binding Union-wide ten-year network development plan, (Union-wide development plan, (Union-wide network development plan), every network development plan), every two years; two years; (c) prepare and adopt proposals AM 118 (c) prepare and adopt proposals related to the European resource (c) prepare and adopt proposals related to the European resource adequacy assessment pursuant to related to the European resource adequacy assessment pursuant to Article 19(2), (3) and (5) and for the adequacy assessment pursuant to Article 19(2), (3) and (5) and for the technical specifications for cross Article 19(1a) and for the technical technical specifications for crossborder participation in capacity specifications for cross-border border participation in capacity mechanisms pursuant to Article participation in capacity mechanisms mechanisms pursuant to Article 21(10); pursuant to Article 21(10); 21(10);

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(d) adopt recommendations (d) adopt recommendations relating relating to the coordination of to the coordination of technical technical cooperation between Union cooperation between Union and thirdand third-country transmission country transmission system system operators; operators; (e) adopt a framework for the (e) adopt a framework for the cooperation and coordination cooperation and coordination between between regional operational centres; [ ] regional security coordinators; (f) adopt a proposal defining the (f) adopt a proposal defining the system operation region covered by system operation region [ ] in each regional operational centre; accordance with the provisions of

Article 33; (fa) cooperate with distribution system operators and the EU DSO entity.

(fb) promote the digitalisation of transmission networks including deployment of smart grids and intelligent metering systems;

(g) adopt common network (g) adopt common network operation tools to ensure operation tools to ensure coordination coordination of network operation in of network operation in normal and normal and emergency conditions, emergency conditions, including a including a common incident common incident classification scale, classification scale, and research and research plans, including the plans, including the deployment of deployment of these plans through an these plans through an efficient efficient research programme. These research programme. These tools tools shall specify inter alia: shall specify inter alia:

(i) the information, including (i) the information, including appropriate day ahead, intra-day and appropriate day ahead, intra-day and real-time information, useful for real-time information, useful for improving operational coordination, improving operational coordination, as well as the optimal frequency for as well as the optimal frequency for the collection and sharing of such the collection and sharing of such information; information;

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(ii) the technological platform for (ii) the technological platform for the exchange of information in real the exchange of information in real time and where appropriate, the time and where appropriate, the technological platforms for the technological platforms for the collection, processing and collection, processing and transmission of the other information transmission of the other information referred to in point (i), as well as for referred to in point (i), as well as for the implementation of the procedures the implementation of the procedures capable of increasing operational capable of increasing operational coordination between transmission coordination between transmission system operators with a view to such system operators with a view to such coordination becoming Union-wide; coordination becoming Union-wide; (iii) how transmission system (iii) how transmission system operators make available the operators make available the operational information to other operational information to other transmission system operators or any transmission system operators or any entity duly mandated to support them entity duly mandated to support them to achieve operational coordination, to achieve operational coordination, and to the Agency; and and to the Agency; and (iv) that transmission system (iv) that transmission system operators designate a contact point in operators designate a contact point in charge of answering inquiries from charge of answering inquiries from other transmission system operators other transmission system operators or or from any entity duly mandated as from any entity duly mandated as referred to in point (iii), or from the referred to in point (iii), or from the Agency concerning such information. Agency concerning such information. (h) adopt an annual work (h) adopt an annual work programme; programme;

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AM 119 Article 27 – paragraph 1 – point h a (new) (h a) standardise, in cooperation with the EU DSO entity, relevant data formats and protocols to facilitate cross-border exchange of data;

(i) adopt an annual report; (i) adopt an annual report;

(j) carry out and adopt seasonal (j) carry out and adopt seasonal adequacy outlooks pursuant to adequacy outlooks pursuant to Article Article 9(2) [Regulation on risk 9(2) [Regulation on risk preparedness preparedness as proposed by as proposed by COM(2016) 862 i] . COM(2016) 862 i].

AM 120 Article 27 – paragraph 1 – point j a (new) (j a) promote digitalisation of transmission systems to ensure, inter alia, efficient real time data acquisition and use and smart substations; AM 121 Article 27 – paragraph 1 – point j b (new) (j b) promote data management, cyber security and data protection in cooperation with relevant authorities and regulated entities; AM 122 Article 27 – paragraph 1 – point j c (new) (j c) develop demand response in cooperation with DSOs.

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• 2. 

  The ENTSO for Electricity AM 123 2. The ENTSO for Electricity shall report to the Agency on 2. The ENTSO for Electricity shall report to the Agency on shortcomings identified regarding the shall report to the Agency on shortcomings identified regarding the establishment and performance of shortcomings identified regarding the establishment and performance of [ ] regional operational centres. establishment and performance of Regional Security Coordinators.

  regional coordination centres .

• 3. 

  The ENTSO for Electricity 3. The ENTSO for Electricity shall publish the minutes of its shall publish the minutes of its Assembly, Board and Committees Assembly, Board and Committees meetings and provide the public with meetings and provide the public with regular information on its decisionregular information on its decisionmaking and activities. making and activities. 4. The annual work programme 4. The annual work programme referred to in (h) of paragraph 1 shall referred to in (h) of paragraph 1 shall contain a list and description of the contain a list and description of the network codes to be prepared, a plan network codes to be prepared, a plan on coordination of operation of the on coordination of operation of the network, and research and network, and research and development activities, to be realised development activities, to be realised in that year, and an indicative in that year, and an indicative calendar. calendar. 5. The ENTSO for Electricity 5. The ENTSO for Electricity shall make available all information shall make available all information required by the Agency to fulfil its required by the Agency to fulfil its tasks under Article 29(1). tasks under Article Transmission system operators shall 29(1). Transmission system make available all information operators shall make available all required for the ENTSO for information required for the ENTSO Electricity to fulfil its task under for Electricity to fulfil its task under sentence 1. sentence 1. 6. Upon request of the 6. Upon request of the Commission, the ENTSO for Commission, the ENTSO for Electricity shall give its views to the Electricity shall give its views to the Commission on the adoption of the Commission on the adoption of the guidelines as laid down in Article 57. guidelines as laid down in Article 57.

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Article 28 Consultations

• 1. 

  While preparing the proposals AM 124 1. While preparing the proposals pursuant to the tasks referred to in 1. While preparing the proposals pursuant to the tasks referred to in Article 27(1) , the ENTSO for pursuant to the tasks referred to in Article 27(1), the ENTSO for Electricity shall conduct an extensive Article 27(1), the ENTSO for Electricity shall conduct an extensive consultation process, at an early stage Electricity shall conduct an extensive consultation process, at an early stage and in an open and transparent consultation process, at an early stage and in an open and transparent manner, involving all relevant and structured in a way to enable manner, involving all relevant stakeholders , and, in particular, the accommodating stakeholder stakeholders, and, in particular, the organisations representing all comments before final adoption and organisations representing all stakeholders, in accordance with the in an open and transparent manner, stakeholders, in accordance with the rules of procedure referred to in involving all relevant stakeholders, rules of procedure referred to in Article 26 . That consultation shall and, in particular, the organisations Article 26. That consultation shall also involve national regulatory representing all stakeholders, in also involve national regulatory authorities and other national accordance with the rules of authorities and other national authorities, supply and generation procedure referred to in Article 26 . authorities, supply and generation undertakings, system users including That consultation shall also involve undertakings, system users including customers, distribution system national regulatory authorities and customers, distribution system operators, including relevant industry other national authorities, supply and operators, including relevant industry associations, technical bodies and generation undertakings, system users associations, technical bodies and stakeholder platforms. It shall aim at including customers and their stakeholder platforms. It shall aim at identifying the views and proposals representatives, distribution system identifying the views and proposals of of all relevant parties during the operators, including relevant industry all relevant parties during the decision-making process. associations, technical bodies and decision-making process.

  stakeholder platforms. It shall aim at identifying the views and proposals of all relevant parties during the decision-making process.

• 2. 

  All documents and minutes of 2. All documents and minutes of meetings related to the consultations meetings related to the consultations referred to in paragraph 1 shall be referred to in paragraph 1 shall be made public. made public.

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• 3. 

  Before adopting the proposals 3. Before adopting the proposals pursuant to Article 27(1) the ENTSO pursuant to Article 27(1) the ENTSO for Electricity shall indicate how the for Electricity shall indicate how the observations received during the observations received during the consultation have been taken into consultation have been taken into consideration. It shall provide consideration. It shall provide reasons reasons where observations have not where observations have not been been taken into account. taken into account.

  Article 29 Monitoring by the Agency

• 1. 

  The Agency shall monitor the 1. The Agency shall monitor the execution of the tasks referred to in execution of the tasks referred to in Article 27(1), (2) and (3) of the Article 27(1), (2) and (3) of the ENTSO for Electricity and report to ENTSO for Electricity and report to the Commission. the Commission. The Agency shall monitor the The Agency shall monitor the implementation by the ENTSO for implementation by the ENTSO for Electricity of network codes Electricity of network codes elaborated under Article 55(14) . elaborated under Article 55(14). Where the ENTSO for Electricity has Where the ENTSO for Electricity has failed to implement such network failed to implement such network codes, the Agency shall request the codes, the Agency shall request the ENTSO for Electricity to provide a ENTSO for Electricity to provide a duly reasoned explanation as to why duly reasoned explanation as to why it it has failed to do so. The Agency has failed to do so. The Agency shall shall inform the Commission of that inform the Commission of that explanation and provide its opinion explanation and provide its opinion thereon. thereon.

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The Agency shall monitor and The Agency shall monitor and analyse analyse the implementation of the the implementation of the network network codes and the guidelines codes and the guidelines adopted by adopted by the Commission as laid the Commission as laid down in down in Article 54(1) , and their Article 54(1), and their effect on the effect on the harmonisation of harmonisation of applicable rules applicable rules aimed at facilitating aimed at facilitating market market integration as well as on nonintegration as well as on nondiscrimination, effective competition discrimination, effective competition and the efficient functioning of the and the efficient functioning of the market, and report to the market, and report to the Commission. Commission.

• 2. 

  The ENTSO for Electricity 2. The ENTSO for Electricity shall submit the draft Union-wide shall submit the draft Union-wide network development plan, the draft network development plan, the draft annual work programme, including annual work programme, including the information regarding the the information regarding the consultation process, and the other consultation process, and the other documents referred to in Article documents referred to in Article 27(1) 27(1) to the Agency for its opinion. to the Agency for its opinion. Within two months from the day of Within two months from the day of receipt, the Agency shall provide a receipt, the Agency shall provide a duly reasoned opinion as well as duly reasoned opinion as well as recommendations to the ENTSO for recommendations to the ENTSO for Electricity and to the Commission Electricity and to the Commission where it considers that the draft where it considers that the draft annual work programme or the draft annual work programme or the draft Union-wide network development Union-wide network development plan submitted by the ENTSO for plan submitted by the ENTSO for Electricity do not contribute to non Electricity do not contribute to nondiscrimination, effective competition, discrimination, effective competition, the efficient functioning of the the efficient functioning of the market market or a sufficient level of crossor a sufficient level of cross-border border interconnection open to thirdinterconnection open to third-party party access. access.

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Article 30 Costs

The costs related to the activities of The costs related to the activities of the ENTSO for Electricity referred to the ENTSO for Electricity referred to in Articles 25 to 29 and 54 to 57 of in Articles 25 to 29 and 54 to 57 of this Regulation, and in Article 11 of this Regulation, and in Article 11 of Regulation (EU) No 347/2013 i shall Regulation (EU) No 347/2013 i shall be be borne by the transmission system borne by the transmission system operators and shall be taken into operators and shall be taken into account in the calculation of tariffs. account in the calculation of tariffs. Regulatory authorities shall approve Regulatory authorities shall approve those costs only if they are those costs only if they are reasonable reasonable and appropriate. and appropriate.

Article 31 Regional cooperation of transmission system operators

• 1. 

  Transmission system operators 1. Transmission system operators shall establish regional cooperation shall establish regional cooperation within the ENTSO for Electricity to within the ENTSO for Electricity to contribute to the activities referred to contribute to the activities referred to in Article 27(1), (2) and (3). In in Article 27(1), (2) and (3). In particular, they shall publish a particular, they shall publish a regional investment plan every two regional investment plan every two years, and may take investment years, and may take investment decisions based on that regional decisions based on that regional investment plan. The ENTSO for investment plan. The ENTSO for Electricity shall promote cooperation Electricity shall promote cooperation between transmission system between transmission system operators at regional level ensuring operators at regional level ensuring interoperability, communication and interoperability, communication and monitoring of regional performance monitoring of regional performance in in those areas which are not yet those areas which are not yet harmonised at Union level. harmonised at Union level.

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• 2. 

  Transmission system operators 2. Transmission system operators shall promote operational shall promote operational arrangements in order to ensure the arrangements in order to ensure the optimum management of the network optimum management of the network and shall promote the development of and shall promote the development of energy exchanges, the coordinated energy exchanges, the coordinated allocation of cross-border capacity allocation of cross-border capacity through non-discriminatory marketthrough non-discriminatory marketbased solutions, paying due attention based solutions, paying due attention to the specific merits of implicit to the specific merits of implicit auctions for short-term allocations, auctions for short-term allocations, and the integration of balancing and and the integration of balancing and reserve power mechanisms. reserve power mechanisms. 3. For the purposes of achieving AM 125 3. For the purposes of achieving the goals set in paragraphs 1 and 2 of 3. For the purposes of achieving the goals set in paragraphs 1 and 2 of this Article, the geographical area the goals set in paragraphs 1 and 2 of this Article, the geographical area covered by each regional cooperation this Article, the geographical area covered by each regional cooperation structure may be defined by the covered by each regional cooperation structure may be defined by the Commission, taking into account structure may be defined by the Commission, taking into account existing regional cooperation Commission, taking into account existing regional cooperation structures. Each Member State shall existing regional cooperation structures. Each Member State shall be allowed to promote cooperation in structures. Each Member State shall be allowed to promote cooperation in more than one geographical area. The be allowed to promote cooperation in more than one geographical Commission is empowered to adopt more than one geographical area. The area. The Commission is delegated acts in accordance with Commission is empowered to adopt empowered to adopt [ ] Article 63 concerning the delegated acts in accordance with implementing acts in accordance geographical area covered by each Article 63 concerning the with Article [ ] 62(2) concerning the regional cooperation structure. For geographical area covered by each geographical area covered by each that purpose, the Commission shall regional cooperation structure. For regional cooperation structure. The consult the Agency and the ENTSO that purpose, the Commission shall decisions and empowerment for Electricity. consult the regulatory authorities, the referred to in this paragraph are

  Agency and the ENTSO for without prejudice to Article 33 and Electricity. shall be subject to consultations. For that purpose, the Commission shall consult the Agency and the ENTSO for Electricity.

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Article 32 Article 32 Establishment and mission of Establishment and mission of [ ] regional operational centres Regional Security Coordinators

• 1. 

  By [OP: twelve months after AM 126 1. By [OP: twelve months after entry into force], all transmission 1. By [OP: twelve months after entry into force], all transmission system operators shall establish entry into force], regional system operators of a [ ] system regional operational centres in coordination centres shall in addition operation region shall submit a accordance with the criteria set out in to other tasks that are laid out in proposal for the enhancement of this chapter. Regional operational Article 34 of this Regulation, replace Regional Security Coordinators centres shall be established in the and cover the functions of regional established pursuant to the System territory of one of the Member States security coordinators established in Operation Guideline adopted on the of the region where it will operate. accordance with the Regulation...[the basis of Article 18 of Regulation

  Commission Regulation establishing 714/2009 for approval by the a guideline on Electricity respective regulatory authorities. Transmission System Operation] pursuant to the criteria set out in this chapter. If a region is not covered by an existing or a planned regional security coordinator, the transmission system operators of that region shall establish a regional coordination centre. All transmission system operators shall adhere to a single regional coordination centre. All transmission system operators of a system operation region shall submit to the regulatory authorities of the system operation region for a review a proposal for the establishment of regional coordination centres in accordance with the criteria set out in this chapter.

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The regulatory authorities of the system operation region shall review and approve the proposal in compliance with the procedures established pursuant to Article 8 of Regulation (EU) ... [recast of Regulation (EC) No 713/2009 i as proposed by COM(2016) 863 i] The proposals referred to the forth The proposal shall contain the subparagraph shall include the following elements: following information: (a) Member State where the regional a) the participating Member coordination centre are to be located; States and TSOs; (b) the organisational, financial and b) the organisational, financial operational arrangements necessary and operational arrangements to ensure the efficient, secure and necessary to ensure the efficient, reliable operation of the secure and reliable operation of the interconnected transmission system; interconnected transmission system; (c) an implementation plan for the c) an implementation plan for entry into operation of the regional the entry into operation of the coordination centres; Regional Security Coordinators; (d) the statutes and rules of d) the statutes and rules of procedure of regional coordination procedure of Regional Security centres; Coordinators; (e) a description of cooperative e) a description of cooperative processes in accordance with Article processes in accordance with 35; Article 35; (f) a description of the arrangements f) a description of the concerning the liability of regional arrangements concerning the coordination centres in accordance liability of Regional Security with Article 44. Coordinators in accordance with Article 44.

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• 2. 

  Regional operational centres 2. [ ] Regional Security shall be organised in a legal form as Coordinators shall be established in referred to in Article 1 of Directive the system operation region where 2009/101/EC of the European it will carry out its tasks and shall Parliament and of the Council. 20 be organised in a legal form as

  referred to in [ ] Annex II of Directive [ ] (EU) 2017/1132 of the European Parliament and of the Council 21 .

  AM 127 Article 32 – paragraph 1 a (new) 1 a. Regional coordination centres shall enter into operation by [OP: twelve months after entry into force of this Regulation]. AM 128 Article 32 – paragraph 2 a (new) 2 a. In performing its functions under Union law, the regional coordination centres shall act independently from individual national interests and from the interests of transmission system operators.

20 Directive 2009/101/EC i of the European Parliament and of the Council of 16 September 2009 on coordination of safeguards which, for the protection of the interests of members and third parties, are required by Member States of companies within the meaning of the second

paragraph of Article 48 of the Treaty, with a view to making such safeguards equivalent (OJ L 258, 1.10.2009, p. 11). 21 Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law

(OJ L 169, 30.6.2017, p. 46).

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• 3. 

  Regional operational centres AM 129 3. [ ] Transmission system shall complement the role of 3. Regional coordination centres operators shall be responsible for transmission system operators by shall complement the role of managing electricity flows and performing functions of regional transmission system operators by ensure a secure, reliable and relevance. They shall establish performing functions of regional efficient electricity system in operational arrangements in order to relevance. The transmission system accordance with Article 40 of the ensure the efficient, secure and operators shall be responsible for [recast of Directive 2009/72/EC i as reliable operation of the managing electricity flows and proposed by COM(2016) 864 i/2] and interconnected transmission system. ensuring a secure, reliable and with national legislation. Regional

  efficient electricity system in Security Coordinators shall accordance with Article 40 of the complement the role of transmission Directive (EU) [recast of Directive system operators by performing [ ] 2009/72/EC as proposed by tasks of regional relevance [ ] COM(2016) 864 i/2]. assigned to them in accordance with Article 34. 4a. Regional Security Coordinators shall take up their new tasks set out in Article 34(1) by 1 January 2025. All Member States of the same system operation region, can jointly decide on earlier operation of the respective Regional Security Coordinator [+].

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Article 33 AM 130 Article 33 Geographical scope of regional Article 33 – title Geographical scope of [ ] Regional operational centres Geographical scope of regional Security Coordinators

coordination centres

0a. For the purpose of this Regulation, the geographical areas covered by each of the transmission system operators sharing the same regional security coordinators established pursuant to the System Operation Guideline adopted on the basis of Article 18 of Regulation 714/2009 shall be referred to as system operation regions. 0b. Regional security coordinators may encompass larger or smaller geographical areas than those existing pursuant to the System Operation Guideline adopted on the basis of Article 18 of Regulation 714/2009 i. In such instance, the respective transmission system operators shall submit a proposal to the Agency defining the system operation regions covered by the Regional security coordinator.

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• 1. 

  By [OP: six months after entry AM 131 1. By [OP: six months after entry into force of this Regulation] the 1. By [OP: six months after entry into force of this Regulation] the ENTSO for Electricity shall submit into force of this Regulation] the ENTSO for Electricity shall submit to to the Agency a proposal defining ENTSO for Electricity shall submit to the Agency a proposal [ ] specifying system operation regions covered by the Agency a proposal defining which transmission system regional operational centres, taking system operation regions covered by operators, bidding zones, bidding into account existing regional regional coordination centres, taking zone borders, capacity calculation security coordinators, on the basis of into account existing regional security regions and outage coordination the following criteria: coordinators, on the basis of the regions are covered by each of the

  following criteria: system operation regions. 1a. Where a Member State is part of multiple different synchronous areas, the transmission system operator may be

  coordinated by two regional security coordinators. For the bidding zone borders adjacent to system operation regions, the proposal in paragraph 1 shall specify how the coordination between regional security coordinators for these borders is to take place. 1b. Each of the Regional Security Coordinators shall perform the tasks listed in Article 34(1) for the transmission system operators of the system operation region where it is established.

(a) The grid topology, including [ ] the degree of interconnection and of interdependency of the power systems in terms of flows;

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(b) the synchronous connection of [ ] the systems;

(c) the size of the region, which [ ] shall cover at least one capacity calculation region;

(d) the geographical optimization [ ] of balancing reserves.

• 2. 

  Within three months of receipt, 2. Within three months of receipt the Agency shall either approve the of the proposal in paragraph 1, the proposal defining the system Agency shall either approve the operation regions or propose proposal defining the system amendments. In the latter case, the operation regions or propose Agency shall consult the ENTSO for amendments. In the latter case, the Electricity before adopting the Agency shall consult the ENTSO for amendments. The adopted proposal Electricity before adopting the shall be published on the Agency's amendments. The adopted proposal website. shall be published on the Agency's

  website.

  Article 34 AM 132 Article 34 Tasks of regional operational centres Article 34 – title Tasks of [ ] Regional Security

  Tasks of regional coordination Coordinators centres

• 1. 

  Each regional operational AM 133 1. Each Regional [ ] security centre shall perform all the following 1. Each regional coordination coordinator shall perform [ ] the functions in the system operation centre shall perform all the following following [ ] tasks of regional region where it is established and functions in the system operation relevance for transmission system regional operational centres shall region where it is established and operators in the system operation perform at least the following regional coordination centres shall region [ ] set out in more detail in functions, set out in more detail in perform at least the following Annex I:

Annex I: functions, set out in more detail in

Annex I:

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(a) coordinated capacity (a) coordinated capacity (a) coordinated capacity calculation; calculation in accordance with the calculation in accordance with the

methodologies developed pursuant to methodologies developed pursuant Articles 21, 26, 29 and 30 of to the Capacity Allocation and Regulation (EU) 2015/1222; Congestion Management Guideline adopted on the basis of Article 18 of Regulation 714/2009 i;

(b) coordinated security analysis; (b) coordinated security analysis in (b) coordinated security analysis in accordance with the methodologies accordance with the methodologies developed pursuant to Articles 75 developed pursuant to the System and 76 of Commission Regulation Operation Guideline adopted on the (EU) 2017/1485 1a ; basis of Article 18 of Regulation 1a Commission Regulation (EU) 714/2009;

2017/1485 of 2 August 2017 establishing a guideline on electricity transmission system operation (OJ L 220, 25.8.2017, p. 1).

(c) creation of common system (c) creation of common system (c) creation of common [ ] grid models; models in accordance with the models in accordance with the

methodologies and procedures methodologies and procedures developed pursuant to Articles 67, 70 developed pursuant to the System and 79 of Commission Regulation Operation Guideline adopted on the (EU) 2017/1485; basis of Article 18 of Regulation 714/2009;

(d) consistency assessment of (d) consistency assessment of (d) support the consistency transmission system operators' transmission system operators' assessment of transmission system defense plans and restoration plans; defense plans and restoration plans in operators' defence plans and

accordance with the procedure set restoration plans in accordance with out in Article 6 of Commission the procedure set out in the Regulation (EU) 2017/2196 b ; Emergency and Restoration 1b Commission Regulation (EU) Network Code adopted on the basis 2017/2196 of 24 November 2017 of Article 6 of Regulation 714/2009 i; establishing a network code on electricity emergency and restoration (OJ L 312, 28.11.2017, p. 54)

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(da) regional week ahead to dayahead system adequacy forecasts and assessments of risk reducing actions in accordance with the procedures set out in the System Operation Guideline adopted on the basis of Article 18 of Regulation 714/2009; (db) regional outage planning coordination in accordance with the procedures set out in the System Operation Guideline adopted on the basis of Article 18 of Regulation 714/2009; (dc) training and certification of staff working for Regional Security Coordinators[+];

(e) coordination and optimization (e) support the coordination and of regional restoration; optimization of regional restoration as

requested by transmission system operators;

(f) post-operation and post(f) post-operation and postdisturbances analysis and reporting; disturbances analysis and reporting; (g) regional sizing of reserve [ ] capacity;

(h) facilitate the regional (h) calculation of the regional [ ] procurement of balancing capacity; balancing capacity;

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(i) regional week ahead to (i) regional week ahead to intraday [ ] intraday system adequacy forecasts system adequacy forecasts and and preparation of risk reducing preparation of risk reducing actions in actions; accordance with the methodology set

out in Article 8 of Regulation (EU) ... [Regulation on risk preparedness as proposed by COM(2016) 862 i] and the procedures set out in Article 81 of Commission Regulation (EU) 2017/1485[The Commission Regulation establishing a Guideline on electricity transmission system operation];

(j) outage planning coordination; (j) outage planning coordination in [ ] accordance with the procedures set

out in Article 80 of Commission Regulation (EU) 2017/1485 ;

(k) optimisation of compensation (k) optimisation of compensation [ ] mechanisms between transmission mechanisms between transmission system operators; system operators;

(l) training and certification; (l) training and certification; [ ]

(m) identification of regional crisis deleted (m) identification of regional crisis

scenarios according to Article 6(1) of scenarios if and to the extent they are

[Regulation on risk preparedness as requested pursuant to Article 6(1) of proposed by COM(2016) 862 i] if this [Regulation on risk preparedness as task is delegated by ENTSO for proposed by COM(2016) 862 i; Electricity;

(n) preparation and carrying out of (n) preparation and carrying out of yearly crisis simulations in yearly crisis simulations in cooperation with competent cooperation with competent authorities pursuant to Article 12(3) authorities pursuant to Article 12(3) of of [Regulation on risk preparedness [Regulation on risk preparedness as as proposed by COM(2016) 862 i]; proposed by COM(2016) 862 i];

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(o) tasks related to the (o) tasks related to the [ ] identification of regional crisis identification of regional crisis scenarios if and to the extent they are scenarios if and to the extent they are delegated to the regional operational delegated to the regional coordination centres pursuant to Article 6(1) of centres pursuant to Article 6(1) of

[Regulation on risk preparedness as [Regulation on risk preparedness as proposed by COM(2016) 862 i]; proposed by COM(2016) 862 i];

(p) tasks related to the seasonal (p) tasks related to the seasonal (p) tasks related to the seasonal adequacy outlooks if and to the adequacy outlooks if and to the extent adequacy outlooks if and to the extent extent they are delegated to the they are delegated to the regional they are requested pursuant to Article regional operational centres pursuant coordination centres pursuant to 9([ ] 3) of [Regulation on risk to Article 9(2) of [Regulation on risk Article 9(2) of [Regulation on risk preparedness as proposed by preparedness as proposed by preparedness as proposed by COM(2016) 862 i];

COM(2016) 862 i]; COM(2016) 862 i];

(q) calculate the maximum entry (q) calculate the value for the capacity available for the maximum entry capacity available for participation of foreign capacity in the participation of foreign capacity in capacity mechanisms pursuant to capacity mechanisms [ ] for the Article 21(6). purpose to issue an

recommendation pursuant to Article 21(6).

(qa) tasks related to support transmission system operators in the identification of needs for new capacity, for upgrade of existing capacity or their alternatives, to be submitted to the regional groups established pursuant to Regulation (EU) 347/2013 and included in the ten-year network development plan referred to in Article 51 of the Directive (EU) ... [recast of Directive 2009/72/EC as proposed by COM(2016) 864 i/2].

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• 2. 

  The Commission may add AM 134 2. [ ] other functions to the regional 2. The Commission may add other Upon joint proposal of regulatory operational centres, not involving functions to the regional coordination authorities, following consultation decision making power, pursuant to centres, not involving decision with the transmission system Chapter VII of this Regulation. making power, pursuant to Chapter operators and the Regional Security

  VII of this Regulation. Coordinators, the Member States of the system operation region may

  jointly decide to provide for additional advisory coordination tasks, on the basis of which Regional Security Coordinators will issue recommendations pursuant to Article 38. In such instance, Regional Security Coordinators shall execute those tasks on the basis of the methodologies drafted by transmission system operators and agreed by the relevant regulatory authorities.

• 3. 

  Transmission system operators AM 135 3. Transmission system operators shall provide their regional 3. Transmission system operators shall provide their [ ] Regional operational centre with the shall provide their regional Security Coordinators with the information necessary to carry out its coordination centre with the information necessary to carry out its functions. information necessary to carry out its [ ] tasks.

  functions. 4. Regional operational centres AM 136 4. [ ] Regional Security shall provide transmission system 4. Regional coordination centres Coordinators shall provide operators of the system operation shall provide transmission system transmission system operators of the region with all the information operators of the system operation system operation region with all the necessary to implement the decisions region with all the information information necessary to implement and recommendations proposed by necessary to ensure system stability the [ ] coordinated actions and the regional operational centres. and security of supply. recommendations proposed by the [ ]

  Regional Security Coordinators.

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For the functions set out in this Article and not already covered by the relevant guidelines, the ENTSO for Electricity shall develop a proposal in accordance with the procedure set out in Article 22. Regional coordination centres shall execute those functions on the basis of a proposal that has been approved by the Agency.

Article 35 AM 137 Article 35 Cooperation within regional Cooperation within and among Cooperation within [ ] and between operational centres regional coordination centres Regional Security Coordinators

• 1. 

  The day-to-day operation of The day-to-day operation of regional 1. The day-to-day [ ] regional operational centres shall be coordination centres shall be coordination within and between managed through cooperative managed through cooperative Regional Security Coordinators decision-making. The cooperativedecision making amongst the shall be managed through cooperative decision making process shall be transmission system operators of the [ ] processes [ ] based on: based on: region, including arrangements for

  coordination between regional coordination centres where relevant. The cooperative process shall be based on:

(a) working arrangements to (a) working arrangements to address planning and operational address planning and operational aspects related to the functions, in aspects [ ] relevant for the tasks accordance with Article 36; referred to in Article 34(1);

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(b) a procedure for consulting the (b) a procedure for consulting, in (b) a procedure for sharing transmission system operators of the an efficient and inclusive manner, analysis and consulting Regional system operation region in the the transmission system operators and Security Coordinators proposals exercise of its operational duties and relevant stakeholders of the system with the transmission system tasks, in accordance with Article 37; operation region in accordance with operators of the system operation

Article 37; region in the exercise of the operational duties and tasks in accordance with Article 37 and with other Regional Security

Coordinators; (c) a procedure for the adoption of (c) a procedure for the adoption (c) a procedure for the adoption of decisions and recommendations in and revision of decisions and [ ] coordinated actions and accordance with Article 38; recommendations in accordance with recommendations in accordance with

Article 38 that ensures equitable Article 38; treatment between members of the regional operational centre;

(d) a procedure for the revision of deleted (d) a procedure for the revision of

decisions and recommendations [ ] coordinated actions and adopted by regional operational recommendations [ ] issued by centres in accordance with Article Regional Security Coordinators in 39. accordance with Article 39.

Article 36 Working arrangements

• 1. 

  Regional operational centres AM 138 1. [ ] Regional Security shall develop working arrangements 1. Regional coordination centres Coordinators shall develop working to address planning and operational shall develop working arrangements arrangements to address planning and aspects related to the functions to be that are efficient, inclusive, operational aspects related to the [ ] performed, taking into account, in transparent and facilitate consensus, tasks to be performed taking into particular, the specificities and to address planning and operational account, in particular, the specificities requirements of those functions as aspects related to the functions to be and requirements of those [ ] tasks as specified in Annex I. performed, taking into account, in specified in Annex I. Regional

  particular, the specificities and Security Coordinators shall also requirements of those functions as develop a process for any revision specified in Annex I. of these working arrangements.

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• 2. 

  Regional operational centres AM 139 2. [ ] Regional Security shall ensure that the working 2. Regional coordination centres Coordinators shall ensure that the arrangements contain rules for the shall ensure that the working working arrangements contain rules notification of parties concerned. arrangements contain rules for the for the notification of parties

  notification of parties concerned. concerned.

  Article 37 Consultation procedure

Regional operational centres shall AM 140 1. [ ] Regional Security develop a procedure to organise, in Regional coordination centres shall Coordinators shall develop a the exercise of their daily operational develop a procedure to organise, in procedure to organise, in the exercise duties and tasks, the appropriate and the exercise of their daily duties and of their daily operational duties and regular consultation of transmission tasks, the appropriate and regular tasks, the appropriate and regular system operators and of relevant consultation of transmission system consultation of transmission system stakeholders. In order to ensure that operators and of relevant stakeholders. operators of the system operation regulatory issues can be addressed, In order to ensure that regulatory region, other Regional Security regulatory authorities shall be issues can be addressed, regulatory Coordinators and of relevant involved when required. authorities shall be involved when stakeholders. In order to ensure that

required. regulatory issues can be addressed, regulatory authorities shall be

involved when required. 2. If necessary, the Regional Security Coordinators may consult the Member States of the system operation region and, where applicable, their regional forums on matters of political relevance excluding the day-to-day activities of Regional Security Coordinators and the implementation of their tasks. The Regional Security Coordinators shall take due account of the recommendations given by the Member States and where applicable, by their regional forums.

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AM 141 Article 37 a (new) Article 37a Transparency 1. Regional coordination centres shall organise a process for stakeholder involvement and organise regular meetings with stakeholders to discuss matters relating to the efficient, secure and reliable operation of the interconnected system as well as to identify shortcomings and propose improvements; 2. ENTSO for Electricity and regional operational centres shall operate in full transparency towards stakeholders and the general public. All relevant documentation shall be published on the website of the respective regional coordination centre. This paragraph shall apply to the proposals, justifications and decisions adopted pursuant to Articles 32 and 33, Article 35(a) and Article 38 of this Regulation.

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Article 38 AM 142 Article 38 Adoption of decisions and Article 38 – title [ ] Coordinated actions and

recommendations Adoption and revisions of decisions recommendations and recommendations

• 1. 

  Regional operational centres AM 143 1. [ ] The transmission system shall develop a procedure for the 1. The transmission system operators of a system operation adoption of decisions and operators of each regional region shall develop a procedure for recommendations. coordination centre shall develop the adoption of [ ] coordinated

  procedures for the adoption and actions and recommendations put revision of decisions and forward by Regional Security recommendations that ensures Coordinators in accordance with geographically balanced the criteria set out in paragraphs 2 representation and equitable to 4. treatment of members of the regional coordination centre.

• 2. 

  Regional operational centres AM 144 2. [ ] Regional Security shall adopt binding decisions 2. Regional coordination centres Coordinators shall [ ] set-out addressed to the transmission system shall adopt binding decisions coordinated actions addressed to the operators in respect of the functions addressed to the transmission system transmission system operators in referred to in points (a), (b), (g) and operators in respect of the functions respect of the [ ] tasks referred to in (q) of Article 34(1). Transmission referred to in (a) and (b) of Article points (a) and (b), [ ] of Article system operators shall implement the 34(1). Transmission system operators 34(1). Transmission system operators binding decisions issued by the shall implement the binding decisions may decide not to [ ] implement the regional operational centres except in issued by the regional coordination coordinated actions [ ] issued by cases when the safety of the system centres except in cases where the the [ ] Regional Security will be negatively affected. implementation of the decision would Coordinators where the

  result in a violation of operational implementation of the coordinated security limits defined by each actions would result in a violation of transmission system operator the operational security limits pursuant to Article 25 of defined by each transmission Commission Regulation (EU) system operator in accordance with 2017/1485. [ ] the System Operation Guideline adopted on the basis of Article 18 of Regulation 714/2009 i.

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2a. Where following the revision triggered in accordance with Article 39, a transmission system operator decides not to implement a coordinated action for the reasons set out in paragraph 2, it shall transparently report the detailed reasons to the Regional Security Coordinator and the transmission system operators of the system operation region without undue delay. In such cases, the Regional Security Coordinator shall assess the impact on the other transmission system operators of the system operation region and may propose a different set of coordinated actions subject to a procedure in paragraph 2.

• 3. 

  Regional operational centres AM 145 3. [ ] Regional Security shall adopt recommendations 3. Regional coordination centres Coordinators shall adopt addressed to the transmission system shall adopt recommendations recommendations addressed to the operators for the functions referred to addressed to the transmission system transmission system operators for the in points (c) to (f) and (h) to (p) of operators for the functions listed in [ ] tasks referred to in [ ] Article Article 34(1). Article 34(1) which are not referred 34(1) except for tasks covered in

  to in paragraph 2 of this Article. paragraph 2 of this Article.

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AM 146 Article 38 – paragraph 3 a (new) 3 a. Where a transmission system operator decides to deviate from the decision or recommendation issued by the regional coordination centre, it shall submit a detailed explanation to the regional coordination centre and to other transmission system operators of the system operation region without delay. AM 147 Article 38 – paragraph 3 b (new) 3 b. The revision shall be triggered at the request of one or more of the transmission system operators of the system operation region. Following the revision of the decision or recommendation, regional operational centres shall confirm or modify the measure. AM 148 Article 38 – paragraph 3 c (new) 3 c. Where the measure subject to revision is a binding decision in accordance with Article 38(2) of this Regulation, the request for revision shall not suspend the decision except in cases where the implementation of the decision would result in a violation of operational security limits defined by each transmission system operator pursuant to Article 25 of the System Operation guidelines.

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• 4. 

  The regulatory authorities of a AM 149 4. Upon proposal of regulatory system operation region may jointly 4. The regulatory authorities of a authority, following consultation decide to grant binding decisionsystem operation region may jointly with the transmission system making powers to the regional decide to grant binding decisionoperators and Regional Security operational centre for one or more of making powers to the regional Coordinators the [ ] Member States the functions provided for in points coordination centre for one or more of a system operation region may (c) to (f) and (h) to (l) of Article of the functions listed in Article 34(1) jointly decide to grant the 34(1). and which are not referred to in competence for coordinated actions

  paragraph 2 of this Article. or binding decision-making powers to the [ ] Regional Security

  Coordinators for one or more of the [ ] tasks provided for in [ ] Article 34(1).

  Article 39 AM 150 Article 39 Revision of decisions and deleted Revision of [ ] coordinated actions

  recommendations and recommendations

• 1. 

  Regional operational centres 1. [ ] Regional Security shall develop a procedure for the Coordinators shall develop a revision of decisions and procedure for the revision of [ ] recommendations. coordinated actions and

  recommendations referred to tasks described in Article 34.

• 2. 

  The procedure shall be 2. The procedure shall be triggered at the request of one or triggered at the request of one or more more of the transmission system of the transmission system operators operators of the system operation of the system operation region. region. Following the revision of the Following the revision of the [ ] decision or recommendation, coordinated action or regional operational centres shall recommendation, [ ] Regional confirm or modify the measure. Security Coordinators [+] shall

  confirm or modify the measure.

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• 3. 

  Where the measure subject to 3. Where the measure subject to revision is a binding decision in revision is a [ ] coordinated action accordance with Article 38(2), the in accordance with Article 38(2), the request for revision shall not suspend request for revision shall not suspend the decision except in cases when the the [ ] coordinated action except in safety of the system will be cases [ ] where the implementation negatively affected. of the coordinated actions would

  result in a violation of the operational security limits defined by each transmission system operator in accordance with the System Operation Guideline adopted on the basis of Article 18 of Regulation 714/2009 i

• 4. 

  Where the measure subject to 4. Where following the [ ] revision is a recommendation in revision [ ] of the recommendation in accordance with Article 38(3) and accordance with Article 38([ ]3) [ ]a following its revision a transmission transmission system operator decides system operator decides to deviate to deviate from the recommendation, from the recommendation, the the transmission system operator shall transmission system operator shall submit a [ ] justification to the [ ] submit a detailed justification to the Regional Security Coordinators and regional operational centre and to the to the other transmission system other transmission system operators operators of the system operation of the system operation region. region.

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Article 40 AM 151 Article 40 Management board of regional Article 40 – title Management board of [ ] Regional

operational centres Management board of regional Security Coordinators coordination centres

• 1. 

  In order to adopt measures AM 152 1. In order to adopt measures related to their governance and to 1. In order to adopt measures related to their governance and to monitor their performance, the related to their governance and to monitor their performance, the [ ] regional operational centres shall monitor their performance, the Regional Security Coordinators establish a management board. regional coordination centres shall shall establish a management board.

  establish a management board. 2. The management board shall AM 153 2. The management board shall be be composed of members 2. The management board shall be composed of members representing representing the transmission system composed of members representing the transmission system operators [ ]. operators and of observers all the transmission system operators representing the regulatory of the system operation region. The authorities of the system operation composition of the management region. The representatives of the board shall be geographically regulatory authorities shall have no balanced. voting rights.

• 3. 

  The management board shall AM 154 3. The management board shall be be responsible for: 3. The management board shall be responsible for:

  responsible for: (a) drafting and endorsing the (a) drafting and endorsing the (a) drafting and endorsing the statutes and rules of procedure of the statutes and rules of procedure of the statutes and rules of procedure of the regional operational centre; regional coordination centre; [ ] Regional Security Coordinators; (b) deciding upon and (b) [ ] implementing the (b) deciding upon and implementing the organisational organisational structure; implementing the organisational structure; structure; (c) preparing and endorsing the (c) preparing and endorsing the annual budget; annual budget; (d) developing and endorsing the (d) developing and endorsing the cooperative decision-making cooperative [ ] processes in processes in accordance with Article accordance with Article 35. 35.

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• 4. 

  The competences of the AM 155 4. The competences of the management board shall exclude 4. The competences of the management board shall exclude those that are related to the day-tomanagement board shall not include those that are related to the day-to-day day activities of regional operational decisions related to the execution of activities of [ ] Regional Security centres and the performance of its the functions of regional Coordinators and the performance of functions. coordination centres. its tasks [ ].

  Article 41 Organisational structure

• 1. 

  Regional operational centres AM 156

shall set up and manage their 1. The transmission system 1. Transmission system organisation according to a structure operators of a system operation operators shall establish the that supports the safety of their region shall set up the organisational necessary arrangements for functions. structure of regional coordination Regional security coordinators to Their organisational structure shall centres. Their organisational structure [ ] manage their organisation

specify: shall specify: according to a structure that supports the safety of their tasks [ ].

Their organisational structure shall specify:

(a) the authority, duties and AM 157 (a) the authority, duties and responsibilities of the management (a) the authority, duties and responsibilities of the management personnel; responsibilities of the [ ] personnel; personnel; (b) the relationship and reporting (b) the relationship and reporting lines between different parts and lines between different parts and processes of the organisation. processes of the organisation. 2. Regional operational centres AM 158 2. [ ] Regional Security may set up regional desks to address 2. Regional coordination centres Coordinators may set up regional local specificities or back-up may set up regional desks to address desks to address [ ] sub-regional operational centres for the efficient local specificities or back-up specificities or back-up regional and reliable exercise of their coordination centres for the efficient security coordinators for the efficient functions. and reliable exercise of their functions and reliable exercise of their [ ] tasks.

where proven to be strictly necessary.

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Article 42 Equipment and staff

Regional operational centres shall be AM 159 [ ] Regional Security Coordinators equipped with all the human, Regional coordination centres shall shall be equipped with all the human, technical, physical and financial be equipped with all the human, technical, physical and financial resources necessary for fulfilling technical, physical and financial resources necessary for fulfilling their their obligations under this resources necessary for fulfilling their obligations under this Regulation and Regulation and carrying out their obligations under this Regulation and carrying out their [ ] tasks. functions. carrying out their functions

independently and impartially. The human, technical, physical and financial resources for regional coordination centres shall not go beyond what is strictly necessary for the fulfilment of its tasks while geographically balanced representation and equitable treatment of members of regional coordination centre shall be ensured.

Article 43 Monitoring and reporting

• 1. 

  Regional operational centres AM 160 1. [ ] Regional Security shall establish a process for the 1. Regional coordination centres Coordinators shall establish a continuous monitoring of at least: shall establish a process for the process for the continuous monitoring

  continuous monitoring of at least: of at least: (a) their operational performance; (a) their operational performance; (a) their operational performance; (b) the decisions and (b) the decisions and (b) the [ ] coordinated actions recommendations issued and the recommendations issued in particular and recommendations issued the outcome achieved; on those where the transmission degree of implementation of the

  system operators have deviated and coordinated actions and the outcome achieved; recommendations by the transmission system operators and the outcome achieved;

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(c) the effectiveness and (c) the effectiveness and efficiency efficiency of each of the functions for of each of the [ ] tasks for which they which they are responsible. are responsible. 2. Regional operational centres AM 161 2. [ ] Regional Security shall submit to the Agency and to the deleted Coordinators shall submit to the regulatory authorities of the system Agency [ ] to the regulatory operation region the data resulting authorities and to the transmission from their continuous monitoring at system operators of the system least annually. operation region the data resulting