Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the internal market for electricity (recast) - Preparation of second trilogue - Hoofdinhoud

Council of the European Union

Brussels, 3 September 2018 (OR. en)

5834/2/18

Interinstitutional File: REV 2

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: Permanent Representatives Committee

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)

• - 

  Preparation of second trilogue

• I. 

  INTRODUCTION

• 1. 

  On 30 November 2016, the Commission submitted a set of proposals as “Clean Energy for

  All Europeans” package, in order to provide a stable legislative framework, necessary for

  the energy transition. Two legislative files, based on article 194(2) of the Treaty, discuss the

  common rules for the internal market in electricity.

• 2. 

  In the European Parliament, these proposals were referred to the Industry, Research and

  Energy Committee (ITRE) which appointed on 25 January 2017 Mr. Krišjānis Kariņš as

  rapporteur. The ITRE Committee voted on its report on 21 February 2018.

II. STATE OF PLAY

• 3. 

  The TTE (Energy) Council adopted, on 18 December 2017, a general approach on the abovementioned

  proposal and the first informal trilogue, based on the Council general approach,

  took place on 27 June 2018.

• 4. 

  During the first informal trilogue, which was a joint trilogue for the electricity Directive and

  Regulation, both institutions explained their views on the main political issues and recognised

  the need to swiftly advance on these files. A broad mandate was also given to the subsequent

  technical meetings to identify and make progress on certain areas of compromise in view of

  the second informal trilogue, planned to take place on 11 September 2018.

• 4. 

  Concerning the Regulation, both institutions recognised the importance of a well-functioning,

  undistorted, decarbonised and flexible internal energy market. The wholesale market needs

  inter alia a revised set of rules regarding electricity trading, definition of the bidding zones,

  addressing resource adequacy, and the design principles for the capacity mechanisms.

• 5. 

  At the Energy Working Party meetings during June/July 2018, delegations were invited to

  indicate their positions and flexibility on the Parliament's amendments concerning the entire

  set of articles. Furthermore, in order to prepare the second informal trilogue, technical

  meetings took place during July and August.

III. REVISED MANDATE

• 6. 

  In view of the second informal trilogue scheduled for 11 September 2018, the fourth-column

  of the document in the Annex, contains the Presidency's compromise proposals on specific

  articles agreed by both institutions during the first informal trilogue and discussed at technical

  level.

• 7. 

  The suggested compromise proposals are included in the following articles: • Article 1 - Subject-matter and scope

  • Article 2(ff) - Definitions (only one definition) • Article 3 - Principles regarding the operation of electricity markets • Article 5 - Balancing market • Article 6 - Day-ahead and intraday markets • Article 7 - Trade on day-ahead and intraday markets • Article 8 - Forward markets • Article 9 - Technical bidding limits • Article 10 - Value of lost load • Articles 25 - 31 Transmission system • Articles 32 - 44 Regional cooperation of TSOs • Article 54 - Network Codes and Guidelines

• 8. 

  The Presidency proposes to accept, partially accept or to put forward compromises to the

  following European Parliament's amendments: Article 1 - AM 10-12; Article 3 - AM 18,

  19-22, 27-29; Article 5 - AM 33 (a) and (b) only, 34-37, 39; Article 7 - AM 44, 45;

  Article 9 - AM 48, 49; Articles 25-44 - AM 118-122, 124, 126 (1(a) only), 128, 137 (opening

  paragraph and 1(b) only), 138, 141, 153, 156, 158, 165. Regarding other European

  Parliament's amendments, the Presidency proposes to maintain the Council's general approach

  at this stage of negotiations.

• 9. 

  In the fourth column, bold italics indicates text proposed by the EP; bold indicates

  compromise texts proposed by the Presidency in response to the EP amendments; bold and

  underlined indicates new text elements, diverging from the previous document (5834/18

  REV 1) and strikethrough indicates deletions.

IV. CONCLUSION

  The Permanent Representatives Committee is invited to agree on a revised mandate for the

second informal trilogue on 11 September 2018, on the basis of the text included in the

Annex.

___________________ ANNEX

Proposal for a

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

(recast)

• 1. 

  COMISSION PROPOSAL EP PLENARY TEXT COUNCIL GENERAL Presidency compromise proposals

  APPROACH (doc. ) (COD 2016/0379 - doc.

  15135/1/16 REV 1 + ADD 1 REV 1)

• 2. 

  THE EUROPEAN THE EUROPEAN

  PARLIAMENT AND THE PARLIAMENT AND THE COUNCIL OF THE COUNCIL OF THE EUROPEAN UNION, EUROPEAN UNION, Having regard to the Treaty on Having regard to the Treaty on the Functioning of the European the Functioning of the European Union, and in particular Article Union, and in particular Article 194 (2) thereof, 194 (2) thereof, Having regard to the proposal Having regard to the proposal from the European Commission, from 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 Having regard to the opinion of the European Economic and the European Economic and Social Committee, Social Committee, Having regard to the opinion of Having regard to the opinion of the Committee of the Regions, the Committee of the Regions, Acting in accordance with the Acting in accordance with the ordinary legislative procedure, ordinary legislative procedure, Whereas: Whereas:

ANNEX TREE.2.B EN

• 3. 

  (1) Regulation (EC) No (1) Regulation (EC) No

  714/2009 of the European 714/2009 of the European Parliament and of the Council Parliament and of the Council 1 has been substantially amended has been substantially amended several times. Since further several times. Since further amendments are to be made, that amendments are to be made, that Regulation should be recast in Regulation should be recast in the interests of clarity. the interests of clarity.

• 4. 

  (2) The Energy Union aims at (2) The Energy Union aims at providing consumers – providing consumers –

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

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 cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003 i (OJ L 211, 14.8.2009, p. 15).

ANNEX TREE.2.B EN

increased competition, in market in electricity has particular at the wholesale level, increased competition, in and cross-border trade. It particular at the wholesale level, remains the foundation of an and cross-border trade. It efficient energy market. remains the foundation of an efficient energy market.

• 5. 

  (3) Europe's energy system is (3) Europe's energy system is in the middle of its most in the middle of its most

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

ANNEX TREE.2.B EN

• 6. 

  (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.

• 7. 

  (4) State interventions, often

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

  and cross-border trade. consequences for investments and cross-border trade.

ANNEX TREE.2.B EN

• 8. 

  (5) In the past, electricity AM 1

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

  efficiency. 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.

ANNEX TREE.2.B EN

• 9. 

  (6) More market integration (6) More market integration and the change towards a more and the change towards a more volatile electricity production volatile electricity production requires increased efforts to requires increased efforts to

  coordinate national energy coordinate national energy policies with neighbours and to policies with neighbours and to use the opportunities of crossuse the opportunities of crossborder electricity trade. border electricity trade.

• 10. 

  (7) Regulatory frameworks (7) Regulatory frameworks have developed, allowing have developed, allowing

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

ANNEX TREE.2.B EN

• 11. 

  (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].

ANNEX TREE.2.B EN

• 12. 

  (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 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.

ANNEX TREE.2.B EN

• 13. 

  (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.

ANNEX TREE.2.B EN

• 14. 

  (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 cooptimisation process, the market-based allocation process and the allocation based on an economic

  efficiency analysis. The cooptimisation allocation process should be performed on a dayahead basis whereas the market-based 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

ANNEX TREE.2.B EN

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 a methodology for the allocation process of crosszonal 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.

ANNEX TREE.2.B EN

• 15. 

  (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.

ANNEX TREE.2.B EN

• 16. 

  (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.

ANNEX TREE.2.B EN

• 17. 

  (7g) The guideline on forward capacity allocation sets out detailed rules on crosszonal capacity allocation in the forward markets, on the establishment of a common methodology to determine long-term cross-zonal capacity, on the establishment of a single allocation platform at European level offering long-term transmission rights, and on the possibility to return long-term 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.

ANNEX TREE.2.B EN

• 18. 

  (7h) The network code on requirements for generators 2 sets out the requirements for grid connection of powergenerating

  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 Union-wide trade in electricity. Articles 66 and 67 of the network code set out rules for emerging technologies in electricity generation.

• 19. 

  (8) Core market principles (8) Core market principles should set out that electricity should set out that electricity prices are to be determined prices are to be determined

  through demand and supply. through demand and supply. Those prices should signal when Those prices should signal when electricity is needed, providing electricity is needed, providing market-based incentives for market-based incentives for investments into flexibility investments into flexibility sources such as flexible sources such as flexible generation, interconnection, generation, interconnection, demand response or storage. demand response or storage.

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

ANNEX TREE.2.B EN

• 20. 

  (9) The decarbonisation of (9) While decarbonisation of the electricity sector, with the electricity sector, with

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

ANNEX TREE.2.B EN

• 21. 

  (10) Short-term markets will AM 2

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

ANNEX TREE.2.B EN

• 22. 

  (11) Derogations to (11) Subject to Union State fundamental market principles aid rules pursuant to Articles such as balancing responsibility, 107, 108 and 109 derogations to market-based dispatch, or fundamental market principles curtailment and redispatch such as balancing responsibility, reduce flexibility signals and act market-based dispatch, or [ ] as barriers to the development of redispatch reduce flexibility

  solutions such as storage, signals and act as barriers to the demand response or development of solutions such aggregation. While derogations as storage, demand response or are still necessary to avoid aggregation. While derogations unnecessary administrative are still necessary to avoid burden for certain actors, in unnecessary administrative particular households and burden for certain actors, in SMEs, broad derogations particular households and SMEs, covering entire technologies are broad derogations covering not consistent with the objective entire technologies are not of achieving market-based and consistent with the [ ] aim of efficient decarbonisation and achieving market-based and should thus be replaced by more efficient decarbonisation targeted measures. process and should thus be replaced by more targeted measures.

• 23. 

  (12) The precondition for AM 3 (12) The precondition for effective competition in the (12) The precondition for effective competition in the internal market in electricity is effective competition in the internal internal market in electricity is non-discriminatory and market in electricity is nonnon-discriminatory and

  transparent charges for network discriminatory, transparent and transparent charges for network use including interconnecting adequate charges for network use use including interconnecting lines in the transmission system. including interconnecting lines in lines in the transmission system. The available capacity of those the transmission system. The Uncoordinated curtailments of lines should be set at the available capacity of those lines interconnector capacities maximum levels consistent with should be set at the maximum increasingly limit the exchange the safety standards of secure levels consistent with the safety of electricity between Member network operation. standards of secure network States and have become a

ANNEX TREE.2.B EN

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 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

ANNEX TREE.2.B EN

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, preventing excessive use of derogation possibilities and giving a predictable capacity value for market participants. Where a flow-based 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.

• 24. 

  (13) It is important to avoid (13) It is important to avoid distortion of competition distortion of competition

  resulting from the differing resulting from the differing safety, operational and planning safety, operational and planning standards used by transmission standards used by transmission system operators in Member system operators in Member States. Moreover, there should States. Moreover, there should be transparency for market be transparency for market

ANNEX TREE.2.B EN

participants concerning participants concerning available available transfer capacities and transfer capacities and the the security, planning and security, planning and operational standards that affect operational standards that affect the available transfer capacities. the available transfer capacities.

• 25. 

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

  transmission infrastructure, transmission infrastructure, bidding zones should reflect bidding zones should reflect structural congestion. In structural congestion. In particular, cross-zonal capacity particular, cross-zonal capacity should not be reduced in order should not be reduced in order to to resolve internal congestion. resolve internal congestion.

• 26. 

  (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

ANNEX TREE.2.B EN

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 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

ANNEX TREE.2.B EN

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.

ANNEX TREE.2.B EN

• 27. 

  (15) Efficient decarbonisation (15) Efficient [ ] market of the electricity system via integration requires

  market integration requires systematically abolishing systematically abolishing barriers to cross-border trade to barriers to cross-border trade to overcome market fragmentation overcome market fragmentation and to allow Union energy and to allow Union energy customers to fully benefit from customers to fully benefit from the advantages of integrated the advantages of integrated electricity markets and electricity markets and competition. competition.

• 28. 

  (16) This Regulation should (16) This Regulation should lay down basic principles with lay down basic principles with regard to tarification and regard to tarification and

  capacity allocation, whilst capacity allocation, whilst providing for the adoption of providing for the adoption of guidelines detailing further guidelines detailing further relevant principles and relevant principles and methodologies, in order to allow methodologies, in order to allow rapid adaptation to changed rapid adaptation to changed circumstances. circumstances.

• 29. 

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

ANNEX TREE.2.B EN

• 30. 

  (18) In an open, competitive (18) In an open, competitive market, transmission system market, transmission system

  operators should be operators should be compensated for costs incurred compensated for costs incurred as a result of hosting crossas a result of hosting crossborder flows of electricity on border flows of electricity on their networks by the operators their networks by the operators of the transmission systems of the transmission systems from from which cross-border flows which cross-border flows originate and the systems where originate and the systems where those flows end. those flows end.

• 31. 

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

• 32. 

  (20) The actual amount (20) The actual amount payable for cross-border access payable for cross-border access to the system can vary to the system can vary

  considerably, depending on the considerably, depending on the transmission system operator transmission system operator involved and as a result of involved and as a result of differences in the structure of differences in the structure of the the tarification systems applied tarification systems applied in in Member States. A certain Member States. A certain degree degree of harmonisation is of harmonisation is therefore therefore necessary in order to necessary in order to avoid avoid distortions of trade. distortions of trade.

ANNEX TREE.2.B EN

• 33. 

  (21) There should be rules on (21) There should be rules on the use of revenues flowing the use of revenues flowing from from congestion-management congestion-management

  procedures, unless the specific procedures, unless the specific nature of the interconnector nature of the interconnector concerned justifies an exemption concerned justifies an exemption from those rules. from those rules.

• 34. 

  (22) To provide for a level (22) To provide for a level playing field between all market playing field between all market participants, network tariffs participants, network tariffs should be applied in a way should be applied in a way which does not discriminate which does not discriminate between production connected at between production connected at the distribution-level with regard the distribution-level with regard to the production connected at to the production connected at the transmission level, either the transmission level, either positively or negatively. They positively or negatively. They should not discriminate against should not discriminate against energy storage, and should not energy storage, and should not create disincentives for create disincentives for

  participation in demand participation in demand response response or represent an or represent an obstacle to obstacle to improvements in improvements in energy energy efficiency. efficiency.

ANNEX TREE.2.B EN

• 35. 

  (23) In order to increase (23) In order to increase transparency and comparability transparency and comparability in tariff-setting where binding in tariff-setting where binding harmonization is not seen as harmonization is not seen as adequate, recommendations on adequate, [ ] best practice tariff methodologies should be report on tariff methodologies issued by the European Agency should be issued by the

  for the Cooperation of Energy European Agency for the Regulators established by [recast Cooperation of Energy of Regulation (EC) No 713/2009 i Regulators established by [recast as proposed by COM(2016) of Regulation (EC) No 713/2009 i 863/2] ("the Agency"). as proposed by COM(2016) 863 i/2] ("the Agency").

• 36. 

  (24) To better ensure optimum (24) To better ensure optimum investment in the transinvestment in the trans-European European grid and address the grid and address the challenge

  challenge where viable where viable interconnection interconnection projects cannot projects cannot be built for lack be built for lack of prioritisation of prioritisation at national level, at national level, the use of the use of congestion rents congestion rents should be should be reconsidered and reconsidered and only allowed contribute [ ] to guarantee in order to guarantee availability availability and maintain or and maintain or increase increase interconnection interconnection capacities. capacities.

• 37. 

  (25) In order to ensure optimal (25) In order to ensure optimal management of the electricity management of the electricity

  transmission network and to transmission network and to allow trading and supplying allow trading and supplying electricity across borders in the electricity across borders in the Union , a European Network of Union, a European Network of Transmission System Operators Transmission System Operators for Electricity (the ENTSO for for Electricity (the ENTSO for Electricity), should be Electricity), should be established. The tasks of the established. The tasks of the

ANNEX TREE.2.B EN

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

ANNEX TREE.2.B EN

towards a competitive and and efficient internal market in efficient internal market in electricity. electricity.

• 38. 

  (26) A robust medium to long AM 4

  term Union level resource (26) A robust methodology for (26) A robust medium to longadequacy assessment should be the long-term Union level resource term Union level resource carried out by the ENTSO for adequacy assessment should be adequacy assessment should be Electricity to provide an carried out by the ENTSO for carried out by the ENTSO for objective basis for the Electricity to provide an objective Electricity to provide an assessment of adequacy basis for the assessment of objective basis for the concerns. The resource adequacy concerns at the Union, assessment of adequacy adequacy concern that capacity regional and Member State level concerns. In order to provide mechanisms address should be and the biding zone levels. The this objective basis for all based on the EU assessment. resource adequacy concern that types of capacity mechanisms, capacity mechanisms address the resource adequacy should be based on the EU assessment shall reflect in its assessment. Capacity mechanisms scenarios and sensitivities the should be allowed to be introduced different types of capacity only if the Union level resource mechanisms. The resource adequacy assessment, conducted adequacy concern that capacity by the ENTSO-E, has identified mechanisms address should be adequacy concerns or if a positive based on [ ] a well coordinated decision concerning the national and European implementation plan has been resource adequacy assessment.

  received from the Commission. 39. (27) The medium to long-term AM 5 (27) The medium to long-term

  resource adequacy assessment (27) The methodology for the resource adequacy assessment (from 10 year-ahead to yearlong-term resource adequacy (from 10 year-ahead to yearahead) set out in this regulation assessment (from 10 year-ahead to ahead) set out in this regulation has a different purpose than the year-ahead) set out in this has a different purpose than the seasonal outlooks (six months regulation has a different purpose seasonal outlooks (six months ahead) as set out in Article 9 than the seasonal outlooks (six ahead) as set out in Article 9 [Regulation on risk preparedness months ahead) as set out in Article [Regulation on risk preparedness as proposed by COM(2016) 9 i [Regulation on risk preparedness as proposed by COM(2016) 862 i]. Medium- to long-term as proposed by COM(2016) 862 i]. 862]. Medium- to long-term

ANNEX TREE.2.B EN

assessments are mainly used to Medium- to long-term assessments assessments are mainly used to assess the need for capacity are mainly used to identify assess the need for capacity mechanisms whereas seasonal adequacy concerns whereas mechanisms whereas seasonal outlooks are used to alert to seasonal outlooks are used to alert outlooks are used to alert to risks risks that might occur in the to short-term risks that might occur that might occur in the following following six months that are in the following six months that are six months that are likely to likely to result in a significant likely to result in a significant result in a significant deterioration of the electricity deterioration of the electricity deterioration of the electricity supply situation. In addition, supply situation. In addition, supply situation. In addition, [ ] Regional Operational Centres Regional Coordination Centres Regional Security also carry out regional adequacy also carry out regional adequacy Coordinators also carry out assessments as defined in assessments as defined in European regional adequacy assessments European legislation on legislation on electricity as defined in European electricity transmission system transmission system operation. legislation on electricity operation. These are very short These are very short-term adequacy transmission system operation. term adequacy assessments assessments (from weak-ahead to These are very short-term (from weak-ahead to day-ahead) day-ahead) used in the context of adequacy assessments (from used in the context of system system operation. weak-ahead to day-ahead) used operation. in the context of system operation.

• 40. 

  (28) Prior to introducing (28) Prior to introducing capacity mechanisms, Member capacity mechanisms, Member States should assess regulatory States should assess regulatory distortions contributing to the distortions contributing to the related resource adequacy related resource adequacy concern. They should be concern. They should be

  required to adopt measures to required to adopt measures to eliminate the identified eliminate the identified distortions including a timeline distortions including a timeline for their implementation. for their implementation. Capacity mechanisms should Capacity mechanisms should only be introduced for the only be introduced for the [ ] residual concerns that cannot be concerns that cannot be addressed through removing addressed through removing such distortions. such distortions.

ANNEX TREE.2.B EN

• 41. 

  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-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.

• 42. 

  (29) Member States intending (29) Member States intending to introduce capacity to introduce capacity

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

ANNEX TREE.2.B EN

• 43. 

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

  European resource adequacy established and no new capacity assessment reveals the absence commitments under mechanisms of any adequacy concern, no already in place should be made. new capacity mechanism should The application of the State aid be established and no new control rules pursuant to Articles capacity commitments under 107 to 109 TFUE must be mechanisms already in place complied with at all times.

  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.

• 44. 

  (31) Detailed rules for AM 7

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

ANNEX TREE.2.B EN

would be possible, enable would be possible, enable which cross-border participation participation and check participation and check would be possible, enable availabilities. National availabilities. National regulatory participation and check regulatory authorities should authorities should enforce the availabilities. [ ] Regulatory enforce the cross-border rules in cross-border rules in the Member authorities should enforce the the Member States. States. cross-border rules in the Member States.

• 45. 

  (32) In view of differences in

  national energy systems and (32) In view of differences in technical limitations of existing national energy systems and electricity networks, the best technical limitations of existing approach to achieving progress electricity networks, the best in market integration will often approach to achieving progress be at a regional level. Regional in market integration will often cooperation of transmission be at a regional level. Regional system operators should thus be cooperation of transmission strengthened. In order to ensure system operators should thus be efficient cooperation, a new strengthened. In order to ensure regulatory framework should efficient cooperation, a new foresee stronger regional regulatory framework should governance and regulatory foresee stronger regional oversight, including by governance and regulatory strengthening the decisionoversight, including by making power of the Agency for strengthening the decisioncross-border issues. Closer making power of the Agency for cooperation of Member States cross-border issues. Closer could be needed also in crisis cooperation of Member States situations, to increase security of could be needed also in crisis supply and limit market situations, to increase security of

  distortions. supply and limit market distortions.

• 46. 

  (33) The coordination between (33) The coordination between transmission system operators at transmission system operators at regional level has been regional level has been

  formalised with the mandatory formalised with the mandatory participation of transmission participation of transmission

ANNEX TREE.2.B EN

system operators in regional system operators in regional security coordinators, which security coordinators, which should be complemented by an should be [ ] further developed enhanced institutional and support the increasingly framework via the establishment integrated operation of of regional operational centres. electricity systems across the The creation of regional Union, ensuring their efficient operational centres should take and secure performance. into account existing regional coordination initiatives and support the increasingly integrated operation of electricity systems across the Union, ensuring their efficient and secure performance.

• 47. 

  (34) The geographical scope of (34) The geographical scope of regional operational centres [ ] Regional Security

  should allow them to play an Coordinators should allow effective coordination role by them to play an effective optimising the operations of contribution to the transmission system operators coordination of [ ] the over larger regions. operations of transmission 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.

ANNEX TREE.2.B EN

• 48. 

  (35) Regional operational AM 8 (35) [ ] Regional Security centres should carry out (35) Regional coordination Coordinators should fulfil

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

• 49. 

  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).

ANNEX TREE.2.B EN

• 50. 

  (36) Regional operational (36) [ ] Regional Security centres should primarily act in Coordinators should primarily the interest of system and act in the interest of system and market operation of the region market operation of the region over the interests of any single over the interests of any single entity. Hence, regional entity. Hence, [ ] Regional

  operational centres should be Security Coordinators should entrusted with decision-making be entrusted with [ ] powers powers to act and to direct necessary to support [ ] actions to be taken by actions to be taken by transmission system operators of transmission system operators of the system operation region for the system operation region for certain functions and with an certain functions and with an enhanced advisory role for the enhanced advisory role for the remaining functions. remaining functions.

• 51. 

  (37) ENTSO for Electricity (37) ENTSO for Electricity should ensure that the actions of should ensure that the actions of regional operational centres are [ ] Regional Security

  coordinated across the regions' Coordinators are coordinated boundaries. across the regions' boundaries.

• 52. 

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

ANNEX TREE.2.B EN

Union distribution system Union distribution system operators. The EU DSO Entity operators. The EU DSO Entity should closely cooperate with should closely cooperate with ENTSO for Electricity on the ENTSO for Electricity on the preparation and implementation preparation and implementation of the network codes where of the network codes where applicable and should work on applicable and should work on providing guidance on the providing guidance on the integration inter alia of integration inter alia of distributed generation and distributed generation and storage in distribution networks storage in distribution networks or other areas which relate to the or other areas which relate to the management of distribution management of distribution networks. networks. The EU DSO shall also 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.

• 53. 

  (39) Increased cooperation and (39) Increased cooperation and coordination among coordination among

  transmission system operators is transmission system operators is required to create network codes required to create network codes for providing and managing for providing and managing effective and transparent access effective and transparent access to the transmission networks to the transmission networks across borders, and to ensure across borders, and to ensure coordinated and sufficiently coordinated and sufficiently forward-looking planning and forward-looking planning and sound technical evolution of the sound technical evolution of the transmission system in the transmission system in the Union , including the creation of Union, including the creation of

ANNEX TREE.2.B EN

interconnection capacities, with interconnection capacities, with due regard to the environment. due regard to the environment. Those network codes should be Those network codes should be in line with framework in line with framework guidelines, which are nonguidelines, which are nonbinding in nature (framework binding in nature (framework guidelines) and which are guidelines) and which are developed by the Agency . The developed by the Agency. The Agency should have a role in Agency should have a role in reviewing, based on matters of reviewing, based on matters of fact, draft network codes, fact, draft network codes, including their compliance with including their compliance with the framework guidelines, and it the framework guidelines, and it should be enabled to should be enabled to recommend recommend them for adoption them for adoption by the by the Commission. The Commission. The Agency Agency should assess proposed should assess proposed amendments to the network amendments to the network codes and it should be enabled codes and it should be enabled to recommend them for adoption to recommend them for adoption by the Commission. by the Commission. Transmission system operators Transmission system operators should operate their networks in should operate their networks in accordance with those network accordance with those network codes. codes.

• 54. 

  (40) To ensure the smooth (40) To ensure the smooth functioning of the internal functioning of the internal

  market in electricity, provision market in electricity, provision should be made for procedures should be made for procedures which allow the adoption of which allow the adoption of decisions and guidelines with decisions and guidelines with regard, inter alia, to tarification 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’

ANNEX TREE.2.B EN

regulatory authorities in that regulatory authorities in that process, where appropriate process, where appropriate through their European through their European association. Regulatory association. Regulatory authorities, together with other authorities, together with other relevant authorities in the relevant authorities in the Member States, have an Member States, have an important role to play in important role to play in contributing to the proper contributing to the proper functioning of the internal functioning of the internal market in electricity. market in electricity.

• 55. 

  (41) All market participants (41) All market participants have an interest in the work have an interest in the work

  expected of the ENTSO for expected of the ENTSO for Electricity. An effective Electricity. An effective consultation process is therefore consultation process is therefore essential and existing structures essential and existing structures that are set up to facilitate and that are set up to facilitate and streamline the consultation streamline the consultation process, such as via national process, such as via national regulators or the Agency, should regulators or the Agency, should play an important role. play an important role.

ANNEX TREE.2.B EN

• 56. 

  (42) In order to ensure greater (42) In order to ensure greater transparency regarding the entire transparency regarding the entire electricity transmission network electricity transmission network in the Union, the ENTSO for in the Union, the ENTSO for

  Electricity should draw up, Electricity should draw up, publish and regularly update a publish and regularly update a non-binding Union-wide tennon-binding Union-wide tenyear network development plan year network development plan (Union-wide network (Union-wide network development plan). Viable development plan). Viable electricity transmission electricity transmission networks networks and necessary regional and necessary regional interconnections, relevant from interconnections, relevant from a a commercial or security of commercial or security of supply supply point of view, should be point of view, should be included in that network included in that network development plan. development plan

• 57. 

  (43) Experience with the

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

  Commission. submitting them to the Commission.

ANNEX TREE.2.B EN

• 58. 

  (44) Investments in major new (44) Investments in major new infrastructure should be infrastructure should be

  promoted strongly while promoted strongly while ensuring the proper functioning ensuring the proper functioning of the internal market in of the internal market in electricity. In order to enhance electricity. In order to enhance the positive effect of exempted the positive effect of exempted direct current interconnectors on direct current interconnectors on competition and security of competition and security of supply, market interest during supply, market interest during the project-planning phase the project-planning phase should be tested and congestionshould be tested and congestionmanagement rules should be management rules should be adopted. Where direct current adopted. Where direct current interconnectors are located in interconnectors are located in the territory of more than one the territory of more than one Member State, the Agency Member State, the Agency should handle as a last resort the should handle as a last resort the exemption request in order to exemption request in order to take better account of its crosstake better account of its crossborder implications and to border implications and to facilitate its administrative facilitate its administrative handling. Moreover, given the handling. Moreover, given the exceptional risk profile of exceptional risk profile of constructing those exempt major constructing those exempt major infrastructure projects, infrastructure projects, undertakings with supply and undertakings with supply and production interests should be production interests should be able to benefit from a temporary able to benefit from a temporary derogation from the full derogation from the full unbundling rules for the projects unbundling rules for the projects concerned. Exemptions granted concerned. Exemptions granted

ANNEX TREE.2.B EN

under Regulation (EC) No under Regulation (EC) No 1228/2003 i 4 continue to apply 1228/2003 5 continue to apply until the scheduled expiry date until the scheduled expiry date as decided in the granted as decided in the granted exemption decision. exemption decision.

• 59. 

  (45) To enhance trust in the (45) To enhance trust in the market, its participants need to market, its participants need to be sure that those engaging in be sure that those engaging in abusive behaviour can be abusive behaviour can be subject subject to effective, to effective, proportionate and proportionate and dissuasive dissuasive penalties. The

  penalties. The competent competent authorities should be authorities should be given the given the competence to competence to investigate investigate effectively effectively allegations of market allegations of market abuse. To abuse. To that end, it is that end, it is necessary that necessary that competent competent authorities have authorities have access to data access to data that provides that provides information on information on operational operational decisions made by decisions made by supply supply undertakings. In the undertakings. In the electricity electricity market, many market, many relevant decisions relevant decisions are made by are made by the generators, the generators, which should which should keep information keep information in relation in relation thereto available to thereto available to and easily and easily accessible by the accessible by the competent competent authorities for a fixed authorities for a fixed period of period of time. The competent time. The competent authorities authorities should, furthermore, should, furthermore, regularly regularly monitor the

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).

ANNEX TREE.2.B EN

monitor the compliance of the compliance of the transmission transmission system operators system operators with the rules. with the rules. Small generators Small generators with no real with no real ability to distort the ability to distort the market market should be exempt from should be exempt from that that obligation. obligation.

• 60. 

  (46) The Member States and (46) The Member States and the competent national the competent national

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

ANNEX TREE.2.B EN

• 61. 

  (47) Member States should lay (47) Member States should lay down rules on penalties down rules on penalties

  applicable to infringements of applicable to infringements of the provisions of this Regulation the provisions of this Regulation and ensure that they are and ensure that they are implemented. Those penalties implemented. Those penalties must be effective, proportionate must be effective, proportionate and dissuasive. and dissuasive.

• 62. 

  (48) Member States and the (48) Member States, [ ] the

  Energy Community Contracting Energy Community Contracting Parties should closely cooperate Parties and other third on all matters concerning the countries which are applying development of an integrated this Regulation or are part of electricity trading region and the synchronous grid of should take no measures that Continental Europe should endanger the further integration closely cooperate on all matters of electricity markets or security concerning the development of of supply of Member States and an integrated electricity trading Contracting Parties. region and should take no measures that endanger the further integration of electricity markets or security of supply of Member States and Contracting Parties.

ANNEX TREE.2.B EN

• 63. 

  (49) In order to ensure the (49) At the time of adoption minimum degree of of Regulation 714/2009 i, only harmonization required for few rules for the internal

  effective market functioning, the electricity market existed at power to adopt acts in EU level. Since then, the EU accordance with Article 290 of internal market has become

  the Treaty on the Functioning of

  the European Union should be more complex due to the delegated to the Commission in fundamental change the respect of areas which are markets are undergoing in fundamental for market particular regarding integration. These should deployment of variable include the geographical area for renewable electricity regional cooperation of production. Therefore the transmission system operators, Network Codes and Guidelines the amount of compensation have become extensively payments between transmission comprehensive addressing system operators, the adoption both technical and general and amendment of network issues. In order to ensure the codes and guidelines, as well as minimum degree of the application of exemption harmonization required for provisions for new effective market functioning, the interconnectors. It is of power to adopt and amend particular importance that the implementing acts in Commission carry out accordance with Article 291 of appropriate consultations during the Treaty on the Functioning of its preparatory work, including the European Union should be [ at expert level, and that those ] conferred to the Commission consultations be conducted in in respect of non-essential accordance with the principles elements of certain specific

  laid down in the

  Interinstitutional Agreement on areas which are fundamental for Better Law-Making of 13 April market integration. These should 2016 . In particular, to ensure include [ ] the adoption and equal participation in the amendment of network codes preparation of delegated acts, and guidelines, as well as the the European Parliament and the application of exemption

ANNEX TREE.2.B EN

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

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.

6 OJ L 123, 12.5.2016, p. 1.

ANNEX TREE.2.B EN

• 64. 

  (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.

• 65. 

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

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

  HAVE ADOPTED THIS REGULATION:

ANNEX TREE.2.B EN

• 66. 

  (51) Market rules should enable the integration of

  electricity from renewable energy sources and provide incentives for increasing energy efficiency.

• 67. 

  (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].

• 68. 

  (53) With regard to balancing markets, efficient and non-distortive 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:

ANNEX TREE.2.B EN

• 69. 

  Chapter I Subject matter, scope and definitions

• 70. 

  Article 1 Subject-matter and scope

• 71. 

  This Regulation aims at: AM 10 (a) setting the basis for an This Regulation aims at: Accept to merge both:

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

  efficient achievement of the objectives of the European Energy (a) setting the basis for an

  (a) setting the basis for an efficient

  objectives of the European Union and in particular the climate efficient achievement of the

  achievement of the objectives of the European

  Energy Union and in particular and energy framework for 2030 30 objectives of the European

  Energy Union and in particular the climate and

  the climate and energy by enabling market signals to be Energy Union and in particular

  energy framework for 2030 9 by enabling

  framework for 2030 7 by delivered for increased flexibility, the climate and energy

  market signals to be delivered for increased

  enabling market signals to be efficiency, decarbonisation, framework for 2030

  8 by efficiency, higher share of renewable energy

  delivered for increased innovation and a higher share of enabling market signals to be

  sources, security of supply, flexibility,

  flexibility, decarbonisation and renewable energy sources. delivered for increased security

  sustainability, decarbonisation and innovation;

  innovation; __________________ of supply, flexibility,

  30

   COM/2014/015 final. sustainability, decarbonisation and innovation;

7 COM/2014/015 final.

8 COM/2014/015 final.

9 COM/2014/015 final.

ANNEX TREE.2.B EN

• 72. 

  (b) setting fundamental AM 11

  principles for well-functioning, (b) setting fundamental (b) setting fundamental

  Accept in part:

  integrated electricity markets, principles for well-functioning principles for well-functioning, which allow non-discriminatory cross-border, integrated and liquid integrated electricity markets,

  (b) setting fundamental principles for wellmarket

  access for all resource electricity markets, which allow which allow non-discriminatory

  functioning, integrated electricity markets,

  providers and electricity non-discriminatory market access market access for all resource

  which allow non-discriminatory market access

  customers, empower consumers, for all resource providers and providers and electricity

  for all resource providers and electricity

  enable demand response and electricity customers, empower customers, empower consumers,

  customers, empower consumers, enable

  energy efficiency, facilitate consumers, enable competitiveness enable demand response and

  competitiveness on the global market as well

  aggregation of distributed on the global market, demand energy efficiency, facilitate

  as demand response, energy storage and energy

  demand and supply, and response, energy storage and aggregation of distributed

  efficiency, facilitate aggregation of distributed

  contribute to the decarbonisation energy efficiency, facilitate demand and supply, [ ] and

  demand and supply, [ ] and enabling market

  of the economy by enabling aggregation of distributed demand enable market integration and

  and sectoral integration and market-based

  market integration and marketand supply, and contribute to the market-based remuneration of

  remuneration of electricity generated from

  based remuneration of electricity decarbonisation of the economy by electricity generated from

  renewable sources;

  generated from renewable enabling market and sectoral renewable sources;

  sources; integration and market-based remuneration of electricity

  generated from renewable sources;

ANNEX TREE.2.B EN

• 73. 

  (c) setting fair rules for cross(c) setting fair rules for cross No change border exchanges in electricity, border exchanges in electricity,

  thus enhancing competition thus enhancing competition within the internal market in within the internal market in electricity, taking into account electricity, taking into account the particular characteristics of the particular characteristics of national and regional markets. national and regional markets. This includes the establishment This includes the establishment of a compensation mechanism of a compensation mechanism for cross-border flows of for cross-border flows of electricity and the setting of electricity and the setting of harmonised principles on crossharmonised principles on crossborder transmission charges and border transmission charges and the allocation of available the allocation of available capacities of interconnections capacities of interconnections between national transmission between national transmission systems; systems;

• 74. 

  (d) facilitating the emergence AM 12 (d) facilitating the emergence Accept in part: of a well-functioning and (d) facilitating the emergence of of a well-functioning and (d) facilitating the emergence of a welltransparent wholesale market a well-functioning, liquid and transparent wholesale market functioning and transparent whole sale market with a high level of security of transparent whole sale market with a high level of security of contributing to a high level of security of supply in electricity. It provides contributing to a high level of supply in electricity. It provides supply in electricity. It provides for for mechanisms to harmonise security of supply in electricity. It for mechanisms to harmonise mechanisms to harmonise the rules for crossthe rules for cross-border provides for mechanisms to the rules for cross-border border exchanges in electricity. exchanges in electricity. harmonise the rules for crossexchanges in electricity

  border exchanges in electricity.

ANNEX TREE.2.B EN

• 75. 

  Article 2 Definitions

• 76. 

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

  Regulation, the definitions Regulation, the definitions contained in Article 2 of contained in Article 2 of Directive [recast of Directive Directive [recast of Directive 2009/72/EC i as proposed by 2009/72/EC as proposed by COM(2016) 864 i/2], in Article 2 COM(2016) 864 i/2], in Article 2 of Regulation (EU) No of Regulation (EU) No 1227/2011 i of the European 1227/2011 of the European Parliament and of the Parliament and of the Council 12 , Council 10 , in Article 2 of in Article 2 of Commission Commission Regulation (EU) Regulation (EU) No 543/2013 i 13 No 543/2013 11 and in Article 2 and in Article 2 of [Recast of [Recast Renewable Energies Renewable Energies Directive] Directive] apply. apply [with the 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.]

10 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).

11 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). 12 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). 13 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).

ANNEX TREE.2.B EN

• 77. 

  2. In addition, the following 2. In addition, the following definitions shall apply: definitions shall apply:

• 78. 

  (a) ‘regulatory authorities’ (a) ‘regulatory authorities’ means the regulatory authorities means the regulatory authorities referred to in Article 57(1) of referred to in Article 57(1) of [recast of Directive 2009/72/EC i [recast of Directive 2009/72/EC i as proposed by COM(2016) as proposed by COM(2016) 864 i/2] ; 864/2] ;

• 79. 

  (b) ‘cross-border flow’ means (b) ‘cross-border flow’ means a physical flow of electricity on a physical flow of electricity on a transmission network of a a transmission network of a

  Member State that results from Member State that results from the impact of the activity of the impact of the activity of producers and/or customers producers and/or customers outside that Member State on its outside that Member State on its transmission network; transmission network;

• 80. 

  (c) ‘congestion’ means a AM 13 (c) ‘congestion’ means a situation in which all requests (c) ‘congestion’ means a situation in which all requests from market participants to trade situation in which all requests from from market participants to trade between two bidding zones market participants to trade [ ] between [ ] network areas cannot be accommodated cannot be accommodated because cannot be accommodated

  because they would significantly they would significantly affect the because they would significantly affect the physical flows on physical flows on network elements affect the physical flows on network elements which cannot which cannot accommodate those network elements which cannot accommodate those flows ; flows ; accommodate those flows;

ANNEX TREE.2.B EN

• 81. 

  (d) ‘new interconnector’ (d) ‘new interconnector’ means an interconnector not means an interconnector not completed by 4 August 2003; completed by 4 August 2003;

• 82. 

  (e) 'structural congestion' AM 14 (e) 'structural congestion' means congestion in the (e) 'structural congestion' means means congestion in the

  transmission system that is congestion in the transmission transmission system that can be predictable, is geographically system that is predictable, [ ] unambiguously defined, is stable over time, and is geographically stable over time, predictable, is geographically frequently reoccurring under and frequently reoccurring under stable over time, and is normal power system normal power system conditions; frequently reoccurring under conditions; normal power system conditions;

• 83. 

  (f) 'market operator' means (f) 'market operator' means an entity that provides a service an entity that provides a service whereby the offers to sell whereby the offers to sell

  electricity are matched with bids electricity are matched with bids to buy electricity; to buy electricity;

• 84. 

  (g) 'nominated electricity (g) 'nominated electricity market operator' or 'NEMO’ market operator' or 'NEMO’ means a market operator means a market operator

  designated by the competent designated by the competent authority to perform tasks authority to perform tasks related to single day-ahead or related to single day-ahead or single intraday coupling; single intraday coupling;

• 85. 

  (h) 'value of lost load' means (h) 'value of lost load' means an estimation in €/MWh, of the an estimation in €/MWh, of the maximum electricity price that maximum electricity price that customers are willing to pay to customers are willing to pay to avoid an outage; avoid an outage;

ANNEX TREE.2.B EN

• 86. 

  (i) 'balancing' means all (i) 'balancing' means all actions and processes, in all actions and processes, in all timelines, through which timelines, through which

  transmission system operators transmission system operators ensure, in a continuous way, ensure, in a continuous way, maintenance of the system maintenance of the system frequency within a predefined frequency within a predefined stability range and compliance stability range and compliance with the amount of reserves with the amount of reserves needed with respect to the needed with respect to the required quality; required quality;

• 87. 

  (j) 'balancing energy' means (j) 'balancing energy' means energy used by transmission energy used by transmission

  system operators to perform system operators to perform balancing; balancing;

• 88. 

  (k) 'balancing service (k) 'balancing service provider' means a market provider' means a market participant providing either or participant providing either or both balancing energy and both balancing energy and balancing capacity to balancing capacity to

  transmission system operators; transmission system operators;

ANNEX TREE.2.B EN

• 89. 

  (l) 'balancing capacity' (l) 'balancing capacity' means means a volume of capacity that a volume of capacity that a

  a balancing service provider has balancing service provider has agreed to hold to and in respect agreed to hold to and in respect to which the balancing service to which the balancing service provider has agreed to submit provider has agreed to submit bids for a corresponding volume bids for a corresponding volume of balancing energy to the of balancing energy to the transmission system operator for transmission system operator for the duration of the contract; the duration of the contract;

• 90. 

  (m) 'balance responsible party' (m) 'balance responsible party' means a market participant or its means a market participant or its chosen representative chosen representative

  responsible for its imbalances in responsible for its imbalances in the electricity market; the electricity market;

• 91. 

  (n) 'imbalance settlement (n) 'imbalance settlement period' means the time unit for period' means the time unit for which the imbalance of the which the imbalance of the balance responsible parties is balance responsible parties is calculated; calculated;

• 92. 

  (o) 'imbalance price' means (o) 'imbalance price' means the price, be it positive, zero or the price, be it positive, zero or negative, in each imbalance negative, in each imbalance

  settlement period for an settlement period for an imbalance in each direction; imbalance in each direction;

• 93. 

  (p) 'imbalance price area' (p) 'imbalance price area' means the area in which an means the area in which an imbalance price is calculated; imbalance price is calculated;

• 94. 

  (q) 'prequalification process' (q) 'prequalification process' means the process to verify the means the process to verify the compliance of a provider of compliance of a provider of

  balancing capacity with the balancing capacity with the requirements set by the requirements set by the transmission system operators; transmission system operators;

ANNEX TREE.2.B EN

• 95. 

  (r) 'reserve capacity' means (r) 'reserve capacity' means the amount of frequency the amount of frequency

  containment reserves, frequency containment reserves, frequency restoration reserves or restoration reserves or replacement reserves that needs replacement reserves that needs to be available to the to be available to the transmission system operator; transmission system operator;

• 96. 

  (s) 'priority dispatch' means (s) 'priority dispatch' means the dispatch of power plants on in self-dispatch model the

  the basis of criteria different dispatch of power plants on the from the economic order of bids basis of criteria different from and, in central dispatch systems, the economic order of bids and, network constraints, giving in central dispatch model also priority to the dispatch of from network constraints, particular generation giving priority to the dispatch of technologies; particular generation technologies;

• 97. 

  (t) 'capacity calculation (t) 'capacity calculation region' means the geographic region' means the geographic area in which the coordinated area in which the coordinated capacity calculation is applied; capacity calculation is applied;

ANNEX TREE.2.B EN

• 98. 

  (u) 'capacity mechanism' AM 15 (u) 'capacity mechanism' means an administrative (u) capacity mechanism' means means an administrative

  measure to ensure the temporary administrative measures measure or a market based achievement of the desired level taken by Member States to fill the measure to ensure the of security of supply by expected resource adequacy gap achievement of the desired level remunerating resources for their for electricity supply to match of [ ] resource adequacy by availability not including electricity demand by offering remunerating resources for their measures relating to ancillary additional payments to capacity availability not including services; providers that operate in the measures relating to ancillary electricity market, in addition to services and congestion income obtained by selling management ; 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;

ANNEX TREE.2.B EN

• 99. 

  (v) 'strategic reserve' means a AM 16 [ ] capacity mechanism in which (v) 'strategic reserve' means a

  resources are only dispatched in capacity mechanism in which case day-ahead and intraday resources are held outside the markets have failed to clear, electricity market and are only transmission system operators dispatched in case day-ahead and have exhausted their balancing intraday markets have failed to resources to establish an clear, transmission system equilibrium between demand operators have exhausted their and supply, and imbalances in balancing resources to establish an the market during periods where equilibrium between demand and the reserves were dispatched are supply, and imbalances in the settled at the value of lost load; market during periods where the reserves were dispatched are settled at least at technical price limits or at the value of lost load;

• 100. 

  (w) ‘high-efficiency (w) ‘high-efficiency cogeneration’ means cogeneration’ means

  cogeneration meeting the criteria cogeneration meeting the criteria laid down in Annex II of 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 14 ; Council 15 ;

• 101. 

  (x) ‘demonstration project’ (x) ‘demonstration project’ means a project demonstrating a means a project demonstrating a technology as a first of its kind technology as a first of its kind in the Union and representing a in the Union and representing a significant innovation that goes significant innovation that goes well beyond the state of the art. well beyond the state of the art.

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). 15 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).

ANNEX TREE.2.B EN

• 102. 

  (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.

• 103. 

  (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.

• 104. 

  (aa) 'countertrading' means a cross zonal exchange

  initiated by system operators between two bidding zones to relieve physical congestion.

• 105. 

  (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.

ANNEX TREE.2.B EN

• 106. 

  (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.

• 107. 

  (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.

• 108. 

  (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 i.

ANNEX TREE.2.B EN

• 109. 

  (ff) 'delegated operator' Maintain Council GA means an entity to whom

  specific tasks or obligations (The proposal in REV 1 was to delete this entrusted to a transmission definition; however, the Presidency decided to system operator or nominated revert to general approach.) 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;

• 110. 

  Chapter II

  General rules for the electricity market

• 111. 

  Article 3

  Principles regarding the operation of electricity markets

• 112. 

  1. Member States, national AM 17 1. Member States, national Maintain Council GA regulatory authorities, 1. Member States, national regulatory authorities,

  transmission system operators, regulatory authorities, transmission transmission system operators, (The proposal was to accept AM 17 instead of distribution system operators, system operators, distribution distribution system operators, [ GA; however, due to the fact that the and market operators shall system operators, market operators ] market operators and Presidency decided to preserved definition (ff) ensure that electricity markets and third parties to whom delegated operators shall above, it was necessary to keep GA in this are operated in accordance with responsibilities have been ensure that electricity markets paragraph.) the following principles: delegated or assigned, shall ensure are operated in accordance with that electricity markets are operated the following principles: in accordance with the following principles:

• 113. 

  (a) prices shall be formed (a) prices shall be formed No change based on demand and supply; based on demand and supply.

ANNEX TREE.2.B EN

• 114. 

  (b) actions which prevent AM 18 (b) actions which prevent Accept modified AM price formation on the basis of (b) actions which prevent price price formation on the basis of (b) market rules shall encourage free price demand and supply or constitute formation on the basis of demand demand and supply or constitute formation and avoid actions which prevent a disincentive to the and supply shall be avoided; a disincentive to the price formation on the basis of demand and development of more flexible development of more flexible supply [ ];

  generation, low carbon generation, low carbon generation, or more flexible generation, or more flexible demand shall be avoided; demand shall be avoided;

• 115. 

  AM 19 Accept modified AM

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

• 116. 

  (c) customers shall be AM 20 (c) customers shall be Accept enabled to benefit from market (c) customers shall be enabled to enabled to benefit from market (c) customers shall be enabled to benefit opportunities and increased benefit from market opportunities opportunities and increased from market opportunities and increased competition on retail markets; and increased competition on retail competition on retail markets; competition on retail markets and be markets and be empowered to act empowered to act as participant in the energy as participant in the energy market market and the energy transition; and the energy transition;

• 117. 

  (d) market participation of (d) market participation of No change consumers and small businesses consumers and small businesses

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

ANNEX TREE.2.B EN

• 118. 

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

  and providing incentives for energy efficiency;

• 119. 

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

  ensure security of supply; 120. (g) barriers to cross-border AM 23 (g) barriers to cross-border Maintain Council GA

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

• 121. 

  (h) market rules shall provide AM 24 (h) market rules shall provide Maintain Council GA for regional cooperation where (h) market rules shall provide for for regional cooperation where

  effective; strong regional cooperation where effective; effective;

ANNEX TREE.2.B EN

• 122. 

  (i) all generation, storage and (i) [ ] safe and sustainable Maintain Council GA demand resources shall generation, storage and demand

  participate on equal footing in [ ] shall participate on equal the market; footing in the market, under the requirements provided for in the EU law;

• 123. 

  (j) all producers shall be (j) all producers shall be No change directly or indirectly responsible directly or indirectly responsible

  for selling the electricity they for selling the electricity they generate; generate;

• 124. 

  AM 25 Reject

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

• 125. 

  (k) market rules shall allow AM 26 [ ] Maintain Council GA for progress in research and (k) market rules shall allow for

  development to be realized and progress in research and used to the benefit of society; development into sustainable, secure and low-carbon energy sources, technologies or systems to be realized and used to the benefit of society;

• 126. 

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

ANNEX TREE.2.B EN

• 127. 

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

  their operations; effective competition and price formation;

• 128. 

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

  offered on exchanges should be subject to compliance with EU further expanded and promoted at treaty rules on competition. Market rules shall facilitate trade of products Union level; Regulatory changes on exchanges at across the Union. shall take into account effects on both short-term and long-term Regulatory changes shall take into account forward and futures markets and effects on both short-term and long-term products. forward and futures markets and products.

• 129. 

  (o) market participants Maintain Council GA have a right to obtain access to

  the transmission and distribution networks on objective, transparent and non-discriminatory terms.

ANNEX TREE.2.B EN

• 130. 

  AM 30

  Article 3 a (new)

• 131. 

  Just transition

• 132. 

  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.

• 133. 

  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 reskilling

  needs.

ANNEX TREE.2.B EN

• 134. 

  Article 4 Article 4

  Balancing responsibility Balance[ ] responsibility

• 135. 

  1. All market participants 1. All market participants [ ] shall aim for system balance and shall be [ ] responsible for the

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

• 136. 

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

• 137. 

  (a) demonstration projects; (a) demonstration projects for emerging technologies as

  defined in Article 66 and 67 of Regulation (EU) 2016/631 16 ;

16 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).

ANNEX TREE.2.B EN

• 138. 

  (b) generating installations (b) power generating facility using renewable energy sources [ ], using renewable energy

  or high-efficiency cogeneration sources or high-efficiency with an installed electricity cogeneration with a total capacity of less than 500 kW; installed electricity capacity of less than [ ] 250 kW;

• 139. 

  (c) installations benefitting (c) Without prejudice to from support approved by the contracts concluded before Commission under Union State [entry into force of the

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

• 140. 

  AM 31 2a. When a Member State

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

ANNEX TREE.2.B EN

• 141. 

  3. From 1 January 2026,

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

  less than 250 kW. with an total installed electricity capacity of less than [ ] 150 kW.

  Member States may apply a lower threshold.

• 142. 

  Article 5

  Balancing market

• 143. 

  1. All market participants AM 32 [ ] Maintain Council GA shall have access to the 1. All market participants,

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

ANNEX TREE.2.B EN

• 144. 

  2. Balancing markets shall AM 33 2. Balancing markets, Accept modified GA be organised in such a way as to 2. Balancing markets shall be including prequalification 2. Balancing markets, including ensure effective nonorganised in such a way as to processes, shall be organised in prequalification processes, shall be organised discrimination between market ensure effective non-discrimination such a way as to: in such a way as to: participants taking account of between market participants. All (a) ensure effective non(a) ensure effective non-discrimination the different technical capability generation, including from discrimination between market between market participants taking account of of generation from variable variable renewable sources, participants taking account of the different technical [ ] needs of the power renewable sources and demand demand side response and storage the different technical [ ] needs system and the different technical side response and storage. shall be enabled to participate on of the power system, a capabilities of generation sources, energy equal footing in balancing transparent and storage and demand response; markets, taking account of the technologically neutral

  different technical capability. definition of services and their (aa) ensure a transparent and technologically transparent, market based neutral definition of services and their

  procurement, transparent, market based procurement, 145. (b) ensure access to all Accept modified GA

  prequalified market Ref. to prequalification remains in 5(2) and participants, be it individual 5(8). or through aggregation; (b) ensure non-discriminatory access to all [ ] market participants, including electricity generated from variable renewable sources, demand response and energy storage, be it individual or through aggregation;

• 146. 

  (c) respect the need to Maintain Council GA accommodate increasing

  shares of variable generation as well as increased demand responsiveness and the advent of new technologies.

• 147. 

  3. Balancing energy shall be AM 34 [ ] Accept modified AM procured separately from 3. Balancing energy shall be This corresponds to 5(5a) of the GA; see also balancing capacity. Procurement procured separately from balancing article 16(6) of Reg. 2017/2195 (Balancing processes shall be transparent capacity. The price of balancing Guideline). Exemptions see new para. 5(11). while at the same time energy shall not be pre-determined 3. The price of balancing energy shall not respecting confidentiality. in a contract of balancing except be pre-determined [ ] in a contract for where an exemption is applied in balancing capacity.

ANNEX TREE.2.B EN

accordance with Article 16(6) of the Commission Regulation (EU) Procurement processes shall be transparent 2017/2195 1a . Procurement while at the same time respecting processes shall be transparent while confidentiality in accordance with paragraph at the same time respecting 4 of Article 40 of the [recast Electricity confidentiality. Directive]. _______________ Commission Regulation (EU)

1a

2017/2195 of 23 November 2017 establishing a guideline on electricity balancing (OJ L 312, 28.11.2017 p. 6).

• 148. 

  4. Balancing markets No change

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

  Article 15. timeframes in accordance with Article 15.

• 149. 

  5. Marginal pricing shall be AM 35 5. [ ] For standard and Accept in part with modified GA used for the settlement of 5. The settlement of balancing specific balancing products, [ ] The settlement of balancing energy for balancing energy. Market energy shall be based on marginal the settlement of balancing standard and specific balancing products participants shall be allowed to pricing. On balancing markets, energy shall be based on shall be based on marginal pricing, pay-asbid as close to real time as market participants shall be allowed marginal pricing, pay-ascleared, [ ]

  possible, and at least after the to bid as close to real time as cleared, without prejudice to intraday cross-zonal gate closure possible, and balancing energy the Balancing Guideline Market participants shall be allowed to bid as time determined in accordance gate closure times shall not be adopted on the basis of Article close to real time as possible, and [ ] balancing with Article 59 of Commission before intraday cross-zonal gate 18 of the Regulation 714/2009 i. energy gate closure times shall not be before Regulation (EU) 2015/1222 17 . closure time determined in Market participants shall be the intraday cross-zonal gate closure time [ ]. accordance with Article 59 of allowed to bid as close to real Commission Regulation (EU) time as possible, and [ ] Transmission system operator applying a

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).

ANNEX TREE.2.B EN

2015/1222 34 balancing energy gate closure central dispatching model may define __________________ times shall not be before the additional rules in accordance with [ ] the

34

 Commission Regulation (EU) intraday cross-zonal gate closure Balancing Guideline adopted on the basis of 2015/1222 of 24 July 2015 time determined in accordance Article 18 of the Regulation 714/2009 i. establishing a guideline on capacity with Article 59 of Commission allocation and congestion Regulation (EU) 2015/1222 18 . management (OJ L 197, 25.7.2015, Transmission system operator p. 24). applying a central dispatching

model may define additional rules in accordance with the Balancing Guideline adopted on the basis of Article 18 of the Regulation 714/2009 i.

• 150. 

  5a. The price of balancing Accept to delete here energy shall not be pre Paragraph 5a is moved to paragraph 3.

  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 i. 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].

18 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).

ANNEX TREE.2.B EN

• 151. 

  6. The imbalances shall be 6. The imbalances shall be Accept to revert to COM original proposal settled at a price that reflects the settled at a price that reflects the 6. The imbalances shall be settled at a price real time value of energy. real time value of energy and that reflects the real time value of energy. shall be calculated in

  accordance with the Balancing Guideline adopted on the basis of Article 18 of the Regulation 714/2009.

• 152. 

  6a. The imbalance price Accept to modify GA and merge with Am 64. area shall be equal to a For the part on imbalance and scheduling

  bidding zone, except in case of areas see Article 54(2) of Reg. 2017/2195 a central dispatching model (Balancing Guideline). and in accordance with 6a. Each imbalance price area shall be equal Balancing Guideline adopted to a bidding zone, except in case of a central on the basis of Article 18 of the dispatching model where an imbalance price Regulation 714/2009 i. The area may constitute a part of a bidding zone. imbalance area shall be equal [ ] to the scheduling area, except in case of a central dispatching model where imbalance 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.

ANNEX TREE.2.B EN

• 153. 

  7. The sizing of reserve AM 36 7. The [ ] dimensioning of Accept to modify GA capacity shall be performed at 7. The sizing of reserve reserve capacity shall be 7. The [ ] dimensioning of reserve regional level in accordance capacity shall be performed at performed [ ] by the capacity shall be performed [ ] by the with point 7 of Annex I. regional level in accordance with transmission system operators transmission system operators [ ] and may Regional operational centres point 7 of Annex I. Regional in accordance with the System be facilitated on a regional level. shall support transmission coordination centres shall support Operation Guideline adopted

  system operators in determining transmission system operators in on the basis of Article 18 of the the amount of balancing determining the amount of Regulation 714/2009 i and may capacity that needs to be balancing capacity that needs to be be facilitated on a regional procured in accordance with procured in accordance with point 8 level. point 8 of Annex I. of Annex I.

ANNEX TREE.2.B EN

• 154. 

  8. The procurement of AM 37 8. The procurement of Accept in part balancing capacity shall be 8. The procurement of balancing capacity shall be The reference to a primary market (COM and facilitated on a regional level in balancing capacity shall be performed by the transmission EP wording) clarifies that organizing balancing accordance with point 8 of performed by the transmission system operators, facilitated on via obligations on all market participants with Annex I. The procurement shall system operators. The procurement a regional level in accordance a secondary market is not sufficient. be based on a primary market shall be based on a primary market with [ ] Balancing Guideline

and organised in such a way as and organised in such a way as to adopted on the basis of Article 8. The procurement of balancing capacity

to be non-discriminatory be non-discriminatory between 18 of the Regulation 714/2009 i. shall be performed by the transmission

between market participants in market participants in the The procurement of balancing system operators and may be facilitated on a

the prequalification process prequalification process, whether capacity shall be market-based regional level [ ].

individually or through market participants participate [ ] and organised in such a way The procurement shall be based on a primary

aggregation. individually or through aggregation as to be non-discriminatory market and organised in such a way as to be

subject to technical constraints between market participants in non-discriminatory between market participants

inherent in managing networks. the prequalification process in the prequalification process, whether market

The reservation of cross-zonal individually or through participants participate individually or through

capacity for the exchange of aggregation in accordance with aggregation in accordance with paragraph 4

balancing capacity shall be limited paragraph 4 of Article 40 of of Article 40 of the [recast Electricity

to 5% of the available capacity for the [recast Electricity Directive].

the exchange of energy of the Directive].

previous relevant calendar year

between the respective bidding

zones.

• 155. 

  9. The procurement of AM 38 9. The procurement of Maintain Council GA

upward balancing capacity and 9. The procurement of upward upward balancing capacity and

downward balancing capacity balancing capacity and downward downward balancing capacity

shall be carried out separately. balancing capacity shall be carried shall be carried out separately, [

The contracting shall be out separately. Procurement of ] in accordance with the

performed for not longer than balancing capacity shall be Balancing Guideline adopted

one day before the provision of performed for not longer than one on the basis of Article 18 of the

the balancing capacity and the day before the provision of the Regulation 714/2009 i. To the

contracting period shall have a balancing capacity and the extent possible, and at least for

maximum of one day. contracting period shall have a a minimum of 40 % of the

maximum duration of one day. standard products used for

balancing capacity, the

contracting of balancing

ANNEX TREE.2.B EN

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.

• 156. 

  9a. On the request of the Maintain Council GA 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:

ANNEX TREE.2.B EN

• 157. 

  (a) specification of the time Maintain Council GA period during which the

  exemption would apply; 158. (b) specification of the volume Maintain Council GA

  of balancing capacity for which the exemption would apply;

• 159. 

  (c) analysis of the impact of Maintain Council GA such an exemption on the

  participation of balancing resources; and

• 160. 

  (d) justification for the Maintain Council GA exemption demonstrating that

  such an exemption would lead to lower costs for consumers.

• 161. 

  10. Transmission system AM 39 10. Transmission system Accept in part and modify GA operators shall publish close to 10. Transmission system operators shall publish, [ ] as

real-time information on the operators or third parties to whom soon as possible but not later 10. Transmission system operators or third

current balancing state of their these responsibilities have been than 30 minutes after real-time, parties delegated operators shall publish, [ ]

control areas, the imbalance delegated by the relevant the information on the current [ as soon as possible but not later than 30

price and the balancing energy transmission system operator, ] system balance of their [ ] minutes after real-time, the information on the

price. Member State or regulatory scheduling areas [ ] and the current [ ] system balance of their [ ]

authority shall publish close to estimated [ ] balancing energy scheduling areas, [ ] the estimated imbalance

real-time information on the current prices. To the extent that prices [ ] and the estimated [ ] balancing

balancing state of their control responsibility for provision of energy prices.

areas, the estimated imbalance this information has been

price and the estimated balancing assigned or delegated to a

energy price. 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.

ANNEX TREE.2.B EN

• 162. 

  AM 40 Reject

  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].

• 163. 

  New proposal in reference to paragraphs 3, 5 and 5a of the GA and Articles 25-26 of Reg.

  2017/2195 (Balancing Guideline). Exemptions for specific products (to avoid copying the entire Balancing Guideline) are bundled here.

  • 11. 

    Transmission system operators may, where standard balancing products are not sufficient to ensure operational security or some balancing resources cannot participate in the balancing market through standard balancing products, propose exemptions from paragraphs 3 and 5 for specific balancing products which are activated locally without exchanging them with other transmission system operators.

  Exemptions for specific balancing products shall be subject to approval by the national regulatory authority.

ANNEX TREE.2.B EN

• 164. 

  Article 6

  Day-ahead and intraday markets

• 165. 

  1. Transmission system 1. Transmission system Maintain Council GA

  operators and nominated operators and nominated electricity market operators shall electricity market operators shall jointly organise the management jointly organise the management of the integrated day-ahead and of the integrated day-ahead and intraday markets based on 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 Transmission system operators and nominated electricity market and nominated electricity market operators shall cooperate at operators shall cooperate at Union level or, where more Union level or, where more appropriate, on a regional basis appropriate, on a regional basis in order to maximise the in order to maximise the efficiency and effectiveness of efficiency and effectiveness of Union electricity day-ahead and Union electricity day-ahead and intraday trading. The obligation intraday trading. The obligation to cooperate shall be without to cooperate shall be without prejudice to the application of prejudice to the application of the provisions of Union the provisions of Union competition law. In their competition law. In their functions relating to electricity functions relating to electricity trading, transmission system trading, transmission system operators and nominated market operators and nominated operators shall be subject to electricity market operators regulatory oversight by shall be subject to regulatory regulators and the Agency oversight by regulators and the pursuant to Article 59 of [recast Agency pursuant to Article 59 of of Directive 2009/72/EC i as [recast of Directive 2009/72/EC i proposed by COM(2016) 864 i/2] as proposed by COM(2016) and Articles 4 and 9 of [recast of 864/2] and Articles 4 and 9 of Regulation (EC) No 713/2009 i as [recast of Regulation (EC) No proposed by COM(2016) 713 i/2009 as proposed by 863/2]. COM(2016) 863 i/2].

ANNEX TREE.2.B EN

• 166. 

  2. Day-ahead and intraday 2. Day-ahead and intraday No change markets shall markets shall

• 167. 

  (a) be organised in such a AM 41 (a) be organised in such a Maintain Council GA way as to be non-discriminatory; (a) be [ ] non-discriminatory; way as to be non-discriminatory;

• 168. 

  (b) maximise the ability of (b) maximise the ability of all Accept modified GA market participants to contribute market participants to [ ] (b) maximise the ability of all market to avoid system imbalances; manage their imbalances; participants to [ ] manage [ ] imbalances;

• 169. 

  (c) maximise the (c) maximise the

  opportunities for market opportunities for all market Maintain Council GA

  participants to participate in participants to participate in cross-border trade as close as cross-[ ] zonal trade as close as possible to real time across all possible to real time across all bidding zones; bidding zones;

• 170. 

  (d) provide prices that reflect (d) provide prices that reflect

  market fundamentals and that market fundamentals, including Maintain Council GA

  market participants can rely on the real time value of energy, when agreeing on longer-term and that market participants can hedging products; rely on when agreeing on longer-term hedging products;

• 171. 

  (e) ensure operational (e) ensure operational No change security whilst allowing for security whilst allowing for

  maximum use of transmission maximum use of transmission capacity; capacity;

• 172. 

  (f) be transparent while at the (f) be transparent while at the Maintain Council GA same time respecting same time respecting

  confidentiality; confidentiality and ensuring trading occurs in an

  anonymous manner; and; 173. (g) ensure trades are [ ] Maintain Council GA

  anonymous; and 174. (h) make no distinction (h) make no distinction No change

  between trades made within a between trades made within a bidding zone and across bidding bidding zone and across bidding zones. zones.

ANNEX TREE.2.B EN

• 175. 

  3. Market operators shall be AM 42 [ ] Maintain Council GA free to develop products and 3. Market operators shall be

  trading opportunities that suit free to develop products and trading market participants' demand and opportunities that suit market needs and ensure that all market participants' demand and needs and participants are able to access ensure that all market participants the market individually or are able to access the market through aggregation. They shall individually or through respect the need to aggregation. They shall respect the accommodate increasing shares need to accommodate increasing of variable generation as well as shares of variable generation and increased demand energy storage as well as increased responsiveness and the advent of demand responsiveness and the new technologies. advent of new technologies

• 176. 

  Article 7

  Trade on day-ahead and intraday markets

• 177. 

  1. Market operators shall AM 43 1. Nominated electricity Maintain Council GA allow market participants to 1. Market operators shall allow market operators shall allow

  trade energy as close to real time market participants to trade energy market participants to trade as possible and at least up to the as close to real time as possible and energy as close to real time as intraday cross-zonal gate closure at least up to 15 minutes before possible and at least up to the time determined in accordance real time across all bidding zones. intraday cross-zonal gate closure with Article 59 of Regulation time determined in accordance (EU) 2015/1222. with [ ] the capacity allocation and congestion management guideline adopted on the basis of Article 18 of Regulation (EU) 714/2009.

ANNEX TREE.2.B EN

• 178. 

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

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

• 179. 

  3. Market operators shall AM 45 3. Nominated electricity Accept in part with modified GA provide products for trading in 3. Market operators shall market operators shall provide

  day-ahead and intraday markets provide products for trading in dayproducts for trading in day 3. Nominated electricity market operators which are sufficiently small in ahead and intraday markets which ahead and intraday markets shall provide products for trading in day-ahead size, with minimum bid sizes of are sufficiently small in size, with which are sufficiently small in and intraday markets which are sufficiently 1 Megawatt or less, to allow for minimum bid sizes of 500 Kilowatt, size, with minimum bid sizes of small in size, with minimum bid sizes of 1 the effective participation of to allow for the effective 1 Megawatt [ ], to allow for the Megawatt or less, to allow for the effective demand-side response, energy participation of demand-side effective participation of participation of demand-side response, energy storage and small-scale response, energy storage and smalldemand-side response, energy storage and small-scale renewables including renewables. scale renewables including directly storage and small-scale directly by customers. [ ] by customers. renewables in accordance to the methodologies developed in the capacity allocation and congestion management guideline adopted on the basis of Article 18 of Regulation (EU) 714/2009.

ANNEX TREE.2.B EN

• 180. 

  4. By 1 January 2025, the AM 46 Maintain Council GA

  imbalance settlement period 4. By 1 January 2021, the 4. By 1 January 2021, the shall be 15 minutes in all control imbalance settlement period shall imbalance settlement period

  areas. be 15 minutes in all control areas. shall be 15 minutes 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 i.

• 181. 

  Article 8

  Forward markets

• 182. 

  1. In line with Regulation 1. In line with Regulation Maintain Council GA

  (EU) 2016/1719, transmission (EU) 2016/1719, transmission system operators shall issue system operators shall issue long-term transmission rights or long-term transmission rights or have equivalent measures in have equivalent measures in place to allow for market place to allow for market participants, in particular owners participants, [ ] including of generation facilities using owners of generation facilities renewable energy sources, to using renewable energy sources, hedge price risks across bidding to hedge price risks across zone borders. bidding zone borders, unless 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 TREE.2.B EN

• 183. 

  2. Long-term transmission 2. Long-term transmission Maintain Council GA rights shall be allocated in a rights shall be allocated in a

  transparent, market based and transparent, market based and non-discriminatory manner non-discriminatory manner through a single allocation through a single allocation platform. Long-term platform [ ] according to the transmission rights shall be firm provisions of the guideline on and be transferable between forward capacity allocation market participants. adopted on the basis of Article 18 of the Regulation 714/2009 i.

• 184. 

  3. Subject to compliance AM 47 3. Subject to compliance Maintain Council GA with treaty rules on competition, 3. Subject to compliance with with treaty rules on competition,

  market operators shall be free to treaty rules on competition, market market operators shall be free to develop forward hedging operators shall be free to develop develop forward hedging products including for the longforward hedging products including products including for the longterm to provide market for the long-term to provide market term to provide market participants, in particular owners participants, in particular owners of participants, [ ] including of generation facilities using generation facilities using owners of generation facilities renewable energy sources, with renewable energy sources, with using renewable energy sources, appropriate possibilities to appropriate possibilities to hedge with appropriate possibilities to hedge financial risks from price financial risks from price hedge financial risks from price fluctuations. Member States fluctuations. Member States shall fluctuations. Member States shall not restrict such hedging support the liquidity of such shall not restrict such hedging activity to trades within a products, in particular of activity to trades within a Member State or bidding zone. exchange-based products that have Member State or bidding zone. already been developed, and shall allow them to be traded across bidding zones.

ANNEX TREE.2.B EN

• 185. 

  Article 9 Article 9

  Price Restrictions [ ] Technical bidding limits

• 186. 

  1. There shall be no AM 48 1. [ ] Wholesale Accept to merge and modify GA

  maximum limit of the wholesale 1. There shall be no maximum [ electricity prices and There shall be no maximum [ ] and no electricity price unless it is set at ] and no minimum limit of the balancing energy prices, minimum limit of the wholesale electricity price

  the value of lost load as wholesale electricity price [ ]. This including bidding and clearing

  determined in accordance with provision shall apply, inter alia, to prices, shall not be subject to a [ ]. This provision shall apply, inter alia, to Article 10. There shall be no bidding and clearing in all minimum or maximum limit. bidding and clearing in all timeframes and minimum limit of the wholesale timeframes and include balancing This is without prejudice to include balancing energy and imbalance prices.

electricity price unless it is set at energy and imbalance prices. the technical price limits This is without prejudice to the technical

a value of minus 2000 € or less which may be applied in the price limits which may be applied in the

and, in the event that it is or balancing timeframe balancing timeframe according to the anticipated to be reached, set at according to the Balancing Balancing Guideline adopted on the basis of a lower value for the following Guideline adopted on the basis Article 18 of the Regulation 714/2009 i and in

day. This provision shall apply, of Article 18 of the Regulation the day-ahead and intraday timeframes as inter alia, to bidding and 714/2009 and in the day-ahead set out in the following paragraph. clearing in all timeframes and and intraday timeframes as set include balancing energy and out in the following imbalance prices. paragraph.

• 187. 

  2. By way of derogation AM 49 2. [ ] Nominated electricity Accept to partly merge from paragraph 1, until [OP: two 2. By way of derogation from market operators may apply 2. Nominated electricity market operators may

years after entry into force] paragraph 1, market operators may harmonised limits on maximum apply harmonised limits on maximum and

market operators may apply apply technical limits on maximum and minimum clearing prices

limits on maximum clearing and minimum bidding limits for for day-ahead and intraday minimum clearing prices for day-ahead and

prices for day-ahead and day-ahead and intraday timeframes timeframes in accordance with [ intraday timeframes in accordance with [ ] the intraday timeframes in in accordance with Articles 41 and ] the capacity allocation and capacity allocation and congestion accordance with Articles 41 and 54 of Regulation (EU) 2015/1222 congestion management management guideline adopted on the basis

54 of Regulation (EU) and for the balancing timeframe in guideline adopted on the basis of Article 18 of the Regulation 714/2009 i. 2015/1222. In the event that accordance with Regulation (EU) of Article 18 of the Regulation These limits shall be sufficiently high so as limits are, or are anticipated to 2017/2195. In the event that those 714/2009. These limits shall not to unnecessarily restrict trade, be

be, reached, they shall be raised technical limits are, or are take into account the harmonised for the common market area and for the following day. anticipated to be, reached, they maximum value of lost load. take into account the maximum value of lost

shall be automatically adjusted. Nominated market operators load. Nominated market operators shall The technical price limits shall be shall implement a transparent implement a transparent mechanism to

sufficiently high so as not to mechanism to adjust adjust automatically the technical bidding unnecessarily restrict trade, and automatically the technical limits in due time in the event that the set

shall be harmonised for the bidding limits in due time in

common market area. They shall the event that the set limits are limits are expected to be reached. The

ANNEX TREE.2.B EN

be returned to initial values after expected to be reached. The adjusted higher limits shall remain

the scarcity situation is over. adjusted higher limits shall applicable until further increases under this

remain applicable until

further increases under this mechanism are required.

mechanism are required. 188. 3. Transmission system 3. Transmission system Maintain Council GA

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

• 189. 

  4. Member States shall 4. National regulatory Maintain Council GA identify policies and measures authorities or other competent

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

ANNEX TREE.2.B EN

• 190. 

  5. Where a Member State 5. Where a national Maintain Council GA has identified a policy or regulatory authority or other

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

ANNEX TREE.2.B EN

• 191. 

  Article 10

  Value of lost load

• 192. 

  1. By [OP: one year after AM 50 1. By [OP: one year after Maintain Council GA

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

ANNEX TREE.2.B EN

• 193. 

  2. Member States shall 2. Member States shall Maintain Council GA update their estimate at least update their estimate at least

  every five years. every five years or when a significant change is observed.

• 194. 

  Article 11

  Dispatching of generation and demand response

• 195. 

  1. Dispatching of power

  generation facilities and demand 1. Dispatching of power response shall be nongeneration facilities and demand discriminatory and market based response shall be nonunless otherwise provided under discriminatory, transparent

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

  11 (4), market based [ ].

• 196. 

  2. When dispatching

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

  following extent: granted priority dispatch up to the following extent:

ANNEX TREE.2.B EN

• 197. 

  (a) generating installations AM 51 (a) [ ] power generating using renewable energy sources (a) generating installations using facility using renewable energy or high-efficiency cogeneration renewable energy sources or highsources or high-efficiency

  with an installed electricity efficiency cogeneration with an cogeneration with an installed capacity of less than 500 kW; or installed electricity capacity of less electricity capacity of less than [ than 500 kW; [ ] ] 250 kW; or

• 198. 

  (b) demonstration projects for AM 52 (b) demonstration projects for innovative technologies. (b) generating installations emerging [ ] technologies as

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

• 199. 

  3. Where the total capacity AM 53 [ ] of generating installations 3. A Member State which does

  subject to priority dispatch not at the time of entry into force under paragraph 2 is higher than of this Regulation grant priority 15 % of the total installed dispatch to any generating generating capacity in a Member installations may request to be State, point (a) of paragraph 2 exempted from the provisions of shall apply only to additional paragraph 2 if it can demonstrate generating installations using to the Commission that all of the renewable energy sources or following conditions are met: high-efficiency cogeneration with an installed electricity capacity of less than 250 kW.

ANNEX TREE.2.B EN

• 200. 

  (a) no priority dispatch exists for installations other than those listed in paragraph 2 is in place;

• 201. 

  (b) its liquid intraday, wholesale and balancing markets are fully accessible to all market players in accordance with the provisions of this Regulation;

• 202. 

  (c) its curtailment rules and congestion management are transparent to all market parties and comply with the provisions of this Regulation;

• 203. 

  (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

ANNEX TREE.2.B EN

• 204. 

  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.

• 205. 

  From 1 January 2026, point (a) From 1 January 2026, point (a) of 3a. For power generating of paragraph 2 shall apply only paragraph 2 shall apply only to facility commissioned as from to generating installations using generating installations using 1 January 2026, point (a) of

  renewable energy sources or renewable energy sources or highparagraph 2 shall apply only to high-efficiency cogeneration efficiency cogeneration with an power generating facilities [ ] with an installed electricity installed electricity capacity of less using renewable energy sources capacity of less than 250 kW or, than 250 kW [ ] . or high-efficiency cogeneration if the threshold under the first with an installed electricity sentence of this paragraph has capacity of less than [ ] 150 been reached, of less than 125 kW [ ]. Member States may kW. apply a lower threshold.

ANNEX TREE.2.B EN

• 206. 

  4. Generating installations AM 54 4. [ ] Without prejudice to using renewable energy sources 4. Without prejudice to contracts concluded before

  or high-efficiency cogeneration paragraph 3 of this Article, [entry into force of the which have been commissioned generating installations using legislation], power generating prior to [OP: entry into force] renewable energy sources or highfacility using renewable energy and have, when commissioned, efficiency cogeneration which have sources or high-efficiency been subject to priority dispatch been commissioned prior to [OP: cogeneration which have been under Article 15(5) of Directive entry into force] and have, when commissioned prior to [OP: 2012/27/EU of the European commissioned, been subject to entry into force] and have, when Parliament and of the Council or priority dispatch under Article 15 commissioned, been subject to Article 16(2) of Directive (5) of Directive 2012/27 i/EU of the priority dispatch under Article 2009/28/EC of the European European Parliament and of the 15(5) of Directive 2012/27 i/EU Parliament and of the Council 19 Council or Article 16 (2) Directive of the European Parliament and shall remain subject to priority 2009/28/EC of the European of the Council or Article 16(2) dispatch. Priority dispatch shall Parliament and of the Council 39 of Directive 2009/28/EC i of the no longer be applicable from the shall remain subject to priority European Parliament and of the date where the generating dispatch. Priority dispatch shall no Council 20 shall [ ] continue to installation is subject to longer be applicable from the date benefit from priority dispatch. significant modifications, which where the generating installation is Priority dispatch shall no longer shall be the case at least where a subject to significant modifications, be applicable from the date new connection agreement is which shall be the case at least where the [ ] power generating required or the generation where a new connection agreement facility is subject to significant capacity is increased. is required or the generation modifications, which shall be the capacity is increased. case at least where a new 1. __________________ connection agreement is

  35

   Directive 2009/28/EC i of the required or the generation European Parliament and of the capacity is increased.

  Council of 23 April 2009 on the promotion of the use of energy from renewable sources and

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).

20 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 TREE.2.B EN

amending and subsequently repealing Directives 2001/77/EC i and 2003/30/EC (OJ L 140, 5.6.2009, p. 16).

• 207. 

  5. Priority dispatch shall not

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

  and non-discriminatory criteria. shall be based on transparent and non-discriminatory criteria.

• 208. 

  Article 12 Article 12

  Redispatching and curtailment Redispatching [ ]

• 209. 

  1. Curtailment or

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

  discriminatory criteria. 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 TREE.2.B EN

• 210. 

  2. The resources curtailed or AM 55 2. The resources [ redispatched shall be selected 2. The resources curtailed or ]redispatched shall be selected amongst generation or demand redispatched shall be selected amongst generation, storage or facilities submitting offers for amongst generation, energy demand facilities [ ] using curtailment or redispatching storage, and/or demand response market-based mechanisms and using market-based mechanisms facilities submitting offers for be financially compensated. [ ] and be financially compensated. curtailment or redispatching using Balancing energy bids used for Non-market-based curtailment market-based mechanisms and be redispatching shall not set the or redispatching of generation or financially compensated. Nonbalancing energy price in redispatching of demand market-based curtailment or accordance with the Balancing response shall only be used redispatching of generation or Guideline adopted on the basis where no market-based redispatching of energy storage of Article 18 of the Regulation alternative is available, where all and/or demand response shall only 714/2009.

  available market-based be used for operational security resources have been used, or reasons and where no marketwhere the number of generation based alternative is available or (part of 2, moved as 2a) or demand facilities available in where all available market-based the area where suitable resources have been used, or where generation or demand facilities the number of generation, energy for the provision of the service storage or demand facilities are located is too low to ensure available in the area where suitable effective competition. The generation, energy storage or provision of market-based demand facilities for the provision resources shall be open to all of the service are located is too low generation technologies, storage to ensure effective competition. The and demand response, including provision of market-based operators located in other resources shall be open to all Member States unless generation technologies, storage technically not feasible. and demand response, including operators located in other Member States unless technically not feasible.

ANNEX TREE.2.B EN

• 211. 

  2a. Without prejudice to

  Articles 107 to 109 TFEU nonmarket-based [ ] redispatching of generation or redispatching of demand response [ ] may only be used [ ] subject to the following conditions:

• 212. 

  (a) no market-based alternative is available,

• 213. 

  (b) [ ] all available marketbased resources have been used, or

• 214. 

  (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. [ ]

• 215. 

  (d) the current grid situation leads to congestion in such a regular and predictable way that market-based 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).

ANNEX TREE.2.B EN

• 216. 

  3. The responsible system AM 56 3. The responsible system operators shall report at least 3. The responsible system operators shall report at least once per year to the competent operators shall report at least once once per year to the competent regulatory authority on per year to the competent regulatory authority on [ ]

  curtailment or downward regulatory authority, which shall be downward redispatching of redispatching of generating transmitted to the Agency, on: power generating facility [ ] installations using renewable using renewable energy sources energy sources or highor high-efficiency cogeneration [ efficiency cogeneration and on ]. 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.

• 217. 

  (a) the level of development and effectiveness of market-based

  curtailment or redispatching mechanisms for generation and demand facilities;

ANNEX TREE.2.B EN

• 218. 

  (b) the reasons, volumes in MWh and type of generation source

  subject to curtailment or downward redispatching;

• 219. 

  (c) the measures taken to reduce the need for the curtailment or

  downward redispatching of generating installations using renewable energy sources or highefficiency cogeneration in the future including investments in digitalisation of the grid infrastructure and in services that increase flexibility;

• 220. 

  (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.

• 221. 

  The competent regulatory authority shall publish the data referred to in paragraphs (a) to (d) together with recommendations for improvement where necessary.

• 222. 

  Curtailment or redispatching of generating installations using

  renewable energy sources or highefficiency cogeneration shall be subject to compensation pursuant to paragraph 6.

ANNEX TREE.2.B EN

• 223. 

  4. Subject to requirements 4. Subject to requirements relating to the maintenance of relating to the maintenance of the reliability and safety of the the reliability and safety of the grid, based on transparent and grid, based on transparent and non-discriminatory criteria non-discriminatory criteria

  defined by the competent defined by the competent national authorities, national authorities, transmission transmission system operators system operators and and distribution system distribution system operators operators shall: shall:

• 224. 

  (a) guarantee the capability AM 57 (a) guarantee the capability of 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 networks to transmit electricity produced from renewable energy energy sources or highproduced from renewable energy sources or high-efficiency

  efficiency cogeneration with sources, energy storage, demandcogeneration with minimum minimum possible curtailment response or high-efficiency possible [ ] redispatching. That or redispatching. That shall not cogeneration with minimum shall not prevent network prevent network planning from possible curtailment or planning from taking into taking into account limited redispatching. That shall not account limited [ ] redispatching curtailment or redispatching prevent network planning from where this is shown to be more where this is shown to be more taking into account limited economically efficient and, [ ] economically efficient and does curtailment or redispatching where does not exceed 5 % of [ ] the not exceed 5 % of installed they can demonstrate in a annual generated electricity in capacities using renewable transparent way that this is more installations using renewable energy sources or higheconomically efficient and does not energy sources [ ] and which efficiency cogeneration in their exceed 5 % of installed capacities are directly connected to their area; using renewable energy sources, respective grid, unless energy storage, demand-response otherwise provided by a or high-efficiency cogeneration in Member State in which their area; electricity from power generating facility using renewable energy sources or high-efficiency cogeneration represents more than 50 % of

ANNEX TREE.2.B EN

annual gross final consumption of electricity;

• 225. 

  (b) take appropriate grid and

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

• 226. 

  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.

• 227. 

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

  following principles shall apply: shall apply:

ANNEX TREE.2.B EN

• 228. 

  (a) generating installations AM 59 (a) [ ] power generating using renewable energy sources (a) generating installations using facilities using renewable shall only be subject to renewable energy sources shall energy sources shall only be downward redispatching or only be subject to downward subject to downward

  curtailment if no other redispatching or curtailment if no redispatching [ ]if no other alternative exists or if other other alternative exists or if other alternative exists or if other solutions would result in solutions would result in solutions would result in disproportionate costs or risks to significantly disproportionate costs disproportionate costs or severe network security; or significant risks to network risks to network security; security;

• 229. 

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

  network security; risks to network security; 230. (c) self-generated electricity [ ]

  from generating installations using renewable energy sources or high-efficiency cogeneration which is not fed into the transmission or distribution network shall not be curtailed unless no other solution would resolve network security issues;

ANNEX TREE.2.B EN

• 231. 

  (d) downward redispatching (d) downward redispatching [ or curtailment under letters a to ] under letters a [ ] and b [ ] it

  c shall be duly and transparently shall be duly and transparently justified. The justification shall justified. The justification shall be included in the report under be included in the report under paragraph 3. paragraph 3.

• 232. 

  6. Where non-market based AM 61 6. Where non-market based [ curtailment or redispatching is 6. Where non-market based ] redispatching is used, it shall

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

ANNEX TREE.2.B EN

• 233. 

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

• 234. 

  (b) 90 % of the net revenues AM 62 (b) [ ] Net revenues from the from the sale of electricity on (b) [ ] net revenues from the sale of electricity on the daythe

  day-ahead market that the sale of electricity on the day-ahead ahead market that the generating generating or demand facility market that the generating or or demand facility would have would have generated without demand facility would have generated without the [ ] the curtailment or redispatching generated without the redispatching redispatching request. Where request. Where financial support request, including lost financial financial support is granted to is granted to generating or support where financial support is generating or demand facilities demand facilities based on the granted to generating or demand based on the electricity volume electricity volume generated or facilities based on the electricity generated or consumed, lost consumed, lost financial support volume generated or consumed [ ] . financial support shall be shall be deemed part of the net deemed part of the net revenues. revenues.

ANNEX TREE.2.B EN

• 235. 

  Chapter III

  Network access and congestion management 236. S ECTION 1

  C APACITY ALLOCATION

• 237. 

  Article 13 Article 13

  Definition of bidding zones Measures to address congestion and definition of bidding zones

• 238. 

  1. Bidding zone borders AM 63 1. Member States shall shall be based on long-term, 1. The configuration of take all appropriate measures structural congestions in the bidding zones in the Union shall to address congestions. Bidding transmission network and be designed in such a way as to zone borders shall be based on bidding zones shall not contain ensure liquidity of day-ahead and long-term, structural congestions such congestions. The intraday markets, and thus to in the transmission network [ ]. configuration of bidding zones maximise economic efficiency and Bidding zones shall not

  in the Union shall be designed in cross-border trading opportunities contain such structural such a way as to maximise while maintaining security of congestions unless they have economic efficiency and crosssupply. Bidding zone borders shall no impact, or their impact on border trading opportunities be based on long-term, structural neighbouring bidding zones is while maintaining security of congestions in the transmission mitigated through the use of supply. network and bidding zones shall not remedial actions and they do contain such congestions unless not lead to reductions of cross they have no impact on zonal trading capacity. The neighbouring bidding zones, or configuration of the bidding their impact is mitigated by zones in the Union shall be remedial actions. designed in such a way as to maximise economic efficiency and in order to maximise crossborder trading opportunities, [ ] with due respect to the provisions in Article 14.

ANNEX TREE.2.B EN

• 239. 

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

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

• 240. 

  3. In order to ensure an AM 65 3. In order to ensure an optimal bidding zone definition 3. In order to ensure an optimal optimal bidding zone [ ]

  in closely interconnected areas, bidding zone definition in closely configuration [ ] a bidding a bidding zone review shall be interconnected areas, a bidding zone review shall be carried out. carried out. That review shall zone review shall be carried out. That review shall identify all include analysis of the That review shall include analysis structural congestion and configuration of bidding zones of the configuration of bidding include analysis of [ ] different in a coordinated manner with the zones in a coordinated manner with configurations of bidding zones involvement of affected the involvement of affected in a coordinated manner with the stakeholders from all affected stakeholders from all affected involvement of affected Member States, following the Member States, following the stakeholders from all [ ] process in accordance with process in accordance with Articles relevant Member States, Articles 32 to 34 of Regulation 32 to 34 of Regulation (EU) following the process in (EU) 2015/1222. The Agency 2015/1222. Current bidding zones accordance with [ ] the shall approve and may request shall be assessed based on their capacity allocation and amendments to the methodology ability to create a reliable market congestion management and assumptions that will be environment, ensure sufficient guideline adopted on the basis used in the bidding zone review flexible generation and load of Article 18 of Regulation process as well as the alternative capacity, which is crucial for (EU) 714/2009. All relevant bidding zone configurations avoiding grid bottlenecks, transmission system operators considered. balancing electricity demand and shall submit a proposal to the supply securing the long-term relevant national regulatory security of investments and the authorities for approval. The grid. The Agency shall approve and relevant national regulatory may request amendments to the authorities shall come to an methodology and assumptions that unanimous decision on the will be used in the bidding zone proposal within [3 month]. In review process as well as the case they do not agree within alternative bidding zone this time frame, the Agency

ANNEX TREE.2.B EN

configurations considered. The shall [ ] decide on the methodology shall take due methodology and assumptions account of infrastructure that will be used in the bidding development projects that are zone review process as well as expected to be realised within the the alternative bidding zone next 5 years. configurations considered. The methodology shall be based on structural congestions which are not expected to be overcome within the next five years, for example taking due account of tangible progress on infrastructure development projects, that are expected to be realised within the next five years.

• 241. 

  3a. Irrespective of the concrete outcome of the infrastructure development projects, Article 14 shall apply to the calculation of the available capacity for crosszonal 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.

• 242. 

  4. The transmission system AM 66 4. The transmission system operators participating in the 4. The transmission system operators participating in the

  bidding zone review shall operators participating in the bidding zone review shall submit a proposal to the bidding zone review shall submit a submit a joint proposal to the Commission regarding whether proposal to the relevant Member [ ] relevant Member States or to amend or maintain the States whether to amend or designated competent bidding zone configuration. maintain the bidding zone authorities of the relevant

ANNEX TREE.2.B EN

Based on that proposal, the configuration. The relevant Member States [no later than Commission shall adopt a Member States shall be those 12 months after entry into force decision whether to amend or participating in the review of this Regulation, specific date maintain the bidding zone pursuant to Article 32(2) of to be inserted by OJ]. In this configuration, [no later than 6 Regulation (EU) 2015/1222 and article, relevant Member months after entry into force of those in the same Capacity States refer to those Member this Regulation, specific date to Calculation Region(s) pursuant to States participating in the be inserted by OP] or by six Regulation (EU) 2015/1222. Based review of the bidding zone months after the conclusion of on the proposal, the relevant configuration and also those in the bidding zone configuration Member States shall come to a the same capacity calculation launched in accordance with unanimous decision within six region pursuant to the points (a), (b) or (c) of Article months on whether to amend or capacity allocation and 32(1) of Regulation (EU) maintain the bidding zone congestion management 2015/1222, whichever comes configuration. Other Member guideline adopted on the basis later. States, Energy Community of Article 18 of Regulation Contracting Parties or other third (EU) 714/2009. countries sharing the same 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

ANNEX TREE.2.B EN

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.

• 243. 

  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.

• 244. 

  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

ANNEX TREE.2.B EN

configuration. 245. 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.

• 246. 

  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.

• 247. 

  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

ANNEX TREE.2.B EN

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 regarding remedial actions and barriers to increased flexibility and national energy policy measures that shift the location of production and consumption.

• 248. 

  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

ANNEX TREE.2.B EN

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 a 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 cross-zonal trade to be compliant with paragraph 7 is at least equal to the values of the trajectory, including 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

ANNEX TREE.2.B EN

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.

• 249. 

  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 crosszonal 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 congestion

ANNEX TREE.2.B EN

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.

• 250. 

  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

ANNEX TREE.2.B EN

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 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.

• 251. 

  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

ANNEX TREE.2.B EN

paragraph 4d, by six months after receiving of such a notification.

• 252. 

  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.

• 253. 

  5. The decision referred to in AM 68 5. The decision referred to in paragraph 4 shall be based on 5. Where the relevant Member paragraph 4d or 4e shall be

  the result of the bidding zone State chooses to establish a based on the report identifying review and the transmission detailed road map with concrete structural congestion or the system operators' proposal milestones on how the congestion result of the bidding zone review concerning its maintenance or issues will be resolved, that and the transmission system amendment. The decision shall Member State shall, within six operators' proposal in be justified, in particular as months of the Commission paragraph 4a and the report regards possible deviations from decision, present that roadmap to in paragraph 4c concerning its the result of the bidding zone the Commission and other relevant maintenance or amendment [ ]. review. Member States. During the The decision shall be justified, implementation of the roadmap in particular as regards possible the relevant Member State shall deviations from the result of the regularly report to the Commission bidding zone review and shall on the progress made. take account of the positions and commitments of the concerned Member States and the comments provided by other Member States.

ANNEX TREE.2.B EN

• 254. 

  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.

• 255. 

  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.

• 256. 

  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.

ANNEX TREE.2.B EN

• 257. 

  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).

• 258. 

  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.

ANNEX TREE.2.B EN

• 259. 

  6. Where further bidding AM 71 6. Where further bidding zone reviews are launched under deleted zone reviews are launched under Article 32(1)(a), (b) or (c) of [ ] the capacity allocation and Regulation (EU) 2015/1222, the congestion management

  Commission may adopt a guideline adopted on the basis decision within six months of of Article 18 of Regulation the conclusion of that bidding (EU) 714/2009 the procedure zone review. outlined in this Article shall be followed.

• 260. 

  7. The Commission shall AM 72 [ ] consult relevant stakeholders on 7. Member States and the

  its decisions under this Article Commission shall consult relevant before they are adopted. stakeholders before adopting a decision under this Article.

• 261. 

  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. this Article shall specify the date of specify the date of That implementation date shall implementation of a change. That implementation of a change. balance the need for expediency implementation date shall balance That implementation date shall with practical considerations, the need for expediency with balance the need for expediency including forward trade of practical considerations, including with practical considerations, electricity. The Commission forward trade of electricity. including forward trade of may define appropriate Appropriate transitional electricity and shall not be less transitional arrangements as part arrangements may be defined as than 12 months after the of its decision. part of the decision. decision is published unless otherwise agreed with the relevant Member States. The [ ] decision may define appropriate transitional arrangements [ ].

ANNEX TREE.2.B EN

• 262. 

  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.

• 263. 

  Article 14

  General principles of capacity allocation and congestion management

• 264. 

  1. Network congestion

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

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

ANNEX TREE.2.B EN

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

• 265. 

  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 transmission system operator must act in an expeditious must act in an expeditious

  manner and re-dispatching or manner and re-dispatching or countertrading is not possible. countertrading is not possible. Any such procedure shall be Any such procedure shall 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 majeure, market participants who have been allocated who have been allocated capacity shall be compensated capacity shall be compensated for any curtailment. for any curtailment.

• 266. 

  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

ANNEX TREE.2.B EN

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 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

ANNEX TREE.2.B EN

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.

ANNEX TREE.2.B EN

• 267. 

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

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

ANNEX TREE.2.B EN

• 268. 

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

• 269. 

  5. The highest value bids, 5. In case of congestion, the whether implicit or explicit in a valid highest value bids for

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

• 270. 

  6. Capacity shall be freely 6. Capacity shall be freely tradable on a secondary basis, tradable on a secondary basis, provided that the transmission provided that the transmission system operator is informed system operator is informed

  sufficiently in advance. Where a sufficiently in advance. Where a transmission system operator transmission system operator refuses any secondary trade refuses any secondary trade (transaction), this shall be (transaction), this shall be

ANNEX TREE.2.B EN

clearly and transparently clearly and transparently communicated and explained to communicated and explained to all the market participants by all the market participants by that transmission system that transmission system operator and notified to the operator and notified to the regulatory authority. regulatory authority.

• 271. 

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

  over control areas caused by over control areas caused by origin otherwise provided under origin and destination within and destination within one control paragraph 7a or 7b. one control area. area.

• 272. 

  Without prejudice to the forth Without prejudice to the subparagraph of Article 13(5), this application of the derogations paragraph shall be considered to under paragraph 7a and 7b, be complied with if the following this paragraph shall be

  minimum levels of available considered to be complied with capacity for cross-zonal trade, if the following minimum which is calculated pursuant to the levels of available capacity for capacity allocation and congestion cross-zonal trade, which is management guideline adopted on calculated pursuant to the the basis of Article 18 of capacity allocation and Regulation (EU) 714/2009 i taking congestion management account of contingencies, are guideline adopted on the basis reached: of Article 18 of Regulation (EU) 714/2009 taking account of N-1 criterion, are reached:

ANNEX TREE.2.B EN

• 273. 

  (i) for borders using a (i) For borders using a coordinated net transfer capacity coordinated net transmission approach, if at least 75 % of the capacity approach, 75% of the net transfer capacity pursuant to net transfer capacity pursuant capacity allocation and congestion to capacity allocation and management guideline are made congestion management

  available for cross-border trade; guideline adopted on the basis of Article 18 of the Regulation 714/2009;

• 274. 

  (ii) for borders using a flow(ii) For borders using a based approach, if on cross-zonal flow-based approach, 75% of and internal critical network the remaining available

  elements considered in the flowmargin on internal and cross based calculation at least 75 % of border critical network the thermal capacity after elements made available for reduction of the amount required cross border flows pursuant to to secure the N-1 principle capacity allocation and pursuant to the capacity allocation congestion management and congestion management guideline adopted on the basis guideline is used as an input for of Article 18 of the Regulation capacity allocation. 714/2009.

• 275. 

  The derogations pursuant to paragraph 7a shall not result with a value below this

  threshold.

ANNEX TREE.2.B EN

• 276. 

  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 crosszonal 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.

• 277. 

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

  subparagraph where it is

  necessary for maintaining authorities may grant a operational security or where it derogation from [ ] paragraph

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

  necessary, and avoid which may not relate to discrimination between internal curtailment of already allocated and cross-zonal exchanges. capacities pursuant to paragraph Before granting a derogation, 5, shall be limited [ ] to one the relevant regulatory authority year at a time, or up to

  shall consult the regulatory

ANNEX TREE.2.B EN

authorities of other Member maximum two years with a States forming part of an significantly decreasing level affected capacity calculation of the derogation each year, be region. In case a regulatory strictly limited to what is

authority disagrees with the

proposed derogation, the necessary, and avoid Agency shall decide on the discrimination between internal derogation pursuant to Article and cross-zonal exchanges. [ ] 6(8)(a) [recast of Regulation The justification and reasons for (EC) No 713/2009 as proposed the derogation shall be by COM(2016) 863 i/2]. The published. Where a derogation is justification and reasons for the granted, the relevant

derogation shall be published. transmission system operators Where a derogation is granted, shall develop and publish a the relevant transmission system methodology and projects [ ] operators shall develop and that shall provide a long-term publish a methodology and solution to the issue that the projects that shall provide a derogation seeks to address. The long-term solution to the issue derogation shall expire when the that the derogation seeks to time limit is reached or, once the

address. The derogation shall solution is applied, whichever is

expire when the time limit is

reached or, once the solution is earlier.

applied, whichever is earlier. 278. 8. Market participants shall 8. Market participants shall

inform the transmission system inform the transmission system operators concerned a operators concerned a reasonable time in advance of reasonable time in advance of the relevant operational period the relevant operational period whether they intend to use whether they intend to use allocated capacity. Any allocated capacity. Any allocated capacity that will not allocated capacity that will not be used shall be reattributed to be used shall be reattributed to the market, in an open, the market, in an open, transparent and nontransparent and nondiscriminatory manner. discriminatory manner.

ANNEX TREE.2.B EN

• 279. 

  9. Transmission system 9. Transmission system operators shall, as far as operators shall, as far as

  technically possible, net the technically possible, net the capacity requirements of any capacity requirements of any power flows in opposite power flows in opposite direction over the congested direction over the congested interconnection line in order to interconnection line in order to use that line to its maximum use that line to its maximum capacity. Having full regard to capacity. Having full regard to network security, transactions network security, transactions that relieve the congestion shall that relieve the congestion shall never be denied. never be denied.

• 280. 

  10. The financial 10. The financial consequences of failure to consequences of failure to honour obligations associated honour obligations associated with the allocation of capacity with the allocation of capacity shall be attributed to those who shall be attributed to those who are responsible for such a are responsible for such a failure. Where market failure. Where market participants fail to use the participants fail to use the capacity that they have capacity that they have committed to use, or, in the case committed to use, or, in the case of explicitly auctioned capacity, of explicitly auctioned capacity, fail to trade on a secondary basis fail to trade on a secondary basis or give the capacity back in due or give the capacity back in due time, they shall lose the rights to time, they shall lose the rights to such capacity and pay a costsuch capacity and pay a costreflective charge. Any costreflective charge. Any costreflective charges for the nonreflective charges for the nonuse of capacity shall be justified use of capacity shall be justified and proportionate. If a and proportionate. If a transmission system operator transmission system operator does not fulfil its obligation, it does not fulfil its obligation, it shall be liable to compensate the shall be liable to compensate the market participant for the loss of market participant for the loss of capacity rights. Consequential capacity rights. Consequential

ANNEX TREE.2.B EN

losses shall not be taken into losses shall not be taken into account for that purpose. The account for that purpose. The key concepts and methods for key concepts and methods for the determination of liabilities the determination of liabilities that accrue upon failure to that accrue upon failure to honour obligations shall be set honour obligations shall be set out in advance in respect of the out in advance in respect of the financial consequences, and financial consequences, and shall be subject to review by the shall be subject to review by the relevant national regulatory relevant [ ] regulatory authority authority or authorities. or authorities.

• 281. 

  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.

ANNEX TREE.2.B EN

• 282. 

  Article 15

  Allocation of cross-zonal capacity across timeframes

• 283. 

  1. Transmission system

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

  process. cross-zonal capacity allocation process.

• 284. 

  1a. Transmission system operators shall define an

  appropriate structure for the allocation of cross-zonal capacity across timeframes, including day-ahead, 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:

ANNEX TREE.2.B EN

• 285. 

  a) the characteristics of the markets;

• 286. 

  b) the operational condition, such as the implications of netting firmly declared schedules;

• 287. 

  c) the level of harmonisation of the percentages and timeframes adopted for the different cross-zonal capacity allocation mechanisms in place.

• 288. 

  2. When cross-zonal 2. When cross-zonal capacity is available after the capacity is available after the intraday cross-zonal gate closure intraday cross-zonal gate closure time, transmission system time, transmission system operators shall use the crossoperators shall use the crosszonal capacity for the exchange zonal capacity for the exchange of balancing energy or for of balancing energy or for operating the imbalance netting operating the imbalance netting process. process.

ANNEX TREE.2.B EN

• 289. 

  3. Transmission system 3. Where cross-zonal operators shall use the capacity is allocated for the methodologies developed in exchange of balancing capacity network codes and guidelines on or sharing of reserves

  balancing, where applicable, to pursuant to Article 5(8), allocate cross-zonal capacity for transmission system operators the exchange of balancing shall use the methodologies capacity or sharing of reserves developed in [ ] accordance pursuant to Article 5(4) and (7). with the balancing guideline adopted on the basis of Article 18 of the Regulation 714/2009 i.

• 290. 

  4. Transmission system

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

  of reserves. of balancing capacity or sharing of reserves.

ANNEX TREE.2.B EN

• 291. 

  Section 2

  Network charges and congestion income

• 292. 

  Article 16 AM 77 Article 16

  Charges for access to networks Charges for access to networks, use Charges for connection and of networks and reinforcement access to networks

• 293. 

  1. Charges applied by AM 78

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

  paragraph 3, those charges shall distribution level and production shall not unduly discriminate either positively or negatively

ANNEX TREE.2.B EN

not be distance-related. connected at the transmission level, against energy storage and shall either positively or negatively. not create disincentives for

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

• 294. 

  2. Tariffs shall grant AM 79

  appropriate incentives to 2. Tariffs shall grant 2. Tariff methodologies transmission and distribution appropriate incentives to shall [ ] reflect appropriate system operators, over both the transmission and distribution incentives and fixed costs of short and long term, to increase system operators, over both the transmission and distribution efficiencies, including energy short and long term, to increase system operators. The allowed efficiency, foster market efficiencies, including energy revenues to be recovered integration and security of efficiency, foster market integration through tariffs shall reflect supply, and support investments and security of supply, and global appropriate incentives to and the related research competitiveness, and support transmission and distribution activities. efficient investments, in particular system operators over both the in digitalisation, flexibility services short and long term, to increase and interconnections, and the efficiencies, including energy related research activities. Tariffs efficiency, foster market shall not create disincentives for integration, [ ] security of energy storage, demand response supply, and support investments,

  or self-generation production. [ ] the related research activities and facilitate

  innovation in the consumer's interest.

• 295. 

  3. Where appropriate, the 3. Where appropriate, the level of the tariffs applied to level of the tariffs applied to producers and/or consumers producers and/or consumers shall provide locational signals shall provide locational signals

ANNEX TREE.2.B EN

at Union level, and take into at Union level, and take into account the amount of network account the amount of network losses and congestion caused, losses and congestion caused, and investment costs for and investment costs for infrastructure. infrastructure.

• 296. 

  4. When setting the charges 4. When setting the charges for network access, the for network access, the

  following shall be taken into following shall be taken into account: account:

• 297. 

  (a) payments and receipts (a) payments and receipts resulting from the interresulting from the intertransmission

  system operator transmission system operator compensation mechanism; compensation mechanism;

• 298. 

  (b) actual payments made and (b) actual payments made and received as well as payments received as well as payments

  expected for future periods of expected for future periods of time, estimated on the basis of time, estimated on the basis of past periods. past periods.

• 299. 

  5. Setting the charges for 5. Setting the charges for network access under this network access under this

  Article shall be without Article shall be without prejudice to charges resulting prejudice to charges resulting from congestion management from congestion management referred to in Article 14. referred to in Article 14.

• 300. 

  6. There shall be no specific

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

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

ANNEX TREE.2.B EN

• 301. 

  7. Distribution tariffs shall AM 80

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

  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.

ANNEX TREE.2.B EN

• 302. 

  8. Regulatory authorities AM 81

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

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

ANNEX TREE.2.B EN

• 303. 

  9. By [OP: please add AM 82 9. By [OP: please add specific date – three months 9. By [OP: please add specific specific date – three months after entry into force] the date – three months after entry into after entry into force] to

  Agency shall provide a force] the Agency shall evaluate mitigate the risk of market recommendation addressed to the feasibility on the convergence fragmentation the Agency shall regulatory authorities on the of transmission and distribution provide a [ ] best practice progressive convergence of tariff methodologies. The report on [ ] transmission and transmission and distribution feasibility study shall address at distribution tariff methodologies tariff methodologies. That least: while leaving sufficient room recommendation shall address at to take national specificities least: into account. That [ ] best practice report shall address at least:

• 304. 

  (a) the ratio of tariffs applied (a) the ratio of tariffs applied to producers and to consumers; to producers and to consumers;

• 305. 

  (b) the costs to be recovered (b) the costs to be recovered by tariffs; by tariffs;

• 306. 

  (c) time differentiated (c) time differentiated network tariffs; network tariffs;

• 307. 

  (d) locational signals; (d) locational signals;

• 308. 

  (e) the relationship between (e) the relationship between transmission and distribution transmission and distribution

  tariffs, including principles tariffs, [ ] relating to non-discrimination;

• 309. 

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

• 310. 

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

  characteristics and forms of consumption, including tariff exemptions

ANNEX TREE.2.B EN

• 311. 

  The Agency shall update its report at least once every two years.

• 312. 

  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:

• 313. 

  (a) volume of curtailed energy in

  MWh, disaggregated per type of generation source;

• 314. 

  (b) percentage of the length of

  lines operated under dynamic line ratings;

• 315. 

  (c) percentage of substations remotely monitored and controlled in real-time;

• 316. 

  (d) percentage of the length of lines operated under dynamic line ratings;

• 317. 

  (e) losses in high, medium and low-voltage grids;

• 318. 

  (f) the frequency and duration of power interruptions on the grid.

ANNEX TREE.2.B EN

• 319. 

  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.

• 320. 

  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].

• 321. 

  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.

ANNEX TREE.2.B EN

• 322. 

  Article 17

  Congestion income

• 323. 

  1. Congestion-management 1. Congestion-management procedures associated with a procedures associated with a

  pre-specified timeframe may pre-specified timeframe may generate revenue only in the generate revenue only in the event of congestion which arises event of congestion which arises for that timeframe, except in the for that timeframe, except in the case of new interconnectors case of new interconnectors which benefit from an which benefit from 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) Article 17 of Regulation (EC) No 714/2009 i or Article 59. The No 714/2009 or Article 59. The procedure for the distribution of procedure for the distribution of those revenues shall be subject those revenues shall be subject to review by the regulatory to review by the regulatory authorities and shall neither authorities and shall neither distort the allocation process in distort the allocation process in favour of any party requesting favour of any party requesting capacity or energy nor provide a capacity or energy nor provide a disincentive to reduce disincentive to reduce congestion. congestion.

ANNEX TREE.2.B EN

• 324. 

  2. Any revenues resulting AM 85 2. Any revenues resulting from the allocation of 2. Any revenues resulting from from the allocation of

  interconnection capacity shall be the allocation of interconnection interconnection capacity shall be used for the following purposes: capacity shall be used for the used for the following purposes: following purposes:

• 325. 

  (a) guaranteeing the actual (a) guaranteeing the actual (a) guaranteeing the actual availability of the allocated availability of the allocated availability of the allocated

  capacity; capacity; or capacity including firmness compensation;

• 326. 

  (b) maintaining or increasing (b) maintaining or increasing (b) maintaining or increasing interconnection capacities interconnection capacities through interconnection capacities

  through network investments, in optimisation of the usage of through network investments, in particular in new existing interconnectors by particular in new interconnectors interconnectors. coordinated remedial and and internal lines and internal countertrading actions or network lines which are listed in Ten investments, up to the target value Years Network Development for transfer capacity at cross Plan of the ENTSO for border boundaries. Electricity as being relevant to reduce interconnector congestion,

• 327. 

  (c) or if applicable, cross border remedial actions such as redispatch and countertrading.

• 328. 

  If the revenues cannot be Where the objectives set out in 2a. [ ] The revenues [ ] may efficiently used for the purposes points (a) and (b) of the first be used, subject to the

  set out in points (a) or (b) of the subparagraph are fulfilled, the approval by the regulatory first subparagraph, they shall be residual revenues may be used as authorities of the Member placed on a separate internal income to be taken into account by States concerned, as income to account line for future use on the national regulatory authorities be taken into account by the these purposes. when approving the methodology regulatory authorities when for calculating network tariffs approving the methodology for and/or fixing network tariffs. calculating network tariffs and/or fixing network tariffs.

ANNEX TREE.2.B EN

• 329. 

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

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

• 330. 

  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.

• 331. 

  Before submission to the [ ]

  Commission, the Agency shall consult on the methodology pursuant to Article 15 [recast of Regulation (EC) No 713/2009 i as proposed by COM(2016) 863 i/2].

• 332. 

  The methodology shall detail as The methodology shall detail as a 3a. The methodology shall a minimum the conditions under minimum the conditions under detail as a minimum the

  which the revenues can be used which the revenues can be used for conditions under which the for points (a) and (b) of [ ] paragraph 2 and the conditions revenues [ ] are deemed to paragraph 2 and the conditions under which, and for how long, have fulfilled the objectives under which, and for how long, they may be placed on a separate expressed in points (a) [ ] (b)

ANNEX TREE.2.B EN

they may be placed on a internal account line for future use or (c) of paragraph 2 [ ]. separate internal account line for on those purposes. future use on those purposes.

• 333. 

  4. Transmission system AM 87 3b. Transmission system operators shall clearly establish 4. Transmission system operators shall clearly establish beforehand how any congestion operators shall clearly establish beforehand how any congestion income will be used, and report beforehand how any congestion income will be used, and report on the actual use of that income. income will be used, and report on on the actual use of that income. On an annual basis, and by 31 the actual use of that income. On an On an annual basis, and by [ ] 1 July each year, the national annual basis, and by 31 July each March each year, the [ ]

  regulatory authorities shall year, the national regulatory regulatory authorities shall publish a report setting out the authorities shall publish a report publish a report setting out the amount of revenue collected for setting out the amount of revenue amount of revenue collected for the 12-month period ending on collected for the 12-month period the 12-month period ending on 30 June of the same year and ending on 30 June of the same year 31 [ ] December of the [ ] how that revenue was used, and how that revenue was used, previous calendar year and including the specific projects including the specific projects the how that revenue was used the income has been used for or income has been used for the pursuant to paragraph 2, the amount placed on a separate amount placed on a separate including the specific projects account line, together with account line, or the amount that the income has been used for or verification that that use has been used when calculating the amount placed on a separate complies with this Regulation network tariffs, together with account line or the amount that and the methodology developed verification that that use complies has been used when pursuant to paragraph 3. with this Regulation. Where some calculating network tariffs, of the congestion revenues are together with verification that used when calculating network that use complies with this tariffs, the report may set out the Regulation and the methodology fulfilment by the transmission developed pursuant to paragraph system operator of the commitment 3. In such cases where some of and balance sheet criteria pursuant the congestion revenues are to paragraph 2. used when calculating network tariffs, the report shall set out how the TSOs fulfilled the priority objectives in Article 2 where applicable.

ANNEX TREE.2.B EN

• 334. 

  Chapter IV

  Resource adequacy

• 335. 

  AM 88 Article 18

  Resource adequacy and capacity Resource adequacy mechanisms

• 336. 

  1. Member States shall AM 89 1. Member States shall monitor resource adequacy 1. Member States shall monitor monitor resource adequacy within their territory based on resource adequacy within their within their territory [ ] based the European resource adequacy territory based on the European on the European resource assessment pursuant to Article resource adequacy assessment adequacy assessment pursuant to 19. pursuant to Article 19 and shall Article 19 and may perform in publish a report on the results of addition national resource the monitoring. adequacy assessment pursuant to Article 19a.

• 337. 

  2. Where the European AM 90 2. Where the European or resource adequacy assessment 2. Where the European resource the national resource adequacy identifies a resource adequacy adequacy assessment identifies a assessments identify a resource concern Member States shall resource adequacy concern Member adequacy concern Member

  identify any regulatory States shall identify any regulatory States shall identify any distortions that caused or distortions and/or market failures regulatory distortions or market contributed to the emergence of that caused or contributed to the distortions, or system the concern. emergence of the concern. bottlenecks such as insufficient infrastructure, that caused or contributed to the emergence of the concern.

• 338. 

  3. Member States shall AM 91 3. Member States shall publish a timeline for adopting 3. A Member State with publish roadmap with a

  measures to eliminate any identified adequacy concerns shall concrete timeline for adopting identified regulatory distortions. publish an implementation plan measures to eliminate any When addressing resource with a timeline for adopting identified regulatory distortions [ adequacy concerns Member measures to eliminate any ] or market distortions, or States shall in particular identified regulatory distortions system bottlenecks. When consider removing regulatory and/or market failures. When addressing resource adequacy distortions, enabling scarcity addressing resource adequacy concerns Member States shall in pricing, developing concerns, the Member States shall particular take into account the

ANNEX TREE.2.B EN

interconnection, energy storage, build on the principles set out in principles defined in Article 3 demand side measures and Article 3 and in particular: and consider removing energy efficiency. regulatory distortions, enabling scarcity pricing via free price 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.

• 339. 

  (a) remove regulatory distortions;

• 340. 

  (b) remove price caps;

• 341. 

  (c) introduce an administrative

  shortage pricing for balancing energy;

• 342. 

  (d) increase interconnection and internal grid capacity;

• 343. 

  (e) enable self-generation, energy storage, demand side measures and energy efficiency by removing

  regulatory obstacles; 344. (f) ensure cost-efficient and

  market-based procurement of balancing and ancillary services;

• 345. 

  (g) remove regulated prices in accordance with Article 5 of

  Directive (EU) ... [recast of Directive 2009/72/EC i as proposed by COM(2016) 864 i/2] .

ANNEX TREE.2.B EN

• 346. 

  AM 92

  Article 18 – paragraph 3 a (new) 3 a. The Member States shall submit the implementation plan to the Commission for review.

• 347. 

  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.

• 348. 

  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.

ANNEX TREE.2.B EN

• 349. 

  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.

• 350. 

  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.

ANNEX TREE.2.B EN

• 351. 

  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 extent 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 month 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

ANNEX TREE.2.B EN

notice of the assessment and the opinion.

• 352. 

  AM 97

  Article 18 a (new) General principles for capacity mechanisms

• 353. 

  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

• 354. 

  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.

ANNEX TREE.2.B EN

• 355. 

  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.

• 356. 

  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).

• 357. 

  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:

• 358. 

  (a) the European resource adequacy assessment has not identified a resource adequacy concern;

ANNEX TREE.2.B EN

• 359. 

  (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).

• 360. 

  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.

• 361. 

  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]

ANNEX TREE.2.B EN

• 362. 

  Article 19

  European resource adequacy assessment

• 363. 

  1. The European resource AM 98 1. The European resource adequacy assessment shall cover 1. The European resource adequacy assessment shall

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

• 364. 

  AM 99

  Article 19 – paragraph 1 a (new) 1a. The European resource assessment shall be conducted by the ENTSO for Electricity.

• 365. 

  2. By [OP: six months after 2. By [OP: six months after entry into force of this entry into force of this

  Regulation], the ENTSO for Regulation], the ENTSO for Electricity shall submit to the Electricity shall submit to the Agency a draft methodology for Electricity Coordination the European resource adequacy Group and the Agency a draft assessment based on the methodology for the European principles provided for in resource adequacy assessment paragraph 4. based on the principles provided for in paragraph 4.

ANNEX TREE.2.B EN

• 366. 

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

  year. information, and not already Generators and other market collected by the relevant DSO, participants shall provide

  from generators and other market transmission system operators participants. with data regarding expected utilization of the generation resources, considering the availability of primary resources and appropriate scenarios of projected demand and supply.

• 367. 

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

  on a transparent methodology which shall ensure that the assessment:

• 368. 

  (a) is carried out on bidding (a) is carried out on each zone level covering at least all respective bidding zone level Member States; covering at least all Member States;

• 369. 

  (b) is based on appropriate AM 102 (b) is based on appropriate scenarios of projected demand (b) is based on appropriate central scenarios of projected and supply including an scenarios of projected demand and demand and supply including an economic assessment of the supply including an economic economic assessment of the

  likelihood of retirement, newassessment of the likelihood of likelihood of retirement, newbuild of generation assets and retirement, mothballing, new-build build of generation assets and

ANNEX TREE.2.B EN

measures to reach energy of generation assets and measures measures to reach energy efficiency targets and to reach energy efficiency and efficiency targets and appropriate sensitivities on electricity interconnection targets appropriate sensitivities on wholesale prices and carbon and appropriate sensitivities on extreme weather events, price developments; wholesale prices and carbon price hydrological conditions, developments; wholesale prices and carbon price developments;

• 370. 

  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;

• 371. 

  (ba) reflects on how the different types of capacity mechanisms address adequacy concerns;

• 372. 

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

  operation;

ANNEX TREE.2.B EN

• 373. 

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

• 374. 

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

  mechanisms; existing or planned capacity mechanisms;

• 375. 

  (f) is based on a market (f) is based on a market model using, where applicable, model using, where applicable, the flow-based approach; the flow-based approach;

• 376. 

  (g) applies probabilistic (g) applies probabilistic calculations; calculations;

• 377. 

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

• 378. 

  (h) applies at least the (h) applies at least the following indicators: following indicators referred to in Article 20:

• 379. 

  – "expected energy not – "expected energy not served", and served", and

• 380. 

  – "loss of load expectation"; – "loss of load expectation";

• 381. 

  (i) identifies the sources of (i) identifies the sources of possible resource adequacy possible resource adequacy

  concerns, in particular whether it concerns, in particular whether it is a network or a resource is a network or a resource constraint, or both. constraint, or both.

ANNEX TREE.2.B EN

• 382. 

  AM 105

  Article 19 – paragraph 4 – point i a (new) (ia) respects real network development.

• 383. 

  (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;

• 384. 

  5. By [OP: six months after 5. By [OP: six months after entry into force of this entry into force of this

  Regulation], the ENTSO for Regulation], the ENTSO for Electricity shall submit to the Electricity shall submit to the Agency a draft methodology for Agency a draft methodology for calculating: calculating:

• 385. 

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

• 386. 

  AM 106

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

• 387. 

  (b) the "cost of new entry" (b) the "cost of new entry" for for generation, or demand generation, or demand response; response; and and

• 388. 

  (c) the reliability standard (c) the reliability standard [ ] expressed as "expected energy referred to in Article 20

  not served" and the "loss of load expectation".

ANNEX TREE.2.B EN

• 389. 

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

  stakeholders and approval by the Agency under the procedure set out in Article 22.

ANNEX TREE.2.B EN

• 390. 

  Article 19a

  National resource adequacy assessments

• 391. 

  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.

ANNEX TREE.2.B EN

• 392. 

  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.

• 393. 

  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.

• 394. 

  Article 20

  Reliability standard

• 395. 

  1. When applying capacity AM 108 1. When applying capacity mechanisms Member States 1. When applying capacity mechanisms Member States

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

ANNEX TREE.2.B EN

• 396. 

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

• 397. 

  3. The reliability standard 3. The reliability standard shall be calculated using the shall be calculated using at least value of lost load and the cost of the value of lost load and the new entry over a given cost of new entry over a given timeframe. timeframe and be expressed as "expected energy not served" and the "loss of load

  expectation". 398. 4. The parameters AM 109 4. When applying capacity

  determining the amount of deleted mechanisms the parameters capacity procured in the determining the amount of capacity mechanism shall be capacity procured in the capacity approved by the national mechanism shall be approved by regulatory authority. the [ ] Member State or another competent authority designated by the Member State.

• 399. 

  Article 21

  Cross-border participation in capacity mechanisms

• 400. 

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

  the bidding zone applying the pursuant to the provisions of mechanism. this Article.

ANNEX TREE.2.B EN

• 401. 

  2. Member States shall 2. Member States shall ensure that foreign capacity ensure that foreign capacity capable of providing equivalent capable of providing equivalent technical performance to technical performance to

  domestic capacities has the domestic capacities has the opportunity to participate in the opportunity to participate in the same competitive process as same competitive process as domestic capacity. domestic 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:

ANNEX TREE.2.B EN

• 402. 

  (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,

• 403. 

  (b) the capacity is not participating in another capacity mechanism for which the capacity needs to be available,

• 404. 

  3. Member States shall not 3. Member States shall not restrict capacity which is located restrict capacity which is located in their territory from in their territory from

  participating in capacity participating in capacity mechanisms of other Member mechanisms of other Member States. States.

• 405. 

  4. Cross-border participation 4. Cross-border participation in market-wide capacity in [ ] capacity mechanisms shall mechanisms shall not change, not change, alter or otherwise

  alter or otherwise impact crossimpact cross-zonal schedules zonal schedules and physical and physical flows between flows between Member States Member States which shall be which shall be determined solely determined solely by the by the outcome of capacity outcome of capacity allocation allocation pursuant to Article 14. pursuant to Article 14.

ANNEX TREE.2.B EN

• 406. 

  5. Capacity providers shall AM 110 5. Capacity providers shall be able to participate in more 5. Capacity providers shall be be [ ] subject to nonthan

  one mechanism for the able to participate in more than one availability payments in case same delivery period. They shall mechanism for the same delivery of non-availability. In case be subject to non-availability period. They shall be subject to capacity providers participate payments in case of nonnon-availability payments in case in more than one mechanism for availability, and subject to two of non-availability, and subject to the same delivery period, they or more non-availability two or more non-availability shall be subject to [ ] multiple payments where there is payments where there is concurrent non-availability payments concurrent scarcity in two or scarcity in two or more bidding when they are unable to fulfil more bidding zones where the zones where the capacity provider multiple commitments. capacity provider is contracted. is contracted. Capacity providers shall be able to participate with no more than their available maximum capacity.

• 407. 

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

  A calculation is required for capacity is located. A calculation is Coordinators pursuant to each bidding zone border. required for each bidding zone Article 34(q), 38 and 39, the border. level of physical interconnection between Member States, expected availability of interconnection and the likely concurrence of

ANNEX TREE.2.B EN

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.

• 408. 

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

ANNEX TREE.2.B EN

• 409. 

  8. Any difference in the 8. [ ] If there are capacity cost of foreign capacity and mechanisms open for crossdomestic

  capacity arising border participation in two through the allocation referred neighbouring Member States, to in paragraph 7 shall accrue to any revenues arising through transmission system operators the allocation referred to in and be shared between them paragraph 7 shall accrue to according to the methodology transmission system operators referred in point (b) of and be shared between them paragraph 10. Transmission according to the methodology system operators shall use such referred in point (b) of paragraph revenues for the purposes set out 10 or a common methodology in Article 17(2). 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).

• 410. 

  9. The transmission system 9. The transmission system operator where the foreign operator where the foreign

  capacity is located shall: capacity is located shall: 411. (a) establish whether (a) establish whether

  interested capacity providers can interested capacity providers can provide the technical provide the technical performance as required by the performance as required by the

ANNEX TREE.2.B EN

capacity mechanism in which capacity mechanism in which the capacity provider intends to the capacity provider intends to participate and register the participate and register the capacity provider in the registry capacity provider in the registry as eligible capacity providers. as eligible capacity providers.

• 412. 

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

• 413. 

  (c) be notified by the respective capacity provider without delay about its participation in foreign capacity mechanism

• 414. 

  (d) notify to the transmission system operator in the Member State applying the capacity mechanism the information received under paragraph 9a to 9c.

• 415. 

  10. By [OP: twelve months 10. By [OP: twelve months after entry into force of this after entry into force of this

  Regulation] the ENTSO for Regulation] the ENTSO for Electricity shall submit to the Electricity shall submit to the Agency: Agency:

• 416. 

  (a) a methodology for (a) a methodology calculating the maximum entry for calculating by the Regional capacity for cross-border Security Coordinator and

  participation as referred to in transmission system operators paragraph 6; the maximum entry capacity for cross-border participation as referred to in paragraph 6;

• 417. 

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

  in paragraph 8; paragraph 8;

ANNEX TREE.2.B EN

• 418. 

  (c) common rules to carry out (c) common rules to carry out availability checks referred to in availability checks referred to in point (b) of paragraph 9; point (b) of paragraph 9;

• 419. 

  (d) common rules to (d) common [ ] principles to determine when a nondetermine when a nonavailability

  payment is due; availability payment is due; 420. (e) terms of the operation of (e) terms of the operation of

  the registry as referred to in the registry as referred to in point (a) of paragraph 9; point (a) of paragraph 9;

• 421. 

  (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 referred to in point (a) of

  paragraph 9. paragraph 9. 422. The proposal shall be subject to The proposal shall be subject to

  prior consultation and approval prior consultation and approval by the Agency under the by the Agency under the procedure set out in Article 22. procedure set out in Article 22.

• 423. 

  11. The Agency shall verify 11. The [ ] national whether the capacities have been regulatory authorities calculated in line with the concerned shall verify whether methodology as referred to in the capacities have been point (a) of paragraph 10. calculated in line with the methodology as referred to in point (a) of paragraph 10.

• 424. 

  12. National regulatory 12. [ ] Regulatory authorities authorities shall ensure that shall ensure that cross-border

  cross-border participation in participation in capacity capacity mechanisms is mechanisms is organised in an organised in an effective and effective and non-discriminatory non-discriminatory manner. manner. They shall in particular They shall in particular provide provide for adequate for adequate administrative administrative arrangements for arrangements for the the enforcement of nonenforcement of non-availability availability payments across payments across borders. borders.

ANNEX TREE.2.B EN

• 425. 

  13. Allocated capacities as 13. Allocated capacities as referred to in paragraph 7 shall referred to in paragraph 7 shall be transferable between eligible be transferable between eligible capacity providers. Eligible capacity providers. Eligible

  capacity providers shall notify capacity providers shall notify any transfer to the registry as any transfer to the registry as referred to in point (a) of referred to in point (a) of paragraph 9. paragraph 9.

• 426. 

  14. No later than [OP: two 14. No later than [OP: two years after the entry into force of years after the entry into force of this Regulation] the ENTSO for this Regulation] the ENTSO for Electricity shall set up and Electricity shall set up and

  operate the registry as referred operate the registry as referred to to in point (a) of paragraph 9. in point (a) of paragraph 9. The The registry shall be open to all registry shall be open to all eligible capacity providers, the eligible capacity providers, the systems applying the systems applying the mechanisms and their mechanisms and their transmission system operators. transmission system operators.

ANNEX TREE.2.B EN

• 427. 

  Article 22

  Approval procedure 428. 1. Where reference is made 1. Where reference is made

  to this Article, the procedure set to this Article, the procedure set out in paragraphs 2 to 4 shall be out in paragraphs 2 to 4 shall be applicable to the approval of a applicable to the approval of a proposal submitted by the proposal submitted by the ENTSO for Electricity. ENTSO for Electricity.

• 429. 

  2. Prior to submitting the 2. Prior to submitting the proposal, the ENTSO for proposal, the ENTSO for

  Electricity shall conduct a Electricity shall conduct a consultation process involving consultation process involving all relevant stakeholders, all relevant stakeholders, [ ] national regulatory authorities regulatory authorities and other and other national authorities. national authorities and shall take the results of a consultation process duly into consideration.

• 430. 

  3. Within three months from 3. Within three months from the date of receipt, the Agency the date of receipt, the Agency

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

ANNEX TREE.2.B EN

• 431. 

  4. The Agency may request 4. The Agency may request changes to the approved changes to the approved

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

• 432. 

  Article 23

  Design principles for capacity mechanisms

• 433. 

  1. To address residual AM 112 1. To address residual concerns that cannot be 1. Any capacity mechanism concerns that cannot be

  eliminated by the measures shall: eliminated by the measures pursuant to Article 18(3), pursuant to Article 18(3), Member States may introduce Member States may introduce capacity mechanisms, subject to capacity mechanisms, subject to the provisions of this Article and the provisions of this Article and to the Union State aid rules. [ ] without prejudice to the Union State aid rules pursuant to Articles 107 to 109 TFEU.

• 434. 

  (a) not create undue market distortions and not limit crossborder trade;

• 435. 

  (b) not go beyond what is necessary to address the adequacy concern;

• 436. 

  (c) select capacity providers by means of a transparent, nondiscriminatory

  and market-based process;

• 437. 

  (d) be technology neutral;

ANNEX TREE.2.B EN

• 438. 

  (e) provide incentives for capacity providers to be available in times of expected system stress;

• 439. 

  (f) ensure that the remuneration is determined through a marketbased

  process; 440. (g) set out the required technical

  conditions for the participation of capacity providers in advance of the selection process;

• 441. 

  (h) be open to participation of all resources, including storage and demand side management that are capable of providing the required technical performance;

• 442. 

  (i) apply appropriate penalties to capacity providers when not

  available in the event of system stress;

• 443. 

  (j) ensure that capacity contracts for existing installations are

  rewarded for a maximum length of 1 year.

• 444. 

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

  neighbouring Member States. connected neighbouring Member States based on a comprehensive study on the possible effects on those Member States.

ANNEX TREE.2.B EN

• 445. 

  (a) be held outside the market;

• 446. 

  (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;

• 447. 

  (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.

• 448. 

  (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.

• 449. 

  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

ANNEX TREE.2.B EN

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.

• 450. 

  3. Capacity mechanisms AM 114 3. Capacity mechanisms shall not create unnecessary 3. In addition to the shall:

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

• 451. 

  (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;

• 452. 

  (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;

ANNEX TREE.2.B EN

• 453. 

  (c) ensure that capacity obligations are transferable between eligible

  capacity providers. 454. (a) not create

  unnecessary market distortions and not limit cross [ ] zonal trade;

• 455. 

  (b) be market-based;

• 456. 

  (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;

• 457. 

  (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; 458. (e) [ ] not go beyond what is

  necessary to address the resource adequacy concern.

• 459. 

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

  capacity mechanism if its emissions are below 550 gr

ANNEX TREE.2.B EN

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.

• 460. 

  (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.

• 461. 

  (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.

ANNEX TREE.2.B EN

Between 31 December 2025 and 31 December 2030, the capacity receiving remuneration for this participation should be reduced by 5% per year.

• 462. 

  (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.

• 463. 

  5. Where the European AM 116 [ ] resource adequacy assessment

  has not identified a resource deleted adequacy concern, Member States shall not apply capacity mechanisms.

ANNEX TREE.2.B EN

• 464. 

  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 phaseout 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.

• 465. 

  Article 24

  Existing mechanisms

• 466. 

  Member States applying AM 117 1. Member States applying capacity mechanisms on [OP: Member States applying capacity capacity mechanisms on [OP: entry into force of this mechanisms on [OP: entry into entry into force of this

  Regulation] shall adapt their force of this Regulation] shall adapt Regulation] shall adapt their mechanisms to comply with their mechanisms to comply with mechanisms to comply with Articles 18, 21 and 23 of this Articles 18, 18a, 21 and 23 of this Articles 18, 21 and 23 of this Regulation. 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.

ANNEX TREE.2.B EN

• 467. 

  Chapter V

  Transmission system operation

• 468. 

  Article 25

  European network of transmission system operators for electricity

• 469. 

  1. Transmission system 1. Transmission system Maintain Council GA operators shall cooperate at operators shall cooperate at

  Union level through the ENTSO Union level through the ENTSO for Electricity, in order to for Electricity, in order to promote the completion and promote the completion and functioning of the internal functioning of the internal market in electricity and crossmarket in electricity and cross [ border trade and to ensure the ] zonal trade and to ensure the optimal management, optimal management, coordinated operation and sound coordinated operation and sound technical evolution of the technical evolution of the European electricity European electricity transmission network. transmission network.

• 470. 

  2. In performing its

  functions under EU law, the 2. In performing its

  Accept modified GA

  ENTSO for Electricity shall act functions under EU law, the for the European good and ENTSO for Electricity shall [ ] 2. In performing its functions under EU independent from individual contribute to the efficient and law, the ENTSO for Electricity shall act in the national interests or the national sustainable achievement of the interest of a well functioning and integrated interests of transmission system objectives set out in the policy Internal Electricity market and shall [ ] operators, and shall contribute to framework for climate and contribute to the efficient and sustainable the efficient and sustainable energy covering the period from achievement of the objectives set out in the achievement of the objectives 2020 to 2030, in particular by policy framework for climate and energy set out in the policy framework contributing to the efficient covering the period from 2020 to 2030, in for climate and energy covering integration of electricity particular by contributing to the efficient the period from 2020 to 2030, in generated from renewable integration of electricity generated from particular by contributing to the energy sources and to increases renewable energy sources and to increases in efficient integration of in energy efficiency while energy efficiency while maintaining system electricity generated from maintaining system security. security. The ENTSO for Electricity shall renewable energy sources and to have adequate human and financial increases in energy efficiency. resources to carry out its duties.

ANNEX TREE.2.B EN

• 471. 

  Article 26

  Establishment of the ENTSO for Electricity

• 472. 

  1. The transmission system 1. The transmission system No change operators for electricity shall operators for electricity shall

  submit to the Commission and submit to the Commission and to to the Agency the draft statutes, the Agency the draft statutes, a a list of members and draft rules list of members and draft rules of procedure, including the rules of procedure, including the rules of procedures on the of procedures on the consultation of other consultation of other stakeholders, of the ENTSO for stakeholders, of the ENTSO for Electricity to be established. Electricity to be established.

• 473. 

  2. Within two months of the 2. Within two months of the No change day of the receipt, the Agency, day of the receipt, the Agency,

  after formally consulting the after formally consulting the organisations representing all organisations representing all stakeholders, in particular the stakeholders, in particular the system users, including system users, including customers, shall provide an customers, shall provide an opinion to the Commission on opinion to the Commission on the draft statutes, list of the draft statutes, list of members and draft rules of members and draft rules of procedure. procedure.

ANNEX TREE.2.B EN

• 474. 

  3. The Commission shall 3. The Commission shall No change deliver an opinion on the draft deliver an opinion on the draft

  statutes, list of members and statutes, list of members and draft rules of procedures taking draft rules of procedures taking into account the opinion of the into account the opinion of the Agency provided for in Agency provided for in paragraph 2 and within three paragraph 2 and within three months of the day of the receipt months of the day of the receipt of the opinion of the Agency. of the opinion of the Agency.

• 475. 

  4. Within three months of 4. Within three months of No change the day of receipt of the the day of receipt of the

  Commission's favourable Commission's favourable opinion, the transmission system opinion, the transmission system operators shall establish the operators shall establish the ENTSO for Electricity and ENTSO for Electricity and adopt adopt and publish its statutes and publish its statutes and rules and rules of procedure. of procedure.

• 476. 

  5. The documents referred to 5. The documents referred to No change in paragraph 1 shall be in paragraph 1 shall be

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

ANNEX TREE.2.B EN

• 477. 

  Article 27

  Tasks of the ENTSO for Electricity

• 478. 

  1. The ENTSO for Electricity 1. The ENTSO for No change shall : Electricity shall:

• 479. 

  (a) elaborate network codes (a) elaborate network codes No change in the areas set out in Article in the areas set out in Article

  55(1) with a view to achieving 55(1) with a view to achieving the objectives set out in Article the objectives set out in Article 25 . 25

• 480. 

  (b) adopt and publish a non(b) adopt and publish a non No change binding Union-wide ten-year binding Union-wide ten-year

  network development plan, network development plan, (Union-wide network (Union-wide network development plan), every two development plan), every two years; years;

• 481. 

  (c) prepare and adopt AM 118 (c) prepare and adopt Accept modified GA proposals related to the (c) prepare and adopt proposals proposals related to the c) prepare and adopt proposals related to the European resource adequacy related to the European resource European resource adequacy European resource adequacy assessment assessment pursuant to Article adequacy assessment pursuant to assessment pursuant to Article pursuant to Article 19 [ ] and for the technical 19(2), (3) and (5) and for the Article 19(1a) and for the technical 19(2), (3) and (5) and for the specifications for cross-border participation in technical specifications for specifications for cross-border technical specifications for capacity mechanisms pursuant to Article cross-border participation in participation in capacity cross-border participation in 21(10);

  capacity mechanisms pursuant mechanisms pursuant to Article capacity mechanisms pursuant to to Article 21(10); 21(10); Article 21(10);

• 482. 

  (d) adopt recommendations (d) adopt recommendations No change relating to the coordination of relating to the coordination of

  technical cooperation between technical cooperation between Union and third-country Union and third-country transmission system operators; transmission system operators;

• 483. 

  (e) adopt a framework for the (e) adopt a framework for the Maintain Council GA cooperation and coordination cooperation and coordination

  between regional operational between [ ] regional security centres; coordinators;

• 484. 

  (f) adopt a proposal defining (f) adopt a proposal defining Maintain Council GA the system operation region the system operation region [ ]

ANNEX TREE.2.B EN

covered by each regional in accordance with the operational centre; provisions of Article 33;

• 485. 

  (fa) cooperate with Maintain Council GA distribution system operators

  and the EU DSO entity. 486. (fb) promote the Accept modified GA

  digitalisation of transmission (fb) promote the digitalisation of networks including transmission networks including deployment deployment of smart grids and of smart grids, efficient real time data intelligent metering systems; acquisition and intelligent metering systems;

• 487. 

  (g) adopt common network (g) adopt common network No change operation tools to ensure operation tools to ensure

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

• 488. 

  (i) the information, including (i) the information, including No change appropriate day ahead, intra-day appropriate day ahead, intra-day

  and real-time information, and real-time information, useful useful for improving operational for improving operational coordination, as well as the coordination, as well as the optimal frequency for the optimal frequency for the collection and sharing of such collection and sharing of such information; information;

• 489. 

  (ii) the technological platform (ii) the technological platform No change for the exchange of information for the exchange of information

  in real time and where in real time and where appropriate, the technological appropriate, the technological platforms for the collection, platforms for the collection, processing and transmission of processing and transmission of

ANNEX TREE.2.B EN

the other information referred to the other information referred to in point (i), as well as for the in point (i), as well as for the implementation of the implementation of the procedures capable of increasing procedures capable of increasing operational coordination operational coordination between transmission system between transmission system operators with a view to such operators with a view to such coordination becoming Unioncoordination becoming Unionwide; wide;

• 490. 

  (iii) how transmission system (iii) how transmission system No change operators make available the operators make available the

  operational information to other operational information to other transmission system operators or transmission system operators or any entity duly mandated to any entity duly mandated to support them to achieve support them to achieve operational coordination, and to operational coordination, and to the Agency; and the Agency; and

• 491. 

  (iv) that transmission system (iv) that transmission system No change operators designate a contact operators designate a contact

  point in charge of answering point in charge of answering inquiries from other inquiries from other transmission system operators or transmission system operators or from any entity duly mandated from any entity duly mandated as referred to in point (iii), or as referred to in point (iii), or from the Agency concerning from the Agency concerning such information. such information.

• 492. 

  (h) adopt an annual work (h) adopt an annual work No change programme; programme;

ANNEX TREE.2.B EN

• 493. 

  AM 119 Propose an alternative EP amendment

  Article 27 – paragraph 1 – point h a (new) h a (new) (h a) contribute to the establishment of (h a) standardise, in cooperation interoperability requirements and nonwith the EU DSO entity, relevant discriminatory and transparent procedures for data formats and protocols to accessing data as provided for in Article 24 of facilitate cross-border exchange of the [Electricity Directive] data;

• 494. 

  (i) adopt an annual report; (i) adopt an annual report; No change

• 495. 

  (j) carry out and adopt (j) carry out and adopt No change seasonal adequacy outlooks seasonal adequacy outlooks

  pursuant to Article 9(2) pursuant to Article 9(2) [Regulation on risk preparedness [Regulation on risk preparedness as proposed by COM(2016) as proposed by COM(2016) 862 i]. 862] .

• 496. 

  AM 120 Reject

  Article 27 – paragraph 1 – point j (partially included in (fb) line 486.) a (new) (j a) promote digitalisation of transmission systems to ensure, inter alia, efficient real time data acquisition and use and smart substations;

• 497. 

  AM 121 Accept modified EP amendment

  Article 27 – paragraph 1 – point j b (new) (j b) promote data management, cyber security (j b) promote data management, and data protection in cooperation with cyber security and data protection relevant authorities and regulated entities;

  in cooperation with relevant authorities and regulated entities;

• 498. 

  AM 122 Accept modified EP amendment

  Article 27 – paragraph 1 – point j c (new) (j c) develop take into account the development (j c) develop demand response in of demand response in fulfilling its tasks; cooperation with DSOs.

ANNEX TREE.2.B EN

• 499. 

  2. The ENTSO for AM 123 2. The ENTSO for Maintain Council GA

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

• 500. 

  3. The ENTSO for 3. The ENTSO for No change

  Electricity shall publish the Electricity shall publish the minutes of its Assembly, Board minutes of its Assembly, Board and Committees meetings and and Committees meetings and provide the public with regular provide the public with regular information on its decisioninformation on its decisionmaking and activities. making and activities.

• 501. 

  4. The annual work 4. The annual work No change programme referred to in (h) of programme referred to in (h) of

  paragraph 1 shall contain a list paragraph 1 shall contain a list and description of the network and description of the network codes to be prepared, a plan on codes to be prepared, a plan on coordination of operation of the coordination of operation of the network, and research and network, and research and development activities, to be development activities, to be realised in that year, and an realised in that year, and an indicative calendar. indicative calendar.

ANNEX TREE.2.B EN

• 502. 

  5. The ENTSO for 5. The ENTSO for No change

  Electricity shall make available Electricity shall make available all information required by the all information required by the Agency to fulfil its tasks under Agency to fulfil its tasks under Article 29(1). Transmission Article 29(1). Transmission system operators shall make system operators shall make available all information available all information required for the ENTSO for required for the ENTSO for Electricity to fulfil its task under Electricity to fulfil its task under sentence 1. sentence 1.

• 503. 

  6. Upon request of the 6. Upon request of the No change

  Commission, the ENTSO for Commission, the ENTSO for Electricity shall give its views to Electricity shall give its views to the Commission on the adoption the Commission on the adoption of the guidelines as laid down in of the guidelines as laid down in Article 57. Article 57.

ANNEX TREE.2.B EN

• 504. 

  Article 28

  Consultations

• 505. 

  1. While preparing the AM 124 1. While preparing the Accept modified EP amendment proposals pursuant to the tasks 1. While preparing the proposals pursuant to the tasks

referred to in Article 27(1) , the proposals pursuant to the tasks referred to in Article 27(1), the 1. While preparing the proposals pursuant

ENTSO for Electricity shall referred to in Article 27(1), the ENTSO for Electricity shall to the tasks referred to in Article 27(1), the

conduct an extensive ENTSO for Electricity shall conduct an extensive ENTSO for Electricity shall conduct an

consultation process, at an early conduct an extensive consultation consultation process, at an early extensive consultation process, at an early stage

stage and in an open and process, at an early stage and stage and in an open and and structured in a way to enable

transparent manner, involving structured in a way to enable transparent manner, involving accommodating stakeholder comments before

all relevant stakeholders , and, in accommodating stakeholder all relevant stakeholders, and, in final adoption and in an open and transparent

particular, the organisations comments before final adoption particular, the organisations manner, involving all relevant stakeholders,

representing all stakeholders, in and in an open and transparent representing all stakeholders, in and, in particular, the organisations representing

accordance with the rules of manner, involving all relevant accordance with the rules of all stakeholders, in accordance with the rules of

procedure referred to in Article stakeholders, and, in particular, the procedure referred to in Article procedure referred to in Article 26 . That

26 . That consultation shall also organisations representing all 26. That consultation shall also consultation shall also involve national

involve national regulatory stakeholders, in accordance with involve national regulatory regulatory authorities and other national

authorities and other national the rules of procedure referred to in authorities and other national authorities, supply and generation undertakings,

authorities, supply and Article 26 . That consultation shall authorities, supply and system users including customers and their

generation undertakings, system also involve national regulatory generation undertakings, system representatives, distribution system operators,

users including customers, authorities and other national users including customers, including relevant industry associations,

distribution system operators, authorities, supply and generation distribution system operators, technical bodies and stakeholder platforms. It

including relevant industry undertakings, system users including relevant industry shall aim at identifying the views and proposals

associations, technical bodies including customers and their associations, technical bodies of all relevant parties during the decisionand

stakeholder platforms. It representatives, distribution system and stakeholder platforms. It making process.

shall aim at identifying the operators, including relevant shall aim at identifying the

views and proposals of all industry associations, technical views and proposals of all

relevant parties during the bodies and stakeholder platforms. It relevant parties during the

decision-making process. shall aim at identifying the views decision-making process.

and proposals of all relevant parties

during the decision-making

process.

ANNEX TREE.2.B EN

• 506. 

  2. All documents and 2. All documents and No change minutes of meetings related to minutes of meetings related to

  the consultations referred to in the consultations referred to in paragraph 1 shall be made paragraph 1 shall be made public. public.

• 507. 

  3. Before adopting the 3. Before adopting the No change proposals pursuant to Article proposals pursuant to Article

  27(1) the ENTSO for Electricity 27(1) the ENTSO for Electricity shall indicate how the shall indicate how the observations received during the observations received during the consultation have been taken consultation have been taken into consideration. It shall into consideration. It shall provide reasons where provide reasons where observations have not been observations have not been taken into account. taken into account.

• 508. 

  Article 29

  Monitoring by the Agency

• 509. 

  1. The Agency shall monitor 1. The Agency shall monitor No change the execution of the tasks the execution of the tasks

  referred to in Article 27(1), (2) referred to in Article 27(1), (2) and (3) of the ENTSO for and (3) of the ENTSO for Electricity and report to the Electricity and report to the Commission. Commission.

ANNEX TREE.2.B EN

• 510. 

  The Agency shall monitor the The Agency shall monitor the No change implementation by the ENTSO implementation by the ENTSO

  for Electricity of network codes for Electricity of network codes elaborated under Article 55(14) . elaborated under Article 55(14). Where the ENTSO for Where the ENTSO for Electricity has failed to Electricity has failed to implement such network codes, implement such network codes, the Agency shall request the the Agency shall request the ENTSO for Electricity to ENTSO for Electricity to provide a duly reasoned provide a duly reasoned explanation as to why it has explanation as to why it has failed to do so. The Agency failed to do so. The Agency shall shall inform the Commission of inform the Commission of that that explanation and provide its explanation and provide its opinion thereon. opinion thereon.

• 511. 

  The Agency shall monitor and The Agency shall monitor and No change analyse the implementation of analyse the implementation of

  the network codes and the the network codes and the guidelines adopted by the guidelines adopted by the Commission as laid down in Commission as laid down in Article 54(1) , and their effect Article 54(1), and their effect on on the harmonisation of the harmonisation of applicable applicable rules aimed at rules aimed at facilitating market facilitating market integration as integration as well as on nonwell as on non-discrimination, discrimination, effective effective competition and the competition and the efficient efficient functioning of the functioning of the market, and market, and report to the report to the Commission. Commission.

• 512. 

  2. The ENTSO for 2. The ENTSO for No change

  Electricity shall submit the draft Electricity shall submit the draft Union-wide network Union-wide network development plan, the draft development plan, the draft annual work programme, annual work programme, including the information including the information

ANNEX TREE.2.B EN

regarding the consultation regarding the consultation process, and the other process, and the other documents referred to in Article documents referred to in Article 27(1) to the Agency for its 27(1) to the Agency for its opinion. opinion.

• 513. 

  Within two months from the day Within two months from the day No change of receipt, the Agency shall of receipt, the Agency shall

  provide a duly reasoned opinion provide a duly reasoned opinion as well as recommendations to as well as recommendations to the ENTSO for Electricity and the ENTSO for Electricity and to to the Commission where it the Commission where it considers that the draft annual considers that the draft annual work programme or the draft work programme or the draft Union-wide network Union-wide network development plan submitted by development plan submitted by the ENTSO for Electricity do the ENTSO for Electricity do not contribute to nonnot contribute to nondiscrimination, effective discrimination, effective competition, the efficient competition, the efficient functioning of the market or a functioning of the market or a sufficient level of cross-border sufficient level of cross-border interconnection open to thirdinterconnection open to thirdparty access. party access.

ANNEX TREE.2.B EN

• 514. 

  Article 30

  Costs

• 515. 

  The costs related to the activities The costs related to the activities No change of the ENTSO for Electricity of the ENTSO for Electricity

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

ANNEX TREE.2.B EN

• 516. 

  Article 31

  Regional cooperation of transmission system operators

• 517. 

  1. Transmission system 1. Transmission system No change operators shall establish regional operators shall establish regional

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

ANNEX TREE.2.B EN

• 518. 

  2. Transmission system 2. Transmission system No change operators shall promote operators shall promote

  operational arrangements in operational arrangements in order to ensure the optimum order to ensure the optimum management of the network and management of the network and shall promote the development shall promote the development of energy exchanges, the of energy exchanges, the coordinated allocation of crosscoordinated allocation of crossborder capacity through nonborder capacity through nondiscriminatory market-based discriminatory market-based solutions, paying due attention solutions, paying due attention to the specific merits of implicit to the specific merits of implicit auctions for short-term auctions for short-term allocations, and the integration allocations, and the integration of balancing and reserve power of balancing and reserve power mechanisms. mechanisms.

• 519. 

  3. For the purposes of AM 125 3. For the purposes of Maintain Council GA achieving the goals set in 3. For the purposes of achieving achieving the goals set in

  paragraphs 1 and 2 of this the goals set in paragraphs 1 and 2 paragraphs 1 and 2 of this Article, the geographical area of this Article, the geographical Article, the geographical area covered by each regional area covered by each regional covered by each regional cooperation structure may be cooperation structure may be cooperation structure may be defined by the Commission, defined by the Commission, taking defined by the Commission, taking into account existing into account existing regional taking into account existing regional cooperation structures. cooperation structures. Each regional cooperation structures. Each Member State shall be Member State shall be allowed to Each Member State shall be allowed to promote cooperation promote cooperation in more than allowed to promote cooperation in more than one geographical one geographical area. The in more than one geographical area. The Commission is Commission is empowered to adopt area. The Commission is empowered to adopt delegated delegated acts in accordance with empowered to adopt [ ] acts in accordance with Article Article 63 concerning the implementing acts in 63 concerning the geographical geographical area covered by each accordance with Article [ ] area covered by each regional regional cooperation structure. For 62(2) concerning the cooperation structure. For that that purpose, the Commission shall geographical area covered by purpose, the Commission shall consult the regulatory authorities, each regional cooperation consult the Agency and the the Agency and the ENTSO for structure. The decisions and

ANNEX TREE.2.B EN

ENTSO for Electricity. Electricity. empowerment referred to in this paragraph are without prejudice to Article 33 and

shall be subject to consultations. For that purpose, the Commission shall consult the Agency and the ENTSO for Electricity.

• 520. 

  Article 32 Article 32 Maintain Council GA

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

• 521. 

  1. By [OP: twelve months AM 126 1. By [OP: twelve months Maintain Council GA after entry into force], all 1. By [OP: twelve months after after entry into force], all

  transmission system operators entry into force], regional transmission system operators of shall establish regional coordination centres shall in a [ ] system operation region operational centres in addition to other tasks that are laid shall submit a proposal for the accordance with the criteria set out in Article 34 of this enhancement of Regional out in this chapter. Regional Regulation, replace and cover the Security Coordinators operational centres shall be functions of regional security established pursuant to the established in the territory of coordinators established in System Operation Guideline one of the Member States of the accordance with the adopted on the basis of Article region where it will operate. Regulation...[the Commission 18 of Regulation 714/2009 i for Regulation establishing a approval by the respective guideline on Electricity regulatory authorities. Transmission System Operation] pursuant to the criteria set out in this chapter.

ANNEX TREE.2.B EN

• 522. 

  If a region is not covered by an Reject existing or a planned regional

  security coordinator, the transmission system operators of that region shall establish a regional coordination centre.

• 523. 

  All transmission system operators Reject shall adhere to a single regional

  coordination centre. 524. All transmission system operators Reject

  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.

• 525. 

  The regulatory authorities of the Reject 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]

• 526. 

  The proposals referred to the forth The proposal shall contain the Maintain Council GA subparagraph shall include the following elements:

  following information:

ANNEX TREE.2.B EN

• 527. 

  (a) Member State where the a) the participating Accept modified GA regional coordination centre are to Member States and TSOs;

  be located; a) the participating Member State where the seat of the [Regional Security Coordinator] will be located and the participating TSOs;

• 528. 

  (b) the organisational, financial b) the organisational, Accept and operational arrangements financial and operational (identical texts) necessary to ensure the efficient, arrangements necessary to

  secure and reliable operation of ensure the efficient, secure and the interconnected transmission reliable operation of the system; interconnected transmission system;

• 529. 

  (c) an implementation plan for the c) an implementation plan Maintain Council GA entry into operation of the regional for the entry into operation of

  coordination centres; the Regional Security Coordinators;

• 530. 

  (d) the statutes and rules of d) the statutes and rules of Maintain Council GA procedure of regional coordination procedure of Regional

  centres; Security Coordinators; 531. (e) a description of cooperative e) a description of Accept

  processes in accordance with cooperative processes in (identical texts) Article 35; accordance with Article 35;

• 532. 

  (f) a description of the f) a description of the Maintain Council GA arrangements concerning the arrangements concerning the

  liability of regional coordination liability of Regional Security centres in accordance with Article Coordinators in accordance 44. with Article 44.

ANNEX TREE.2.B EN

• 533. 

  2. Regional operational 2. [ ] Regional Security Maintain Council GA centres shall be organised in a Coordinators shall be

  legal form as referred to in established in the system Article 1 of Directive operation region where it will 2009/101/EC of the European carry out its tasks and shall be Parliament and of the Council. 21 organised in a legal form as referred to in [ ] Annex II of Directive [ ] (EU) 2017/1132 of the European Parliament and of the Council 22 .

• 534. 

  AM 127 Reject

  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].

• 535. 

  AM 128 Accept modified AM

  Article 32 – paragraph 2 a (new) 2 a. In performing its [ ] tasks under Union 2 a. In performing its functions law, the Regional Security Coordinators [ ] under Union law, the regional shall act independently from individual coordination centres shall act national interests and from the interests of independently from individual transmission system operators. national interests and from the interests of transmission system operators.

21 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).

22 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).

ANNEX TREE.2.B EN

• 536. 

  3. Regional operational AM 129 3. [ ] Transmission system Maintain Council GA centres shall complement the 3. Regional coordination operators shall be responsible

  role of transmission system centres shall complement the role for managing electricity flows operators by performing of transmission system operators by and ensure a secure, reliable functions of regional relevance. performing functions of regional and efficient electricity system They shall establish operational relevance. The transmission system in accordance with Article 40 arrangements in order to ensure operators shall be responsible for of the [recast of Directive the efficient, secure and reliable managing electricity flows and 2009/72/EC as proposed by operation of the interconnected ensuring a secure, reliable and COM(2016) 864 i/2] and with transmission system. efficient electricity system in national legislation. Regional accordance with Article 40 of the Security Coordinators shall Directive (EU) [recast of Directive complement the role of 2009/72/EC as proposed by transmission system operators COM(2016) 864 i/2]. by performing [ ] tasks of regional relevance [ ] assigned to them in accordance with Article 34.

• 537. 

  4a. Regional Security Maintain Council GA

  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 [+].

ANNEX TREE.2.B EN

• 538. 

  Article 33 AM 130 Article 33 Maintain Council GA

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

• 539. 

  0a. For the purpose of this Maintain Council GA

  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 i shall be referred to as system operation regions.

• 540. 

  0b. Regional security Maintain Council GA 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.

ANNEX TREE.2.B EN

• 541. 

  1. By [OP: six months after AM 131 1. By [OP: six months after Maintain Council GA entry into force of this 1. By [OP: six months after entry into force of this

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

• 542. 

  1a. Where a Member State Maintain Council GA 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.

• 543. 

  1b. Each of the Regional Maintain Council GA

  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.

ANNEX TREE.2.B EN

• 544. 

  (a) The grid topology, [ ] Maintain Council GA including the degree of

  interconnection and of interdependency of the power systems in terms of flows;

• 545. 

  (b) the synchronous [ ] Maintain Council GA connection of the systems;

• 546. 

  (c) the size of the region, [ ] Maintain Council GA which shall cover at least one

  capacity calculation region; 547. (d) the geographical [ ] Maintain Council GA

  optimization of balancing reserves.

• 548. 

  2. Within three months of 2. Within three months of Maintain Council GA receipt, the Agency shall either receipt of the proposal in

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

ANNEX TREE.2.B EN

• 549. 

  Article 34 AM 132 Article 34 Maintain Council GA

  Tasks of regional operational Article 34 – title Tasks of [ ] Regional Security centres Tasks of regional coordination Coordinators centres

• 550. 

  1. Each regional operational AM 133 1. Each Regional [ ] Maintain Council GA centre shall perform all the 1. Each regional coordination security coordinator shall

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

• 551. 

  (a) coordinated capacity (a) coordinated capacity (a) coordinated capacity Maintain Council GA calculation; calculation in accordance with the calculation in accordance with

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

• 552. 

  (b) coordinated security (b) coordinated security analysis (b) coordinated security Maintain Council GA analysis; in accordance with the analysis in accordance with the

  methodologies developed pursuant methodologies developed to Articles 75 and 76 of pursuant to the System Commission Regulation (EU) Operation Guideline adopted 2017/1485 1a ; on the basis of Article 18 of

  1a

   Commission Regulation (EU) Regulation 714/2009 i; 2017/1485 of 2 August 2017 establishing a guideline on electricity transmission system operation (OJ L 220, 25.8.2017, p.

  1).

ANNEX TREE.2.B EN

• 553. 

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

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

• 554. 

  (d) consistency assessment of (d) consistency assessment of (d) support the consistency Maintain Council GA transmission system operators' transmission system operators' assessment of transmission

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

• 555. 

  (da) regional week ahead to Maintain Council GA day-ahead 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 i;

ANNEX TREE.2.B EN

• 556. 

  (db) regional outage planning Maintain Council GA coordination in accordance

  with the procedures set out in the System Operation Guideline adopted on the basis of Article 18 of Regulation 714/2009;

• 557. 

  (dc) training and Maintain Council GA certification of staff working

  for Regional Security Coordinators[+];

• 558. 

  (e) coordination and (e) support the coordination Maintain Council GA optimization of regional and optimization of regional

  restoration; restoration as requested by transmission system operators;

• 559. 

  (f) post-operation and post(f) post-operation and post Maintain Council GA disturbances analysis and disturbances analysis and

  reporting; reporting; 560. (g) regional sizing of reserve [ ] Maintain Council GA

  capacity; 561. (h) facilitate the regional (h) calculation of the regional [ ] Maintain Council GA

  procurement of balancing balancing capacity; capacity;

ANNEX TREE.2.B EN

• 562. 

  (i) regional week ahead to (i) regional week ahead to [ ] Maintain Council GA intraday system adequacy intraday system adequacy forecasts

  forecasts and preparation of risk and preparation of risk reducing reducing actions; actions in 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];

• 563. 

  (j) outage planning (j) outage planning coordination [ ] Maintain Council GA coordination; in accordance with the procedures

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

• 564. 

  (k) optimisation of (k) optimisation of compensation [ ] Maintain Council GA compensation mechanisms mechanisms between transmission

  between transmission system system operators; operators;

• 565. 

  (l) training and certification; (l) training and certification; [ ] Maintain Council GA

• 566. 

  (m) identification of regional deleted (m) identification of regional Maintain Council GA crisis scenarios according to crisis scenarios if and to the

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

ANNEX TREE.2.B EN

• 567. 

  (n) preparation and carrying (n) preparation and carrying Maintain Council GA out of yearly crisis simulations out of yearly crisis simulations

  in cooperation with competent in cooperation with competent authorities pursuant to Article authorities pursuant to Article 12(3) of [Regulation on risk 12(3) of [Regulation on risk preparedness as proposed by preparedness as proposed by COM(2016) 862 i]; COM(2016) 862 i];

• 568. 

  (o) tasks related to the (o) tasks related to the [ ] Maintain Council GA identification of regional crisis identification of regional crisis

  scenarios if and to the extent scenarios if and to the extent they they are delegated to the are delegated to the regional regional operational centres coordination centres pursuant to pursuant to Article 6(1) of Article 6(1) of [Regulation on risk [Regulation on risk preparedness preparedness as proposed by as proposed by COM(2016) COM(2016) 862 i]; 862];

• 569. 

  (p) tasks related to the (p) tasks related to the seasonal (p) tasks related to the Maintain Council GA seasonal adequacy outlooks if adequacy outlooks if and to the seasonal adequacy outlooks if

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

• 570. 

  (q) calculate the maximum (q) calculate the value for Maintain Council GA entry capacity available for the the maximum entry capacity

  participation of foreign capacity available for the participation of in capacity mechanisms foreign capacity in capacity pursuant to Article 21(6). mechanisms [ ] for the purpose to issue an recommendation pursuant to Article 21(6).

ANNEX TREE.2.B EN

• 571. 

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

• 572. 

  2. The Commission may add AM 134 2. [ ] Maintain Council GA other functions to the regional 2. The Commission may add Upon joint proposal of

  operational centres, not other functions to the regional regulatory authorities, involving decision making coordination centres, not involving following consultation with the power, pursuant to Chapter VII decision making power, pursuant to transmission system operators of this Regulation. Chapter VII of this Regulation. and the Regional Security 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.

ANNEX TREE.2.B EN

• 573. 

  3. Transmission system AM 135 3. Transmission system Maintain Council GA operators shall provide their 3. Transmission system operators shall provide their [ ]

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

• 574. 

  4. Regional operational AM 136 4. [ ] Regional Security Maintain Council GA centres shall provide 4. Regional coordination Coordinators shall provide

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

• 575. 

  For the functions set out in this Maintain Council GA

  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.

ANNEX TREE.2.B EN

• 576. 

  Article 35 AM 137 Article 35 Maintain Council GA

  Cooperation within regional Cooperation within and among Cooperation within [ ] and operational centres regional coordination centres between Regional Security Coordinators

• 577. 

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

  on: 578. (a) working arrangements to (a) working arrangements to Maintain Council GA

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

• 579. 

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

  Security Coordinators;

ANNEX TREE.2.B EN

• 580. 

  (c) a procedure for the (c) a procedure for the adoption (c) a procedure for the Maintain Council GA adoption of decisions and and revision of decisions and adoption of [ ] coordinated

  recommendations in accordance recommendations in accordance actions and recommendations in with Article 38; with Article 38 that ensures accordance with Article 38; equitable treatment between members of the regional operational centre;

• 581. 

  (d) a procedure for the deleted (d) a procedure for the Maintain Council GA revision of decisions and revision of [ ] coordinated

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

• 582. 

  Article 36

  Working arrangements

• 583. 

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

  revision of these working arrangements.

ANNEX TREE.2.B EN

• 584. 

  2. Regional operational AM 139 2. [ ] Regional Security Maintain Council GA centres shall ensure that the 2. Regional coordination Coordinators shall ensure that

  working arrangements contain centres shall ensure that the the working arrangements rules for the notification of working arrangements contain rules contain rules for the notification parties concerned. for the notification of parties of parties concerned. concerned.

• 585. 

  Article 37

  Consultation procedure

• 586. 

  Regional operational centres AM 140 1. [ ] Regional Security Maintain Council GA shall develop a procedure to Regional coordination centres shall Coordinators shall develop a

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

ANNEX TREE.2.B EN

• 587. 

  2. If necessary, the Maintain Council GA

  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 dayto-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.

ANNEX TREE.2.B EN

• 588. 

  AM 141 Accept modified AM

  Article 37 a (new) Transparency Article 37a 1. Regional Security Coordinators [ ] shall Transparency organise a process for stakeholder 1. Regional coordination involvement and organise regular meetings centres shall organise a process with stakeholders to discuss matters relating to for stakeholder involvement and the efficient, secure and reliable operation of organise regular meetings with the interconnected system as well as to identify stakeholders to discuss matters shortcomings and propose improvements; relating to the efficient, secure and reliable operation of the interconnected system as well as to identify shortcomings and propose improvements;

• 589. 

  2. ENTSO for Electricity and Accept modified AM regional operational centres shall 2. ENTSO for Electricity and Regional operate in full transparency Security Coordinators [ ] shall operate in full towards stakeholders and the transparency towards stakeholders and the general public. All relevant general public. All relevant documentation documentation shall be published shall be published on the website of the on the website of the respective respective Regional Security Coordinator [ ]. 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.

ANNEX TREE.2.B EN

• 590. 

  Article 38 AM 142 Article 38 Maintain Council GA

  Adoption of decisions and Article 38 – title [ ] Coordinated actions and recommendations Adoption and revisions of recommendations

  decisions and recommendations

• 591. 

  1. Regional operational AM 143 1. [ ] The transmission Maintain Council GA centres shall develop a 1. The transmission system system operators of a system

  procedure for the adoption of operators of each regional operation region shall develop decisions and recommendations. coordination centre shall develop a procedure for the adoption of [ procedures for the adoption and ] coordinated actions and revision of decisions and recommendations put forward recommendations that ensures by Regional Security geographically balanced Coordinators in accordance representation and equitable with the criteria set out in treatment of members of the paragraphs 2 to 4. regional coordination centre.

• 592. 

  2. Regional operational AM 144 2. [ ] Regional Security Maintain Council GA centres shall adopt binding 2. Regional coordination Coordinators shall [ ] set-out

  decisions addressed to the centres shall adopt binding coordinated actions addressed transmission system operators in decisions addressed to the to the transmission system respect of the functions referred transmission system operators in operators in respect of the [ ] to in points (a), (b), (g) and (q) respect of the functions referred to tasks referred to in points (a) of Article 34(1). Transmission in (a) and (b) of Article 34(1). and (b), [ ] of Article 34(1). system operators shall Transmission system operators Transmission system operators implement the binding decisions shall implement the binding may decide not to [ ] issued by the regional decisions issued by the regional implement the coordinated operational centres except in coordination centres except in actions [ ] issued by the [ ] cases when the safety of the cases where the implementation of Regional Security system will be negatively the decision would result in a Coordinators where the affected. violation of operational security implementation of the limits defined by each coordinated actions would transmission system operator result in a violation of the pursuant to Article 25 of operational security limits Commission Regulation (EU) defined by each transmission 2017/1485. system operator in accordance with [ ] the System Operation

ANNEX TREE.2.B EN

Guideline adopted on the basis of Article 18 of Regulation 714/2009.

• 593. 

  2a. Where following the Maintain Council GA 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.

• 594. 

  3. Regional operational AM 145 3. [ ] Regional Security Maintain Council GA centres shall adopt 3. Regional coordination Coordinators shall adopt

  recommendations addressed to centres shall adopt recommendations addressed to the transmission system recommendations addressed to the the transmission system operators for the functions transmission system operators for operators for the [ ] tasks referred to in points (c) to (f) the functions listed in Article 34(1) referred to in [ ] Article 34(1) and (h) to (p) of Article 34(1). which are not referred to in except for tasks covered in paragraph 2 of this Article. paragraph 2 of this Article.

ANNEX TREE.2.B EN

• 595. 

  AM 146 Reject

  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.

• 596. 

  AM 147 Reject

  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.

• 597. 

  AM 148 Reject

  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.

ANNEX TREE.2.B EN

• 598. 

  4. The regulatory authorities AM 149 4. Upon proposal of Maintain Council GA of a system operation region 4. The regulatory authorities of regulatory authority, following

  may jointly decide to grant a system operation region may consultation with the binding decision-making powers jointly decide to grant binding transmission system operators to the regional operational decision-making powers to the and Regional Security centre for one or more of the regional coordination centre for Coordinators the [ ] Member functions provided for in points one or more of the functions listed States of a system operation (c) to (f) and (h) to (l) of Article in Article 34(1) and which are not region may jointly decide to 34(1). referred to in paragraph 2 of this grant the competence for Article. coordinated actions or binding decision-making powers to the [ ] Regional Security Coordinators for one or more of the [ ] tasks provided for in [ ] Article 34(1).

• 599. 

  Article 39 AM 150 Article 39 Maintain Council GA

  Revision of decisions and deleted Revision of [ ] coordinated recommendations actions and recommendations

• 600. 

  1. Regional operational 1. [ ] Regional Security Maintain Council GA centres shall develop a Coordinators shall develop a

  procedure for the revision of procedure for the revision of [ ] decisions and recommendations. coordinated actions and recommendations referred to tasks described in Article 34.

• 601. 

  2. The procedure shall be 2. The procedure shall be Maintain Council GA triggered at the request of one or triggered at the request of one or

  more of the transmission system more of the transmission system operators of the system operators of the system operation region. Following the operation region. Following the revision of the decision or revision of the [ ] coordinated recommendation, regional action or recommendation, [ ] operational centres shall confirm Regional Security or modify the measure. Coordinators [+] shall confirm or modify the measure.

ANNEX TREE.2.B EN

• 602. 

  3. Where the measure 3. Where the measure Maintain Council GA subject to revision is a binding subject to revision is a [ ]

  decision in accordance with coordinated action in Article 38(2), the request for accordance with Article 38(2), revision shall not suspend the the request for revision shall not decision except in cases when suspend the [ ] coordinated the safety of the system will be action except in cases [ ] where negatively affected. the implementation 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

• 603. 

  4. Where the measure 4. Where following the [ ] Maintain Council GA subject to revision is a revision [ ] of the

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

ANNEX TREE.2.B EN

• 604. 

  Article 40 AM 151 Article 40 Maintain Council GA

  Management board of regional Article 40 – title Management board of [ ] operational centres Management board of regional Regional Security Coordinators coordination centres

• 605. 

  1. In order to adopt AM 152 1. In order to adopt measures Maintain Council GA measures related to their 1. In order to adopt measures related to their governance and

  governance and to monitor their related to their governance and to to monitor their performance, performance, the regional monitor their performance, the the [ ] Regional Security operational centres shall regional coordination centres shall Coordinators shall establish a establish a management board. establish a management board. management board.

• 606. 

  2. The management board AM 153 2. The management board Accept modified AM shall be composed of members 2. The management board shall shall be composed of members 2. The management board shall be representing the transmission be composed of members representing the transmission composed of members representing all the system operators and of representing all the transmission system operators [ ]. transmission system operators [ ] that observers representing the system operators of the system participate in the respective Regional regulatory authorities of the operation region. The composition Security Coordinators. system operation region. The of the management board shall be

  representatives of the regulatory geographically balanced. authorities shall have no voting rights.

• 607. 

  3. The management board AM 154 3. The management board No change shall be responsible for: 3. The management board shall shall be responsible for:

  be responsible for: 608. (a) drafting and endorsing the (a) drafting and endorsing the (a) drafting and endorsing the Maintain Council GA

  statutes and rules of procedure statutes and rules of procedure of statutes and rules of procedure of the regional operational the regional coordination centre; of the [ ] Regional Security centre; Coordinators;

ANNEX TREE.2.B EN

• 609. 

  (b) deciding upon and (b) [ ] implementing the (b) deciding upon and Maintain Council GA implementing the organisational organisational structure; implementing the organisational

  structure; structure; 610. (c) preparing and endorsing (c) preparing and endorsing Maintain Council GA

  the annual budget; the annual budget; 611. (d) developing and endorsing (d) developing and endorsing Maintain Council GA

  the cooperative decision-making the cooperative [ ] processes in processes in accordance with accordance with Article 35. Article 35.

• 612. 

  4. The competences of the AM 155 4. The competences of the Maintain Council GA management board shall exclude 4. The competences of the management board shall exclude

  those that are related to the daymanagement board shall not those that are related to the dayto-day activities of regional include decisions related to the to-day activities of [ ] Regional operational centres and the execution of the functions of Security Coordinators and the performance of its functions. regional coordination centres. performance of its tasks [ ].

• 613. 

  Article 41

  Organisational structure

• 614. 

  1. Regional operational AM 156

  centres shall set up and manage 1. The transmission system 1. Transmission system

  Accept in part and modified AM instead of GA

  their organisation according to a operators of a system operation operators shall establish the

  • 1. 

    The transmission system operators of a

  structure that supports the safety region shall set up the necessary arrangements for

  system operation region shall set up the

  of their functions. organisational structure of Regional security coordinators

  organisational structure of Regional Security Coordinators that supports the safety of their

  Their organisational structure regional coordination centres. to [ ] manage their tasks. Their organisational structure shall shall specify: Their organisational structure shall organisation according to a specify:

  specify: structure that supports the safety of their tasks [ ].

  Their organisational structure shall specify:

ANNEX TREE.2.B EN

• 615. 

  (a) the authority, duties and AM 157 (a) the authority, duties and Maintain Council GA responsibilities of the (a) the authority, duties and responsibilities of the

  management personnel; responsibilities of the [ ] personnel; management personnel; 616. (b) the relationship and (b) the relationship and No change

  reporting lines between different reporting lines between different parts and processes of the parts and processes of the organisation. organisation.

• 617. 

  2. Regional operational AM 158 2. [ ] Regional Security Accept in part centres may set up regional 2. Regional coordination Coordinators may set up 2. [ ] Regional Security Coordinators desks to address local centres may set up regional desks to regional desks to address [ ] may set up regional desks to address [ ] subspecificities or back-up address local specificities or backsub-regional specificities or regional specificities or back-up regional operational centres for the up coordination centres for the back-up regional security security coordinators for the efficient and efficient and reliable exercise of efficient and reliable exercise of coordinators for the efficient and reliable exercise of their [ ] tasks where their functions. their functions where proven to be reliable exercise of their [ ] proven to be strictly necessary. strictly necessary. tasks.

ANNEX TREE.2.B EN

• 618. 

  Article 42

  Equipment and staff

• 619. 

  Regional operational centres AM 159 [ ] Regional Security Maintain Council GA shall be equipped with all the Regional coordination centres shall Coordinators shall be equipped

  human, technical, physical and be equipped with all the human, with all the human, technical, financial resources necessary for technical, physical and financial physical and financial resources fulfilling their obligations under resources necessary for fulfilling necessary for fulfilling their this Regulation and carrying out their obligations under this obligations under this their functions. Regulation and carrying out their Regulation and carrying out functions independently and their [ ] tasks. 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.

• 620. 

  Article 43

  Monitoring and reporting

• 621. 

  1. Regional operational AM 160 1. [ ] Regional Security Maintain Council GA centres shall establish a process 1. Regional coordination Coordinators shall establish a

  for the continuous monitoring of centres shall establish a process for process for the continuous at least: the continuous monitoring of at monitoring of at least: least:

• 622. 

  (a) their operational (a) their operational (a) their operational No change performance; performance; performance;

ANNEX TREE.2.B EN

• 623. 

  (b) the decisions and (b) the decisions and (b) the [ ] coordinated Maintain Council GA recommendations issued and the recommendations issued in actions and recommendations

  outcome achieved; particular on those where the issued the degree of transmission system operators implementation of the have deviated and the outcome coordinated actions and achieved; recommendations by the transmission system operators and the outcome achieved;

• 624. 

  (c) the effectiveness and (c) the effectiveness and Maintain Council GA efficiency of each of the efficiency of each of the [ ]

  functions for which they are tasks for which they are responsible. responsible.

• 625. 

  2. Regional operational AM 161 2. [ ] Regional Security Maintain Council GA centres shall submit to the deleted Coordinators shall submit to

  Agency and to the regulatory the Agency [ ] to the regulatory authorities of the system authorities and to the operation region the data transmission system operators resulting from their continuous of the system operation region monitoring at least annually. the data resulting from their continuous monitoring at least annually.

• 626. 

  3. Regional operational AM 162 3. [ ] Regional Security Maintain Council GA centres shall establish their costs 3. Regional coordination Coordinators shall establish

  in a transparent manner and centres shall establish their costs in their costs in a transparent report them to the Agency and a transparent manner and report manner and report them to the to the regulatory authorities of them to the Agency and to the Agency and to the regulatory the system operation region. regulatory authorities of the system authorities of the system operation region. operation region.

ANNEX TREE.2.B EN

• 627. 

  4. Regional operational AM 163 4. [ ] Regional Security Maintain Council GA centres shall submit an annual 4. Regional coordination Coordinators shall submit an report concerning their centres shall submit an annual annual report concerning their performance to ENTSO for report containing relevant performance to ENTSO for Electricity, the Agency, the monitoring data pursuant to Electricity, the Agency, the regulatory authorities of the paragraph 1 of this Article and regulatory authorities of the system operation region and the information on their performance system operation region and the Electricity Coordination Group to ENTSO for Electricity, the Electricity Coordination Group established pursuant to Article 1 Agency, the regulatory authorities established pursuant to Article 1 of Commission Decision 2012/C of the system operation region and of Commission Decision 2012/C 353/02 23 . the Electricity Coordination Group 353/02

  24

  . established pursuant to Article 1 of

  Commission Decision 2012/C 353/02.

• 628. 

  5. Regional operational AM 164 5. [ ] Regional Security Maintain Council GA centres shall report 5. Regional coordination Coordinators shall report

  shortcomings identified in the centres shall report shortcomings shortcomings identified in the monitoring process under identified in the monitoring process monitoring process under paragraph 1 to ENTSO for under paragraph 1 to ENTSO for paragraph 1 to ENTSO for electricity, the regulatory electricity, the regulatory electricity, the regulatory authorities of the system authorities of the system operation authorities of the region the operation region, the Agency region, the Agency and the Agency and the competent and the competent authorities of competent authorities of Member authorities of Member States Member States responsible for States responsible for the responsible for the prevention the prevention and management prevention and management of and management of crisis of crisis situations. crisis situations. situations. Following this report, the regulatory authorities of the region may propose to the Regional Security Coordinators measures to address the shortcomings.

23 Commission Decision of 15 November 2012 setting up the Electricity Coordination Group (OJ C 353, 17.11.2012, p.2).

24 Commission Decision of 15 November 2012 setting up the Electricity Coordination Group (OJ C 353, 17.11.2012, p.2).

ANNEX TREE.2.B EN

• 629. 

  AM 165 Accept with one change:

  Article 43 – paragraph 5 a (new) 5 a. Without prejudice to the principle of 5 a. Without prejudice to the confidentiality and the need to preserve principle of confidentiality and the security and commercially sensitive need to preserve security and information Regional Security Coordinators[ commercially sensitive ] shall make public the reports referred to in information regional coordination paragraphs 4 and 5. centres shall make public the reports referred to in paragraphs 4 and 5.

• 630. 

  Article 44

  Liability

• 631. 

  Regional operational centres AM 166 [ ] In the proposal for the Maintain Council GA shall take the necessary steps to The proposal for the establishment establishment of regional

  cover liability related to the of regional coordination centres in security coordinators in execution of their tasks, in accordance with Article 32, shall accordance with Article 32, the particular, where they adopt include arrangements to cover transmission system operators decisions binding on liability related to the execution of of the system operation region transmission system operators. the tasks of the regional shall take the necessary steps to The method employed to coordination centre. The method cover liability related to the provide the cover shall take into employed to provide the cover shall execution of their tasks. [ ] The account the legal status of the take into account the legal status of method employed to provide the regional operational centre and the regional coordination centre cover shall take into account the the level of commercial and the level of commercial legal status of the [ ] Regional insurance cover available. insurance cover available. Security Coordinators and the level of commercial insurance cover available.

ANNEX TREE.2.B EN

• 632. 

  Article 45

  Ten-year network development plan

• 633. 

  1. The Union-wide 1. The Union-wide network network development plan development plan referred to

  referred to under Article under Article 27(1)(b) shall 27(1)(b) shall include the include the modelling of the modelling of the integrated integrated network, scenario network, scenario development development and an assessment and an assessment of the of the resilience of the system. resilience of the system. The Union-wide network The Union-wide network development plan shall, in development plan shall, in particular: particular:

• 634. 

  (a) build on national (a) build on national investment plans, taking into investment plans, taking into account regional investment account regional investment plans as referred to in Article plans as referred to in Article 12(1), and, if appropriate, Union 12(1), and, if appropriate, Union aspects of network planning as aspects of network planning as set out in Regulation (EU) No set out in Regulation (EU) No 347/2013 i of the European 347/2013 of the European Parliament and of the Council Parliament and of the Council ; 25 ; it shall be subject to a costit shall be subject to a costbenefit analysis using the benefit analysis using the methodology established as set methodology established as set out in Article 11 of that out in Article 11 of that Regulation; Regulation;

25 Regulation (EU) No 347/2013 i of the European Parliament and of the Council of 17 April 2013 on guidelines for trans-European energy infrastructure (OJ L 115, 25.4.2013, p. 39).

ANNEX TREE.2.B EN

• 635. 

  (b) regarding cross-border (b) regarding cross-border interconnections, also build on interconnections, also build on the reasonable needs of different the reasonable needs of different system users and integrate longsystem users and integrate longterm commitments from term commitments from

  investors referred to in Articles investors referred to in Articles 44 and 51 of [recast of Directive 44 and 51 of [recast of Directive 2009/72/EC i as proposed by 2009/72/EC as proposed by COM(2016) 864 i/2]; and COM(2016) 864 i/2]; and

• 636. 

  (c) identify investment gaps, (c) identify investment gaps, notably with respect to crossnotably with respect to crossborder

  capacities. border capacities. 637. In regard to point (c) , a review In regard to point (c) , a review

  of barriers to the increase of of barriers to the increase of cross-border capacity of the cross-border capacity of the network arising from different network arising from different approval procedures or practices approval procedures or practices may be annexed to the Unionmay be annexed to the Unionwide network development plan. wide network development plan.

• 638. 

  2. The Agency shall provide 2. The Agency shall provide an opinion on the national tenan opinion on the national tenyear

  network development plans year network development plans to assess their consistency with to assess their consistency with the Union-wide network the Union-wide network development plan. If the Agency development plan. If the Agency identifies inconsistencies identifies inconsistencies between a national ten-year between a national ten-year network development plan and network development plan and the Union-wide network the Union-wide network development plan, it shall development plan, it shall recommend amending the recommend amending the national ten-year network national ten-year network development plan or the Uniondevelopment plan or the Unionwide network development plan wide network development plan as appropriate. If such national as appropriate. If such national

ANNEX TREE.2.B EN

ten-year network development ten-year network development plan is elaborated in accordance plan is elaborated in accordance with Article 51 of [recast of with Article 51 of [recast of Directive 2009/72/EC i as Directive 2009/72/EC i as proposed by COM(2016) proposed by COM(2016) 864 i/2], 864/2], the Agency shall the Agency shall recommend recommend that the competent that the competent national national regulatory authority regulatory authority amend the amend the national ten-year national ten-year network network development plan in development plan in accordance accordance with Article 51(7) of with Article 51(7) of that that Directive and inform the Directive and inform the Commission thereof. Commission thereof.

ANNEX TREE.2.B EN

• 639. 

  Article 46

  Inter-transmission system operator compensation mechanism

• 640. 

  1. Transmission system 1. Transmission system

  operators shall receive operators shall receive compensation for costs incurred compensation for costs incurred as a result of hosting crossas a result of hosting crossborder flows of electricity on border flows of electricity on their networks. their networks.

• 641. 

  2. The compensation 2. The compensation referred to in paragraph 1 shall referred to in paragraph 1 shall be paid by the operators of be paid by the operators of national transmission systems national transmission systems from which cross-border flows from which cross-border flows originate and the systems where originate and the systems where those flows end. those flows end.

• 642. 

  3. Compensation payments 3. Compensation payments

  shall be made on a regular basis shall be made on a regular basis with regard to a given period of with regard to a given period of time in the past. Ex-post time in the past. Ex-post adjustments of compensation adjustments of compensation paid shall be made where paid shall be made where necessary, to reflect costs necessary, to reflect costs actually incurred. actually incurred.

• 643. 

  The first period of time for The first period of time for

  which compensation payments which compensation payments shall be made shall be shall be made shall be determined in the guidelines determined in the guidelines referred to in Article 57. referred to in Article 57.

• 644. 

  4. The Commission shall 4. The Commission shall adopt delegated acts in adopt delegated acts in

  accordance with Article 63 accordance with Article 63 concerning the amounts of concerning the amounts of compensation payments compensation payments payable. payable.

ANNEX TREE.2.B EN

• 645. 

  5. The magnitude of cross 5. The magnitude of crossborder flows hosted and the border flows hosted and the

  magnitude of cross-border flows magnitude of cross-border flows designated as originating and/or designated as originating and/or ending in national transmission ending in national transmission systems shall be determined on systems shall be determined on the basis of the physical flows of the basis of the physical flows of electricity actually measured electricity actually measured during a given period of time. during a given period of time.

• 646. 

  6. The costs incurred as a 6. The costs incurred as a result of hosting cross-border result of hosting cross-border flows shall be established on the flows shall be established on the basis of the forward-looking basis of the forward-looking long-run average incremental long-run average incremental costs, taking into account losses, costs, taking into account losses, investment in new investment in new infrastructure, infrastructure, and an and an appropriate proportion of appropriate proportion of the the cost of existing

  cost of existing infrastructure, in infrastructure, in so far as such so far as such infrastructure is infrastructure is used for the used for the transmission of transmission of cross-border cross-border flows, in particular flows, in particular taking into taking into account the need to account the need to guarantee guarantee security of supply. security of supply. When When establishing the costs establishing the costs incurred, incurred, recognised standardrecognised standard-costing costing methodologies shall be methodologies shall be used. used. Benefits that a network Benefits that a network incurs as incurs as a result of hosting a result of hosting cross-border cross-border flows shall be flows shall be taken into account taken into account to reduce the to reduce the compensation compensation received. received.

ANNEX TREE.2.B EN

• 647. 

  7. For the purpose of the 7. For the purpose of the inter-transmission system inter-transmission system

  operator compensation operator compensation mechanism only, where mechanism only, where transmission networks of two or transmission networks of two or more Member States form part, more Member States form part, in whole or in part, of a single in whole or in part, of a single control block, the control block control block, the control block as a whole shall be considered as a whole shall be considered as as forming part of the forming part of the transmission transmission network of one of network of one of the Member the Member States concerned, in States concerned, in order to order to avoid flows within avoid flows within control control blocks being considered blocks being considered as as cross-border flows under cross-border flows under Article Article 2(2)(b) and giving rise to 2(2)(b) and giving rise to compensation payments under compensation payments under paragraph 1 of this Article . The paragraph 1 of this Article. The regulatory authorities of the regulatory authorities of the Member States concerned may Member States concerned may decide which of the Member decide which of the Member States concerned shall be that of States concerned shall be that of which the control block as a which the control block as a whole is to be considered to whole is to be considered to form part. form part.

ANNEX TREE.2.B EN

• 648. 

  Article 47

  Provision of information

• 649. 

  1. Transmission system 1. Transmission system operators shall put in place operators shall put in place coordination and information coordination and information exchange mechanisms to ensure exchange mechanisms to ensure the security of the networks in the security of the networks in the context of congestion the context of congestion

  management. management. 650. 2. The safety, operational 2. The safety, operational

  and planning standards used by and planning standards used by transmission system operators transmission system operators shall be made public. The shall be made public. The information published shall information published shall include a general scheme for the include a general scheme for the calculation of the total transfer calculation of the total transfer capacity and the transmission capacity and the transmission reliability margin based upon reliability margin based upon the the electrical and physical electrical and physical features features of the network. Such of the network. Such schemes schemes shall be subject to the shall be subject to the approval approval of the regulatory of the regulatory authorities. authorities.

ANNEX TREE.2.B EN

• 651. 

  3. Transmission system 3. Transmission system operators shall publish estimates operators shall publish estimates of available transfer capacity for of available transfer capacity for each day, indicating any each day, indicating any

  available transfer capacity available transfer capacity already reserved. Those already reserved. Those publications shall be made at publications shall be made at specified intervals before the specified intervals before the day of transport and shall day of transport and shall include, in any event, weekinclude, in any event, weekahead and month-ahead ahead and month-ahead estimates, as well as a estimates, as well as a quantitative indication of the quantitative indication of the expected reliability of the expected reliability of the available capacity. available capacity.

• 652. 

  4. Transmission system AM 167 4. Transmission system operators shall publish relevant 4. Transmission system operators shall publish relevant data on aggregated forecast and operators shall publish relevant data data on aggregated forecast and actual demand, on availability on aggregated forecast and actual actual demand, on availability and actual use of generation and demand, on availability and actual and actual use of generation and load assets, on availability and use of generation and load assets, load assets, on availability and use of the networks and on availability and use of the use of the networks and

  interconnections, and on networks and interconnections, on interconnections, and on balancing power and reserve balancing power and reserve balancing power and reserve capacity. For availability and capacity and on the availability of capacity. For availability and actual use of small generation flexibility. For availability and actual use of small generation and load units, aggregated actual use of small generation and and load units, aggregated estimate data may be used. load units, aggregated estimate data estimate data may be used. may be used.

• 653. 

  5. The market participants 5. The market participants concerned shall provide the concerned shall provide the

  transmission system operators transmission system operators with the relevant data. with the relevant data.

ANNEX TREE.2.B EN

• 654. 

  6. Generation undertakings 6. Generation undertakings which own or operate generation which own or operate generation assets, where at least one assets, where at least one

  generation asset has an installed generation asset has an installed capacity of at least 250 MW, or capacity of at least 250 MW, or which have a portfolio which have a portfolio comprising at least 400 MW of comprising at least 400 MW of generation assets, shall keep at generation assets, shall keep at the disposal of the national the disposal of the national regulatory authority, the national regulatory authority, the national competition authority and the competition authority and the Commission, for five years all Commission, for five years all hourly data per plant that is hourly data per plant that is necessary to verify all necessary to verify all operational dispatching operational dispatching decisions and the bidding decisions and the bidding behaviour at power exchanges, behaviour at power exchanges, interconnection auctions, reserve interconnection auctions, reserve markets and over-the-countermarkets and over-the-countermarkets. The per-plant and per markets. The per-plant and per hour information to be stored hour information to be stored shall include, but shall not be shall include, but shall not be limited to, data on available limited to, data on available generation capacity and generation capacity and committed reserves, including committed reserves, including allocation of those committed allocation of those committed reserves on a per-plant level, at reserves on a per-plant level, at the times the bidding is carried the times the bidding is carried out and when production takes out and when production takes place. place.

ANNEX TREE.2.B EN

• 655. 

  7. Transmission system 7. Transmission system operators shall exchange operators shall exchange

  regularly a set of sufficiently regularly a set of sufficiently accurate network and load flow accurate network and load flow data in order to enable load flow data in order to enable load flow calculations for each calculations for each transmission system operator in transmission system operator in their relevant area. The same set their relevant area. The same set of data shall be made available of data shall be made available to the regulatory authorities and to the regulatory authorities and to the Commission upon to the Commission and request. The regulatory Member States upon request. authorities and the Commission The regulatory authorities, shall treat that set of data Member States and the confidentially, and shall ensure Commission shall treat that set that confidential treatment is of data confidentially, and shall also given by any consultant ensure that confidential carrying out analytical work on treatment is also given by any their request, on the basis of consultant carrying out those data. analytical work on their request, on the basis of those data.

• 656. 

  Article 48

  Certification of transmission system operators

• 657. 

  1. The Commission shall 1. The Commission shall examine any notification of a examine any notification of a decision on the certification of a decision on the certification of a transmission system operator as transmission system operator as laid down in Article 52(6) of laid down in Article 52(6) of [recast of Directive 2009/72/EC i [recast of Directive 2009/72/EC i as proposed by COM(2016) as proposed by COM(2016) 864 i/2] as soon as it is received. 864/2] as soon as it is received. Within two months of the day of Within two months of the day of receipt of such notification, the receipt of such notification, the Commission shall deliver its Commission shall deliver its opinion to the relevant national opinion to the relevant national regulatory authority as to its regulatory authority as to its

ANNEX TREE.2.B EN

compatibility with Article 52(2) compatibility with Article 52(2) or Article 53 and Article 43 of or Article 53 and Article 43 of [recast of Directive 2009/72/EC i [recast of Directive 2009/72/EC i as proposed by COM(2016) as proposed by COM(2016) 864 i/2]. 864/2].

• 658. 

  When preparing the opinion When preparing the opinion referred to in the first referred to in the first

  subparagraph, the Commission subparagraph, the Commission may request the Agency to may request the Agency to provide its opinion on the provide its opinion on the national regulatory authority’s national regulatory authority’s decision. In such a case, the decision. In such a case, the twotwo-month period referred to in month period referred to in the the first subparagraph shall be first subparagraph shall be extended by two further months. extended by two further months.

• 659. 

  In the absence of an opinion by In the absence of an opinion by the Commission within the the Commission within the

  periods referred to in the first periods referred to in the first and second subparagraphs, the and second subparagraphs, the Commission shall be deemed Commission shall be deemed not to raise objections to the not to raise objections to the regulatory authority’s decision. regulatory authority’s decision.

• 660. 

  2. Within two months of 2. Within two months of receiving an opinion of the receiving an opinion of the Commission, the national Commission, the national

  regulatory authority shall adopt regulatory authority shall adopt its final decision regarding the its final decision regarding the certification of the transmission certification of the transmission system operator, taking the system operator, taking the utmost account of that opinion. utmost account of that opinion. The regulatory authority's The regulatory authority's decision and the Commission's decision and the Commission's opinion shall be published opinion shall be published together. together.

ANNEX TREE.2.B EN

• 661. 

  3. At any time during the 3. At any time during the procedure, regulatory authorities procedure, regulatory authorities and/or the Commission may and/or the Commission may request from a transmission request from a transmission system operator and/or an system operator and/or an

  undertaking performing any of undertaking performing any of the functions of generation or the functions of generation or supply any information relevant supply any information relevant to the fulfilment of their tasks to the fulfilment of their tasks under this Article. under this Article.

• 662. 

  4. Regulatory authorities and 4. Regulatory authorities and the Commission shall preserve the Commission shall preserve

  the confidentiality of the confidentiality of commercially sensitive commercially sensitive information. information.

• 663. 

  5. Where the Commission 5. Where the Commission has received notification of the has received notification of the certification of a transmission certification of a transmission system operator under Article system operator under Article 43(9) of [recast of Directive 43(9) of [recast of Directive

  2009/72/EC as proposed by 2009/72/EC as proposed by COM(2016) 864 i/2] , the COM(2016) 864 i/2], the Commission shall take a Commission shall take a decision relating to certification. decision relating to certification. The regulatory authority shall The regulatory authority shall comply with the Commission comply with the Commission decision. decision.

ANNEX TREE.2.B EN

• 664. 

  Chapter VI

  Distribution system operation 665. Article 49 Article 49

  European entity for distribution [ ] Cooperation of distribution system operators system operators

• 666. 

  Distribution system operators AM 168 1. Distribution system

  which are not part of a vertically Distribution system operators shall operators [ ] shall cooperate

  integrated undertaking or which

  are unbundled according to the cooperate at Union level through a at Union level [ ] to promote the provisions of Article 35 [recast European Entity for Distribution completion and functioning of

  of Directive 2009/72/EC i as system operators ("EU DSO the internal market in electricity, proposed by COM(2016) entity"), in order to promote the and to promote optimal

  864/2], shall cooperate at Union completion and functioning of the management and a coordinated level through a European Entity internal market in electricity, and to operation of distribution and

  for Distribution system promote optimal management and a transmission systems. [ ] operators ("EU DSO entity"), in coordinated operation of

  order to promote the completion distribution and transmission and functioning of the internal systems. Distribution system

  market in electricity, and to operators who wish to participate in

  promote optimal management the EU DSO entity shall have the

  and a coordinated operation of

  distribution and transmission right to become registered

  systems. Distribution system members of the entity.

  operators who wish to participate in the EU DSO entity shall become registered members of the entity.

ANNEX TREE.2.B EN

• 667. 

  Registered members may participate in the EU DSO entity directly or be represented by the national association designated by the Member State or by an Union level association.

• 668. 

  In performing its functions under

  Union law, the EU DSO entity shall act independently from individual national interests or the national interests of distribution system operators.

• 669. 

  1a. Distribution system operators are entitled to

  associate themselves through the establishment of a European Entity for Distribution system operators the EU DSO entity and to join it. The EU DSO entity shall be established at the latest by 31 December 2022 and shall fulfil the tasks and procedures foreseen by this Regulation in accordance with Article [51]. As an expert entity working for the common European interest, it shall not represent particular interest nor seek to influence the decision making process to defend certain interests.

ANNEX TREE.2.B EN

• 670. 

  1b. Members of the EU DSO

  entity shall be subject to registration and payment of a fair and proportionate membership fee.

• 671. 

  Article 50 Article 50

  Establishment of the EU DSO Establishment of the EU DSO entity for electricity entity[ ]

• 672. 

  0. EU DSO entity shall consist of, at least, a General Assembly, Board of Directors, Strategic Advisor Group, Expert Groups and a

  Secretary General. 673. 1. By [OP: twelve months AM 169 1. [ ] Within [OP: twelve

  after entry into force], the 1. By [OP: twelve months after months after entry into force], distribution system operators, entry into force], the distribution the distribution system operators with the administrative support system operators, with the [ ] shall submit to the of the Agency, shall submit to administrative support of the Commission and to the Agency the Commission and to the Agency, shall submit to the the draft statutes in accordance Agency the draft statutes, a list Commission and to the Agency the with [Article 50a] including a of registered members, the draft draft statutes, a list of participating code of conduct, a list of rules of procedure, including the distribution system operators and registered members, the draft rules of procedures on the entities designated to represent rules of procedure, including the consultation with ENTSO for distribution system operators, the rules of procedures on the Electricity and other draft rules of procedure, including consultation with ENTSO for stakeholders and the financing the rules of procedures on the Electricity and other rules, of the EU DSO entity to consultation with ENTSO for stakeholders and the financing be established. Electricity and other stakeholders, rules, of the EU DSO entity to the decision-making procedure and be established. the financing rules, of the EU DSO entity to be established.

ANNEX TREE.2.B EN

• 674. 

  The draft rules of procedure of the

  EU DSO entity shall ensure balanced representation of all participating DSOs regardless of their size, including in the decision-making procedure.

• 675. 

  2. Within two months of AM 170 2. Within two months of receipt, the Agency, after 2. Within two months of receipt, the Agency, after

  formally consulting the receipt, the Agency, after formally formally consulting the organisations representing all consulting the organisations organisations representing all stakeholders, in particular representing all stakeholders, in stakeholders, in particular distribution system users, shall particular distribution system users distribution system users, shall provide an opinion to the and consumer protection provide an opinion to the Commission on the draft organisations, shall provide an Commission on the draft statutes, the list of members and opinion to the Commission on the statutes, the list of members and the draft rules of procedure. draft statutes, the list of members the draft rules of procedure. and the draft rules of procedure, taking into account in particular the rules related to the independence of the EU DSO, to the prevention of conflicts of interests, and to the necessity to ensure geographically balanced representation and equitable treatment of its Members.

ANNEX TREE.2.B EN

• 676. 

  3. The Commission shall AM 171 3. The Commission shall deliver an opinion on the draft 3. The Commission shall deliver an opinion on the draft statutes, the list of members and deliver an opinion on the draft statutes, the list of members and the draft rules of procedure statutes, the list of members and the the draft rules of procedure

  taking into account the opinion draft rules of procedure, including taking into account the opinion of the Agency provided for in the rules of procedures on the of the Agency provided for in paragraph 2, within three consultation with ENTSO for paragraph 2, within three months months of receipt of the opinion Electricity and other stakeholders, of receipt of the opinion of the of the Agency. the decision-making procedure Agency. and the financing rules, taking into account the opinion of the Agency provided for in paragraph 2, within three months of receipt of the opinion of the Agency.

• 677. 

  4. Within three months of 4. Within three months of the day of receipt of the the day of receipt of the

  Commission’s positive opinion, Commission’s positive opinion, the distribution system operators the distribution system operators shall establish the EU DSO shall establish the EU DSO entity and adopt and publish its entity and adopt and publish its statutes and rules of procedure. statutes and rules of procedure.

• 678. 

  5. The documents referred to 5. The documents referred to in paragraph 1 shall be in paragraph 1 shall be

  submitted to the Commission submitted to the Commission and to the Agency in case of and to the Agency in case of changes thereof or upon their changes thereof or upon their reasoned request. The Agency reasoned request. The Agency and the Commission shall and the Commission shall deliver an opinion in line with deliver an opinion in line with the process set out in paragraphs the process set out in paragraph

5834/2/18 REV 2 BL/st 248

ANNEX TREE.2.B EN

• 679. 

  6. The costs related to the AM 172 6. The costs related to the activities of the EU DSO entity 6. The costs related to the activities of the EU DSO entity shall be borne by distribution activities of the EU DSO entity shall be borne by distribution system operators who are shall be borne by distribution system operators who are

  registered members and shall be system operators who are registered registered members and shall be taken into account in the members and shall be considered taken into account in the calculation of tariffs. Regulatory as eligible cost and taken into calculation of tariffs. Regulatory authorities shall approve those account by the regulatory authority authorities shall approve those costs only if they are reasonable in the calculation of tariffs. costs only if they are reasonable and proportionate. Regulatory authorities shall and proportionate. approve those costs only if they are reasonable and proportionate.

• 680. 

  AM 173 Article 50a

  Article 50 a (new) Principal rules and procedures Article 50a for the EU DSO entity for Principal rules and procedures for electricity the EU DSO entity for electricity

• 681. 

  1. The statutes of the EU DSO 1. The statutes of the EU entity adopted in accordance with DSO entity adopted in

  Article 50 shall safeguard the accordance with Article 50 following principles: shall safeguard the following principles:

• 682. 

  (a) participation in the works of (a) participation in the the EU DSO entity is limited to works of the EU DSO entity is registered members with the limited to registered members possibility of delegation within the with the possibility of

  membership; delegation within the membership;

• 683. 

  (b) strategic decisions regarding (b) strategic decisions the activities of the EU DSO entity regarding the activities of the as well as policy guidelines for the EU DSO entity as well as Board of Directors are adopted by policy guidelines for the Board the General Assembly; of Directors are adopted by the General Assembly;

ANNEX TREE.2.B EN

• 684. 

  (c) decisions of the General (c) decisions of the General

  Assembly are adopted according Assembly are adopted with the following rules: according with the following - when 65% of the votes attributed rules: to the members of the General - when 65% of the votes Assembly are reached, attributed to the members of the General Assembly are - whereby each member disposes reached, of a number of votes proportional to the respective number of - whereby each member customers and disposes of a number of votes proportional to the respective number of customers and - the final outcome is supported by at least 55% of the members of the - the final outcome is General Assembly. supported by at least 55% of the members of the General Assembly.

ANNEX TREE.2.B EN

• 685. 

  (d) decisions of the General (d) decisions of the General

  Assembly are blocked according Assembly are blocked with the following rules: according with the following -when 35% of the votes attributed rules: to the members of the General -when 35% of the votes Assembly are reached, attributed to the members of the General Assembly are - whereby each member disposes reached, of a number of votes proportional to the respective number of - whereby each member customers; and disposes of a number of votes proportional to the respective - the final outcome is supported by number of customers; and at least 25% of the members of the General Assembly - the final outcome is supported by at least 25% of the members of the General Assembly

• 686. 

  (e) the Board of Directors is (e) the Board of Directors is elected by the General Assembly elected by the General

  for a mandate of maximum 4 Assembly for a mandate of years; maximum 4 years;

• 687. 

  (f) the Board of Directors (f) the Board of Directors nominates the President and the nominates the President and three Vice-Presidents among its the three Vice-Presidents

  members; among its members; 688. (g) DSO-TSO cooperation (g) DSO-TSO cooperation

  pursuant to Articles 52 and 53 is pursuant to Articles 52 and 53 led by the Board of Directors; is led by the Board of Directors;

ANNEX TREE.2.B EN

• 689. 

  (h) decisions of the Board of (h) decisions of the Board of

  Directors are adopted by simple Directors are adopted by majority of 15 votes; simple majority of 15 votes;

• 690. 

  (i) based on proposal by the (i) based on proposal by the

  Board of Directors, the Secretary Board of Directors, the General is appointed by the Secretary General is appointed General Assembly among its by the General Assembly members for a four years mandate, among its members for a four renewable once; years mandate, renewable once;

• 691. 

  (j) based on proposal by the (j) based on proposal by the

  Board of Directors, Expert Groups Board of Directors, Expert are appointed by the General Groups are appointed by the Assembly whereby each group General Assembly whereby shall not exceed 30 members with each group shall not exceed 30 the possibility of 1/3 coming from members with the possibility outside the membership. In of 1/3 coming from outside the addition, 'one country' expert membership. In addition, 'one group shall be established and country' expert group shall be consist of exactly one DSO established and consist of representative from each Member exactly one DSO State. representative from each Member State.

• 692. 

  2. Procedures adopted by the 2. Procedures adopted by

  EU DSO entity shall safeguard the the EU DSO entity shall fair and proportionate treatment of safeguard the fair and its members and reflect the diverse proportionate treatment of its geographical and economic members and reflect the structure of its membership. In diverse geographical and particular, the procedures shall economic structure of its foresee that: membership. In particular, the procedures shall foresee that:

ANNEX TREE.2.B EN

• 693. 

  (a) the Board of Directors is (a) the Board of Directors is composed by the President of the composed by the President of Board and 27 members' the Board and 27 members'

  representatives, of which: representatives, of which: - [ ] 9 are representatives of - 9 are representatives of members with more than 1 million members with more than 1 grid users; million grid users; - 9 are representatives of - [ ] 9 are representatives of members with more than members with more than 100,000 100,000 and less than 1 million and less than 1 million grid users; grid users; and and - 9 are representatives of - [ ] 9 are representatives of members with less than members with less than 100,000 100,000 grid users; grid users;

• 694. 

  (b) representatives of existing DSO (b) representatives of existing associations may participate as DSO associations may

  observers to the meetings of the participate as observers to the Board of Directors; meetings of the Board of Directors;

• 695. 

  (c) the Board of Directors may (c) the Board of Directors not consist of more than 3 may not consist of more than 3 representatives of members based representatives of members in the same Member State or the based in the same Member

same industrial group; State or the same industrial

group;

• 696. 

  (d) each Vice-President of the (d) each Vice-President of

Board has to be nominated among the Board has to be nominated

representatives of members in among representatives of

each category described in members in each category

paragraph (a) above; described in paragraph (a)

above;

ANNEX TREE.2.B EN

• 697. 

  (e) representatives of members (e) representatives of based in one Member State or the members based in one

  same industrial group may not Member State or the same constitute the majority of the industrial group may not Expert Group participants; constitute the majority of the Expert Group participants;

• 698. 

  (f) the Board of Directors shall (f) the Board of Directors establish a Strategic Advisory shall establish a Strategic

  group that provides its opinion to Advisory group that provides the Board of Directors and the its opinion to the Board of Expert Groups and consists of Directors and the Expert representatives of the European Groups and consists of DSO associations and representatives of the representatives of those Member European DSO associations States which are not represented in and representatives of those the Board of Directors. Member States which are not represented in the Board of Directors.

ANNEX TREE.2.B EN

• 699. 

  Article 51

  Tasks of the EU DSO entity

• 700. 

  1. The tasks of the EU DSO AM 174 1. The tasks of the EU DSO

  entity shall be the following: 1. The tasks of the EU DSO entity shall be the following: entity shall be the following:

• 701. 

  (a) coordinated operation and (a) promote coordinated (a) (b in GA) [ ] promote

  planning of transmission and operation and planning of operation and planning of [ ] distribution networks; transmission and distribution distribution networks in networks; cooperation with operation and planning of transmission networks;

• 702. 

  (b) integration of renewable (b) improve and maximise the (b) (c in GA) facilitation of energy resources, distributed integration of renewable energy the integration of renewable

  generation and other resources resources, distributed generation energy resources, distributed embedded in the distribution and facilitate other resources generation and other resources network such as energy storage; embedded in the distribution embedded in the distribution network such as energy storage and network such as energy storage; sectoral integration;

• 703. 

  (c) development of demand (c) facilitate the development of (c) (d in GA) facilitation of [ response; demand response; ] demand side flexibility and

  response, and distribution grid users’ access to markets;

• 704. 

  (d) digitalisation of (d) improve the digitalisation of (d) (e in GA) contribute to distribution networks including distribution networks including the digitalisation of distribution deployment of smart grids and deployment of smart grids and [ ] systems including

  intelligent metering systems; smart metering systems; deployment of smart grids and intelligent metering systems;

ANNEX TREE.2.B EN

• 705. 

  (e) data management, cyber (e) guarantee non(e) (f in GA) support the security and data protection; discriminatory and neutral access development of data

  to data regardless of the data management, cyber security and management model, and promote data protection in cooperation standardization, cross-border data with relevant authorities and exchange, in particular with regulated entities; ENTSO for Electricity where relevant to facilitate data exchange, cyber security and data protection;

• 706. 

  (f) participation in the (f) participate in the elaboration (f) (a in GA) participation in elaboration of network codes of network codes pursuant to the elaboration of network codes pursuant to Article 55. Article 55. which are relevant to the

  operation and planning of distribution grids and the coordinated operation of the transmission and distribution networks pursuant to Article 55.

• 707. 

  2. In addition the EU DSO 2. In addition the EU DSO entity shall: entity shall:

• 708. 

  (a) cooperate with ENTSO AM 175 (a) cooperate with ENTSO for electricity on the monitoring (a) cooperate effectively with for electricity on the monitoring of implementation of the ENTSO for electricity, the Agency of implementation of the

  network codes and guidelines and national regulators to network codes and guidelines which are relevant to the facilitate the monitoring by the which are relevant to the operation and planning of Agency and where relevant the operation and planning of distribution grids and the national regulatory authorities of distribution grids and the coordinated operation of the implementation of the network coordinated operation of the transmission and distribution codes and guidelines which are transmission and distribution networks and which are adopted relevant to the operation and networks and which are adopted pursuant to this Regulation; planning of distribution grids and pursuant to this Regulation; the coordinated operation of the transmission and distribution networks and which are adopted pursuant to this Regulation;

ANNEX TREE.2.B EN

• 709. 

  (b) cooperate with ENTSO (b) cooperate with ENTSO for electricity and adopt best for electricity and adopt best

  practices on the coordinated practices on the coordinated operation and planning of operation and planning of transmission and distribution transmission and distribution systems including issues such as systems including issues such as exchange of data between exchange of data between operators and coordination of operators and coordination of distributed energy resources; distributed energy resources;

• 710. 

  (c) work on identifying best [ ]

  practices on the areas identified in paragraph 1 and for the introduction of energy efficiency improvements in the distribution network;

• 711. 

  (d) adopt an annual work (d) adopt an annual work programme and an annual programme and an annual

  report; report;

• 712. 

  (e) operate in full compliance (e) operate in full compliance

  with competition rules. with competition rules and ensure neutrality.

ANNEX TREE.2.B EN

• 713. 

  Article 52

  Consultations in the network code development process

• 714. 

  1. While preparing possible AM 176 1. While preparing possible

  network codes pursuant to 1. While participating in the network codes pursuant to Article 55, the EU DSO entity elaboration of new network codes Article 55, the EU DSO entity shall conduct an extensive pursuant to Article 55, the EU DSO shall conduct an extensive consultation process, at an early entity shall conduct an extensive consultation process, at an early stage and in an open and consultation process, at an early stage and in an open and transparent manner, involving stage and in an open and transparent manner, involving all relevant stakeholders, and, in transparent manner, involving all all relevant stakeholders, and, in particular, the organisations relevant stakeholders, and, in particular, the organisations representing all stakeholders, in particular, the organisations representing all stakeholders, in accordance with the rules of representing all stakeholders, in accordance with the rules of procedure referred to in Article accordance with the rules of procedure referred to in Article 50. That consultation shall also procedure referred to in Article 50. 50. That consultation shall also involve national regulatory That consultation shall also involve involve [ ] regulatory authorities and other national national regulatory authorities and authorities and other national authorities, supply and other national authorities, supply authorities, supply and generation undertakings, system and generation undertakings, generation undertakings, system users including customers, system users including customers, users including customers, [ ], distribution system operators, distribution system operators, technical bodies and stakeholder including relevant industry including relevant industry platforms. It shall aim at associations, technical bodies associations, technical bodies and identifying the views and and stakeholder platforms. It stakeholder platforms. It shall aim proposals of all relevant parties shall aim at identifying the at identifying the views and during the decision-making views and proposals of all proposals of all relevant parties process. relevant parties during the during the decision-making decision-making process. process.

ANNEX TREE.2.B EN

• 715. 

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

• 716. 

  3. The EU DSO entity shall 3. The EU DSO entity shall take into consideration the views take into consideration the views provided during the provided during the

  consultations. Before adopting consultations. Before adopting proposals for network codes proposals for network codes referred to in Article 55 the EU referred to in Article 55 the EU DSO entity shall indicate how DSO entity shall indicate how the observations received during the observations received during the consultation have been taken the consultation have been taken into consideration. It shall into consideration. It shall provide reasons where provide reasons where observations have not been observations have not been taken into account. taken into account.

• 717. 

  Article 53

  Cooperation between distribution system operators and transmission system operators

• 718. 

  AM 177

  Article 53 – paragraph -1 (new) -1. The ENTSO for Electricity and the EU DSO entity shall develop a formal mechanism to facilitate cooperation between distribution system operators and transmission system operators.

ANNEX TREE.2.B EN

• 719. 

  1. Distribution system AM 178 1. Distribution system operators shall cooperate with 1. Distribution system operators and transmission transmission system operators in operators and transmission system system operators shall

  planning and operating their operators shall cooperate in cooperate with each other [ ] in networks. In particular, planning and operating their planning and operating their transmission and distribution networks. In particular, networks. In particular, system operators shall exchange transmission and distribution transmission and distribution all necessary information and system operators shall exchange all system operators shall exchange data regarding, the performance necessary information and data all necessary information and of generation assets and demand regarding, the performance of data regarding, the performance side response, the daily generation assets and demand side of generation assets and demand operation of their networks and response, the daily operation of side response, the daily the long-term planning of their networks and the long-term operation of their networks and network investments, with the planning of network investments, the long-term planning of view to ensure the cost-efficient, with the view to ensure the costnetwork investments, with the secure and reliable development efficient development and view to ensure the cost-efficient, and operation of their networks. operation and the secure and secure and reliable development reliable operation of their networks. and operation of their networks.

• 720. 

  2. Transmission and 2. Transmission and distribution system operators distribution system operators shall cooperate in order to shall cooperate with each other achieve coordinated access to in order to achieve coordinated resources such as distributed access to resources such as generation, energy storage or distributed generation, energy demand response that may storage or demand response that support particular needs of both may support particular needs of the distribution system and the both the distribution system and transmission system. the transmission system.

ANNEX TREE.2.B EN

• 721. 

  Chapter VII

  Network codes and guidelines

• 722. 

  Article 54

  Adoption of network codes and guidelines

• 723. 

  1. The Commission may, 1. The Commission may, Maintain Council GA subject to the empowerments in subject to the empowerments in

  Articles 55 and 57, adopt Articles 55 and 57, adopt [ ] delegated acts. Such delegated implementing acts. Such [ ] acts can either be adopted as implementing acts can either be network codes on the basis of adopted as network codes on the text proposals developed by the basis of text proposals ENTSO for Electricity, or, developed by the ENTSO for where so decided in the priority Electricity, or, where so decided list pursuant to Article 55 in the priority list pursuant to paragraph 2, by the EU DSO Article 55 paragraph 2, by the entity and the Agency pursuant EU DSO entity where relevant to the procedure in Article 55 or in mutual cooperation with the as guidelines pursuant to the ENTSO for Electricity and the procedure in Article 57. Agency pursuant to the procedure in Article 55 or as guidelines pursuant to the procedure in Article 57.

• 724. 

  2. The network codes and 2. The network codes and Maintain Council GA guidelines shall guidelines shall

ANNEX TREE.2.B EN

• 725. 

  (a) ensure that they provide (a) ensure that they provide Maintain Council GA the minimum degree of the minimum degree of

  harmonisation required to harmonisation required to achieve the aims of this achieve the aims of this Regulation; Regulation;

• 726. 

  (b) take into account, where (b) take into account, where Maintain Council GA appropriate, regional appropriate, regional

  specificities; specificities; 727. (c) not go beyond what is (c) not go beyond what is Maintain Council GA

  necessary for that purpose; and necessary for that purpose; and 728. (d) be without prejudice to (d) be without prejudice to Maintain Council GA

  the Member States’ right to the Member States’ right to establish national network codes establish national network codes which do not affect cross-border which do not affect cross [ ] trade. zonal trade.

• 729. 

  Clarification of applicability to third countries, following the discussion on the definition of

  “interconnector” in article 2(33) of the Electricity Directive (see document 7506/1/18 REV 1) 3. Network codes and guidelines adopted pursuant to this Article may provide for conditions and procedures for their application in relation to one or more third countries.

ANNEX TREE.2.B EN

• 730. 

  Article 55

  Establishment of network codes

• 731. 

  1. The Commission is 1. The Commission is empowered to adopt delegated empowered to adopt [ ]

  acts in accordance with Article implementing acts in 63 concerning the establishment accordance with Article [ ] of network codes in the 62(2) in order to ensure following areas: uniform conditions for the implementation of this Regulation by establishing [ ] network codes in the following areas:

ANNEX TREE.2.B EN

• 732. 

  (a) network security and (a) network security and reliability rules including rules reliability rules including rules for technical transmission for technical transmission

  reserve capacity for operational reserve capacity for operational network security; network security including system states, remedial actions and operational security limits, voltage control and reactive power management, short-circuit current management, power flow management, contingency analysis and handling, protection equipment and schemes, data exchange, compliance, training, operational planning and security analysis, regional operational security coordination, outage coordination, availability plans of relevant assets, adequacy analysis, ancillary services, scheduling, and operational planning data environments;

ANNEX TREE.2.B EN

• 733. 

  (b) network connection rules; (b) network connection rules including connection of

  transmission-connected demand facilities, transmission-connected distribution facilities and distribution systems, connection of demand units used to provide demand response, requirements for grid connection of generators, requirements for high-voltage direct current grid connection, requirements for direct current-connected power park modules and remote-end highvoltage direct current converter stations, and operational notification procedures for grid connection;

• 734. 

  (c) third-party access rules; (c) third-party access rules;

• 735. 

  (d) data exchange and (d) data exchange and settlement rules; settlement rules;

• 736. 

  (e) interoperability rules; (e) interoperability rules;

• 737. 

  (f) operational procedures in (f) operational procedures in an emergency; an emergency including system defence plans, restoration

  plans, market interactions, information exchange and communication and tools and facilities;

ANNEX TREE.2.B EN

• 738. 

  (g) capacity-allocation and (g) capacity-allocation and congestion-management rules congestion-management rules [ including curtailment of ] including day ahead,

  generation and redispatch of intraday and forward capacity generation and demand; calculation methodologies and processes, grid models, bidding zone configuration, redispatching and countertrading, trading algorithms, single day-ahead and intraday coupling, firmness of allocated crosszonal capacity, congestion income distribution, crosszonal transmission risk hedging, nomination procedures, and capacity allocation and congestion management cost recovery ;

• 739. 

  (h) rules for trading related to (h) rules for trading related to technical and operational technical and operational

  provision of network access provision of network access services and system balancing; services and system balancing including functions and responsibilities, platforms for the exchange of balancing energy, gate closure times, requirements for standard and specific products, procurement of balancing services, allocation of cross-zonal capacity for the exchange of balancing services or sharing of reserves, settlement of balancing energy, settlement

ANNEX TREE.2.B EN

of exchanges of energy between system operators, imbalance settlement and settlement of balancing capacity;

• 740. 

  (i) transparency rules; (i) transparency rules;

• 741. 

  (j) balancing rules including (j) balancing rules including network-related reserve power network-related reserve power rules; rules including load frequency control, frequency quality

  defining and target parameters, frequency containment reserves, frequency restoration reserves, replacement reserves, exchange and sharing of reserves, cross-border activation processes of reserves, time-control processes and transparency of information;

• 742. 

  (k) rules regarding AM 179 (k) rules regarding harmonised transmission and deleted harmonised transmission [ ] distribution tariff structures and tariff structures [as referred to connection charges including in Article 16] [ ] including locational signals and interlocational signals and intertransmission system operator transmission system operator compensation rules; compensation rules; energy efficiency regarding electricity networks;

ANNEX TREE.2.B EN

• 743. 

  (l) energy efficiency [ ] regarding electricity networks;

• 744. 

  (m) rules for non(m) rules for nondiscriminatory, transparent discriminatory, transparent provision of non-frequency provision of non-frequency ancillary services, including ancillary services, including steady state voltage control, steady state voltage control, inertia, fast reactive current inertia, fast reactive current injection, black-start capability; injection, inertia for grid stability, short circuit current, black-start capability and island operation capability;

• 745. 

  (n) demand response, [ ] including aggregation, energy

  storage, and demand curtailment rules;

• 746. 

  (o) cyber security rules; and (o) sector-specific rules for cyber security [ ] aspects of

  cross-border electricity flows, on common minimum requirements, planning, monitoring, reporting and crisis management;

• 747. 

  (p) rules concerning regional AM 180 [ ] operational centres. deleted

ANNEX TREE.2.B EN

• 748. 

  2. The Commission shall, after AM 181 2. The Commission shall, consulting the Agency, the 2. The Commission shall, after after consulting the Agency, the ENTSO for Electricity and the consulting the Agency, the ENTSO ENTSO for Electricity, the EU other relevant stakeholders, for Electricity, the EU DSO entity DSO Entity and the other

  establish a priority list every for electricity and the other relevant relevant stakeholders, establish a three years, identifying the areas stakeholders, establish a priority list priority list every three years, set out in paragraph 1 to be every three years, identifying the identifying the areas set out included in the development of areas set out in paragraph 1 to be in paragraph 1 to be included in network codes. If the subjectincluded in the development of the development of network matter of the network code is network codes. If the subject-matter codes. If the subject-matter of directly related to the operation of the network code is directly the network code is directly of the distribution system and related to the operation of the related to the operation of the less relevant for the transmission distribution system and less distribution system and [ ] not system, the Commission may relevant for the transmission primarily relevant for the require the EU DSO entity for system, the Commission may transmission, the Commission electricity instead of the ENTSO require the EU DSO entity for may require the EU DSO entity for Electricity to convene a electricity instead of the ENTSO in cooperation with [ ] the drafting committee and submit a for Electricity to convene a drafting ENTSO for Electricity to proposal for a network code to committee and submit a proposal convene a drafting committee the agency. for a network code to the agency. and submit a proposal for a network code to the agency.

ANNEX TREE.2.B EN

• 749. 

  3. The Commission shall 3. The Commission shall request the Agency to submit to request the Agency to submit to it within a reasonable period of it within a reasonable period of time not exceeding six months a time not exceeding six months a non-binding framework non-binding framework

  guideline (framework guideline) guideline (framework guideline) setting out clear and objective setting out clear and objective principles for the development principles for the development of network codes relating to the of network codes relating to the areas identified in the priority areas identified in the priority list. The request of the list. The request of the Commission may include Commission may include conditions which the framework conditions which the framework guideline shall address. Each guideline shall address. Each framework guideline shall framework guideline shall contribute to market integration, contribute to market integration, non-discrimination, effective non-discrimination, effective competition, and the efficient competition, and the efficient functioning of the market. Upon functioning of the market. Upon a reasoned request from the a reasoned request from the Agency, the Commission may Agency, the Commission may extend that period. extend that period.

• 750. 

  4. The Agency shall 4. The Agency shall formally consult the ENTSO for formally consult the ENTSO for Electricity, the EU DSO entity, Electricity , the EU DSO entity, and the other relevant and the other relevant

  stakeholders in regard to the stakeholders in regard to the framework guideline, during a framework guideline, during a period of no less than two period of no less than two months, in an open and months, in an open and transparent manner. transparent manner.

ANNEX TREE.2.B EN

• 751. 

  5. The Agency shall submit 5. The Agency shall submit a non-binding framework a non-binding framework

  guideline to the Commission guideline to the Commission where requested to do so under where requested to do so under paragraph 3. The Agency shall paragraph 3. The Agency shall review the non-binding review the non-binding framework guideline and reframework guideline and resubmit it to the Commission submit it to the Commission where requested to do so under where requested to do so under paragraph 6. paragraph 6.

• 752. 

  6. If the Commission 6. If the Commission considers that the framework considers that the framework guideline does not contribute to guideline does not contribute to market integration, nonmarket integration, nondiscrimination, effective discrimination, effective competition and the efficient competition and the efficient functioning of the market, it functioning of the market, it may may request the Agency to request the Agency to review the review the framework guideline framework guideline within a within a reasonable period of reasonable period of time and retime and re-submit it to the submit it to the Commission. Commission.

• 753. 

  7. If the Agency fails to 7. If the Agency fails to submit or re-submit a submit or re-submit a framework framework guideline within the guideline within the period set period set by the Commission by the Commission under

  under paragraphs 3 or 6, the paragraphs 3 or 6, the Commission shall elaborate the Commission shall elaborate the framework guideline in framework guideline in question. question.

ANNEX TREE.2.B EN

• 754. 

  8. The Commission shall 8. The Commission shall request the ENTSO for request the ENTSO for

  Electricity or, where so decided Electricity or, where so decided in the priority list pursuant to in the priority list pursuant to paragraph 2, the EU DSO entity paragraph 2, the EU DSO entity for Electricity, to submit a [ ] in co-operation with the proposal for a network code ENTSO for Electricity, to which is in line with the relevant submit a proposal for a network framework guideline, to the code which is in line with the Agency within a reasonable relevant framework guideline, to period of time not exceeding 12 the Agency within a reasonable months. period of time not exceeding 12 months.

• 755. 

  9. The ENTSO for 9. The ENTSO for

  Electricity, or where so decided Electricity, or where so decided in the priority list pursuant to in the priority list pursuant to paragraph 2, the EU DSO entity, paragraph 2, the EU DSO entity, shall convene a drafting shall convene a drafting committee to support it in the committee to support it in the network code development network code development process. The drafting committee process. The drafting committee shall consist of representatives shall consist of representatives of the ENTSO for Electricity, of the ENTSO for Electricity, the Agency, the EU DSO entity, the Agency, where appropriate where appropriate of nominated of the EU DSO entity, where electricity market operators and appropriate of nominated a limited number of the main electricity market operators and affected stakeholders.The a limited number of the main ENTSO for Electricity or where affected stakeholders. The so decided in the priority list ENTSO for Electricity or where pursuant to paragraph 2 the EU so decided in the priority list DSO entity,shall elaborate pursuant to paragraph 2 the EU proposals for network codes in DSO entity, in co-operation the areas referred to in with the ENTSO for paragraph 1 upon a request Electricity shall elaborate addressed to it by the proposals for network codes in

ANNEX TREE.2.B EN

Commission in accordance with the areas referred to in paragraph paragraph 8. 1 upon a request addressed to it by the Commission in accordance with paragraph 8.

• 756. 

  10. The Agency shall revise 10. The Agency shall revise the network code and ensure that the network code and ensure that the network code is in line with the network code is in line with the relevant framework the relevant framework

  guideline and contributes to guideline and contributes to market integration, nonmarket integration, nondiscrimination, effective discrimination, effective competition, and the efficient competition, and the efficient functioning of the market and, functioning of the market and submit the revised network code submit the revised network code to the Commission within six to the Commission within six months of the day of the receipt months of the day of the receipt of the proposal. In the proposal of the proposal . In the proposal submitted to the Commission, submitted to the Commission, the Agency shall take into the Agency shall take into account the views provided by account the views provided by all involved parties during the all involved parties during the drafting of the proposal led by drafting of the proposal led by the ENTSO for Electricity or the the ENTSO for Electricity or the EU DSO entity and shall EU DSO entity and shall formally consult the relevant formally consult the relevant stakeholders on the version to be stakeholders on the version to be submitted to the Commission. submitted to the Commission.

ANNEX TREE.2.B EN

• 757. 

  11. Where the ENTSO for 11. Where the ENTSO for

  Electricity or the EU DSO entity Electricity or the EU DSO entity have failed to develop a network have failed to develop a network code within the period of time code within the period of time set by the Commission under set by the Commission under paragraph 8, the Commission paragraph 8, the Commission may request the Agency to may request the Agency to prepare a draft network code on prepare a draft network code on the basis of the relevant the basis of the relevant framework guideline. The framework guideline. The Agency may launch a further Agency may launch a further consultation in the course of consultation in the course of preparing a draft network code preparing a draft network code under this paragraph. The under this paragraph. The Agency shall submit a draft Agency shall submit a draft network code prepared under network code prepared under this paragraph to the this paragraph to the Commission and may Commission and may recommend that it be adopted. recommend that it be adopted.

• 758. 

  12. The Commission may 12. The Commission may adopt, on its own initiative, adopt, on its own initiative, where the ENTSO for where the ENTSO for Electricity Electricity or the EU DSO entity or the EU DSO entity have have failed to develop a network failed to develop a network code, or the Agency has failed to code, or the Agency has failed to develop a draft network code as develop a draft network code as referred to in paragraph 11 of referred to in paragraph 11 of this Article, or upon this Article, or upon

  recommendation of the Agency recommendation of the Agency under paragraph 10 of this under paragraph 10 of this Article, one or more network Article, one or more network codes in the areas listed in codes in the areas listed in paragraph 1. paragraph 1.

ANNEX TREE.2.B EN

• 759. 

  13. Where the Commission 13. Where the Commission proposes to adopt a network proposes to adopt a network

  code on its own initiative, the code on its own initiative, the Commission shall consult the Commission shall consult the Agency, the ENTSO for Agency, the ENTSO for Electricity and all relevant Electricity and all relevant stakeholders in regard to the stakeholders in regard to the draft network code during a draft network code during a period of no less than two period of no less than two months. months.

• 760. 

  14. This Article shall be 14. This Article shall be without prejudice to the without prejudice to the

  Commission's right to adopt and Commission's right to adopt and amend the guidelines as laid amend the guidelines as laid down in Article 57. It shall be down in Article 57. It shall be without prejudice to the without prejudice to the possibility for the ENTSO for possibility for the ENTSO for Electricity to develop non Electricity to develop nonbinding guidance in the areas set binding guidance in the areas set out in paragraph 1 where this out in paragraph 1 where this does not relate to areas covered does not relate to areas covered by a request addressed to it by by a request addressed to it by the Commission. This guidance the Commission. This shall be submitted to the Agency guidance shall be submitted to for an opinion. This opinion the Agency for an opinion. This shall be taken duly into account opinion shall be taken duly into by the ENTSO for Electricity. account by the ENTSO for Electricity.

ANNEX TREE.2.B EN

• 761. 

  Article 56

  Amendments of network codes

• 762. 

  1. The Commission is 1. Until 31 December 2025 empowered to adopt delegated the Commission is empowered acts in accordance with Article to adopt [ ] implementing acts 63 concerning the amendment of in accordance with Article [ ]

  network codes following the 62(2) concerning the amendment procedure under Article 55. of network codes within the Amendments can also be areas listed in Article 55(1) proposed by the Agency under and following the procedure the procedure set out in under Article 55. [ ] paragraphs 2 to 4 of this Article.

• 763. 

  2. Draft amendments to any AM 182 2. Draft amendments to network code adopted under 2. Draft amendments to any any network code adopted under Article 55 may be proposed to network code adopted under Article Article 55 may be proposed to the Agency by persons who are 55 may be proposed to the Agency the Agency by persons who are likely to have an interest in that by persons who are likely to have likely to have an interest in that network code, including the an interest in that network code, network code, including the

  ENTSO for Electricity, the EU including the ENTSO for ENTSO for Electricity, the EU DSO entity, transmission system Electricity, the EU DSO entity, DSO entity, regulatory operators, system users and transmission and distribution authorities distribution and consumers. The Agency may system operators, system users and transmission system operators, also propose amendments on its consumers. The Agency may also system users and consumers. own initiative. propose amendments on its own The Agency may also propose initiative. amendments on its own initiative.

ANNEX TREE.2.B EN

• 764. 

  3. The Agency may make 3. The Agency may make reasoned proposals for reasoned proposals for

  amendments to the Commission, amendments to the Commission explaining how such proposals explaining how such proposals are consistent with the are consistent with the objectives of the network codes objectives of the network codes set out in Article 55(2). Where it set out in Article 55(2). Where deems an amendment proposal it deems an amendment proposal admissible and on amendments admissible and on amendments on its own initiative, the Agency on its own initiative, the Agency shall consult all stakeholders in shall consult all stakeholders in accordance with Article 15 accordance with Article 15 [recast of Regulation (EC) No [recast of Regulation (EC) No 713/2009 i as proposed by 713/2009 as proposed by COM(2016) 863 i/2]. COM(2016) 863 i/2].

• 765. 

  4. The Commission is 4. Until 31 December 2025 empowered to adopt, taking the Commission is empowered account of the Agency's to adopt, taking account of the

  proposals, amendments to any Agency's proposals, network code adopted under amendments to any network Article 55 6 as delegated acts in code adopted under Article 55 as accordance with Article 63. [ ] implementing acts in accordance with Article [ ] 62(2).

ANNEX TREE.2.B EN

• 766. 

  5. Consideration of proposed [ ] amendments under the

  procedure set out in Article 63 shall be limited to consideration of the aspects related to the proposed amendment. Those proposed amendments are without prejudice to other amendments which the Commission may propose.

• 767. 

  AM 183

  Article 56 a (new) Article 56 a By 31 December 2022 the Commission shall assess the existing implementing acts containing network codes and guidelines in order to evaluate which of their elements could be usefully enshrined in legislative acts of the Union concerning the internal electricity market. The Commission shall submit a detailed report of its assessment to the European Parliament and to the Council. That report shall be accompanied, where appropriate, by legislative proposals following up on the Commission's assessment.

ANNEX TREE.2.B EN

• 768. 

  Article 57

  Guidelines

• 769. 

  1. The Commission may 1. Until 31 December 2025 adopt binding guidelines in the the Commission may adopt

  areas listed below. binding guidelines by in the areas listed below. Those

  guidelines shall be adopted as implementing acts in accordance with the examination procedure referred to in Article 62(2).

• 770. 

  2. The Commission may 2. Until 31 December 2025 adopt a delegated act as a the Commission may adopt [ ] Guideline in the areas where implementing acts as a

  such acts could also be Guideline in the areas where developed under the network such acts could also be code procedure pursuant to developed under the network Article 55 (1). code procedure pursuant to Article 55 (1).

• 771. 

  3. Guidelines may be 3. Guidelines may be adopted relating to the interadopted relating to the intertransmission system operator transmission system operator compensation mechanism. They compensation mechanism. They shall specify, in accordance with shall specify, in accordance with the principles set out in Articles the principles set out in Articles

5834/2/18 REV 2 BL/st 279

ANNEX TREE.2.B EN

• 772. 

  (a) details of the procedure (a) details of the procedure for determining which for determining which

  transmission system operators transmission system operators are liable to pay compensation are liable to pay compensation for cross-border flows including for cross-border flows including as regards the split between the as regards the split between the operators of national operators of national transmission systems from transmission systems from which cross-border flows which cross-border flows originate and the systems where originate and the systems where those flows end, in accordance those flows end, in accordance with Article 46(2); with Article 46(2);

• 773. 

  (b) details of the payment (b) details of the payment procedure to be followed, procedure to be followed,

  including the determination of including the determination of the first period for which the first period for which compensation is to be paid, in compensation is to be paid, in accordance with the second accordance with the second subparagraph of Article 46(3); subparagraph of Article 46(3);

• 774. 

  (c) details of methodologies (c) details of methodologies for determining the cross-border for determining the cross-border flows hosted for which flows hosted for which

  compensation is to be paid compensation is to be paid under under Article 46, in terms of Article 46, in terms of both both quantity and type of flows, quantity and type of flows, and and the designation of the the designation of the magnitudes of such flows as magnitudes of such flows as originating and/or ending in originating and/or ending in transmission systems of transmission systems of individual Member States, in individual Member States, in accordance with Article 46(5); accordance with Article 46(5);

ANNEX TREE.2.B EN

• 775. 

  (d) details of the (d) details of the methodology for determining methodology for determining the the costs and benefits incurred costs and benefits incurred as a as a result of hosting crossresult of hosting cross-border border flows, in accordance with flows, in accordance with Article 46(6); Article 46(6);

• 776. 

  (e) details of the treatment in (e) details of the treatment in the context of the interthe context of the intertransmission

  system operator transmission system operator compensation mechanism of compensation mechanism of electricity flows originating or electricity flows originating or ending in countries outside the ending in countries outside the European Economic Area; and European Economic Area; and

• 777. 

  (f) the participation of (f) the participation of national systems which are national systems which are interconnected through direct interconnected through direct current lines, in accordance with current lines, in accordance with Article 46. Article 46.

ANNEX TREE.2.B EN

• 778. 

  4. Guidelines may also 4. Guidelines may also determine appropriate rules determine appropriate rules relating to charges applied to relating to charges applied to producers, energy storage and producers, energy storage and customers (load) under national customers (load) under national distribution and transmission [ ] transmission tariff systems [ tariff systems and connection ], including the reflection of the regimes, including the reflection inter-transmission system of the inter-transmission system operator compensation

  operator compensation mechanism in national network mechanism in national network charges and the provision of charges and the provision of appropriate and efficient appropriate and efficient locational signals, in accordance locational signals, in accordance with the principles set out in with the principles set out in Article 16. Article 16.

• 779. 

  The guidelines may make The guidelines may make provision for appropriate and provision for appropriate and efficient harmonised locational efficient harmonised locational signals at Union level. signals at Union level.

• 780. 

  Any such harmonisation shall Any such harmonisation shall not prevent Member States from not prevent Member States from applying mechanisms to ensure applying mechanisms to ensure that network access charges that network access charges

  borne by customers (load) are borne by customers (load) are comparable throughout their comparable throughout their territory. territory.

ANNEX TREE.2.B EN

• 781. 

  5. Where appropriate, 5. Where appropriate, guidelines providing the guidelines providing the minimum degree of minimum degree of

  harmonisation required to harmonisation required to achieve the aim of this achieve the aim of this Regulation may also specify: Regulation may also specify:

• 782. 

  (a) details of rules for the (a) details of rules for the trading of electricity; trading of electricity;(b) details of investment incentive rules for interconnector capacity

  including locational signals; 783. (b) details of investment (b) details of investment

  incentive rules for incentive rules for interconnector capacity interconnector capacity including locational signals; including locational signals;

• 784. 

  6. The Commission may 6. The Commission may adopt guidelines on the adopt guidelines on the

  implementation of operational implementation of operational coordination between coordination between transmission system operators at transmission system operators at Union level. Those guidelines Union level. Those guidelines shall be consistent with and shall be consistent with and build upon the network codes build upon the network codes referred to in Article 55 of this referred to in Article 55 of this Regulation and build upon the Regulation and build upon the adopted specifications referred adopted specifications referred to in Article 27(1)(g) of this to in Article 27(1)(g) of this Regulation. When adopting Regulation. When adopting those guidelines, the those guidelines, the Commission shall take into Commission shall take into account differing regional and account differing regional and national operational national operational requirements. requirements.

ANNEX TREE.2.B EN

• 785. 

  Those guidelines shall be [Those guidelines shall be adopted in accordance with the adopted in accordance with the examination procedure referred examination procedure referred to in Article 62(2). to in Article 62(2). ]

• 786. 

  7. When adopting or AM 184 7. When adopting or amending guidelines, the 7. When adopting or amending amending guidelines, the Commission shall consult the guidelines, the Commission shall Commission shall consult the Agency, the ENTSO for consult the Agency, the ENTSO for Agency, the ENTSO for Electricity and other Electricity, the EU DSO entity and Electricity, the EU DSO Entity stakeholders where relevant. other stakeholders where relevant. and other stakeholders where relevant.

• 787. 

  Article 58

  Right of Member States to provide for more detailed measures

• 788. 

  This Regulation shall be without This Regulation shall be without prejudice to the rights of prejudice to the rights of

  Member States to maintain or Member States to maintain or introduce measures that contain introduce measures that contain more detailed provisions than more detailed provisions than those set out in this Regulation, those set out in this Regulation, in the guidelines referred to in in the guidelines referred to in Article 57 or in the network Article 57 or in the network codes referred to in Article 55, codes referred to in Article 55, provided those measures do not provided those measures do not [ endanger the effectiveness of ] contradict of Union Union legislation. legislation.

ANNEX TREE.2.B EN

• 789. 

  Article 58a

  By 31 December 2023 the Commission shall assess the existing implementing acts containing network codes and guidelines in order to evaluate which of their elements could be usefully enshrined in legislative acts of the Union concerning the internal electricity market and how the empowerments for network codes and guidelines pursuant to Articles 55 and 57 could be revised. The Commission shall submit a detailed report of its assessment to the European Parliament and the Council. That report shall be accompanied, where appropriate, by legislative proposals following up on the Commission's assessment.

ANNEX TREE.2.B EN

• 790. 

  Chapter VIII

  Final provisions

• 791. 

  Article 59

  New interconnectors

• 792. 

  1. New direct current 1. New direct current interconnectors may, upon interconnectors may, upon request, be exempted, for a request, be exempted, for a limited period of time, from the limited period of time, from the provisions of Article 17(2) of provisions of Article 17(2) of this Regulation and Articles 6, this Regulation and Articles 6, 43 59(6) and 60(1) of [recast of 43, 59(6) and 60(1) of [recast of Directive 2009/72/EC i as Directive 2009/72/EC i as proposed by COM(2016) 864 i/2] proposed by COM(2016) 864 i/2] under the following conditions: under the following conditions:

• 793. 

  (a) the investment must (a) the investment must enhance competition in enhance competition in

  electricity supply; electricity supply; 794. (b) the level of risk attached (b) the level of risk attached

  to the investment is such that the to the investment is such that the investment would not take place investment would not take place unless an exemption is granted; unless an exemption is granted;

• 795. 

  (c) the interconnector must (c) the interconnector must be be owned by a natural or legal owned by a natural or legal

  person which is separate at least person which is separate at least in terms of its legal form from in terms of its legal form from the system operators in whose the system operators in whose systems that interconnector will systems that interconnector will be built; be built;

• 796. 

  (d) charges are levied on (d) charges are levied on users of that interconnector; users of that interconnector;

ANNEX TREE.2.B EN

• 797. 

  (e) since the partial market (e) since the partial market opening referred to in Article 19 opening referred to in Article 19 of Directive 96/92/EC i of the of Directive 96/92/EC i of the European Parliament and of the European Parliament and of the Council 26 , no part of the capital Council 27 , no part of the capital or operating costs of the or operating costs of the

  interconnector has been interconnector has been recovered from any component recovered from any component of charges made for the use of of charges made for the use of transmission or distribution transmission or distribution systems linked by the systems linked by the interconnector; and interconnector; and

• 798. 

  (f) the exemption must not be (f) the exemption must not be to the detriment of competition to the detriment of competition

  or the effective functioning of or the effective functioning of the internal market in electricity, the internal market in electricity, or the efficient functioning of or the efficient functioning of the regulated system to which the regulated system to which the interconnector is linked. the interconnector is linked.

26 Directive 96/92/EC i of the European Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity (OJ L 27, 30.1.1997, p. 20).

27 Directive 96/92/EC i of the European Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity (OJ L 27, 30.1.1997, p. 20).

ANNEX TREE.2.B EN

• 799. 

  2. Paragraph 1 shall also 2. Paragraph 1 shall also apply, in exceptional cases, to apply, in exceptional cases, to alternating current alternating current

  interconnectors provided that the interconnectors provided that the costs and risks of the investment costs and risks of the investment in question are particularly high in question are particularly high when compared with the costs when compared with the costs and risks normally incurred and risks normally incurred when connecting two when connecting two neighbouring national neighbouring national transmission systems by an transmission systems by an alternating current alternating current interconnector. interconnector.

• 800. 

  3. Paragraph 1 shall also 3. Paragraph 1 shall also apply to significant increases of apply to significant increases of capacity in existing capacity in existing

  interconnectors. interconnectors. 801. 4. The decision on the 4. The decision on the

  exemption under paragraphs 1, 2 exemption under paragraphs 1, 2 and 3 shall be taken on a caseand 3 shall be taken on a caseby-case basis by the regulatory by-case basis by the regulatory authorities of the Member States authorities of the Member States concerned. An exemption may concerned. An exemption may cover all or part of the capacity cover all or part of the capacity of the new interconnector, or of of the new interconnector, or of the existing interconnector with the existing interconnector with significantly increased capacity. significantly increased capacity.

ANNEX TREE.2.B EN

• 802. 

  Within two months from the Within two months from the date on which the request for date on which the request for exemption was received by the exemption was received by the last of the regulatory authorities last of the regulatory authorities concerned, the Agency may concerned, the Agency may submit an advisory opinion to submit an advisory opinion to those regulatory authorities those regulatory authorities which could provide a basis for which could provide a basis for their decision. their decision.

• 803. 

  In deciding to grant an In deciding to grant an exemption, consideration shall exemption, consideration shall be given, on a case-by-case be given, on a case-by-case basis, to the need to impose basis, to the need to impose conditions regarding the conditions regarding the duration of the exemption and duration of the exemption and non-discriminatory access to the non-discriminatory access to the interconnector. When deciding interconnector. When deciding those conditions, account shall, those conditions, account shall, in particular, be taken of in particular, be taken of additional capacity to be built or additional capacity to be built or the modification of existing the modification of existing capacity, the time-frame of the capacity, the time-frame of the project and national project and national

  circumstances. circumstances.

ANNEX TREE.2.B EN

• 804. 

  Before granting an exemption, Before granting an exemption, the regulatory authorities of the the regulatory authorities of the Member States concerned shall Member States concerned shall decide upon the rules and decide upon the rules and

  mechanisms for management mechanisms for management and allocation of capacity. and allocation of capacity. Congestion-management rules Congestion-management rules shall include the obligation to shall include the obligation to offer unused capacity on the offer unused capacity on the market and users of the facility market and users of the facility shall be entitled to trade their shall be entitled to trade their contracted capacities on the contracted capacities on the secondary market. In the secondary market. In the assessment of the criteria assessment of the criteria referred to in points (a), (b) and referred to in points (a), (b) and (f) of paragraph 1, the results of (f) of paragraph 1, the results of the capacity-allocation the capacity-allocation procedure shall be taken into procedure shall be taken into account. account.

• 805. 

  Where all the regulatory Where all the regulatory authorities concerned have authorities concerned have reached agreement on the reached agreement on the exemption decision within six exemption decision within six months, they shall inform the months, they shall inform the Agency of that decision. Agency of that decision.

• 806. 

  The exemption decision, The exemption decision, including any conditions including any conditions referred to in the second referred to in the second subparagraph of this paragraph, subparagraph of this paragraph, shall be duly reasoned and shall be duly reasoned and published. published.

ANNEX TREE.2.B EN

• 807. 

  5. The decision referred to in 5. The decision referred to in paragraph 4 shall be taken by paragraph 4 shall be taken by the the Agency: Agency:

• 808. 

  (a) where all the regulatory (a) where all the regulatory authorities concerned have not authorities concerned have not been able to reach an agreement been able to reach an agreement within six months from the date within six months from the date the exemption was requested the exemption was requested before the last of those before the last of those

  regulatory authorities; or regulatory authorities; or 809. (b) upon a joint request from (b) upon a joint request from

  the regulatory authorities the regulatory authorities concerned. concerned. Before taking such a decision, Before taking such a decision, the Agency shall consult the the Agency shall consult the regulatory authorities concerned regulatory authorities concerned and the applicants. and the applicants.

• 810. 

  6. Notwithstanding 6. Notwithstanding paragraphs 4 and 5, Member paragraphs 4 and 5, Member States may provide for the States may provide for the regulatory authority or the regulatory authority or the Agency, as the case may be, to Agency, as the case may be, to submit, for formal decision, to submit, for formal decision, to the relevant body in the Member the relevant body in the Member State, its opinion on the request State, its opinion on the request for an exemption. That opinion for an exemption. That opinion shall be published together with shall be published together with the decision. the decision.

ANNEX TREE.2.B EN

• 811. 

  7. A copy of every request 7. A copy of every request for exemption shall be for exemption shall be

  transmitted for information transmitted for information without delay by the regulatory without delay by the regulatory authorities to the Agency and to authorities to the Agency and to the Commission on receipt. The the Commission on receipt. The decision shall be notified, decision shall be notified, without delay, by the regulatory without delay, by the regulatory authorities concerned or by the authorities concerned or by the Agency (notifying bodies), to Agency (notifying bodies), to the Commission, together with the Commission, together with all the relevant information with all the relevant information with respect to the decision. That respect to the decision. That information may be submitted to information may be submitted to the Commission in aggregate the Commission in aggregate form, enabling the Commission form, enabling the Commission to reach a well-founded to reach a well-founded decision. In particular, the decision. In particular, the information shall contain: information shall contain:

ANNEX TREE.2.B EN

• 812. 

  (a) the detailed reasons on the (a) the detailed reasons on the basis of which the exemption basis of which the exemption

  was granted or refused, was granted or refused, including the financial including the financial information justifying the need information justifying the need for the exemption; for the exemption;

• 813. 

  (b) the analysis undertaken of (b) the analysis undertaken of the effect on competition and the the effect on competition and the effective functioning of the effective functioning of the

  internal market in electricity internal market in electricity resulting from the grant of the resulting from the grant of the exemption; exemption;

• 814. 

  (c) the reasons for the time (c) the reasons for the time period and the share of the total period and the share of the total capacity of the interconnector in capacity of the interconnector in question for which the question for which the

  exemption is granted; and exemption is granted; and 815. (d) the result of the (d) the result of the

  consultation of the regulatory consultation of the regulatory authorities concerned. authorities concerned.

ANNEX TREE.2.B EN

• 816. 

  8. Within a period of 50

  working days from the day 8. Within a period of 50 following receipt of notification working days from the day under paragraph 7, the following receipt of notification Commission may take a under paragraph 7, the decision requesting the notifying Commission may take a decision bodies to amend or withdraw the requesting the notifying bodies decision to grant an exemption. to amend or withdraw the That period of 50 working days decision to grant an exemption. may be extended by an That period of 50 working days additional period of 50 working may be extended by an days where further information additional period of 50 working is sought by the Commission. days where further information That additional period shall is sought by the Commission. begin on the day following That additional period shall receipt of the complete begin on the day following information. The initial period receipt of the complete may also be extended by consent information. The initial period of both the Commission and the may also be extended by consent

  notifying bodies. of both the Commission and the notifying bodies.

ANNEX TREE.2.B EN

• 817. 

  When the requested information When the requested information is not provided within the period is not provided within the period set out in the request, the set out in the request, the

  notification shall be deemed to notification shall be deemed to be withdrawn unless, before the be withdrawn unless, before the expiry of that period, either the expiry of that period, either the period is extended by consent of period is extended by consent of both the Commission and the both the Commission and the notifying bodies, or the notifying bodies, or the notifying notifying bodies, in a duly bodies, in a duly reasoned reasoned statement, inform the statement, inform the Commission that they consider Commission that they consider the notification to be complete. the notification to be complete.

• 818. 

  The notifying bodies shall The notifying bodies shall comply with a Commission comply with a Commission decision to amend or withdraw decision to amend or withdraw the exemption decision within the exemption decision within one month and shall inform the one month and shall inform the Commission accordingly. Commission accordingly.

• 819. 

  The Commission shall preserve The Commission shall preserve the confidentiality of the confidentiality of

  commercially sensitive commercially sensitive information. information.

• 820. 

  The Commission's approval of The Commission's approval of an exemption decision shall an exemption decision shall

  expire two years after the date of expire two years after the date of its adoption in the event that its adoption in the event that construction of the construction of the interconnector has not yet interconnector has not yet started by that date, and five started by that date, and five years after the date of its years after the date of its adoption if the interconnector adoption if the interconnector has not become operational by has not become operational by that date, unless the that date, unless the Commission Commission decides, on the decides, on the basis of a

ANNEX TREE.2.B EN

basis of a reasoned request by reasoned request by the the notifying bodies, that any notifying bodies, that any delay delay is due to major obstacles is due to major obstacles beyond beyond the control of the person the control of the person to to whom the exemption has whom the exemption has been been granted. granted.

• 821. 

  9. Where the regulatory Where the regulatory authorities authorities of the Member States of the Member States concerned concerned decide to modify a decide to modify a decision

  decision under paragraph 1, they under paragraph 1, they shall shall notify this decision without notify this decision without delay to the Commission, delay to the Commission, together with all the relevant together with all the relevant information with respect to the information with respect to the decision. Paragraphs 1 to 8 shall decision. Paragraphs 1 to 8 shall apply to this notified decision, apply to this notified decision, taking into account the taking into account the particularities of the existing particularities of the existing exemption. exemption.

• 822. 

  10. The Commission may, The Commission may, upon upon request or on its own request or on its own initiative, initiative, reopen the reopen the proceedings:

  proceedings: 823. (a) where, taking due (a) where, taking due

  consideration of legitimate consideration of legitimate expectations by the parties and expectations by the parties and of the economic balance of the economic balance achieved in the original achieved in the original exemption decision, there has exemption decision, there has been a material change in any of been a material change in any of the facts on which the decision the facts on which the decision was based; was based;

ANNEX TREE.2.B EN

• 824. 

  (b) where the undertakings (b) where the undertakings concerned act contrary to their concerned act contrary to their commitments; or commitments; or

• 825. 

  (c) where the decision was (c) where the decision was based on incomplete, incorrect based on incomplete, incorrect or misleading information or misleading information

  provided by the parties. provided by the parties. 826. 11. The Commission is 11. The Commission is

  empowered to adopt delegated empowered to adopt delegated acts in accordance with Article acts in accordance with Article 63 concerning the adoption of 63 concerning the adoption of guidelines for the application of guidelines for the application of the conditions laid down in the conditions laid down in paragraph 1 of this Article and paragraph 1 of this Article and to set out the procedure to be to set out the procedure to be followed for the application of followed for the application of paragraphs 4, 7 8, 9 and 10 of paragraphs 4, 7, 8, 9 and 10 of this Article. this Article.

• 827. 

  Article 59a

  Derogations

• 828. 

  1. Member States may apply for derogations from the relevant provisions of Articles 3, 5, 6 (1), 7 (1) and (4), 8 to 10, 13 to 15, 17 to 22, 23 (1), (2), (4) (5) and (5a), 24, 32 to 44 and 48 in the following cases:

ANNEX TREE.2.B EN

• 829. 

  (a) the Member State can demonstrate that there are substantial problems for the operation of their small

  isolated and connected systems. In this case, the derogation shall be limited in time and subject to conditions aiming at increased competition and integration with the internal market.

• 830. 

  (b) for outermost regions within the meaning of Article 349 of TFEU, that cannot be interconnected with the

  European energy market for evident physical reasons. In this case, the derogation is not limited in time.

ANNEX TREE.2.B EN

• 831. 

  In both cases, the derogation shall be subject to conditions aimed at ensuring that the

  derogation does not hamper the transition towards renewable energies.

• 832. 

  When granting a derogation, the Commission shall reflect in its decision to which extent the derogations must take into

  account the application of the network codes and guidelines.

• 833. 

  If a derogation is granted, the

  Commission shall inform the Member States of those applications before taking a decision, taking into account respect for confidentiality.

• 834. 

  2. Articles 3, 4, 5, 6 (1),

  (2)(c), (2)(h), 7 to 10, 12 to 15, 17 to 22, 23 (1), (2), (5) and (5a), 23(4)(b), 24, 31(2), (3), 32 to 44, 46 and 48 shall not apply to Cyprus until its transmission system becomes connected to other Member States’ transmission systems via interconnections.

• 835. 

  If the transmission system of

  Cyprus is not connected to other Member States’ transmission systems via interconnections by 1 January 2026, Cyprus shall assess the need for derogation from those

ANNEX TREE.2.B EN

provisions and may submit a request for continued derogation to the Commission. The Commission shall assess whether the application of the respective provisions risks causing substantial problems for the operation of the electricity system in Cyprus or whether their application in Cyprus is expected to provide benefits to market functioning. On the basis of this assessment, the Commission shall issue a reasoned decision on full or partial prolongation of the derogation which shall be published in the Official Journal of the European Union.

• 836. 

  3. The provisions of the

  Regulation shall not affect the application of the derogations pursuant to the [Electricity Directive].

ANNEX TREE.2.B EN

• 837. 

  Article 60

  Provision of information and confidentiality

• 838. 

  1. Member States and the 1. Member States and the regulatory authorities shall, on regulatory authorities shall, on request, provide to the request, provide to the

  Commission all information Commission all information necessary for the purposes of necessary for the purposes of enforcing the provisions of this enforcing the provisions of this Regulation. Regulation.

• 839. 

  The Commission shall fix a The Commission shall fix a reasonable time limit within reasonable time limit within which the information is to be which the information is to be provided, taking into account the provided, taking into account the complexity of the information complexity of the information required and the urgency with required and the urgency with which the information is needed. which the information is needed.

• 840. 

  2. If the Member State or the 2. If the Member State or the regulatory authority concerned regulatory authority concerned

  does not provide the information does not provide the information referred to in paragraph 1 within referred to in paragraph 1 within the given time-limit pursuant to the given time-limit pursuant to paragraph 1 , the Commission paragraph 1, the Commission may request all information may request all information necessary for the purpose of necessary for the purpose of enforcing the provisions of this enforcing the provisions of this Regulation directly from the Regulation directly from the undertakings concerned. undertakings concerned.

• 841. 

  When sending a request for When sending a request for information to an undertaking, information to an undertaking, the Commission shall at the the Commission shall at the same time forward a copy of the same time forward a copy of the request to the regulatory request to the regulatory

  authorities of the Member State authorities of the Member State in whose territory the seat of the in whose territory the seat of the undertaking is situated. undertaking is situated.

ANNEX TREE.2.B EN

• 842. 

  3. In its request for 3. In its request for information under paragraph 1, information under paragraph 1, the Commission shall state the the Commission shall state the legal basis of the request, the legal basis of the request, the time-limit within which the time-limit within which the information is to be provided, information is to be provided, the purpose of the request, and the purpose of the request, and the penalties provided for in the penalties provided for in Article 61(2) for supplying Article 61(2) for supplying incorrect, incomplete or incorrect, incomplete or misleading information. The misleading information. The Commission shall fix a Commission shall fix a reasonable time-limit taking into reasonable time-limit taking into account the complexity of the account the complexity of the information required and the information required and the urgency with which the urgency with which the information is needed. information is needed.

• 843. 

  4. The owners of the 4. The owners of the undertakings or their undertakings or their

  representatives and, in the case representatives and, in the case of legal persons, the persons of legal persons, the persons authorised to represent them by authorised to represent them by law or by their instrument of law or by their instrument of incorporation, shall supply the incorporation, shall supply the information requested. Where information requested. Where lawyers duly authorised so to act lawyers duly authorised so to act supply the information on behalf supply the information on behalf of their clients, the client shall of their clients, the client shall remain fully responsible in the remain fully responsible in the event that the information event that the information supplied is incomplete, incorrect supplied is incomplete, incorrect or misleading. or misleading.

ANNEX TREE.2.B EN

• 844. 

  5. Where an undertaking 5. Where an undertaking does not provide the information does not provide the information requested within the time-limit requested within the time-limit fixed by the Commission or fixed by the Commission or supplies incomplete supplies incomplete information, information, the Commission the Commission may by

  may by decision require the decision require the information information to be provided. That to be provided. That decision decision shall specify what shall specify what information is information is required and fix required and fix an appropriate an appropriate time-limit within time-limit within which it is to which it is to be supplied. It be supplied. It shall indicate the shall indicate the penalties penalties provided for in Article provided for in Article 61(2). It 61(2). It shall also indicate the shall also indicate the right to right to have the decision have the decision reviewed by reviewed by the Court of Justice the Court of Justice of the of the European Union. European Union .

• 845. 

  The Commission shall, at the The Commission shall, at the same time, send a copy of its same time, send a copy of its decision to the regulatory decision to the regulatory

  authorities of the Member State authorities of the Member State within the territory of which the within the territory of which the person is resident or the seat of person is resident or the seat of the undertaking is situated. the undertaking is situated.

ANNEX TREE.2.B EN

• 846. 

  6. The information referred 6. The information referred to in paragraphs 1 and 2 shall be to in paragraphs 1 and 2 shall be used only for the purposes of used only for the purposes of

  enforcing the provisions of this enforcing the provisions of this Regulation. Regulation.

• 847. 

  The Commission shall not The Commission shall not disclose information of the kind disclose information of the kind covered by the obligation of covered by the obligation of professional secrecy which is professional secrecy which is acquired pursuant to this acquired pursuant to this

  Regulation. Regulation.

• 848. 

  Article 61

  Penalties

• 849. 

  1. Without prejudice to 1. Without prejudice to paragraph 2, the Member States paragraph 2, the Member States shall lay down rules on penalties shall lay down rules on penalties applicable to infringements of applicable to infringements of the provisions of this the provisions of this

  Regulation, the network codes Regulation, the network codes adopted pursuant to Article 55, adopted pursuant to Article 55, and the guidelines adopted and the guidelines adopted pursuant to Article 57 and shall pursuant to Article 57 and shall take all measures necessary to take all measures necessary to ensure that those provisions are ensure that those provisions are implemented. The penalties implemented. The penalties provided for must be effective, provided for must be effective, proportionate and dissuasive. proportionate and dissuasive.

• 850. 

  2. The Commission may, by 2. The Commission may, by decision, impose on decision, impose on

  undertakings fines not exceeding undertakings fines not exceeding 1 % of the total turnover in the 1 % of the total turnover in the preceding business year where, preceding business year where, intentionally or negligently, they intentionally or negligently, they supply incorrect, incomplete or supply incorrect, incomplete or misleading information in misleading information in

ANNEX TREE.2.B EN

response to a request made response to a request made pursuant to Article 60(3) or fail pursuant to Article 60(3) or fail to supply information within the to supply information within the time-limit fixed by a decision time-limit fixed by a decision adopted pursuant to the first adopted pursuant to the first subparagraph of Article 60(5). subparagraph of Article 60(5). In In setting the amount of a fine, setting the amount of a fine, the the Commission shall have Commission shall have regard to regard to the gravity of the the gravity of the failure to failure to comply with the comply with the requirements of requirements of the first the first subparagraph. subparagraph.

• 851. 

  3. Penalties provided for 3. Penalties provided for pursuant to paragraph 1 and pursuant to paragraph 1 and decisions taken pursuant to decisions taken pursuant to paragraph 2 shall not be of a paragraph 2 shall not be of a criminal law nature. criminal law nature.

• 852. 

  Article 62

  Committee procedure

• 853. 

  1. The Commission shall be 1. The Commission shall be assisted by the committee set up assisted by the committee set up by Article 68 of [recast of by Article 68 of [recast of

  Directive 2009/72/EC i as Directive 2009/72/EC i as proposed by COM(2016) proposed by COM(2016) 864 i/2]. 864/2].

• 854. 

  2. Where reference is made 2. Where reference is made to this paragraph, Article 5 of to this paragraph, Article 5 of Regulation (EU) No 182/2011 i Regulation (EU) No 182/2011 i of of the European Parliament and the European Parliament and of of the Council 28 shall apply. the Council

  29 shall apply.

28 Regulation (EU) No 182/2011 i of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (OJ L 55, 28.2.2011, p. 13).

ANNEX TREE.2.B EN

• 855. 

  Article 63

  Exercise of the delegation

• 856. 

  1. The power to adopt 1. The power to adopt delegated acts is conferred on delegated acts is conferred on the Commission subject to the the Commission subject to the conditions laid down in this conditions laid down in this Article. Article.

• 857. 

  2. The power to adopt 2. The power to adopt delegated acts referred to in delegated acts referred to in Article 31(3), Article 46(4), Article [ ] 46(4), [ ] and Article 55(1), Article 56(1) and Article 59(11) shall be conferred (4), and Article 59(11) shall be on the Commission for an conferred on the Commission undetermined period of time for an undetermined period of from the [OP: please insert the time from the [OP: please insert date of entry into force]. the date of entry into force].

29 Regulation (EU) No 182/2011 i of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (OJ L 55, 28.2.2011, p. 13).

ANNEX TREE.2.B EN

• 858. 

  3. The delegation of power 3. The delegation of power referred to in Article 31(3), referred to in [ ] Article 46(4), [ Article 46(4), Article 55(1), ] and Article 59(11) may be

  Article 56(1) and (4), and revoked at any time by the Article 59(11) may be revoked European Parliament or by the at any time by the European Council. A decision to revoke Parliament or by the Council. A shall put an end to the delegation decision to revoke shall put an of power specified in that end to the delegation of power decision. It shall take effect on specified in that decision. It the day following the shall take effect on the day publication of the decision in the following the publication of the Official Journal of the European decision in the Official Journal Union or at a later date specified of the European Union or at a therein. It shall not affect the later date specified therein. It validity of any [delegated] act shall not affect the validity of already in force. any delegated act already in force.

ANNEX TREE.2.B EN

• 859. 

  4. Before adopting a 4. Before adopting a delegated act, the Commission delegated act, the Commission shall consult experts designated shall consult Electricity Crossby each Member State in border Committee and experts accordance with the principles designated by each Member laid down in the State in accordance with the Interinstitutional Agreement on principles laid down in the Better Law-Making of 13 April Interinstitutional Agreement on 2016. Better Law-Making of 13 April 2016.

• 860. 

  5. As soon as it adopts a 5. As soon as it adopts a delegated act, the Commission delegated act, the Commission shall notify it simultaneously to shall notify it simultaneously to the European Parliament and to the European Parliament and to the Council. the Council.

• 861. 

  6. A delegated act adopted 6. A delegated act adopted pursuant to Article 31(3), Article pursuant to [ ] Article 46(4), [ ] 46(4), Article 55(1), Article and Article 59(11) shall enter 56(1) and (4), and Article 59(11) into force only if no objection shall enter into force only if no has been expressed either by the objection has been expressed European Parliament or by the either by the European Council within a period of two Parliament or by the Council months of notification of that act within a period of two months of to the European Parliament and notification of that act to the the Council or if, before the

  European Parliament and the expiry of that period, the Council or if, before the expiry European Parliament and the of that period, the European Council have both informed the Parliament and the Council have Commission that they will not both informed the Commission object. That period shall be that they will not object. That extended by two months at the period shall be extended by two initiative of the European months at the initiative of the Parliament or of the Council. European Parliament or of the Council.

ANNEX TREE.2.B EN

• 862. 

  Article 64

  Repeal

• 863. 

  Regulation (EC) No 1. Regulation (EC) No

  714/2009 is repealed. 714/2009 is repealed. References to the repealed References to the repealed Regulation shall be construed as Regulation shall be construed as references to this Regulation and references to this Regulation and shall be read in accordance with shall be read in accordance with the correlation table in Annex II. the correlation table in Annex II.

• 864. 

  1a. Any implementing act adopted on the basis of

  Regulation 714/2009 i shall continue to apply beyond the date of repeal of Regulation 714/2009 until it is repealed.

• 865. 

  AM 185

  Article 64 a (new) Article 64 a Review By 1 June 2025, the Commission shall review and submit a report on the implementation of this Regulation, together with a legislative proposal if appropriate, to the European Parliament and to the Council.

ANNEX TREE.2.B EN

• 866. 

  Article 65

  Entry into force

• 867. 

  This Regulation shall enter into This Regulation shall enter into force on the twentieth day force on the twentieth day

  following that of its publication following that of its publication in the Official Journal of the in the Official Journal of the European Union. European Union. It shall apply from 1 January It shall apply from 1 January 2020. 2020.

  Articles 13 and 58a of this Regulation shall apply with effect from the date of entry into force of this Regulation.

  For the purpose of implementing Article 13, Article 14 of this Regulation shall apply with effect from the date of entry into force of this Regulation.

  For the purpose of reviewing this Regulation no later than by the end of 2030, the Commission shall, where appropriate, submit a proposal.

ANNEX TREE.2.B EN

• 868. 

  This Regulation shall be binding This Regulation shall be binding in its entirety and directly in its entirety and directly

  applicable in all Member States. applicable in all Member States.

• 869. 

  Done at Brussels, Done at Brussels,

  For the European Parliament For the European Parliament The President The President For the Council For the Council The President The President

ANNEX TREE.2.B EN

• 870. 

  ANNEX I

  AM 186 871. FUNCTIONS OF FUNCTIONS OF REGIONAL [ ] TASKS OF REGIONAL [

  REGIONAL OPERATIONAL COORDINATION CENTRES ]SECURITY CENTRES COORDINATORS

• 872. 

  1. Coordinated capacity 1. Coordinated capacity 1. Coordinated capacity calculation calculation calculation

• 873. 

  1.1. Regional operational 1.1. Regional coordination 1.1 Regional [ ] security centres shall perform centres shall perform coordinated coordinators shall perform the coordinated calculation of cross calculation of cross zonal coordinated calculation of cross zonal capacities. capacities. zonal capacities.

• 874. 

  1.2. Coordinated capacity [ ] Coordinated capacity calculation shall be performed in calculation shall be performed [ due time for each market ] for [ ] the day-ahead and timeframe and as frequently as intraday timeframes.

  needed during the intraday timeframe.

• 875. 

  1.2a Coordinated capacity calculation shall be performed on the basis of the

  methodologies developed pursuant to Articles 21, 26, 29 and 30 of [Commission Regulation 2015/1222 establishing a guideline on capacity allocation and congestion management].

ANNEX TREE.2.B EN

• 876. 

  1.3. Coordinated capacity 1.3 Coordinated capacity calculation shall be performed calculation shall be performed based on a common system based on a common [ ] grid model in accordance with point model in accordance with point 2 and on a coordinated capacity 3 [ ].

  calculation methodology developed by the transmission system operators of the relevant system operation region.

• 877. 

  1.4. Coordinated capacity 1.4 Coordinated capacity calculation shall ensure efficient calculation shall ensure an congestion management in efficient congestion

  accordance with the principles management in accordance with of congestion management the principles of congestion defined in this Regulation. management defined in this Regulation.

• 878. 

  2. Coordinated security 2. Coordinated security analysis analysis

• 879. 

  2.1. Regional operational 2.1. Regional coordination 2.1. Regional [ ] security centres shall perform centres shall perform coordinated coordinators shall perform coordinated security analysis security analysis aiming at ensuring coordinated security analysis aiming at ensuring secure secure system operation. aiming at ensuring secure

  system operation. system operation. 880. 2.2. Security analysis shall be 2.2 Security analysis shall be

  performed for all operational performed for all operational planning timeframes using the planning timeframes, between common system models. the year-ahead and intraday timeframes, using the common [ ] grid models.

ANNEX TREE.2.B EN

• 881. 

  2.2a Coordinated security analysis shall be performed on the basis of the methodologies developed pursuant to Articles 75 and 76 of Commission

  Regulation 2017/1485 establishing a guideline on electricity transmission system operation.

• 882. 

  2.3. Regional operational 2.3. Regional coordination 2.3 Regional [ ] security centres shall share the results of centres shall share the results of the coordinators shall share the the coordinated security analysis coordinated security analysis with results of the coordinated

  with at least the transmission at least the transmission system security analysis with at least the system operators of the system operators of the system operation transmission system operators of operation region. region. the system operation region.

• 883. 

  2.4. When as a result of the 2.4. When as a result of the 2.4 When as a result of the coordinated security analysis a coordinated security analysis a coordinated security analysis a regional operational centre regional coordination centre regional [ ] security

  detects a possible constraint, it detects a possible constraint, it shall coordinator detects a possible shall design remedial actions design remedial actions maximizing constraint, it shall design maximizing economic economic efficiency. remedial actions maximizing efficiency. effectivenes and economic efficiency.

• 884. 

  2.4 a. Coordinated security analysis shall be performed based on a common system model in accordance with point 2 and on a methodology to design coordinated remedial actions developed by the transmission system operators of the relevant system operation region.

ANNEX TREE.2.B EN

• 885. 

  3. Creation of common 3. Creation of common [ ] system models grid models

• 886. 

  3.1. Regional operational 3.1. Regional coordination 3.1 Regional [ ] security centres shall set up efficient centres shall set up efficient coordinators shall set up

  processes for the creation of a processes for the creation of a efficient processes for the common system model for each common system model for each creation of a common [ ] grid operational planning timeframe. operational planning timeframe. model for each operational planning timeframe between the year-ahead and intraday timeframes.

• 887. 

  3.2. Transmission system 3.2. Transmission system 3.2 Transmission system operators shall appoint one operators shall appoint one regional operators shall appoint one regional operational centre to coordination centre to build the regional [ ] security

  build the common system model common system model for all coordinator to build the Unionfor all regions. regions. wide common [ ] grid models [ ].

• 888. 

  3.2a Common grid models shall be performed in

  accordance with the methodologies developed pursuant to Articles 67, 70 and 79 of Commission Regulation 2017/1485 establishing a guideline on electricity transmission system operation and pursuant to Article 28 of Commission Regulation 2015/1222 establishing a guideline on capacity allocation and congestion management.

ANNEX TREE.2.B EN

• 889. 

  3.3. Common system models 3.3 Common [ ] grid models shall include relevant data for shall include relevant data for

  efficient operational planning efficient operational planning and capacity calculation in all and capacity calculation in all operational planning operational planning timeframes. timeframes between the yearahead and intraday timeframes.

• 890. 

  3.4. Common system models 3.4. Common system models 3.4 Common [ ] grid models shall be made available to all shall be made available to all shall be made available to all

  regional operational centres, regional coordination centres, regional [ ] security transmission system operators, transmission system operators, coordinators, transmission ENTSO for Electricity and the ENTSO for Electricity and the system operators, ENTSO for Agency, upon its request. Agency, upon its request. Electricity and the Agency, upon its request.

• 891. 

  4. Consistency assessment 4. Support to the of transmission system consistency assessment of operators' defense plans and transmission system operators' restoration plans defense plans and restoration plans

ANNEX TREE.2.B EN

• 892. 

  4.1a Regional security coordinators shall support the transmission system operators of the system operation region in carrying out the consistency assessment of transmission system operators' defense plans and restoration plans pursuant to the procedures set out in Article 6 of

  [Commission Regulation xxxx/xxxx establishing a network code on electricity emergency and restoration].

• 893. 

  4.1. All transmission system 4.1 All transmission system operators shall agree on a operators shall agree on a

  threshold above which the threshold above which the impact of actions of one or more impact of actions of one or more transmission system operators in transmission system operators in the emergency, blackout or the emergency, blackout or restoration states is considered restoration states is considered significant for other significant for other transmission transmission system operators system operators synchronously synchronously or nonor non- synchronously synchronously interconnected. interconnected.

ANNEX TREE.2.B EN

• 894. 

  4.2. Using the threshold 4.2. Using the threshold defined [ ] defined pursuant to point 4.1, pursuant to point 4.1, each regional

  each regional operational centre coordination centre shall provide shall provide support to the support to the transmission system transmission system operators of operators of the system operation the system operation region region regarding the assessment of regarding the assessment of the the consistency of its transmission consistency of its transmission system operators’ system defence system operators’ system plans and the restoration plans. defence plans and the restoration plans.

• 895. 

  4.3. In providing support to 4.3. In providing support to the 4.3 In providing support to the transmission system transmission system operators, the the transmission system

  operators, the regional regional coordination centre shall: operators, the regional [ ] operational centre shall: security coordinator shall:

• 896. 

  (a) identify potential (a)identify incompatibilities; potential

  incompatibilities; 897. (b) propose mitigation (b) propose mitigation

  actions. actions. 898. 4.4. Transmission system 4.4 Transmission system

  operators shall take into account operators shall assess and take the proposed mitigation actions. into account the proposed mitigation actions.

• 899. 

  5. Coordination and 5. (8 in GA) Support the

  optimization of regional coordination and optimization restoration of regional restoration

• 900. 

  5.1. Regional operational deleted [ ] centres shall be equipped with

  the close to real time supervisory control and data acquisition systems with the observability defined by applying the threshold defined in accordance with point 4.1.

ANNEX TREE.2.B EN

• 901. 

  5.2. Each relevant regional 5.2. Each relevant regional 5.2 (8.2 IN GA) Each relevant operational centre shall provide coordination centre shall provide regional [ ] security

  assistance to the appointed assistance to the appointed coordinator shall [ ] support frequency leaders and the frequency leaders and the the transmission system resynchronisation leaders resynchronisation leaders aiming at operators appointed as [ ] aiming at improving the improving the efficiency and frequency leaders and the efficiency and effectiveness of effectiveness of system restoration. resynchronisation leaders system restoration. Transmission system operators pursuant to Articles 29 and 33 Transmission system operators shall be entitled to request of Commission Regulation shall be entitled to request assistance from regional xxxx/xxxx establishing a assistance from regional coordination centres if their system network code on emergency operational centres if their is in a blackout or restoration state. and restoration [aiming at system is in a blackout or improving] to improve the restoration state. efficiency and effectiveness of system restoration. The transmission system operators of the system operation region shall define the role of the regional security coordinator relating to the support to the coordination and optimisation of regional restoration.

ANNEX TREE.2.B EN

• 902. 

  8.3 in GA (ex last sentence of

  5.2) Transmission system operators [ ] may [ ] request assistance from regional [ ] security coordinators if their system is in a blackout or restoration state.

• 903. 

  8.4 in GA Regional security coordinators shall be equipped with the close to real time

  supervisory control and data acquisition systems with the observability defined by applying the threshold defined in accordance with point 4.1.

• 904. 

  6. Post-operation and post 6. (9 in GA) Post-operation disturbances analysis and and post-disturbances analysis reporting and reporting

• 905. 

  6.1. Regional operational 6.1. Regional coordination 6.1 (9.1 in GA) Regional [ ] centres shall investigate and centres shall investigate and security coordinators shall [ ] prepare a report on any incident prepare a report on any incident prepare a report on any incident above the threshold defined in above the threshold defined in above the threshold defined in accordance with point 4.1. The accordance with point 4.1. The accordance with point 4.1. The regulatory authorities of the regulatory authorities of the system regulatory authorities of the

  system operation region and the operation region and the Agency system operation region and the Agency may be involved in the may be involved in the Agency may be involved in the investigation upon their request. investigation upon their request. investigation upon their request. The report shall contain The report shall contain The report shall contain recommendations aiming at recommendations aiming at recommendations aiming at preventing similar incidents in preventing similar incidents in preventing similar incidents in future. future. future.

ANNEX TREE.2.B EN

• 906. 

  6.2. The report shall be made 6.2 (9.5 in GA) The report available to all transmission shall be [ ] published. The system operators, regulatory Agency may issue

  authorities, the Commission and recommendations aiming at the Agency. The Agency may preventing similar incidents in issue recommendations aiming future. at preventing similar incidents in future.

• 907. 

  7. Regional sizing of [ ] reserve capacity

• 908. 

  7.1. Regional operational 7.1. Regional coordination centres shall determine the centres shall determine the reserve reserve capacity requirements capacity requirements for the for the system operation region. system operation region. The The determination of reserve determination of reserve capacity capacity requirements shall: requirements shall:

• 909. 

  (a) pursue the general objective to maintain operational security in the most cost effective manner;

• 910. 

  (b) be performed at the dayahead and/or intraday

  timeframe; 911. (c) determine the overall

  amount of required reserve capacity for the system operation region;

ANNEX TREE.2.B EN

• 912. 

  (d) define minimum reserve capacity requirements for each type of reserve capacity;

• 913. 

  (e) take into account possible substitutions between different types of reserve capacity with

  the aim to minimise the costs of procurement;

• 914. 

  (f) set out the necessary requirements for the

  geographical distribution of required reserve capacity, if any.

• 915. 

  8. Facilitation of the [ ] regional procurement of

  balancing capacity 916. 8.1. Regional operational 8.1. Regional coordination

  centres shall support the centres shall support the transmission system operators of transmission system operators of the system operation region in the system operation region in determining the amount of determining the amount of balancing capacity that needs to balancing capacity that needs to be be procured. The determination procured. The determination of the of the amount of balancing amount of balancing capacity shall: capacity shall:

• 917. 

  (a) be performed at the dayahead and/or intraday

  timeframe; 918. (b) take into account possible

  substitutions between different types of reserve capacity with the aim to minimise the costs of procurement;

ANNEX TREE.2.B EN

• 919. 

  (c) take into account the volumes of required reserve capacity that are expected to be provided by balancing energy bids, which are not submitted based on a contract for

  balancing capacity. 920. (ca) take into account possible

  substitutions between different types of reserve capacity with the aim to minimise the costs of procurement.

• 921. 

  8.2. Regional operational deleted centres shall support the

  transmission system operators of the system operation region in procuring the required amount of balancing capacity determined in accordance with point 8.1. The procurement of balancing capacity shall:

• 922. 

  (a) be performed at the daydeleted ahead and/or intraday

  timeframe; 923. (b) take into account possible deleted

  substitutions between different types of reserve capacity with the aim to minimise the costs of procurement.

ANNEX TREE.2.B EN

• 924. 

  9. Regional system 9. (5 in GA) Week-ahead to

  adequacy forecasts and day-ahead regional system preparation of risk reducing adequacy [ ] assessments and actions preparation of risk reducing actions

• 925. 

  9.1. Regional operational 9.1. Regional coordination 9.1 (5.1 in GA)Regional centres shall perform week centres shall perform week ahead to regional [ ] security

  ahead to intraday regional intraday regional adequacy coordinators shall perform adequacy assessments. assessments. week ahead to [ ] day-ahead regional adequacy assessments in accordance with the procedures set out in Article 81 of Commission Regulation 2017/1485 establishing a guideline on electricity system operation and on the basis of the methodology developed pursuant Article 8 of [Risk preparedness Regulation].

• 926. 

  9.2. Regional operational 9.2. Regional coordination 9.2 (5.2 in GA) Regional [ ] centres shall base the adequacy centres shall base the adequacy security coordinators shall base assessments on the information assessments on the information the short-term regional

  provided by the transmission provided by the transmission adequacy assessments on the system operators of system system operators of system information provided by the operation region with the aim of operation region with the aim of transmission system operators of detecting situations where a lack detecting situations where a lack of system operation region with the of adequacy is expected in any adequacy is expected in any of the aim of detecting situations of the control areas or at control areas or at regional level. where a lack of adequacy is regional level. Regional Regional coordination centres shall expected in any of the control operational centres shall take take into account possible crossareas or at regional level. into account possible crosszonal exchanges and operational Regional [ ] security zonal exchanges and operational security limits in all operational coordinators shall take into security limits in all operational planning timeframes. account possible cross-zonal planning timeframes. exchanges and operational security limits in all relevant operational planning timeframes.

ANNEX TREE.2.B EN

• 927. 

  9.3. When performing a 9.3. When performing a regional 9.3 (5.3 in GA)When regional generation adequacy generation adequacy assessment, performing a regional [ ] assessment, each regional each regional coordination centre system adequacy assessment, operational centre shall shall coordinate with other regional each regional [ ] security coordinate with other regional coordination centres to: coordinator shall coordinate operational centres to: with other regional [ ] security coordinators to:

• 928. 

  (a) verify the underlying (a) verify the underlying assumptions and forecasts; assumptions and forecasts;

• 929. 

  (b) detect possible cross(b) detect possible crossregional lack of adequacy regional lack of adequacy

  situations. situations. 930. 9.4. Each regional operational 9.4. Each regional coordination 9.4 (5.4 in GA) Each regional

  centre shall deliver the results of centre shall deliver the results of [ ] security coordinator shall the regional generation the regional generation adequacy deliver the results of the regional adequacy assessments together assessments together with the generation adequacy with the actions it proposes to actions it proposes to reduce risks assessments together with the reduce risks of lack of adequacy of lack of adequacy to the actions it proposes to reduce to the transmission system transmission system operators of risks of lack of adequacy to the operators of the system the system operation region and to transmission system operators of operation region and to other other regional coordination centres. the system operation region and regional operational centres. to other regional [ ] security coordinators.

• 931. 

  10. Regional outage 10. (6 in GA) Regional coordination outage planning coordination

• 932. 

  10.1. Each regional operational 10.1. Each regional coordination 10.1 (6.1 in GA) Each regional centre shall perform outage centre shall perform outage [ ] security coordinator shall

  coordination in order to monitor coordination in order to monitor the perform regional outage the availability status of the availability status of the relevant coordination in accordance relevant assets and coordinate assets and coordinate their with the procedures set out in their availability plans to ensure availability plans to ensure the Article 80 of Commission the operational security of the operational security of the Regulation 2017/1485 transmission system, while transmission system, while establishing a guideline on maximizing the capacity of the maximizing the capacity of the electricity transmission system interconnectors and/or the interconnectors and/or the operation in order to monitor

ANNEX TREE.2.B EN

transmission systems affecting transmission systems affecting the availability status of the cross-zonal flows. cross-zonal flows. relevant assets and coordinate their availability plans to ensure the operational security of the transmission system, while maximizing the capacity of the interconnectors and/or the transmission systems affecting cross-zonal flows.

• 933. 

  10.2. Each regional operational 10.2. Each regional coordination 10.2 (6.2 in GA) Each regional centre shall maintain a single list centre shall maintain a single list of [ ] security coordinator shall

  of relevant grid elements, power relevant grid elements, power maintain a single list of relevant generating modules and demand generating modules and demand grid elements, power generating facilities of the system operation facilities of the system operation modules and demand facilities region and make it available on region and make it available on the of the system operation region the ENTSO for Electricity ENTSO for Electricity operational and make it available on the operational planning data planning data environment. ENTSO for Electricity environment. operational planning data environment.

• 934. 

  10.3. Each regional operational 10.3. Each regional coordination 10.3 (6.3 in GA) Each regional centre shall carry out the centre shall carry out the following [ ] security coordinator shall

  following activities related to activities related to outage carry out the following activities outage coordination in the coordination in the system related to outage coordination in system operation region: operation region: the system operation region:

• 935. 

  (a) assess outage planning (a) assess outage planning compatibility using all compatibility using all

  transmission system operators’ transmission system operators’ year-ahead availability plans; year-ahead availability plans;

• 936. 

  (b) provide the transmission (b) provide the transmission system operators of the system system operators of the system operation region with a list of operation region with a list of detected planning detected planning

  incompatibilities and the incompatibilities and the solutions it proposes to solve the solutions it proposes to solve the incompatibilities. incompatibilities.

ANNEX TREE.2.B EN

• 937. 

  11. Optimization of inter 11. (12 in GA) Optimization transmission system operators of inter-transmission system

  compensation mechanisms operators compensation mechanisms

• 938. 

  11.1. Regional operational 11.1. Regional coordination 11.1 (12.1 in GA) The centres shall support the centres shall support the transmission system operators transmission system operators of transmission system operators of of the system operation region the system operation region in the system operation region in may jointly decide to receive administering the financial flows administering the financial flows support from the regional related to inter- transmission related to inter- transmission security coordinator [ ] in system operators settlements system operators settlements administering the financial flows involving more than two involving more than two related to inter-transmission transmission system operators, transmission system operators, such system operators settlements such as redispatching costs, as redispatching costs, congestion involving more than two congestion income, income, unintentional deviations or transmission system operators, unintentional deviations or reserve procurement costs. such as redispatching costs, reserve procurement costs. congestion income,

  unintentional deviations or reserve procurement costs.

• 939. 

  12. Training and 12. (7 in GA) Training and certification certification of staff working for regional security

  coordinators 940. 12.1. Regional operational 12.1. Regional coordination 12.1. (7.1 in GA) Regional [ ]

  centres shall prepare and centres shall prepare and execute security coordinators shall execute training and certification training and certification programs prepare and execute training and programs focusing on regional focusing on regional system certification programs focusing system operation for the operation for the personnel working on regional system operation for personnel working in the in the planning and control rooms the personnel working for planning and control rooms of of the transmission system regional security coordinators the transmission system operators of system operation [ ] operators of system operation region. region.

ANNEX TREE.2.B EN

• 941. 

  12.2. The training programs 12.2 (7.2 in GA) The training shall cover all the relevant programs shall cover all the

  components of system relevant components of system operation, including scenarios of operation, where the regional regional crisis. security coordinator performs tasks including scenarios of regional crisis.

• 942. 

  13. Identification of regional 13. Identification of regional

  crisis situations and crisis situations and preparation of risk mitigation preparation of risk mitigation scenarios reviewing the risk scenarios reviewing the risk preparedness plans as preparedness plans as established in Member States established in Member States

• 943. 

  13.1. If ENTSO for Electricity 13.1. If ENTSO for Electricity 13.1 If the ENTSO for delegates this function, regional delegates this function, regional Electricity delegates this operational centres shall identify coordination centres shall identify function, regional [ ] security regional crisis scenarios in regional crisis scenarios in coordinators shall identify accordance with the criteria set accordance with the criteria set out regional crisis scenarios in out in Article 6(1) of [Risk in Article 6(1) of [Risk accordance with the criteria set Preparedness Regulation as Preparedness Regulation as out in Article 6(1) of [Risk proposed by COM(2016) 862 i] proposed by COM(2016) 862 i] Preparedness Regulation as proposed by COM(2016) 862 i].

• 944. 

  The identification of regional crisis scenarios shall be

  performed in accordance with the methodology set out in Article 5 of the [Risk Preparedness Regulation].

• 945. 

  13.2. Regional operational 13.2. Regional coordination 13.2 Regional [ ] security centres shall prepare and carry centres shall prepare and carry out coordinators shall support the out yearly crisis simulation in yearly crisis simulation in competent authorities of each cooperation with competent cooperation with competent system operation region in the authorities according to Article authorities according to Article preparation and carrying out of [ 12(3) of [Risk Preparedness 12(3) of [Risk Preparedness ] annual crisis simulation [ ] in Regulation as proposed by Regulation as proposed by accordance with Article 12(3)

ANNEX TREE.2.B EN

COM(2016) 862 i]. COM(2016) 862 i]. of [Risk Preparedness Regulation as proposed by COM(2016) 862 i].

• 946. 

  13a. Identification of needs for new capacity, for upgrade of

  existing capacity or their alternatives.

• 947. 

  13a.1. Regional coordination

  centres shall support transmission system operators in the identification of needs for new capacity, for an upgrading of existing capacity or for their alternatives, to be submitted to the regional groups established pursuant to Regulation (EU) No 347/2013 and to be included in the ten-year network development plan referred to in Article 51 of [recast of Directive 2009/72/EC i as proposed by COM(2016) 864 i/2]

• 948. 

  The preparation of risk mitigation scenarios shall be performed in accordance with the process set out in Article 12 of the [Risk Preparedness Regulation].

[ ]

• 949. 

  14. (10 in GA) Calculation of the maximum entry

  capacity available for the participation of foreign capacity in capacity mechanisms.

ANNEX TREE.2.B EN

• 950. 

  14.1 (10.1 in GA) Regional

  security coordinators shall support TSO in calculating the maximum entry capacity available for the participation of foreign capacity in capacity mechanisms taking into account the 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.

• 951. 

  14.2 (10.2 in GA) The calculation shall be performed in accordance with the methodology set out in Article 21(10)(a) of this Regulation.

• 952. 

  14.3 (10.3 in GA) Regional security coordinators shall provide a calculation for each bidding zone border covered by the system operation

region.

• 953. 

  15. (11 in GA) Preparation of seasonal outlooks

ANNEX TREE.2.B EN

• 954. 

  15.1 (11.1 in GA) If the

  ENTSO for Electricity delegates this function pursuant to Article 9 of [Risk preparedness Regulation], regional security coordinators shall carry out regional seasonal adequacy outlooks.

• 955. 

  15.2 (11.2 in GA) The preparation of seasonal outlooks shall be carried out on the basis of the

  methodology developed pursuant to Article 8 of [Risk preparedness Regulation].

ANNEX TREE.2.B EN