Network Codes Implementation

The European Commission, the Agency for the Cooperation of Energy Regulators (ACER), ENTSO-E, Distribution System Operator (DSO) organisations and other stakeholders from across the electricity sector have devoted considerable effort to the development of the network codes for electricity over the past four years. ENTSO-E has delivered nine draft network codes to ACER, and the first network codes are currently going through the process of becoming law.

The drafting and approval of network codes is, however, just the beginning. The network codes have been developed to help achieve Europe’s three energy policy goals: ensuring security of supply, creating a competitive internal electricity market (IEM), and decarbonising the electricity sector. For this to happen, network codes need to be implemented and complied with across Europe.

This represents an important challenge for the European electricity sector. Each network code requires a series of steps to be taken before they can be considered as fully implemented. This might include national decisions, regional agreements, and new European common methodologies. All market participants, DSOs, Transmission System Operators (TSOs), and regulators will be involved and the required development work and consultation process will be extensive.

Stakeholder Engagement: a Priority

The implementation of network codes needs to be undertaken in a coordinated way. Effective stakeholder engagement is essential in ensuring a successful process, and ENTSO-E values greatly their input. This involves the sharing of views and information by all interested parties. Stakeholders will be kept abreast of developments and, where appropriate, are encouraged to provide their views and feedback. Responsibilities for implementation are clearly defined in the draft network codes. TSOs have the ultimate responsibility to implement a vast number of tasks at pan-European, regional, and national level. TSOs have asked for ENTSO-E’s support for some of these tasks, and in particular to ensure consistency of work and communication.

A joint ACER/ENTSO-E public consultation on the best way to involve stakeholders in the network codes implementation process will run from 12 December 2014 to 23 January 2015.

Early Implementation Projects

Network codes need to be finalised and adopted by Member States, and are therefore expected to evolve over time. TSOs have however decided to begin the early implementation of a number of projects, as suggested by regulators. This will contribute to faster delivery of the IEM.

Information on the Cross Border Electricity Balancing Pilot Projects can be found at the link below; more implementation projects will be made available over the coming months.

ENTSO-E Guidelines to Connection Network Codes

The connection network codes employ a flexible framework which allows some parameters to be set on a national basis (within ranges specified in the draft network codes), and others at pan-European level. This approach reflects the fact that electricity transmission infrastructure has developed differently throughout Europe, due to a number of national factors including scale, topography, and economy. Furthermore, the levels of interconnection between countries vary greatly.

ENTSO-E has published implementation guidelines for the Network Code on Requirement for Generators (NC RFG) and Demand Connection Code (DCC) in order to support the codes by highlighting the impact on specific technologies, the link with local network characteristics, as well the need for coordination between network operators and grid users.

Capacity Calculation and Congestion Management

This section lists the different information linked to the implementation of the EU regulation on the implementation of the capacity calculation and congestion management guideline - the “CACM regulation”.

03/03/2016 - Memorandum of understanding on a common day-ahead flow-based capacity calculation for the Central Western and Central Eastern capacity calculation regions and on the merger of the two regions

The sixteen transmission system operators of the Central Western Europe and Central Eastern Europe capacity calculation regions (CCRs) signed a memorandum of understanding (MoU) on 3 March to develop a common day-ahead flow-based capacity calculation methodology and merge the two regions into one.

Read our Press release Read the Memorandum

13/11/2015 - All TSOs’ proposal on capacity calculation regions

The proposal on capacity calculation regions (CCRs) that all transmission system operators (TSOs) submitted on 13 November to all national regulatory authorities (NRAs) for approval, and to the Agency for the Cooperation of Energy Regulators (ACER) for information, is the first milestone in the implementation of ​Regulation EU (No) 2015/1222 establishing a guideline on capacity allocation and congestion management ​entered into force last August.

Cost Benefit Analysis for the Imbalance Settlement Period

Cost Benefit Analysis according to NC EB

The Network Code on Electricity Balancing (NC EB)1 covers three major aspects of balancing namely:

  • Procurement of balancing services;
  • Reservation and use of cross zonal capacity for balancing; and
  • TSO settlements.

The NC EB requires a cost benefit analysis (CBA) be undertaken in support of various decisions:

  • European Integration Model (Article 16(3), 18(3), 20(3), 22(3)): CBA to support TSOs’ proposal to modify the European integration model (Replacement Reserves (RR), Frequency Restoration Reserves with manual activation (FRR-m), Frequency Restoration Reserves with automatic activation (FRR-a)), and the imbalance netting process); and

  • Application of a TSO-BSP model (Article 41(2)): CBA to identify the efficiency of the application of a TSO-BSP model for at least the control area or scheduling area for the relevant TSOs. In addition, the Agency for the Cooperation of Energy Regulators (ACER) proposes that its recommendation on the Imbalance Settlement Period is assessed by a cost benefit analysis to be undertaken by ENTSO-E before the NC EB enters the Comitology process.

In addition, the Agency for the Cooperation of Energy Regulators (ACER) proposes that its recommendation on the Imbalance Settlement Period is assessed by a cost benefit analysis to be undertaken by ENTSO-E before the NC EB enters the Comitology process.

Methodologies for performing CBAs

ENTSO-E has asked Frontier Economics and Consentec to develop a general methodology for TSOs in relation to the completion of the CBAs envisaged in the NC EB, and a specific methodology for the completion of the CBA for ISP harmonisation.

Cost benefit analysis for the Imbalance Settlement Period

The NC EB requires all TSOs to develop a proposal to harmonise the main features of imbalance settlement, subject to approval by all NRAs. However, the Imbalance Settlement Period duration falls outside this proposal and will be drafted into the final version of the NC EB. ACER has reviewed the draft NC EB and has proposed that the Imbalance Settlement Period duration be harmonised at 15 minutes. ACER also proposes that its recommendation on the Imbalance Settlement Period is assessed by a cost benefit analysis (CBA) to be undertaken by ENTSO-E before the NC EB enters the Comitology process.

Following on from the development of the methodologies, ENTSO-E has asked Frontier to support the process of undertaking a CBA of a change in ISP. To secure relevant inputs to the CBA process, ENTSO-E is asking for data from stakeholders across Europe, via a questionnaire.

Final Report

Consultation Documents

Time planning

  • 13 November 2015: ENTSO-E distributes questionnaire to stakeholders.​
  • 7 December 10:00 -12:00 (extension possible until 14:00): Stakeholder webconference Q&A.
  • 7 January 10:00 – 12:00 (extension possible until 14:00): Stakeholder webconference Q&A.
  • 14 Janu​ary 2016: Deadline for submitting answered questionnaires
  • 14-27​ January 2016: Deadline for ENTSO-E data consolidation and review ​- 8 March 2016, 10:00-13:00, webinar:
    Webinar Over​ Download ​Webinar Presentation​
  • 13 April 2016, Balancing Stakeholder Group Meeting for BSG members

ENTSO-E invites stakeholder to participate in the survey. Feedback is desired from stakeholders from EU countries, Liechtenstein, Norway and Switzerland​. Feedback from stakeholders from other countries, such as the Energy Community, is also welcomed.​

  • Aggregator
  • Broker
  • Data provider
  • DSO
  • End consumer (metered)
  • Generator (metered)
  • Market operator
  • Meter provider
  • Metering service provider
  • NRA
  • Power exchange
  • Retail supplier
  • Trader
  • TSO​
  • Others

For information and to send input on the CBA on ISP please use the following email address​