security of supply – eu perspective and legal framework first eu-russia energy law conference,30...

|Date 13-05-2011

faculty of law groningen centre of energy law

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Security of Supply – EU Perspective and Legal Framework

First EU-Russia Energy Law Conference,30 and May 2013

Martha Roggenkamp

|Date 13-05-2011


Concept of Supply Security› Definition: “Condition in which a nation [..] has

access to sufficient energy resources at reasonable prices at the foreseeable future free from serious risk of major disruption of service”

› It distinguishes between ‘access’ to resources (level of production capacity/availability of sufficient (primary) energy sources), and ‘access’ to supply systems (reliability of networks) necessary for supplying consumers

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Supply Security in Europe › In 1950s limited focus on security of energy

supply› No specific reference in Treaties although the

ECSC recognised the role of cheap energy for economic development

› The oil crisis in the 1970s led to several Community actions: Obligation to maintain minimum stocks Energy efficiency targets (labelling), etc.

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The market dominates› EU Law is based on principles of free

movement and competition › The ‘Internal Energy Market’ also aims at the

opening up of the electricity and gas market and the belief that the ‘market would take care of security of supply’

› Supply security is, however, a possible exemption on freedom principles (Campus Oil Case)

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Treaty on the Functioning of the European Union› Art. 194 TFEU: ‘In the context of the

development of an internal market, and with regard the need to preserve/improve the environment, EU energy policy shall ensure (i) the functioning of the internal market, (ii) security of energy supply and (iii) promote renewable forms of energy

› EU energy policy is shared competence but also depends on cooperation with non-EU countries (f.ex. Energy Community Treaty)

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Internal Market Directives› The Electricity and Gas Directives increasingly

focus on Supply Security 1990s Directives include the option of ‘public

service obligations relating to security of supply’ and ‘the need for sufficient grid capacity to meet energy demand’

The 2003 Directives include monitoring and reporting obligations, tendering of capacity if insufficient energy production and network safety and security

2009 Directives more focus on network investments and regional cooperation

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Security of Supply Directives› Security of Electricity and Gas Supply

Directives (2006/2008) aim at safeguarding supply and network operations

› Directives illustrate the difference between electricity and gas sector as electricity generation is more ‘national’ in scope and networks operations require precise balancing

› The 2009 Ukraine-Russia gas supply dispute showed that EU market model does not provide long term security (investments)

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Regulation on Security of Gas Supply› The 2009 Gas Security of Supply Regulation

aims at more market (integration) and more investments infrastructure

› It is based on principle of solidarity and responsibility between Member States

› In case of supply interuption effective advanced action needs to be taken by MS and market players before Community intervention

› Commission is advised by Gas Coordination Group

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Identifying risks› All MS need to appoint a Competent Authority

responsible for monitoring gas supply developments, assessing supply risks, establishing preventive action plans to

mitigate risks establishing emergency plans which need to

take into account three crisis levels: early warning level, alert level and emergency level

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Common standards› MS must ensure gas supply to ‘protected

customers’ during extreme weather and emergency situation(disruption)

› MS must ensure that infrastructure can satisfy gas demand: Emphasis on improving infrastructure (take

into account N-1 standard and 10 year development plans of ENTSO-G

Investments in cross-border interconnections TSOs responsible for bi-directional gas flows

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Emergency response › Community emergency response if CA/MS has

declared an emergency or at the request of CA or if Community loses more than 10% daily gas import from third countries

› Emergency response depends on the crisis levels and are based on emergency plans

› Distinction is made between market-based and non-market based measures Increase production, interruptable contracts Emergency gas stocks, enforced fuel switch

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Conclusion› Supply security depends on access

to/availability of recources and access to supply networks

› Supply security in EU is primarily based on market mechanisms (oil, gas and electricity)

› State/Community intervention only if really necessary

› Regulatory provisions/requirements are increasing

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Thank you for your attention

security of supply – eu perspective and legal framework first eu-russia energy law conference,30...

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