Legal Affairs Committee Implementation of TSO and DSO Unbundling Provisions – Update and Clean Energy Package Outlook CEER Status Review Ref: C18-LAC-02-08 14 June 2019 Council of European Energy Regulators asbl Cours Saint-Michel 30a, Box F – 1040 Brussels, Belgium Arrondissement judiciaire de Bruxelles – RPM 0861.035.445 Ref: C18-LAC-02-08 CEER Status Review on TSO and DSO Unbundling INFORMATION PAGE Abstract This CEER document (C18-LAC-02-08) presents an updated Status Review on the Implementation of Transmission and Distribution System Operators’ Unbundling Provisions of the 3rd Energy Package, focusing on new developments since summer 2015. It also briefly summarises the main changes and novelties with regard to unbundling-related provisions that were made in the recasts of the Electricity Directive and Electricity Regulation within the framework of “Clean Energy for All Europeans” package (CEP). Under the 3rd Energy Package, energy networks are subject to unbundling requirements which oblige Member States to ensure the separation of vertically integrated energy companies, resulting in the separation of the various stages of energy supply (generation, transmission, distribution, and retail). This Status Review aims to assess the status of DSO and TSO unbundling, highlighting the new developments since 2015 and to provide an overview of the main changes in unbundling-related provisions introduced in CEP. Topics explored included related issues such as: cases and reasons for reopening certification decisions; branding; financial independence in terms of staff and resources; compliance programmes and officers; investments, joint-venture TSOs and joint undertakings. Target Audience European Commission, energy suppliers, traders, gas/electricity customers, gas/electricity industry, consumer representative groups, network operators, Member States, academics and other interested parties. Keywords Unbundling; Cross-Sectoral; Networks; 3rd Package; Market Monitoring; National Regulatory Authorities (NRAs); Transmission System Operators (TSOs); Distribution System Operators (DSOs); Ownership Unbundling; Independent System Operator (ISO); Independent Transmission Operator (ITO); Interconnectors; Clean Energy for all Europeans Package (Clean Energy Package, CEP). If you have any queries relating to this paper, please contact: CEER Secretariat Tel. +32 (0)2 788 73 30 Email: [email protected] 2/53 Ref: C18-LAC-02-08 CEER Status Review on TSO and DSO Unbundling Related Documents CEER documents • CEER Status Review on the Implementation of Transmission System Operators’ Unbundling Provisions of the 3rd Energy Package, 28 April 2016, Ref. C15-LTF-43-04. https://www.ceer.eu/en/1305 • CEER Status Review on the Implementation of Distribution System Operators’ Unbundling Provisions of the 3rd Energy Package, 1 April 2016, Ref. C15-LTF-43-03. https://www.ceer.eu/en/1305 • The Future Role of DSOs - A CEER Conclusions Paper, 13 July 2015, Ref: C15-DSO- 16-03. https://www.ceer.eu/en/1306 • CEER Memo on the transposition of unbundling requirements for Transmission, Distribution and Closed Distribution Systems Operators, 30 July 2014, Ref: C14-IBM- 61-03. https://www.ceer.eu/en/1307 • CEER Status Review on the Transposition of Unbundling Requirements for DSOs and Closed Distribution System Operators, 16 April 2013, Ref: C12-UR-47-03. https://www.ceer.eu/en/1308 External documents • European Commission Opinion on the certification of RTE, C(2018) 150 final, 10 January 2018. Retrieved from: https://ec.europa.eu/energy/sites/ener/files/documents/2017_134_fr_en.pdf • Commission de Régulation de l’énergie (CRE) Decision on the certification of RTE, Decision No 2018-005, 11 January 2018. Retrieved from: https://www.cre.fr/Documents/Deliberations/Decision/certification-rte • ENTSO-E “Practical implementation document for inclusion of transmission and storage projects in the TYNDP 2018” 2 October 2017. Retrieved from: https://docstore.entsoe.eu/Documents/TYNDP%20documents/Third%20Party%20Pro jects/171002_ENTSO- E%20practical%20implementation%20of%20the%20guideliens%20for%20inclusion% 20of%20proj%20in%20TYNDP%202018_FINAL.pdf • European Commission Staff Working Document “Report on the ITO Model”, SWD(2014) 312 final, 13 October 2014. Retrieved from: https://ec.europa.eu/energy/sites/ener/files/documents/2014_iem_communication_an nex3.pdf • European Commission Staff Working Document “Ownership Unbundling”, SWD(2013)177final, 8 May 2013. Retrieved from: https://ec.europa.eu/energy/sites/ener/files/documents/swd_2013_0177_en.pdf 3/53 Ref: C18-LAC-02-08 CEER Status Review on TSO and DSO Unbundling • European Commission Staff Working Paper “Certification of TSOs of networks for electricity and natural gas in the European Union”, SEC(2011) 1095 final, 21 September 2011. Retrieved from: https://ec.europa.eu/energy/sites/ener/files/documents/sec_2011_1095.pdf • European Commission Staff Working Paper “The Unbundling Regime”, 22 January 2010. Retrieved from: https://ec.europa.eu/energy/sites/ener/files/documents/2010_01_21_the_unbundling_ regime.pdf 4/53 Ref: C18-LAC-02-08 CEER Status Review on TSO and DSO Unbundling Table of Contents EXECUTIVE SUMMARY ....................................................................................................... 8 1 THE NEW CHALLENGES OF THE CERTIFICATION PROCEDURES ........................ 13 1.1 Changing the unbundling model ............................................................................. 14 1.2 Changes in the ownership structure ....................................................................... 14 1.3 Cross border certifications ...................................................................................... 16 1.4 Third-Countries Certification Regime...................................................................... 17 1.4.1 Certification of TSOs in relation to third countries ..................................... 17 1.4.2 The definition of the “security of supply” criteria ........................................ 18 1.5 Participation of financial investors in TSOs’ activities ............................................. 20 1.6 New developments in the OU model ...................................................................... 21 1.6.1 Compliance of state-owned TSOs with unbundling requirements ............. 22 1.6.2 Additional NRAs’ requirements for the OU model ..................................... 23 1.7 New developments in the ITO model ...................................................................... 23 1.8 New developments in the ISO model ..................................................................... 24 1.9 New developments on joint ventures ...................................................................... 24 1.10 European Commission’s assessment in the certification decisions ........................ 25 1.11 Monitoring the application of the unbundling provisions ......................................... 27 2 DSO UNBUNDLING ...................................................................................................... 30 2.1 Unbundling regime and DSOs’ structure ................................................................ 30 2.2 Assessment of DSOs’ rebranding .......................................................................... 31 2.3 Overview of the DSOs in different Member States ................................................. 33 2.4 Independence of DSOs .......................................................................................... 36 2.4.1 Independence regime ............................................................................... 36 2.4.2 Special rules for shared services .............................................................. 37 2.5 Financial and personnel resources of the DSOs .................................................... 37 3 CONCLUSION .............................................................................................................. 40 3.1 Main outcome of the assessment of TSO unbundling ............................................ 40 3.2 Main outcome of the status review of the DSOs unbundling ................................... 41 4 THE CLEAN ENERGY PACKAGE UNBUNDLING RELATED PROVISIONS IN A NUTSHELL ......................................................................................................................... 44 4.1 Main TSO unbundling principles and certification rules remain unaltered ............... 44 4.2 Delegation and scope of TSO tasks ....................................................................... 44 5/53 Ref: C18-LAC-02-08 CEER Status Review on TSO and DSO Unbundling 4.3 Ownership, development, management and operation of energy storage facilities by TSOs, including new tasks for NRAs ............................................................................. 45 4.4 Derogations from unbundling rules ......................................................................... 46 4.5 DSO Unbundling, Citizen Energy Communities and Closed Distribution Systems .. 47 4.6 Ownership, development, management and operation of storage facilities by DSOs 48 4.7 New DSO tasks regarding the use of flexibility, integration of electro-mobility into the network and data management ..................................................................................... 49 ANNEX – LIST OF ABBREVIATIONS ................................................................................ 51 ABOUT CEER ....................................................................................................................