Network Codes – European Energy Law in the Making

Abstract

The European Union is preparing a series of regulations governing in detail various aspects of grid operation and free-market trade in electricity and gas, the so-called network codes. The paper reviews this process of European energy legislation development. Also discussed are the European Union bodies and major stakeholders in this process, as well as the national law making and enforcing agencies. In the past, law in Poland was created by Polish citizens. After joining the European Union the law in effect is largely created elsewhere by someone else, even if with significant participation of Polish representatives. The law on energy is not only important for producers, distributors and trading companies, but it strongly effects industrial competitiveness and hence the quality of life of the population. DOI: 10.12736/issn.2300-3022.2015201 1. Relevance of the European Union regulations for the domestic energy sector The EU regulations are part of European law, and EU law is generally divided into primary and secondary legislation. Primary law is the basis for EU functioning, and it consists of the founding treaties, agreements between Member States (e.g. The Lisbon Treaty) and accession treaties. Secondary law is created by EU institutions on the basis of the primary law. This consists of: Directives, Regulations, Decisions, Opinions and Recommendations. The full names of the directives or regulations contain the names of the bodies that adopted them, such as ”Directive of the European Parliament and of the Council”, ”Regulation of the European Parliament and of the Council” or ”Commission Regulation”. European law is superimposed on national law and forms part of the law in effect in a country. The order of precedence of the provisions is as follows: constitution (national), EU directives and regulations, national laws, ministerial regulations (national), and local law (e.g. municipal council). In rare cases of an inconsistency in an EU directive or regulation with the constitution, typically the constitution is amended in order to keep the order shown above. EU directives, in accordance with Art. 288 of the Lisbon Treaty, require EU Member States to accomplish specified outcomes, in forms and with remedies freely chosen by their national authorities. Typically they inspire amendments to the national law necessary to achieve the objectives set by the directive (hence the frequent amendments to the Polish „Energy Law”). In particular cases EU directives may be directed to selected countries only. EU regulation is, however, a directly binding act. It must be applied directly to its full extent, throughout the EU. EU law also provides for publication of messages in so-called EC green papers to stimulate discussion on selected topics, and to submit proposals in so-called EC white papers to encourage action on specific issues. These messages often lead to legislative action. Directives and regulations on energy appeared in successive waves of market liberalization. The regulations now implemented have been drafted since 2009 and are referred to as the third package. Some important and now binding EU directives and regulations are presented in Table 1, and their full names are given in the list of references at the end of the article. Acts drafted by the EU aim to facilitate the development of a single, competitive European energy market, unfettered by Member State boundaries and regulations, to lead to liberalization and competition in the markets for electricity and gas, as well as to improve the standard of service and security of supply. 2. European energy-related organizations Operation of power system, as well as gas system, requires supervision in the country, and coordination and cooperation at the interconnections with systems in other countries. Organizations in the energy sector deal with technical issues, enabling operation systems, market issues, liberalization and support for energy trade, and broader issues of energy policy. European G. Blajszczak, I. Gawel | Acta Energetica 2/23 (2015) | 4–9