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The Electricity and Gas (Internal Markets and Network Codes) (Amendment etc.) (EU Exit) Regulations 2020

Type Statutory-Instrument

Publication 2020-09-15

State In force

Department King's Printer of Acts of Parliament

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(1) Article 5 (balance responsibility) is amended as follows.

(2) In paragraph 2, for “Member States” in both places it occurs substitute “The Secretary of State”.

(3) In paragraph 3, for “a Member State” substitute “the Secretary of State”.

6

(1) Article 6 (balancing market) is amended as follows.

(2) In paragraph 2, omit “in accordance with Article 40(4) of Directive (EU) 2019/944”.

(3) In paragraph 3, omit “in accordance with Article 17”.

(4) In paragraph 4—

(a) in subparagraph 1, for “all regulatory authorities approve” substitute “the regulatory authority approves”;

(b) omit subparagraph 3.

(5) In paragraph 7, omit “and shall be facilitated at regional level”.

(6) In paragraph 8, omit “in accordance with Article 40(4) of Directive (EU) 2019/944”.

(7) In paragraph 12—

(a) for “regulatory authorities” substitute “the transmission system operator”;

(b) for “Commission and ACER” substitute “regulatory authority”.

(8) In paragraph 14, in the first subparagraph, for “authorities” substitute “authority”.

7

(1) Article 7 (day-ahead and intraday markets) is amended as follows.

(2) For paragraph 1 substitute—

(1) Transmission system operators must organise the management of the day-ahead and intraday markets. Transmission system operators must cooperate, so far as possible, at a regional level in order to maximise the efficiency and effectiveness of electricity day-ahead and intraday trading. The obligation to cooperate is without prejudice to the application of competition law. In their functions relating to electricity trading, transmission system operators are to be subject to regulatory oversight by the regulatory authority.

(3) In paragraph 2—

(a) omit point (c);

(b) in point (f), at the end insert “and”;

8

(1) Article 8 (trade on day-ahead and intraday markets) is amended as follows.

(2) Omit paragraphs 1 to 3.

(3) In paragraph 4, for “regulatory authorities have” substitute “the regulatory authority has”.

9

(1) Article 9 (forward markets) is amended as follows.

(2) In paragraph 1—

(a) omit “In accordance with Regulation (EU) 2016/1719,”;

(b) for “competent regulatory authorities” substitute “regulatory authority”.

(3) In paragraph 2, for “a single” substitute “an”.

(4) In paragraph 3—

(a) in the first sentence, omit “Union”;

(b) in the second sentence—

(i) for “Member States” substitute “The regulatory authority”;

(ii) omit “Member State or”.

10

(1) Article 10 (technical bidding limits) is amended as follows.

(2) In paragraph 1, omit the words from “, without prejudice” to the end.

(3) Omit paragraph 2.

(4) In paragraph 4, for the words from “Regulatory authorities” to “competent authorities,” substitute “The regulatory authority”.

(5) In paragraph 5—

(a) in the first sentence, for “a regulatory authority or designated competent authority” substitute “the regulatory authority”;

(b) omit the second sentence.

11

(1) Article 11 (value of lost load) is amended as follows.

(2) For paragraph 1 substitute—

(1) Where required for the purpose of setting a reliability standard in accordance with Article 25, the relevant authority must determine a single estimate of the value of lost load for Great Britain. That estimate must be made publicly available. The relevant authority may determine different estimates per bidding zone if there is more than one bidding zone in Great Britain. Where a bidding zone consists of more than one control area, the relevant authority must determine a single estimate of the value of lost load for that bidding zone.

(3) In paragraph 2—

(a) for “Regulatory authorities and designated competent authorities” substitute “The relevant authority”;

(b) for “their” substitute “its”;

(d) for “observe” substitute “observes”.

(4) After paragraph 2, insert—

(3) In this Article, “relevant authority” means the Secretary of State or the regulatory authority.

12

(1) Article 12 (dispatching of generation and demand response) is amended as follows.

(2) In paragraph 2, for “Member States” substitute “the regulatory authority”.

(3) In paragraph 3—

(a) in the first subparagraph, in the opening words, for “A Member State” substitute “The regulatory authority”;

(b) omit points (c) to (e);

(d) in the third subparagraph, for “Member States” substitute “the regulatory authority”.

(4) In paragraph 4, for “Member States” substitute “the regulatory authority”.

(5) In paragraph 7, omit the words from “, shall not be used” to the end.

13

(1) Article 13 (redispatching) is amended as follows.

(2) In paragraph 1, in the second sentence, omit the words from “, including those” to the end.

(3) In paragraph 3—

(a) in point (b), after “used;” insert “or”;

(b) in point (c), after “located” omit “; or”;

(4) In paragraph 4—

(a) in the first subparagraph, in the words before point (a), for “competent regulatory authority” substitute “regulatory authority”;

(b) omit the second subparagraph.

(5) In paragraph 5—

(a) in the words before point (a), for “authorities” substitute “authority”;

(b) in point (a), for “a Member State” substitute “the regulatory authority”.

(6) In paragraph 6, in point (d), for “paragraph 3” substitute “paragraph 4”.

14

Omit Articles 14 and 15.

15

(1) Article 16 (general principles of capacity allocation and congestion management) is amended as follows.

(2) In paragraph 1—

(a) for “shall take into account” substitute “must consider, so far as possible,”;

(b) omit “as provided for in Regulation (EU) 2015/1222”.

(3) Omit paragraph 3.

(4) In paragraph 4, omit the words from “to reach the minimum capacity” to the end.

(5) In paragraph 5, omit the final sentence.

(6) Omit paragraph 8.

(7) In paragraph 9—

(a) omit the first and second subparagraphs;

(b) in the third subparagraph, in the first sentence, omit “relevant”.

(8) In paragraph 12—

(a) in the first sentence, omit “or NEMOs”;

(b) in the final sentence, omit “relevant”.

(9) In paragraph 13—

(a) in the first subparagraph—

(i) for “regulatory authorities” substitute “the regulatory authority”;

(ii) omit “the congestion between two bidding zones”;

(iii) after “observed” insert “congestion”.

(b) omit the second subparagraph.

16

Omit Article 17.

17

(1) Article 18 (charges for access to networks, use of networks and reinforcement) is amended as follows.

(2) In paragraph 3, omit “at Union level”.

(3) In paragraph 4, omit point (a).

(4) In paragraph 7, in the final sentence—

(a) for “Member States have implemented the deployment of smart metering systems, regulatory authorities” substitute “smart metering systems have been deployed, the regulatory authority”;

(b) omit “in accordance with Article 59 of (EU) 2019/944”.

(5) After paragraph 8, insert—

(8A) The references to Article 15(1) and (6) of Directive 2012/27/EU of the second subparagraph of paragraph 1 are to be treated as references to those provisions with the following modifications— (a) Article 15(1), subparagraph 1 is to be read as if— (i) for “Member States” there were substituted “the Secretary of State”; (ii) for “national energy regulatory authorities” there were substituted “the regulatory authority”; (iii) for “Directives 2009/72/EC and 2009/73/EC regarding their” there were substituted “retained EU law regarding its”; (b) Article 15(1), subparagraph 2 is to be read as if— (i) for “Member States” there were substituted “the Secretary of State”; (ii) for “national energy regulatory authorities” there were substituted “the regulatory authority”; (iii) for “Directive 2009/72/EC” there were substituted “retained EU law”; (c) Article 15(1), subparagraph 4 is to be read as if— (i) for “Member States” there were substituted “the Secretary of State”; (ii) for “Regulation (EC) No 714/2009” there were substituted “Regulation (EU) 2019/943”; (d) Article 15(6) is to be read as if for “Member States” (in both places it occurs) there were substituted “the Secretary of State”; (e) A reference to “the regulatory authority” in Article 15(1) as modified by this Article has the meaning given in Article 2 of this Regulation.

(6) Omit paragraphs 9 and 10.

18

(1) Article 19 (congestion income) is amended as follows.

(2) In paragraph 1, for “authorities” substitute “authority”.

(3) In paragraph 3, for “authorities” substitute “authority”.

(4) In paragraph 4—

(a) in the first subparagraph—

(i) for “regulatory authorities” substitute “the regulatory authority”;

(ii) for “ACER” substitute “the regulatory authority”;

(iii) omit the final sentence;

(b) omit the second subparagraph.

(5) In paragraph 5—

(a) in the first sentence, for “authorities” substitute “authority”;

(b) in the second sentence, for “authorities shall inform ACER and” substitute “authority”.

19

(1) Article 20 is amended as follows.

(2) In the heading, omit “in the internal market for electricity”.

(3) In paragraph 1—

(a) omit the first sentence;

(b) in the second sentence—

(i) for “For the purpose of complementing the European resource adequacy assessment, Member States may also” substitute “The Secretary of State may”;

(ii) for “national” substitute “a”;

(iii) for “assessments” substitute “assessment”.

(4) In paragraph 2—

(a) for “the European resource adequacy assessment referred to in Article 23 or national” substitute “a”;

(b) for “Member State concerned” substitute “Secretary of State”.

(5) In paragraph 3—

(a) in the first sentence, for “Member States with identified resource adequacy concerns” substitute “Where a resource adequacy assessment has identified a resource adequacy concern, the Secretary of State”;

(b) in the second sentence, for “Member States” substitute “Secretary of State”;

(d) at the end of point (f), for “;” substitute “.”;

(e) omit point (g).

(6) Omit paragraphs 4 and 5.

(7) In paragraph 6—

(a) for “Member States concerned” substitute “Secretary of State ”;

(b) omit the words “and shall submit” to the end.

(8) Omit paragraph 7.

(9) In paragraph 8, for “Member States” substitute “The Secretary of State ”.

20

(1) Article 21 (general principles for capacity mechanisms) is amended as follows.

(2) In paragraph 1—

(a) for “Member States” substitute “the Secretary of State”;

(b) after “introduce” insert “a”;

(3) Omit paragraph 2.

(4) In paragraph 3—

(a) in the first sentence, for “Member States” substitute “The Secretary of State ”;

(b) in the second sentence, for “Member States” substitute “the Secretary of State”;

(5) In paragraph 4—

(a) for “Member States” substitute “The Secretary of State ”;

(b) for “capacity mechanisms” substitute “a capacity mechanism”;

(d) for “, or in the absence of a national resource adequacy assessment, the European resource adequacy assessment” substitute “has”.

(6) Omit paragraph 5.

(7) In paragraph 6—

(a) for “Where a Member State applies a capacity mechanism, it” substitute “The Secretary of State”;

(b) for “that” in the first place it occurs substitute “the”;

(d) for “, or in the absence of a national resource adequacy assessment, the European resource adequacy assessment have” substitute “has”;

(e) omit the words “or the implementation plan” to the end.

(8) In paragraph 7, for “Member States” substitute “the Secretary of State ”.

(9) In paragraph 8—

(a) for “. They shall be approved by the Commission” substitute “and shall be approved”;

(b) in the last sentence, for “Member States” substitute “The Secretary of State”.

21

(1) Article 22 (design principles for capacity mechanisms) is amended as follows.

(2) In paragraph 1, in point (b), omit “and not limit cross-zonal trade”.

(3) In paragraph 4, omit the words “By 5 January 2020” to the end.

(4) In paragraph 5, for “Member States that apply capacity mechanisms on 4 July 2019 shall adapt their mechanisms” substitute “The Secretary of State must adapt the capacity mechanism that was applied on 4 July 2019”.

22

(1) Article 23 is amended as follows.

(2) In the heading, for “European” substitute “Methodology for ”.

(3) Omit paragraphs 1 to 4.

(4) In paragraph 5—

(a) in the first sentence —

(i) omit “European”;

(ii) after “resource adequacy assessment” insert “must cover the territory of Great Britain and”;

(b) omit point (a);

(5) Omit paragraphs 6 and 7.

23

(1) Article 24 is amended as follows.

(2) In the heading, omit “National”.

(3) In paragraph 1—

(a) in the first subparagraph—

(i) for “shall” in the first place it occurs, substitute “may”;

(ii) omit “referred in Article 23(3) in particular”;

(iii) omit the words “National resource adequacy assessments shall contain” to the end of the paragraph.

(4) In paragraph 2—

(a) omit “National”;

(b) omit “and, where applicable, the European resource adequacy assessment and the opinion of ACER pursuant to paragraph 3”.

(5) Omit paragraph 3.

24

(1) Article 25 (reliability standard) is amended as follows.

(2) In paragraph 1—

(a) for “When applying capacity mechanisms Member States” substitute “The capacity mechanism”;

(b) in the second sentence, omit “of the Member State”;

(3) For paragraph 2, substitute—

(2) The reliability standard shall be set by the Secretary of State in accordance with regulation 6 of the Electricity Capacity Regulations 2014[^f00011].

(4) In paragraph 4, for the words “Member State or” to the end substitute “the Secretary ofState ”.

25

OmitArticles 26 to 49.

26

(1) Article 50 (provision of information) is amended as follows.

(2) In paragraph 2, for “authorities” substitute “authority”.

(3) In paragraph 6, for “, national competition authority and the Commission” substitute “and the competition authority”.

(4) In paragraph 7—

(a) in the second sentence, for “authorities, and to the Commission and Member States” substitute “authority and the Secretary of State”.

(b) in the final sentence, for “authorities, Member States and the Commission” substitute “authority and the Secretary of State”.

27

Omit Articles 51 to 56.

28

(1) Omit Articles 58 and 59.

(2) A network code adopted by the Commission under—

(a) Article 6 of Regulation (EC) No 714/2009 before 1 January 2020, or

(b) Article 59 of this Regulation before IP completion day,

forms part of domestic law on and after IP completion day as it had effect in EU law immediately before IP completion day.

29

For Article 60 substitute—

(1) In this Article— “Regulation (EC) No 714/2009” means Regulation (EC) No 714/2009 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; “electricity network code or guideline” means— (a) a network code adopted by the Commission under— (i) Article 6 of Regulation (EC) No 714/2009 before 1 January 2020; or (ii) Article 59 of this Regulation before IP completion day, as those codes have effect in domestic law; (b) guidelines adopted by the Commission under— (i) Article 18 of Regulation (EC) No 714/2009 before 1 January 2020; (ii) Article 61 of this Regulation before IP completion day, as those guidelines have effect in domestic law. (2) The Secretary of State may, by regulations, amend an electricity network code or guideline. (3) The power in paragraph 2 includes power to— (a) insert into the electricity network code or guideline new provision about the same subject-matter as, or subject-matter related to, an existing provision of the electricity network code or guideline; or (b) revoke the electricity network code or guideline or any provision of it, either with or without making replacement provision. (4) Regulations under paragraph 2 must be consistent with the objectives of contributing to non-discrimination, effective competition and the efficient functioning of the electricity market. (5) Regulations under paragraph 2 may— (a) include supplementary, incidental, consequential, transitional, transitory or saving provision; and (b) make different provision for different cases. (6) The power to make regulations conferred on the Secretary of State by paragraph 2 is exercisable by statutory instrument. (7) Before the Secretary of State makes regulations under paragraph 2, the Secretary of State must consult— (a) the regulatory authority; (b) persons who are certified, within the meaning of section 10O of the Electricity Act 1989[^f00012]; and (c) such other persons as the Secretary of State considers appropriate. (8) A statutory instrument containing regulations under this Article may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.

30

(1) Omit Article 61.

(2) A guideline adopted by the Commission under—

(a) Article 18 of Regulation (EC) No 714/2009 before 1 January 2020, or

(b) Article 61 of this Regulation before IP completion day,

forms part of domestic law on and after IP completion day as it had effect in EU law immediately before IP completion day.

31

Omit Article 62.

32

(1) Article 63 (new interconnectors) is amended as follows.

(2) In paragraph 1—

(a) for the words from “Article 19(2) and (3)” to “Directive (EU) 2019/944” substitute “the provisions specified in paragraph 4A”;

(b) in point (c), for “natural or legal person which” substitute “person who”;

(d) in point (f), for “internal market for electricity” substitute “electricity market in Great Britain”.

(3) In paragraph 4—

(a) in the first subparagraph, for “authorities of the Member States concerned” substitute “authority”;

(b) omit the second subparagraph;

(d) in the fourth subparagraph, for “regulatory authorities of the Member States concerned” substitute “regulatory authority”;

(e) omit the fifth subparagraph.

(4) After paragraph 4, insert—

(4A) The provisions specified for the purposes of paragraph 1 are the standard conditions of an interconnector licence granted under section 6(1)(e) of the Electricity Act 1989[^f00013] relating to— (a) the provision of third-party access to an interconnector; (b) tariffs or charging methodologies for such access; (c) use of revenues.

(5) Omit paragraphs 5 to 8.

(6) In paragraph 9—

(a) omit the first sentence;

(b) in the second sentence, for “8 shall apply to the decision” substitute “4A apply to the decision of the regulatory authority”.

(7) Omit paragraphs 10 and 11.

33

(1) Article 64 (derogations) is amended as follows.

(2) In paragraph 1—

(a) for the first subparagraph substitute—

(1) The Secretary of State or regulatory authority, as appropriate, may grant a derogation from the relevant provisions of Articles 3, 6, 7(1), 8(4), 9 to 11, 16 and 19 to 25 provided that the Secretary of State or regulatory authority is satisfied that there are substantial problems for the operation of small isolated systems and small connected systems.

(b) in the second subparagraph—

(i) omit the words from “In the situation” to “subparagraph,”;

(ii) omit “internal”;

(iii) after “electricity” insert “in Great Britain”;

(d) in the sixth subparagraph, for “Commission” substitute “Secretary of State”.

(3) Omit paragraphs 2, 3 and 4.

34

Omit Articles 65 to 68.

35

Omit Article 69.

36

In Article 70 (repeal)—

(a) omit the first sentence;

(b) in the second sentence, for “the repealed Regulation” substitute “Regulation (EC) No 714/2009 in retained direct EU legislation”.

37

In the text after Article 71 omit “This Regulation shall be binding in its entirety and directly applicable in all Member States”.

38

Omit Annex 1.

Signed

Kwasi Kwarteng — Minister of State — Department for Business, Energy and Industrial Strategy — 15th September 2020

Explanatory note

(This note is not part of the Regulations)

EXPLANATORY NOTE

These Regulations are made in order to address failures of retained direct EU legislation to operate effectively and other deficiencies arising from the withdrawal of the United Kingdom from the European Union.

Regulation 2 amends S.I. 2019/532 to remove the definition of ‘regulatory authority’ in Regulation (EU) 2017/2195 as the same definition has been imported through Regulation (EU) 2019/943 as amended by these Regulations.

Regulation 3 amends S.I 2019/533 to disapply some definitions of Regulation (EU) 2019/943 as amended by these Regulations as they apply in Regulation (EU) 2017/1485. Regulation 3 also amends Article 2 of Regulation (EU) 2017/1485 so that the definitions in Regulation (EU) 2016/631, Regulation (EU) 2016/1388 and Regulation (EU) 2016/1447 will continue to apply. As a consequence of this change, the definitions expressly applied through paragraph 4(5) of Schedule 2 to S.I. 2019/533 have been removed.

Regulations 4, 5 and 6 introduce Schedules 1, 2 and 3 respectively, Commission Regulation (EU) 2016/631, Commission Regulation (EU) 2016/1388 and Commission Regulation (EU) 2016/1447. The amended Regulations are network codes relating to electricity and are tertiary legislation made by the European Commission.

Regulation 7, introduces Schedule 4, which amends Regulation (EU) 2019/943 on the internal market for electricity (recast).

Regulation 8 revokes Regulation (EU) 2019/942 establishing a European Union Agency for the Co-operation of Energy Regulators (recast).

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sectors is foreseen.

Footnotes

[^f00001]: 2018 c.16. Paragraph 21 of Schedule 7 was amended by the European Union (Withdrawal Agreement) Act 2020 (c. 1) section 41(4) and Schedule 5, part 2, paragraphs 38 and 53(1) and (2).

[^f00002]: S.I. 2019/532.

[^f00003]: S.I. 2019/533, as amended by S.I. 2019/1104.

[^f00004]: “the jurisdiction of Great Britain” is defined in article 2 of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (recast).

[^f00005]: 1989 c.29. Section 6 was substituted by the Utilities Act 2000 (c. 27), section 30.

[^f00006]: Section 10H was inserted by S.I. 2011/2704. Section 10H was amended by S.I. 2019/530.

[^f00007]: “the regulatory authority” is defined in Article 2 of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (recast).

[^f00008]: 1989 c.29. Schedule 2ZA was inserted by S.I. 2011/2704.

[^f00009]: 1989 c. 29. Section 4(3F) was inserted by section 145(3) of the Energy Act 2004 (c. 20).

[^f00010]: Section 10H was inserted by S.I. 2011/2704. Section 10H was amended by S.I. 2019/530.

[^f00011]: S.I. 2014/2043, amended by S.I. 2016/742; there are other amending instruments but none is relevant.

[^f00012]: 1989 c. 29. Section 10O was inserted by S.I. 2011/2704. Section 10O was amended by S.I. 2017/493 and S.I. 2019/530.

[^f00013]: 1989 c. 29; see section 8A for the incorporation of the standard conditions to an interconnector licence.

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