Annual Report 2011 

European Federa on of Local Energy Companies 

Tableofcontents

 

 A WORD FROM THE CHAIRMAN                  3 

  

  

CEDEC                        4    

INTRODUCTION                    4 

CARACTERISTICS OF COMPANIES AFFILIATED TO CEDEC          4 

MISSION STATEMENT                  4 

COMPOSITION OF EXECUTIVE AND SUPERVISORY BODIES          6 

MEETINGS OF THE EXECUTIVE BODIES IN 2011            7 

CEDEC CONGRESS IN 2011                 7 

AN AFFILIATION TO CEDEC                 7 

  

 

2011 ‐ HIGHLIGHTS                    8 

  

  

OUTLINES OF EUROPEAN UNION ENERGY POLICY              10     INTRODUCTION                    10 

  INTERNAL ENERGY MARKET                10 

  CLIMATE CHALLENGE                  14 

  ENERGY INFRASTRUCTURES                17 

  

 

FLORENCE FORUM – MADRID FORUM – LONDON FORUM            19 

  

  

EUROPEAN COUNCIL IN 2011                  20   

COUNCIL PRESIDENCY                  20 

EUROPEAN ENERGY COUNCIL                21 

  

  

ACER PUBLICATIONS                    23 

  

  

ERGEG PUBLICATIONS AND CONSULTATIONS              24 

  

               

 

Awordfromthechairman

Theyear2011hasbeenmarkedbyanimpor-tant series of events and uncertainties in theinternational energy scene whose repercus-sionsarebeingfeltinEurope.Theinternationaleconomicand inancialcrisishas had particularly heavy consequences in2011onpublic inances inallmember states,and thus on the economic sphere and con-sumption of electricity and gas. The nuclearaccident in Fukushima in Japan led certaincountries to review their nuclear policy. Thedecision of Germany, among others, to aban-don nuclear energy caused disquiet on thelevelofsecurityofsupplyand led toa funda-mentaldebateonthefutureenergymixoftheEUmemberstates.After having adopted the third Europeandirective in 2009, all member states arecommitted to transposing it intonational lawin the course of the year 2011, which had atirstbeen ixedforMarch2011andthenpost-poned until autumn 2011. The new legalframeworknotably includesmorepowers forregulators, greater clarity in consumer rights,the de inition of a speci ic calendar for theinstallation of smart meters with a cost/bene itanalysisaccruingtoeachmemberstateandthedevelopmentofsmartgrids.The European 20-20-20 objectives have alsobeen transposed with particular attention tothe proposal for the energy ef iciency direc-tive. The Smart Grids Task Force has led,throughouttheyear(andduringthecourseofthe year 2012) an intensive campaign on thethemeofsmartgrids.Moreover, the debates on the appropriatedistribution of roles and oversight in thefuture energy landscape, namely with theentry of the Agency for the Cooperation ofEnergy Regulators (ACER), bear on the ques-tionofknowingwhatthemarketmodelshouldlooklike–andwithwhatdegreeofuniformity

in the EU – andwhat role local and regionalenergy companieswill play in this constantlyevolvingenvironment.Variousuncertaintieshavethuslefttheirmarkin2011,andthemembercompaniesofCEDECmust confront them,on theeconomic, techni-cal,socialandenvironmentallevels.CEDEC wishes to accompany its af iliatedcompaniesinordertorisetothesechallengeswithasinglevoice.CEDEChas positioned itself during 2011 as aconstructive interlocutor with the EuropeanParliament and European Commission andwill continue toclosely followanddefend thedifferentEuropeanlegislativeinitiatives.Thankstothecredibilitygainedduringtwentyyearsofitsexistence–sincetheappearanceofthe irstprojectsconcerningthe liberalizationof the European energy market - CEDECremainsanappreciatedactorintheEuropeanpublicservicesector.Lastly,Iwishtothankthedirectorsandcolla-borators of the national federations andaf iliated companies, who bring an essentialcontributiontotheeffectivenessoftheactionscarriedoutbyCEDEC.

BerndWilmertPresident

3 

Introduction

CEDECdefendstheinterestsoflocalandregionalcompaniesoperatinginthe ieldofelectrici-tyandgassupplyatEuropeanlevel.CEDEC’smembershipismadeupof2,000companieswhichaccountforanoverallturnoverof 100 billion euros, 75 million customers and connections to the grid, and more than250.000employees.Mostofthelocalcompanies,predominantlystructuredassmallandmedium-sizedcompanies,havedevelopedactivities in electricityandheatproductionsectors,operatingofelectricityandgasdistributionsystems,andsupplyingofelectricity,gasandenergyservices.Theyareofconsiderable geographical importance to regional economic development and creation oflocaljobs.Thesecompanieshavebeeninvestinginthe ieldsofrenewableenergies,combinedelectricityand heat production, energy ef iciency and energy services formany years. They also passtheirknow-howontoconsumers.The structural conditions applicable to the internal energy market need to be developedwithoutendangeringlocalandregionalcompanies’chancesandcompetitiveness.

4 

 

CEDEC

Caracteristicsofcompaniesaf iliatedtoCEDEC

Theyarekeyplayers in competitive energymarkets:without competitors ofdifferentsizesnocompetitionispossible.

Theyplayanactivepartintheentirevaluechainandtheyaspiretocivicvalue:produc-

tion, network operation, management of metering systems, supply and services forenergyef iciency.

They are small and medium-sized energy companies with local and regional share-

holders:keyplayersinregionaleconomicdevelopment,investmentsandlocaljobs. Theyarepartnersinthetranspositionofenvironmentaltargets:investmentsinsustai-

nablelocalelectricityproduction,ef icientandsmartgrids.

Missionstatement

Torepresentouraf iliatedcompa-nies’interestsindealingswiththeEuropeanauthorities

CEDEC represents its members’interestsindealingswiththeEuropeanauthoritiesinthe ieldofelectricityandgas.Thedrawingupoflegislationandregu-lation is the inal outcome of a longprocess of information, dialogue,consultation and negotiation, inwhichCEDECplaysanactivepart.CEDEC issuesopinionsonbehalfof itsmembers at the various stages of thelegislative process. It plays a role asEuropean spokesperson for the localandregionalenergycompanysector.It aims to put forward anddefend thejoint positions of af iliated companiesin dealingswith the various Europeaninstitutions, including the EuropeanParliament,CouncilandCommission.ItalsotakespartintheforumsheldinFlorence(electricity),Madrid(gas)andLondon(energyconsumers).Through itswork,CEDEC thusaims topromote the development of local andregionalenergycompaniesinEurope.

To translate the relationshipbetweenthecompaniesandnationalregulators and carry it forward indealings with the European regula-tor:

It appears more and more crucial toensure that CEDEC is involved inconsultationproceduresandother ini-tiatives launched by the Europeanregulator(ACER/CEER).

Topromoteexchangesofinformationandexperience.

CEDEC acts as a veritable round tableforlocalandregionalcompaniesopera-ting in the ield of energy. It promotesthe exchanging of information andtechnical and economic experiencebetween itsmembersontheonehand,and between CEDEC and the relevantinternational organisations on theother.Depending on current needs, ad hocworkinggroupsaresetupandexpertsaregatheredinthevarious ieldsrepre-sented. They contribute to prepareCEDEC’sopinions.

Toprovideservices toaf iliatedcom-panies

CEDEC closely monitors all legislativeand regulatory initiatives and commu-nicates relevant subjects to itsmembers.Todo so, it publishes, amongothers, aregular newsletter providing targetedinformation:CEDECBriefnews.Depending upon the strategic andtechnical requirements, CEDEC orga-nisescongressesandseminars.Its website and information portal(www.cedec.com) enable people toconsult a whole series of informationonline,especiallytherelevantEuropeanlegislation.

5 

Compositionofexecutiveandsupervisorybodies

6 

 

ExecutiveboardChairmanBernd WILMERT (Stadtwerke Bochum -VKU)Deputychairmen:BernardMARGARON(SICAEdeRay-Cendrecourt-FNSICAE)FrancescoSPERANDINI(AceaRoma-Federutility)Administrators:JosANSOMS(Intermixt)LorenzoBARDELLI(Federutility)NorbertBREIDENBACH(REWAGRegens-burg-VKU)ClaudeDESAMA(Ores-Intermixt)AlexandreDUNOYER(ANROC)JoGEEBELEN(INTER-REGIES)tillendofFebruary2011JoostGOTTMER(Alliander)RobertGRUNEIS(VKO)MarcelHALMA(NetbeheerNederland)ReneKELHETTER(FNCCR)HeidrunMAIER-DEKRUIJFF(VKO)BernardMARGARON(FNSICAE)GiovanniTAGLIALATELA(Federutility)FrancescoSPERANDINI(Federutility)BartVANDERCAMMEN(NetbeheerNederland)GeryVanlommel(INTER-REGIES)asfrom1March2011BerndWILMERT(VKU)MichaelWUBBELS(VKU)

AssistantstotheExecutiveboard:

PierreBOULNOIS(FNSICAE)ClaudeBOURDET(ELE)RenzoCAPRA(Federutility)FrancescoDELFINI(FNSICAE)ThomasFREUDENBERG(VKU)LucHUJOEL(Intermixt)AlainPETIT(Sibelga-Intermixt)YvesRAGUIN(FNCCR)OlivierSALA(GEG)PascalSOKOLOFF(FNCCR)GuillaumeTABOURDEAU(ANROC)JacquesVANDEBOSCH(INTER-REGIES)ChristianVIAENE(Sibelgas-Intermixt)CollegeofcommissionersJacquesVANDEBOSCH(INTER-REGIES)KarlFERRARI(Federutility)ClaudeBOURDET(ELE)Day‐to‐daymanagementGertDEBLOCK-SecretairegeneralCatherineBIREN-Managementassistant

CEDEC members are local and regional companies (or the nationalfederationsrepresentingthem)operatinginthe ieldofenergy.Thespeci icnatureoflocalandregionalcompanies,rootedintheirlocalandregionalcommu-nities, does not in anyway deprive them of the right to be represented at European level.Thecollaborationofalllocalandregionalcompanieswillstrengthenandbothoptimisetheirrepresentativenessandhelpthemtodefendtheirownlegitimateinterests.CEDEC is aiming to expand by admitting new members, in order toconsolidatebothitspositionindealingswiththeEuropeaninstitutionsanditsimpactintheEuropeandecision-makingprocess.Thiswillallowittodefendthepositionsandinterestsofitsmembersaseffectivelyaspossible.AnycompanyororganisationwhichprovidesapublicserviceoflocalinterestandwishestobecomeinvolvedintheworkofCEDEC–asaneffectiveoranassociatemember–mayapplytojoinCEDEC.

7 

Meetingoftheexecutivebodiesin2011

TheExecutiveBoardmeton24/02/2011(Paris–France),13/04/2011(Brussels-Belgium),7/06/2011 (Vienna - Austria), 22/09/2011 (Brussels - Belgium) and on 8/12/2011(Brussels-Belgium).TheannualGeneralMeetingwasheldinVienna(Austria)on7/06/2011.

Anaf iliationtoCEDEC

TheCEDECCongresswasheldat theRenaissancehotel inBrusselson12thand13thApril2011andwasattendedbymanyimportant iguresfromtheEuropeanParliament,theEuro-peanCommission, the regulatoryauthoritiesandexecutives from local companies fromva-riouscountries.TheymettoofferareminderofEuropeanenergypolicydirectionsandtoex-changeideasontheinitiativeswhichareunderwayinlocalandregionalenergycompanies.Thecentralsubjectof “European initiativesdealingwith localrealitiesorseekingabalancebetween general economic interests, consumers’ expectations and the ambitions of "local”companies”gaverisetointerestingdebatesamongthepeopleattendingthemeeting.

CEDECCongressin2011

J HungarychairstherevolvingPresidencyoftheEuropeanUnion

Council.

F TheHungarianPresidencyorganiseson4Februarythevery irstEuropeanSummitspeciallydedi-

catedtoenergy. At the Energy Council of 28 February, ministers adopt conclusions on energy strategy

2011–2020andonEuropeanprioritiesrelatingtoenergyinfrastructurefor2020andbeyond.M Of icialdateofpromulgationofthirdEnergyPackageforliberalizationofinternalelectricityand

gasmarket. The Agency for the Cooperation of Energy Regulators (ACER) becomes operational, with

headquartersinLjubljana,Slovenia. TheCommissionpublishesitsnewactionplanforenergyef iciency. CEDECparticipatesintheMadridForum. The nuclear accident in Fukushima, Japan rekindles in Europe and throughout the world the

debateonthesafetyofnuclearreactorsandtheirprolongationorconstruction.

A CEDECorganizesitsannualcongressonthetheme“Perspectivesforactionbylocalandregional

companieswithintheframeworkofEUenergystrategy”. TheEuropeanCommissionpublishesacommuniqueondeploymentofsmartgrids. ACERsolicitsprofessionalopiniontoelaborateitsframeworkguidelinesonelectricitybalancing. Morethan600eventstakeplacethroughoutEuropeontheoccasionoftheEuropeanSustainable

EnergyWeek(EUSEW). TheEuropeanCommissionwishestoend iscalunbalanceslinkedtotheenergytaxationdirec-

tive,andproposestomodifyit.M InresponsetotheFukushimanuclearaccidentinMarch2011,theGermangovernment

announcestheclosingofitsseventeennuclearreactorsbefore2022. CEDECparticipatesintheFlorenceForum23and24May.

8 

2011‐Highlights

9 

J TheEuropeanCommissionpublishesaproposalonenergyef iciencydirective.

J ThePolishPresidencychairstherevolvingpresidencyofEUCouncil. EuropeanFundforpromotionofenergyef iciencyislaunched. EuropeanParliamentcallsforincreased inancialsupportfromtheEUforlargeinfrastructurepro-

jectsintheenergy ield.Aresolutioninthissensewasadopted5Julyinplenarysession.

A ACER adoptsmajor framework guidelines, de ining future rules formanagement of cross border

electricityandgasinterconnections.Theseframeworkguidelinesshallbestatedinnetworkcodes,directlyapplicableinallmemberstates.

S CEDECtakespartinMadridForum,held26and27September. EuropeanCommissionpublishescommuniqueonsecurityofsupplyandinternationalcooperation.

O CEDECparticipatesinLondonForum,held26and27October. EuropeanCommissionpublishesbilloninvestmentsinenergyinfrastructure. EUCounciladoptsnewrulesdesigned topreventmanipulationandabuse inwholesaleelectricity

andgasmarket.N NordStreamgaspipeline,newmaritimegashighwaybetweenRussiaandEuropeviatheBaltic,is

inaugurated. CEDEC sends amendments on directive proposal concerning energy ef iciency to general

rapporteur,ClaudeTurmes,andtomembersoftheITRECommissionoftheEuropeanParliament.D EuropeanCommissionpublishesdirectiveproposalonallotmentofconcessioncontracts. EuropeanCommissionpublishesitsEnergy2050roadmap. CEDECtakespartinFlorenceForum,held5and6December.

The achievement of the internal energy marketcontinues in spite of the important obstacles toovercome, among which we ind non-existentinfrastructureandinsuf icientmarkettransparen-cy.Duringtheyear2011thetranspositionofthethirdenergy package remained the major objective oftheCommissionandmemberstates.Evenso,thenationalimplementationofdirectiveshasbeendelayed.WellbeyondthedatesetforMarch2011,onlyeightmemberstateshavesigni iedtheentiretranspositionofthepack-age.

FrameworkguidelinesandnetworkcodesGunterOettinger,EuropeanEnergyCommissioner,andAlbertoPototschnig,the irstdirectorof the Agency for the Cooperation of Energy Regulators (ACER), of icially launched on3March2011theactivitiesoftheAgency.ACERnotablyplaysacentralroleintherealisationandelaborationofthemodalitiesofthenewEuropeanregulations.

10 

OutlinesofEuropeanUnionEnergyPolicy

Introduction

ThefutureofenergyintheEUisoneofthemostimportantchallengesEuropemustface.The inevitable adaptation of our energy systems onto a more secure and sustainable pathnecessitatesacoherentstrategyandlongtermvisionofclearpoliticalchoices.Consequently,thedecisionstobetakentoputusontherightpathareurgent,bothfortheinvestmentsofallconcerned actors as well as for the purchasing power and competitiveness of consumers.Ontheonehand,theinternalenergymarketremainsfragmentedandhasnotyetrealisedallitspossibilities intermsof transparency,accessibilityandchoice.Theachievementofa trulyintegratedinternalmarketmustbeconsideredapriority.On theotherhand,keydecisionsmustbe taken, inorder toattain theclimateobjectives for2020, namely to reduce greenhouse gas emissionsby20%, evenup to 30%, to increase theshareofrenewableenergysourcesto20%andimproveenergyef iciencyby20%.Theseobjec-tivesmerelyconstitutea irststeptowards2050.It is therefore necessary for Europe to concentrate, in the coming decade, on the necessaryinvestmentandintegrationoftechnologicalprogresssothatEuropeaninfrastructurerespondstofutureneeds.

Internalenergymarket

CEDECnotesthattheframe-work guidelines andnetwork codes are deve-loped at the same time,whichmight lead todif icul-ties for the participants tomobilise the necessaryexperts.CEDEC is convincedthattheambitiouscalendarcanonlybemetifthe ieldofapplication of the frame-work guidelines and net-work codes is restricted tocross-border issueswith apotentialincidenceondistri-butionsystemoperators.This is why CEDECrecommends: Allotting the necessarytimetotheelaborationofnetworkcodestakingintoaccount a suf icient pe-riod of time in order toconsult all concernedactors;

Recognising that allnetwork codes do notneed the same period ofdevelopment; certaincodes may be realised inless than a year, othersneed a longer space oftime;

Utilising the same prin-ciple for electricity as forgas,namelyindevelopingonly one network codeconforming toone frame-workguideline;

Limitingnetworkcodestocross-borderissues.

11 

Theprocessdescribedbythethirdpackageforesees,amongothers,thattheseprincipleswillbestatedasguidelinesandcodes of operational networks for the European transportsystem operators for electricity (ENTSO-E) and for gas(ENTSO-G).The elevated level of sophistication of the network codesposesthequestionoftheirpotentialrevision.Notingthatthesenetworkcodes,whose ieldofactivityisinprinciple restrained to transport activities,directly in luence the activities of the distribution systemoperators, CEDEC has become involved in theelaboration process of these codes. In viewof the develop-mentofnetworkcodes,concertationstookplacewithENTSO-E and resulted in a cooperation agreement at the end of2011. Groups of experts from different organisations ofdistribution systemoperators (includingCEDEC)were thenput in place for the elaboration of each speci ic networkcode.Throughout the year 2011, ACER adopted texts whichestablish the principles for development of the futureEuropean network codes. These framework guidelines (cf.ACER annual report)will be stated as network codes,directlyapplicableineachmemberstateoftheEU.The texts are the result of an intensive amount of workcarriedoutbyEuropeanregulators,andduringwhichCEDECparticipatedat atpublic consultationsandworkshops,bothinelectricityandgas.InviewofthefollowupofallprojectsandforwhichCEDECappealed to the experts of the member companies, CEDECplaced at the disposition of its members fromSeptember2011a lexibleandaccessibleextranetformem-bersandtheirexpertsonthefollowingsite:www.cedec.com.

Enforcement of these prohibitions is con ided to inancial andsectorregulators.Themonitoringofcross-bordertransactionsiscoordinatedattheACERlevelwhichmustalertnationalauthori-ties of a potential market abuse and favour informationexchange. National energy regulators will be tasked with theenquiriesandwillbeabletoimposesanctions.

CEDECsupportstheinitia-tiveaimingtoimprovetheintegrityandtransparencyof the energy markets. Ahigh degree of marketintegrityandtransparencywill enable a reinforce-ment of trust in the mar-kets and will encouragetheparticipantstobecomemoreactive.In addition, the intentionof implementing a “lexspecialis” for the whole-sale energy market,covering all energy pro-ducts is, in CEDEC’sopinion, the most appro-priate approach to coverthe question of energymarketmonitoring.

12 

Marketintegrityandtransparency(REMIT)

Regulation 1227/2011 of the European Parliament and Council of25 October 2011which appeared 8 December 2011 in the of icialJournaloftheEuropeanUnionconcerningwholesaleenergymarketintegrityandtransparency, forbidscertainactions inthewholesaleenergymarketsandcon idestoregulatorsthemonitoringandenfor-cementoftheseprohibitions.Theprohibitionsinquestionnamelyconcern: Insider operations consisting of using non-public information, whosepublicationwouldhavean impacton thepriceof energy concerned, in order to intervene in the markets for ones own bene it. Market manipulations giving a wrong signal on the price or balanceofsupplyanddemand.

In order to enable this monitoring, REMIT envisages obligations as to the availability of data, as forexampletheuseofthemeansofproductionofelectricityandthenetworks.ACERshallgatherthedatacollected.Thecontentand ieldofapplicationofthesedatawillbede inedbyimplementingmeasures adopted at the European level.Once they are implemented, thewhole of themechanismput inplacebyREMITwillbetotallyoperational,probablyinthecourseoftheyear2013.Preparationhasalreadycommenced,withCEDECtakingpart.Lastly, REMIT has created a European register of wholesale energy market actors which will gatherrelevant information collected in the emission quota markets and which can be accessed by theregulators.

13 

Concessions

ThedraftdirectiveoftheEuropeanCommission,published20December2011,ontheallocationofconcessioncontracts,extendsthe ieldofapplicationtodistributionandenergysupplyconcessions.Thisdraftdirectiveaimstomodifydirectives2004/18and2004/17.The European Commission considers that the dispositions envisaged do not engender excessiveadministrativeburdensandonlyconcernconcessionsofasigni icantamount,wherecross-borderinterestismanifest.Thedirectiveobjectivesare: tooffergreatertransparencytocompanies; to ensure lexibility and security for the contracting authorities: no public authority shall be

constrained to externalise its management methods, but this directive will on the contraryenablethemtobesecuritised.

tocombatbadpractices.Inthisframework,theCommissionproposesthefollowingmeasures:

Obligation to publish in the of icial Journal of the European Union beyond ive millioneuros;

Moreprecisede initionofwhatconstitutesaconcession; Guaranteesofminimalprocedures; Rulesonmodi icationofcontracts; Rulesoncon lictofinterest.

ThetextshallbedebatedattheEuropeanParliamentandattheCouncil.CEDEChasalreadytakenpositionwithin the framework of consultations carried out by the European Commission. It willcontinuetodefenditspositionduringthelatterphasesofnegotiation.

In general, CEDEC isfavourable to EuropeanCommission proposalsconcerning instrumentswhich stimulatemore ef i-cientenergyuseandreco-gnisestheresponsibilityofthe public sector in thisobjective.However, the manner inwhich energy resourcesare used affects not onlythe public but also theprivatesector.Thatiswhyobligations must beassignedinafairandnon-discriminatory manner topublicandprivateactors.Moreover, CEDEC reco-gnises that access toenergy isof capital impor-tance in improvingqualityoflife,aswellaseconomicdevelopment.Consequently,energyscar-citymust be analysed andapproachedwithaholisticvision.Concerningintroductionofinnovative technology,such as smart grids andmeters, CEDEC recognisesthat these are key factorsin attaining ahigh level ofenergyef iciency.CEDEC also considers thatcombinedheatandelectri-city production is anessential instrument inenhancing energy ef icien-cy.

Climatechallenge

14 

Actionplanforenergyef iciency2011The European Commission adopted, on 8 March 2011, an action plan forenergyef iciencyseekingtoattainenergysavingsof20%by2020.The Commission will evaluate the results in 2013 and, if necessary, willpropose binding national objectives for 2020. In this context, the newenergyef iciencyplanproposedinparticular: Tofavourexemplaryroleofpublicsector; To focus on deployment of smart grids andmeters to optimise energy

consumption; Toimproveef iciencyofelectricityandheatproduction,electricitydistri-

butionsystemoperatorsbeingobligedtograntpriorityaccesstocogene-ratedelectricity;

Suppliersanddistributorshavingtocontributetoenergysavingactions

by improving energy ef iciency among their clients. They must alsoappealtoenergyservicecompanies(ESCO);

Tolaunch“SmartCitiesandCommunities”initiative.

Finally, CEDEC recognises the importance of the Covenant of Mayorswhichaimstocontributetotheenergyobjectiveofhorizon2020.Itmustalsobe taken intoaccount the small regionsandcommunitieswhoalsoplay a key role in realising energy saving objectives, as they ensuresecurity of supply by providing sustainable energy services, andcontributeinthiswaytoaddedvalueintheirrespectiveregionsandcom-munities.

15 

Energyef iciencydirective

Pursuanttoitsrevisedactionplanonenergyef iciency,the Commissionpublished,on22June 2011, a draft directive on energyef iciency which aims to replace the direc-tivesonpromotionofcogenerationandener-gyef iciencyinendapplicationsandenergyservices.Thenewtextforeseesmeasuresleadingmemberstatestointen-sify their efforts formore ef icient useof energy in all steps ofthe chain, fromenergyproduction throughdistribution to inalconsumption.Thisdraftdirective,whichmustassisttheEUinreducingby20%its energy consumption, has an important potential impact onlocal and regional energy companies. In effect, theCommissionproposesinparticularthat: Energydistributionorretailenergycompaniesmustachieve

eachyearenergysavingsequivalentto1.5%oftheirsales,byimplementingenergyef iciencymeasures;

Publicauthoritiesmustrealiseeachyearthermalrenovation

whichmustcoveratleast3%ofthetotalgroundsurface; Installationofsmartmetersbefore1January2015ismanda-

tory, in order to communicate in real time to consumersdetailed information on their energy consumption in orderbettertomanagetheirenergyconsumption;

Member statesmust foresee incentives related to tariffs, in

order to limit unnecessary increases in volumes of distri-butedortransportedenergy.

TheEuropeanCommissiondraftdirectivehasbeentheobjectofnumerous debates. At the Parliament, in the ITRE committee,some 1,800 amendments were tabled. At the end, 18 compro-misearticleswereapprovedinCommission.Theamendedtextmentionsmeasuresnotincludedintheinitialproposal of the European Commission. One of the measuresconsists notably in the putting into place of binding nationalobjectives,basedonreferencevaluesspeci ictoeachcountryofthe EuropeanUnion. The goal of thismeasure is to ensure thereaching of the global energy savings objective of 20%throughout Europe. The Commission would evaluate, in June2013, progress achieved by the member states. The EuropeanExecutiveshould thenpresent, in June2014,anenergysavingsproposalhorizon2030.

CEDEC has, on numerousoccasions, intervened inorder to mitigate certainmeasures, notably concer-ning obligatory ef iciencymeasures and smartmeters.CEDEC also insists on thenecessity for the memberstatestoensuretheecono-mic and inancial viabilityof the DSOs and supplierswith regulated prices andtariffsandthatthisnecessi-ty must not be compro-mised by way of bindingenergyef iciencymeasures.The third energy packageforesees the need for acost/bene it analysis forthe implementation ofsmart meters. CEDECconsiders that this cost/bene it analysis must takeintoaccountnotonly inan-cial and technical effects,but also issues of securityandconsumerdataprotec-tion.It is necessary thatprocedures be created atthedistributionlevelintheoptic of accelerating theimplementation of smartenergygrids.The simpli ication andacceleration of theapprovalprocess for cons-tructionofgridsshouldnotbe limited to the level ofthe transport system, butalso equally be applied tothedistributionsystem.

16 

Roadmap2050The European Commission published on 15 December2011 its energy roadmap horizon 2050. It presents ivescenarios to reach the objective of reducing its CO2emissionsto85%by2050.The decarbonisation of the energy sector cannot berealisedonlybysigni icantenergysavings.Themeasuresnotably take into account stricter requirements for newbuildings and appliances, the high renovation rate ofexisting buildings and the creation of energy savingsobligationsforenergysectorcompanies.The roadmap also counts on a doubling of the share ofelectricity in the inal energy demand and on a greatercontribution of renewable energy in the production ofelectricity.Inaddition to therapidriseofnewtechnology in theex-ploitation of renewable energy, this evolution shouldincludearecon igurationoftheelectricsystemwithmorelexibleandbettercoordinatedinfrastructure.The roadmap states that, if carbon capture and storagetechnologyisavailableandextensiveonalargescale,gasmightoccupyagreaterplaceintheEuropeanenergymix.In this case, the reinforcement of interconnections inEurope and the diversi ication of sources of supplymustbefurthertakenintoconsideration.Fromtheanalysisofthesescenarios,nuclearenergywouldcontribute in lowering the system costs and the price ofelectricity. As a large scale low carbon option, nuclearenergymightcontinuetoconstituteoneofthepossibilitiesforelectricityproductioninEurope.

Moreover, CEDECbelieves thatanef icientroadmap should includea combination of diffe-rent scenarios andrequire signi icant tech-nological developmentatalllevels.CEDEC supports, ingeneral, the initiative ofthe European Commis-sionseekinga longtermsolution. It considersthatthetransitionofoureconomy towards a lowcarbon energy futurewill have a considerableimpactonenergyinfras-tructure and on allactorsinthevaluechain,including distributionsystem operators. It istherefore crucial toanalyse the roles andresponsibilities of theactors in a low carboneconomy.

There is no doubt that infrastructure is an essential element to successfully carry out the energyprogrammesoftheEU,rangingfromtheachievementoftheinternalmarkettocompetitivenessandimprovementofconsumerservices,fromenergysolidaritytomeetinggoalsrelatingtoclimateandrenewableenergy,andfromenergyef iciencytosecurityofsupply.

In February 2011, ERGEG (European Regula-tors' Group) published its recommendations,following a consultation and public hearings,relating to smart meter deployment. Amongthese recommendations, the regulators advisemember states to de ine at a national level aminimal listofservices thatsuppliersandelec-tricity and gas distribution system operatorsmust offer their clients, in order that the lattermaybene itfromtheseinvestments.Ifsmartmeteringisdeployed,itmusteffectivelybene itnotonlythesuppliersandDSO’sbutalsoconsumers.AccordingtotheEuropeanCommissioncommu-nique published 12 April 2011, 80% of house-holdsinEuropeshouldhaveaccess,by2020,tosmartmeters. The Commission recognises thatthe systemoperatorsmustbear the costof theinvestments.This communique stipulates ive types ofmeasurestofavoursmartgriddevelopment: The elaborationof technical standards: this

implies communication protocols andfunctionalitiesinordertoensuretheintero-perability among systems. Besides thede inition of a network code, the Commis-sionwill ensurethedevelopmentofstan-dards relatingto ICT(InformationandCommunication Technology). The irst

resultsonthesubjectofEuropeanstandardsforsmartmetersareexpectedattheendof2012.

Legalandregulatorydispositionstoguaran-

tee respect of consumer privacy.Concurrently with the development oftechnical standards for smart grids, theprivacyaspectwillbetakenintoaccount.

The elaboration of guidelines de ining a

methodology for national implementationplansforsmartgrids.

With a view to ensuring competitive

services to consumers, the Commissionenvisages, on the one hand, the revision ofthe energy services directive, and on theotherhandthemonitoringoftheapplicationof the requirements of the third energypackage.

Lastly, the Commission intends to further

supportinnovationandsmartgridtechnolo-gy by launching the European initiative onsmart cities and collectivities in 2011, andby initiatives of large scale demonstrationforthedeploymentofsmartgrids.

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EnergyInfrastructures

Smartgridsandsmartmeters

CEDECwishesthat:

proceduresbecreatedatthedistributionlevelintheopticofacceleratingtheimplementationof smart energy grids: the simpli ication and acceleration of the process of constructionpermitapprovalshouldnotbelimitedtotheleveloftransportnetwork,butalsobeappliedtothedistributionnetwork,inasimultaneouswaywiththeplannedreinforcementoftransportnetworkcapacity;

theadditionalcostsofformationandreconstructionlinkedtonetworkdevelopment,suchastheimplementationofsmartenergygrids,berecognisedassuchintheregulation,ifitisdoneonabasisofstimulationmeasures:localenergycompanieswithintheEUneedtohavetheirinvestmentsguaranteedinthelongterm;

Ifthepoliticalwillofdeployingsmartgridscomestofruition,acoherentworkingframeworkmustbeput inplace. Interfacesandopen technologystandardsmust see theday.Thegridoperatorsmust,aswell,havetheopportunitytore inanceinvestmentgrantedintheinstalla-tionofsmartmeters.

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Nevertheless, in its communique, the Commission has attributed a greater role to supplierswhereasallthepartiesinvolvedintheworkofthesmartgridtaskforceagreedonthepivotalrolethatdistributionsystemoperatorswillplayinthedeploymentofsmartgrids.

Regulationoninvestmentsinenergyinfrastructures

TheEuropeanCommissionpublished,on19October2011,apropo-sal for a regulation on investment in energy infrastructure.The objective is to coordinate andoptimise thedevelopmentofnetworksintheEU.Theregulation includes thedevelopmentofsmartgridsamong the“priorityenergycorridors”whoserealisationtheCommissionjudgesindispensable in order to reach the energy and climate objectivesthatEuropehassetfor2020.Aselectionof“commoninterestprojects”(CIP)shouldbeorganised,in the irst instance,ataregional level,alsohavingmemberstates,regulatorsandoperatorsintervene.TheEuropeanCommissiondesiresregulatorstofacilitatetheimple-mentationoftheseprojectsbymeansof inancialstimuli.Theissueoftheprincipleof“bene iciary-payer”isalsoposedinthecase of projects which lead to costs in one member state andgeneratebene itsinaneighbouringstate. ThisiswhytheCommis-sion asks concerned regulators to agree on a sharing of costs infunctionofthebene itsperceived.

CEDEC has introducedits amendments to thetext, in viewof the inalreport which will beadopted in June2012intheITRECommittee.CEDECdeploresthattheconcreteelementsofthetext focus solely ontransport. The takingintoaccountofdistribu-tion infrastructure –including local smartgrids – is necessary toarriveatabalancedandcompletetext.

TheambitiousprojectsofthisregulationmuststillbedebatedamongtheCommission,ParliamentandCounciloftheEuropeanUnion,inviewoftheadoptionofthe inaltext,foreseenfortheendof2012.

CEDECtookpartintheElectricityForumheld23and24MayinFlorence.ThisForumdebatedthestakeslinkedtotheconcretisationoftheEuropeanelectricitymarket.Thediscussionsandpresentationsfocusedonfourprinciplethemes: Developmentofinfrastructure.CEDECexpresseditsopiniontoextendtheCommissionproposalon

infrastructuretothedistributionlevel,sinceittendstorestrictitsprojectsexclusivelytothetrans-portlevel;

Regionalelectricityinitiatives; Transparency and integrity of the energymarket. The European Commission notably intends to

propose,byautumnofthisyear,comitologyguidelinesondatatransparency; Internalmarket fromnowto2014.Thestresshasbeenplacedonguidelinesandnetworkcodes

necessaryfortheimplementationoftheEuropeanelectricitymarketby2014.AsecondFlorenceForumwasheld5and6December2011.

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FlorenceForum–MadridForum–LondonForum

CEDECparticipatedin2011inElectricity(FlorenceForum),Gas(MadridForum)andCitizens’EnergyForums(LondonForum).The Florence, Madrid and London Forums consist of representatives of the European Commission,regulatoryauthorities(ACERandCEER),memberstates,consumers(IFIEC,BEUC)andorganisationsrepresentingmarketactors,notablyCEDEC.Ingeneral, in theFlorenceandMadridForums,mainlyproblems touching thewholesalemarketarediscussed:transport(interconnections),storage,generationandtrading.The London Forum deals with key questions relating to the retail market and consumer interests:conditionsof changingenergy supplier,billing,meteringanddataexchangeor consumerprotection,consequentlydistributionsystemoperatorsandsuppliersaremoreconcerned.

FlorenceForum–Electricity

MadridForum‐Gas

CEDECparticipatedintheMadridForumof21and22March2011.Thediscussionsweremainly centredon the implementationof the third energypackage, on frame-work guidelines, on the package concerning energy infrastructure and on EU proposals relating toenergymarketintegrity.AsecondMadridForumwasheld26and27September2011.

LondonForum‐Citizen’sEnergyForum

CEDECparticipatedintheCitizen’sEnergyForum,held26and27October2011inLondon.Verydiversi iedthemeswhichre lectallparticularaspectsoftheretailmarketweredebated:marketcompetitiveness,handlingofcomplaints,changingsuppliers,theroleofdifferentactors,smartmetersanddevelopmentofenergyservicesfordemandsidemanagement.

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EuropeanCouncilin2011

CouncilPresidency

ThePresidencyoftheCouncilplaysanessentialroleattheleveloflegislativeandpoliticaldecisionmakingintheheartoftheEU.Itischargedwithorgani-singandpresidingthewholeoftheCouncilsessions,aswellaselaboratingcompromiseslikelytoofferasolutiontothecasesunderdiscussion.

HungarianPresidency

The Hungarian Presidency completed, in the irstsemesterof2011,theworkofthetrioofpresiden-cieschairedbySpainandBelgiumin2010.An event which strongly marked the HungarianPresidency was the European Council of4Februaryentirelydevotedtoenergy.UndertheHungarianPresidency,severalstrategiciles destined to de ine common energy policydirectionsforthedecadetocomeandtothe2050horizonweretakenintoconsideration. A ten year strategy stressed ive priorities:

ef icientuseof energy, Europeanmarket inte-gration,technologicaldevelopment,secureandaffordable supply be itting consumers and areinforced external dimension centred onstronginternationalpartnership.

Ahorizon2050 roadmap sets themaindirec-tions in order to assure the EU’s transitiontowardsalowcarboneconomy.

Budapestalsobegantheworkonmodernisingandreinforcinginfrastructure,inordertosetprioritiesin interconnectionsandelectricityandgascapaci-ty.Lastly,theHungarianpresidencyledtothe irstwork on the integrity and transparency of theenergymarket.

PolishPresidencyFrom 1 July to 31 December it was the turn ofPolandtoheadtheCounciloftheEuropeanUnion,thus inaugurating a new trio of presidencies inwhichDenmarkandCypruswillalsotakepart.Takingintoaccountthedirectionsde inedbytheEuropeanCouncil inFebruary2011and thecon-clusions of the Council on Energy Strategy 2020,these three presidencies will emphasize theimplementationofthestrategyinquestion,inclu-ding the chapter dedicated to infrastructure andtheenergyef iciencyplan.The implementation of the directive on energyproducedfromrenewablesourceswastheobjectofa followupconcerningtheviabilityofbiofuelsand questions of inance and coordination, andwork on the integration of renewable energy inelectricitygrids.Regulatory initiativesbearingonsmartgridsandpromotionofelectricvehicleswerealsoenvisagedinthiscontext.Lending appropriate support to the pursuit andimplementationoftheEuropeanStrategicplanforEnergyTechnology (SET) equallyplayed amajorroleintheseareas.DuringthesecondsemesterPolandwishedtoclosethe negotiations in progress on the Regulation onEnergyMarketIntegrityandTransparency(REMIT).Lastly, the Polish presidency desired to lend, in itsprogramme, its contribution to the elaboration oftheexternalenergypolicyoftheEU.

Itisheldinturnbyeachmemberstateforaperiodofsixmonths(fromJanuarytoJuneandfromJulytoDecember), according toapre-establishedorder. In2011, thePresidencywassuccessivelyoccupiedbyHungary and Poland. Each Presidency elaborates its work programme, which also includes an energychapter.

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TheEuropeanEnergyCouncilbringstogetherheadsofstateorgovernmentof theEUmemberstatesandthepresidentof theEuropeanCommission.ThedecisionstakenatEuropeanCoun-cilmeetingsplayaprimordialroleinde iningthegeneralpolicydirectionsoftheEU,includinginthe ieldofenergy.TheprincipleEuropeanCouncilheldduringtheyear2011wasthatof4February.OrganisedbytheHungarianpresidency,thisEuropeanCouncilfocused primarily on the topics of energy and innovation andconcluded that achieving the internalmarket of theEuropeanUnionwasits irstpriority.

TheEuropeanleadershavealsoconcludedthatEUmembersmustpromoteinvestmentinrenewableenergyandinreliableandsustainabletechnology.

Inthiscontext,CEDECsubmittedapositiontotheEuropeanleaderswhichcalls foran increaseinenergyef iciencyattheheartoftheenergysector,notably: RevisionanddevelopmentofcogenerationDirective,theobjectbeingtoputintoplaceminimum

standardsdesignedtostimulatetherecoursetocogenerationwithintheMemberStates; Integration of heat produced by cogeneration in the quota exchange mechanism for EU

emissions. Inthis,CEDECconsidersthattheaccentmustbeplacedonthemannerthatpublicpoliciesmightcompensatecompetitivedisadvantageslinkedtoheatproducedbycogeneration,originatinginauctioningofemissionquotasrelatingtocompetitiveenergysourcesnamelygasandheatingoil.

Anenhancedintegrationofelectricity,gas,heatingandcoolingnetworks.Inthisoptic,itwould

becounterproductivetothrowopentocompetitioncollectiveheatingandcoolingnetworks,astheriskofclosingexistingproductivecogenerationsiteswouldresult,intheend,inareductionofenergyef iciency.

Ambitiousclimateobjectives.Itwillbenecessarytoinvolveallpotentialactorswhomaycontri-

bute toreaching thesegoals. Itwouldbebetter,moreover, tomaintainvarious incentivesandsupportmechanismstotheextentthattheyhaveprovedtheireffectiveness.

TheCouncilagreedthattheobjectiveof20%energyef iciencyby2020intheEUmustbemet.

CEDECformallysupportsEUplanswithaviewtopursuingdevelopmentofrenewableenergy.Thedifferent national aid systems have proven, so far, to be ef icient and pro itable promotion tools;theymustthusbemaintainedtoavoidalldisturbanceofthecurrentpositiveevolution.Itwillhowe-verbepreferabletoanalysethesuitabilityofharmonising,inthelongterm,thedifferentaidsystemspresentintheEUinternalmarket.

EuropeanEnergyCouncil

22 

AsfortheEuropeanCommission,ithasbeeninvitedtopresentnewinitiativesrelatingtosmartgrids.TheCouncilhasalso invitedtheEuropeanCommissiontopaymoreattentionto issuesrelatedtoconsumersandmoreparticularlytovulnerableconsumers.

Intheopticofreinforcingconsumerprotection,CEDECsuggeststhat: Concerning data collection, protection and privacy, only relevant information

shouldbegatheredand treated,preferablybyaneutralmarket facilitatorsuchastheDSO;

On a European scale, a common de inition of the notion “vulnerable consumer”

shouldbeelaborated,takingintoaccountdifferentsituationsofmemberstatesonasocialandeconomiclevel.

DuringthisCouncil,communiquesfromtheEuropeanCommissiononEUenergystrategyfor2011-2020andleadershipdevelopmentintechnologyandinnovationwerebroached.

IntheopticofdevelopingleadershipintechnologyandinnovationCEDECconsidersthat: InthecontextofEU inancialperspectives, thedifferentaidprogrammesof theEU

shouldfocusmoreonde inedobjectivesinEUpoliciesrelatingtoenergyandclimatechange;

Aidprogrammesdealingwithmanagingfundsandallotmentofresourcesshouldbe

conceived inawaytoenable localenergycompanies todemonstrate their interestdirectly without a plethora of bureaucratic red tape, and that payment of fundsshouldbeaccelerated;

Pilotprojectsdeployedintheenergydomainshouldtakeintoaccountthedecentra-

lisationprocessoftheenergysystem,oftheroleplayedbylocalenergycompanies,aswellasthecentralpositionoftheDSOintheenvironmentofsmartenergygrids.

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TitreAucoeurdel’actualiteACERPublications

SomeofthepublicationsoftheAgencyfortheCooperationofEnergyRegulators(ACER),issuedin2011,whichwereofgreatinterestforCEDEC: FinalversionofFrameworkGuidelinesOnElectricityGridConnections(July2011) Framework Guidelines on Capacity Allocation and Congestion Management for Electricity

(July2011) FrameworkGuidelinesonCapacityAllocationMechanismsfortheEuropeanGasTransmission

Network(August2011) FrameworkGuidelinesonGasBalancinginTransmissionSystems(October2011)

SomeofthepublicationsandconsultationsoftheEuropeannationalRegulators'GroupforElectrici-tyandGasissuedin2011andwhichwereofgreatinteresttoCEDEC.CEDEChasvoicedopinionsonsomeofthem: GGPonRegulatoryAspectsofSmartMeteringforElectricityandGas(February2011) CEERresponsetotheCommission´spublicconsultationontheMiFIDReview(February2011) CEER response to theCommission's consultation on the external dimension of the EU energy

policy(February2011) GGPonRegulatoryAspectsofSmartMeteringforElectricityandGas(February2011) EvaluationofCommentstoCall forEvidenceonCEERVisionPaperforaconceptualmodel for

theEuropeangasmarket(March2011) FinalERGEGFrameworkGuidelineonGasBalancingintransmissionsystems(March2011) CEER submission to European Commission Consultation on Alternative Dispute Resolution

(ADR)(March2011)

CEERresponsetotheEuropeanCommission'sonlineconsultationontheEnergyRoadmap2050

(March2011) CEERstatusreviewofregulatoryapproachestosmartelectricitygrids(July2011) StatusReviewoftheImplementationoftheGGPonComplaintHandling,ReportingandClassi i-

cationasof1January2011(September2011) CEER inaladviceontheregulatoryoversightofenergyexchanges.ACEERConclusionsPaper

(October2011) BenchmarkingReportontherolesandresponsibilitiesofNRAsincustomerempowermentand

protectionasof1stJanuary2011(October2011) CEERFinaladviceontheIntroductionofaEurope-wideEnergyWholesaleTradingPassport.A

CEERConclusionsPaper(November2011) Transparencyrequirementsfornaturalgas.Summaryofresponsesdocument(November2011) CEERVisionforaEuropeanGasTargetModel.ConclusionsPaper(December2011) Advice on the take-off of a demand response electricity market with smart meters

(December2011)

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ERGEGPublicationsandConsultations

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CEDEC

RueRoyale,55boîte10

1000BruxellesBelgique

Tel.0032(0)2217.81.17–Fax0032(0)2219.20.56

E‐mail:gert.deblock@cedec.com

www.cedec.com