Network codes are part of the package of tools of European energy policy.
Network codes are associated with the aim of the EU's third energy package that entered into force in July 2009 concerning the European internal market in electricity. Key actors in the preparation of network codes are the European Commission, the energy regulators through their cooperative agency ACER, and the European transmission system operators through their cooperative organisation ENTSO-E. In the different stages of the network code preparation process, different stakeholders in the energy sector are being extensively consulted.
During the initial stage of preparation, the European Commission asks ACER to prepare a framework guideline within six months, which sets the network code objectives in principle.
After preparing the framework guideline, ENTSO-E is tasked by the Commission with preparing a network code within a period of one year, which executes the objectives of the framework guideline. A public consultation about the network code is held for stakeholders. Two months must be set aside for the consultation.
Once the consultation has been concluded, ACER, within a period of three months, assesses whether the network code will execute the objectives set in the framework guideline. Once this assessment has been concluded, ACER may either recommend to the Commission approval of the network code or may return the network code to ENTSO-E for modification.
In case of the latter, no specific time limit has been set for carrying out the modifications.
Network codes that have passed the inspection of ACER proceed to the comitology process, in which the European Commission, the Council of Europe and the European Parliament must seek consensus on the issue at hand. The network codes approved in the comitology process are published in the European Union's official journal, after which they become legislation directly in force in the member states.
Electricity market legislation included in the third package is
- Directive concerning Common Rules for the Internal Market in Electricity (2009/72/EC)
- Regulation concerning Establishing an Agency for the Cooperation of Energy Regulators (713/2009)
- REGULATION (EC) No 714/2009 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL.
The network codes are legislation subject to Regulation 714/2009.
From a point of view of their legislative status, the network codes are European regulations, i.e. they arelegislation directly in force in EU member states. As European legislation, the network codes are ahead of national legislation in the hierarchy, and in case of conflict, override it. The member states are responsible for implementing the network codes.
The network codes are divided into three groups: connections, operations and the market codes.
It is the duty of the member states to mplement the network codes, and to ensure the harmonisation of national legislation with the network codes.