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Declaration of intent to create european network of<br />transmission system operators for electricity, ENTSO-E
 
DECLARATION OF INTENT TO CREATE EUROPEAN NETWORK OF TRANSMISSION SYSTEM OPERATORS FOR ELECTRICITY, ENTSO-E
 

We the undersigned, CEOs or duly empowered persons of the Transmission System Operators (TSO) in Europe, hereby declare our intention to create European Network of Transmission System Operators for Electricity, ENTSO-E, before the end of 2008 in accordance with the principles of the third legislative package of the Internal Electricity Market and as further detailed in the attached Terms of Reference.

The establishment of ENTSO-E will strengthen both pan-European and regional TSO cooperation and representation with the aim of enhancing the integration of the European electricity market and the security and reliability of the European power transmission system. The incorporation of ENTSO-E represents a major step towards increased harmonisation of our current rules and practices.

We undertake to propose to the appropriate bodies of the current TSO associations that, they initiate procedures to wind-up their respective associations after the formal setting up of ENTSO-E. This is subject to transfer of the main activities of the current TSO associations into ENTSO-E as soon as possible after the establishment of ENTSO-E. We have the intention to keep the transitional period not exceeding 6 months.


 

TERMS OF REFERENCE OF THE EUROPEAN NETWORK OF TRANSMISSION SYSTEM OPERATORS FOR ELECTRICITY (ENTSO-E)

1. Purpose

The European Union is in process of launching a 3rd legislative package on Internal Electricity Market. . According to the package, the Transmission System Operators (TSOs) shall found the European Network of Transmission System Operators for Electricity (ENTSO-E) to strengthen TSO co-operation and, among others, to draft codes to be made binding

On this basis the TSOs (The Parties) in Europe have decided to study the possibility of establishing, by own initiative, a new association ENTSO-E to enhance TSO cooperation prior to the entry-intoforce of the 3rd package and to facilitate the start of the formal new body.

The Declaration of Intent signed by the TSOs expresses the intent of the Parties to establish ENTSO-E and to continue current TSO co-operation within ENTSO-E by winding up the current associations (ATSOI, BALTSO, ETSO, NORDEL, UCTE, and UKTSOI). These Terms of Reference (ToR) describe the proposed main structure and governance principles of ENTSO-E. The formal decisions of the establishment will be made later this year based on Articles of Association and Internal Regulations to be worked out in line with the principles described in these Terms of Reference.

The early establishment of ENTSO-E based on the TSO preferences for how they co-operate, and develop rules is meant to contribute positively to the EU legislative process. Further development of this process may require that the ENTSO-E Articles and Regulations may need adjustments for complete consistence with the legislation after it enters into force.

The present ToR serve as a guideline for the further development of rules and procedures of governance for ENTSO-E. Some aspects need further clarification and adaptation before implementation in the Articles of Association and Internal Regulations.

2.Objective of ENTSO-E

ENTSO-E will be a new association of TSOs at European level to facilitate the following 3 broad objectives:

  • To fulfil the obligations and comply with the formal status as proposed in the 3rd package proposals.
  • To foster and to demonstrate enhanced levels of coordination and cooperation between TSOs at a pan European and regional level ensuring optimal management, sound technical evolution and secure operation of the European electricity transmission system, and enhancing efficient functioning of the European electricity market.
  • To promote the legitimate interests of TSOs.
(See attached draft statement for the objective)

3. Legal form and members of ENTSO-E

ENTSO-E will be established as an international non-profit association under Belgian law.

The TSOs which are members of the current TSO associations can join ENTSO-E as full members. The voting powers of these members may differ according to the subject to be decided upon. This would mean that only those members should vote who are affected by the measure in-question, being for example, of binding character or financially relevant for those TSOs.

The pre-defined criteria are needed for assessing new applicants for membership. A category of associate member shall be considered, for example, as a transitory status for an applicant who comes from an accession country to EU.

4. Governance

It is currently planned that ENTSO-E will have a General Assembly, a Board and a working structure consisting of Committees with project groups, the Group of legal/regulatory experts, regional groupings and a Secretariat.

General Assembly

The GA is in charge of all the significant decisions of the association. The GA meets some four times a year, one meeting being a higher-profile Annual Meeting.

The GA will decide on such issues as the work programme, technical and market codes, grid development statements, and any decision having significant financial or other important impact on TSOs. The Annual meeting decides on such issues as membership, Articles of Association, Internal Regulations, budget, accounts, and the election of the president, vice presidents, the chairperson of other ENTSO-E bodies and the Secretary General.

The General Assembly (GA) adopts its decisions through proposals usually made by the Board and the Committees. Each full member has a seat and voting rights in the GA as described above while associate members can attend the meetings but are not allowed to vote. The GA is chaired by the President or in his/her absence by a Vice-President.

For practical and efficiency reasons the GA is expected to delegate decision powers to the Board and the Committees.

The Articles of Association will provide clear rules regarding the decision-making. Decision-making in the GA aims at unanimity. If it is not achievable, the GA can decide by voting based on simple or qualified majority rules depending on the topic. Voting rights are weighted according to the criteria to be defined later, for example the EU Council key. The voting rights will also serve as a key for sharing of the costs of the association.

The Articles of Association of ENTSO-E may also foresee an appeal mechanism whereby the GA is empowered to scrutinize appeals of the members against decisions taken at lower levels.

Board

The Board of ENTSO-E coordinates the work between the Committees and prepares proposals to be submitted for decision-making in the GA. The Board will be responsible for overall management of the association, co-ordination of the representation of the association and for any issues delegated to its responsibility by the GA.

The Board will be composed at least of the chairperson of the Board and the chairpersons of the Committees and of the Group of legal/regulatory experts. The objective is to keep the number of members limited as to preserve the efficiency of its functioning.

The members of the Board and its Chairperson are appointed by the GA for a fixed term taking into account a fair representation of the regions. The President and the Vice President(s) of the GA can attend the Board meetings.

The Secretariat prepares the meetings. The Board works on the basis of unanimity. If unanimity is not reached, the matter will be moved to the GA for decision.

Committees

Initially, ENTSO-E is expected to have at least Market, Operations and System Development Committees. The Committee is in charge of professional TSO cooperation in its area of responsibility. It prepares positions and proposals on decisions to be taken by the higher bodies, or, upon their delegation, for its own decision-making. The Committee can take initiatives for pan-European harmonisation of the codes and rules, lead studies within its area and coordinate regional activities when in the pan-European interest. The Committee can make operative decisions to carry out its agreed work programme. The scope of the Committees will be defined by the Work Streams C-E.

The Committees endeavour to work on the basis of unanimity. To avoid unreasonable minority blocking or to ensure timely actions, the Committees can make decisions based on qualified majority. Each member will have one vote.

The Committees can establish project groups under their strict control.

The Committee members (around 15 persons in each Committee) will be appointed for a fixed term by the Board on the proposal of the respective Committee Chairperson, taking into account a fair representation between regions. The Chairpersons of the Committees are appointed by the General Assembly

In addition to the Committees, a Group of legal/regulatory experts will advise the Board, the Secretariat and the Committees in the positioning of ENTSO-E vis-a-vis ACER and EU institutions in the evolution of the regulatory framework. It shall also ensure the regulatory compliance of the association's activities. The members of the Group will be appointed for a fixed term by the Board and the Chairperson will be appointed by the GA.

As in current associations, ad hoc or permanent service teams of TSO experts can be set up to support different bodies and Secretariat in specific matters like websites, statistics etc.

Regional structure and interaction with the pan-European level

Regional TSO cooperation will be an important part of ENTSO-E governance. Regional groupings are in most cases emerging from the current activities of the existing associations in the areas of operations, system development and market frameworks.

ENTSO-E needs to offer a flexible platform for regional activities. Regions can be geographically different depending on the subject. For example, cooperation on system operation relates mainly to synchronous areas while for market or planning issues, other border lines can be relevant. Regions can also change over time.

The regional groupings can organise themselves and make decisions on their own issues as long as they remain consistent with the rules and guidelines approved by ENTSO-E. Each regional grouping shall be linked to the relevant Committees and keep it informed about its activities. The groupings shall submit their terms of reference to the respective Committee for registration and acknowledgement. Regional groupings may submit rules for approval by the GA if they so choose.

The TSOs are also involved in other regional groupings that are not under the direct governance of ENTSO-E, mainly linked to market issues. Member TSOs participating in these regional groupings shall keep the respective Committee informed about these initiatives, their progress and results.

5. Processes

ENTSO-E faces high requirement of efficiency and transparency. Therefore clearly defined working processes are needed for such areas like rule making, internal and external consultation and compliance monitoring. Whilst the rule-making will be steered by the Committees in their respective work areas, preparation shall follow ENTSO-E’s uniform working processes. The Group of legal/regulatory experts will support the rule setting process. The professional process management will be provided by the Secretariat.

6. Secretariat

The main tasks of the Secretariat are providing support to the ENTSO-E bodies, processes and possibly to regional groupings, and communication with external stakeholders. The Secretariat shall be neutral vis-a-vis members and be able to work fast, efficiently and in a professional manner. The Secretariat will provide a significant proactive focus for the activities of the association and drafting proposals for decision.

The Secretary General will be responsible for managing the association and staff. In the initial phase at least 10-12 persons may be needed to launch the new association with an expectation that staff will need to grow later to about 20 persons. Some of the tasks to be defined later should be outsourced. Additional secretarial resources may be needed to support some of the regional activities. The management structure of the Secretariat will be designed in the next phase of establishment process.

7. Costs and financing

A rough first estimate of the required budget is 5 million euros for the Secretariat, outsourced services and consultancy projects. The costs will be shared among Members in proportion to their voting rights.

The costs borne by the establishment process of ENTSO-E are financed through the budget of ETSO. These costs can relate e.g. to the project manager, legal advisor and initial costs for staff hired before the new association is registered.

8. Transition from the current associations

The activities of the current TSO associations will continue until ENTSO-E is established. The goal is to establish ENTSO-E by the end of 2008. Thereafter a transition period is needed to allow a smooth transfer of activities, commitments, resources and systems to the new association. The winding-up of today’s current associations will occur when the transition is completed.

9. Legal status of the ToR

These Terms of Reference are not legally binding. Nothing in the ToR shall create an obligation to enter into any agreement. Nevertheless, the Parties undertake to negotiate in good faith with the intention of implementing the ToR. Notwithstanding Section 7 above, each Party shall bear its own cost including for example the travelling costs of its staff and the cost of its own advisors for the work under the ToR.


 

APPENDIX

Objective of ENTSO-E

The European Network of Transmission System Operators for Electricity (ENTSO-E) is the organisation for the co-operation of the European Transmission System Operators (TSOs) both on the pan-European and regional level. It promotes the TSO interests and it is in charge of the European rule setting process in compliance with the EU legislation

Its objective is to promote the optimal management and sound technical evolution of the European electricity transmission system in order to ensure the security of supply and to meet the needs of the internal integrated European electricity market.

The objective will be reached by

  • coordinating the development of a socio-economically adequate transmission system. The emphasis of the coordination lies in the planning of cross border investments and meeting the European security of supply requirements, while the implementation of investments lies with the TSOs.
  • developing technical interoperability codes and the system operations in order to maintain the reliability of the power system and to use the existing resources efficiently
  • developing network related market codes in order to ensure a non-discriminatory access to the grid and to facilitate a consistent European electricity market integration
  • monitoring the compliance on the implementation of the codes and the network development
  • promoting R&D activities relevant for the TSO industry
  • promoting the public acceptability of transmission infrastructure
  • taking positions to issues that can have an impact on the development and operation of the transmission system or market facilitation
  • enhancing communication with the stakeholders and transparency of the TSO operations
  • performing other tasks within the interest of the association.

The rule-setting and other activities of ENTSO-E will be carried out in close consultation with the stakeholders. ENTSO-E will continuously exchange views with the stakeholders on the issues related to the power system planning, operation and market facilitation.

DECLARATION OF INTENT TO CREATE EUROPEAN NETWORK OF TRANSMISSION SYSTEM OPERATORS FOR ELECTRICITY, ENTSO-E

SIGNATORIES OF TSO COMPANIES REPRESENTATIVES

pridané dňa: 25.7.2008
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