Antitrust: Commission invites comments on TenneT's proposed commitments to increase cross border electricity capacity with Denmark
The European Commission has invited comments on commitments by the German grid operator TenneT to increase capacity on the electricity interconnector between Western Denmark and Germany. The commitments are in response to Commission concerns that capacity restrictions may breach EU antitrust rules.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Electricity interconnectors must be open to cross-border trade if we are to build a real Energy Union. To achieve this we need to ensure that energy flows freely without any capacity restrictions that may breach EU antitrust rules. In this context, we will assess whether TenneT's proposed commitments address our competition concerns in light of the responses of interested parties."
The Commission has concerns that TenneT may have limited the capacity at the electricity interconnector between Western Denmark and Germany, preventing Danish producers from selling electricity in Germany. The limitation of cross-border capacity by grid operators could lead to discrimination between domestic and foreign electricity producers and consumers, as well as distorting electricity prices in the region.
Prior to the opening of the investigation and sending of a preliminary assessment on 19 March 2018, TenneT had already been in commitment discussions with the Commission. The opening of the investigation allowed TenneT to formally submit a set of commitments to address the Commission's concerns. In particular, TenneT is proposingto ensure that the maximum capacity of the interconnector between Denmark and Germany would be made available to the market, while preserving the security of the German high-voltage electricity network.
In particular, under the proposed commitments:
- TenneT would offer a minimum guaranteed hourly capacity of 1 300 megawatts on the interconnector, corresponding to the capacity that can be made available on the interconnector under normal operating conditions. This minimum guaranteed hourly capacity would be reached following an implementation phase of up to six months.
- TenneT would only be able to reduce the capacity offered below the minimum guaranteed level in a limited number of exceptional circumstances, when required to ensure security of the high-voltage electricity network. These exceptional circumstances would be limited to outages of a critical network element, insufficient re-dispatch or countertrading capacity to relieve network congestion and requests for assistance by another transmission system operator.
The commitments would remain in force for 9 years and a trustee would be in charge of monitoring TenneT's compliance with the commitments.
The Commission invites all stakeholders to submit their views on the commitments within four weeks of their publication in the Official Journal. Taking into account all comments received, the Commission will then take a final view on whether the commitments address its competition concerns.
If this is the case, the Commission may adopt a decision to make the commitments legally binding on TenneT (under Article 9 of the EU's antitrust Regulation 1/2003).
Such a decision would not conclude whether there was an infringement of EU antitrust rules but would legally bind TenneT to respect the commitments it has offered.
If a company breaks such commitments, the Commission can impose a fine of up to 10% of the company's worldwide turnover, without having to find an infringement of the EU antitrust rules.
TenneT TSO GmbH (TenneT) is the largest of the four German transmission system operators that manages the high-voltage electricity network in Germany. Transmission system operators transport electricity over the grid from generation plants to regional or local electricity distribution operators and large industrial electricity consumers.
Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the EEA Agreement prohibit the abuse of a dominant position which may affect trade and prevent or restrict competition.
The Commission opened a formal antitrust investigation into TenneT's practices on 19 March 2018. Article 9(1) of the Antitrust Regulation 1/2003 enables companies that are concerned by a Commission investigation to offer commitments in order to meet the Commission's concerns.
The Commission already addressed the issue of compatibility with EU antitrust rules of limiting cross-border capacity in the Swedish Interconnectors case, where it adopted a decision in April 2010 rendering legally binding commitments offered by Svenska Kraftnat
The investigation into TenneT complements the Commission's effort to address the systematic limitation of cross border capacity on electricity interconnectors across the EU. The Commission has proposed to update the Electricity Regulation as part of the 'Clean Energy for All Europeans' package which is currently being discussed in Council and Parliament. Among other things, it aims at improving the rules on cross-border capacity in order to maximise the capacity made available and to ensure that transmission system operators do not unnecessarily limit the volume of cross-border capacity.