Europe structuring our activities

The French electricity grid, pivotal to Europe’s energy

Background

RTE was born with Europe’s electricity system. Progressive opening of the European market to competition between 1999 and 2009 resulted in the unbundling of generation and transmission activities so as to guarantee non-discriminatory and open grid access for the electricity generation companies. Since then, with impetus from the European institutions, integration of this market has speeded up. In 2009, European legislation assigned the responsibility for three major projects to the transmission system operators within ENTSO-E: compiling of the European ten-yearly network development plan, drafting of the grid codes and construction of an integrated R&D roadmap.

In 2011, the European Council recommended that the internal electricity market should be finished by the end of 2014, which is mainly based on tangible market coupling progress.

Its pivotal position in Europe makes RTE into a key participant in Europe’s energy policy and its three aims: construction of the internal electricity market, security of supply and combating global warming with energy transition. These European projects currently structure all our activities.

Participating in the construction of Europe’s electricity system

With the other transmission system operators (TSO), RTE has contributed to European market consolidation over the past few years:

RTE is closely involved in the setting up and running of ENTSO-E, the European association of TSOs.

RTE is also the driving force behind the setting up of the technical centre, Coreso (Coordination of electrical system operators) whose aim is to improve operational coordination between the transmission system operators for electricity grid operation on a regional scale.

It is also the founding shareholder of CASC (Capacity Allocation Service Company). This service company acts as one-stop counter for the operation of the long-term allocation of trade capacities at the cross-border interconnections.

The European Business Division, coordinating our actions

Conduct of our activities at national level is intrinsically related to the European electricity system aims. Set up in 2012, the European Business Division enhances our capacity to act at a European level and integrate our grid on a cross-border scale. Its remit is to identify the European initiatives impacting RTE and develop and support the position with the European institutions. This also involves facilitating the understanding of the European aims by all our personnel in order to pre-empt the changes they are driving.

Our multiple actions on the European front involve all our specialisations:

  • Carrying out lobbying actions: as the transmission system operator, we are affected by the numerous European legislative proposals. Within this context, RTE's stance is developed and supported not only to protect the interests of the company and its customers, but also to make all its knowledge on the electricity system available to the European decision-makers.
  • Strengthening cross-border connections: cross-border connections constitute the backbone of Europe’s energy policy because they ensure electricity trades between countries. As the French transmission system operator, RTE is building new interconnections to consolidate its trade capacities with its neighbours.
  • Building Europe’s electricity market: the European Council has asked for the internal electricity market to be completed by the end of 2014. In addition to application of the European legislation, this is based on the concrete construction of a new market architecture standardised at a European level. Within this context, RTE plays a leading role in the development of the interconnection access mechanisms. Working closely together with the other TSOs, regulators and electricity exchanges, RTE also contributes to driving market coupling and adopting the joint management rules based on the market codes.
  • Coordinating with the other European TSOs for grid operation: managing interconnection potential in the optimum way is based on coordinated operation of the infrastructures. This is the aim of the initiatives, such as the technical centre Coreso and our involvement in the works of ENTSO-E to standardise our operating practices (frequency adjustment, risk assessment and event analysis methods, etc).
  • Developing R&D projects at a European level: recognised in Europe for its innovative strength and its R&D resources, RTE plays a crucial role in the development of European research projects supervised by the European Commission and by the ENTSO-E R&D committee.

 

Key points

  1. 1

    Construction of a real European electricity market to optimise resources and reduce costs

  2. 2

    Improvement of security of supply by pooling generation sources and consumption profiles

  3. 3

    Integration of a growing volume of renewable energies while guaranteeing system safety and stability

  1. 600 million

    European citizens, more than 300 000 km of high and extra-high voltage lines and annual consumption of around 3300 TWH: coordination carried out within ENTSO-E fosters the construction of Europe’s integrated electricity market.

  2. 43 %

    of the population of the European Union, 215 million Europeans. This is the scope of action of the technical coordination centre, Coreso, which we set up with 4 other European TSOs (Elia, the National Grid, TERNA and 50Hertz Transmission) and which operates 24 hours a day, 7 days a week to coordinate our security of supply.

The France-Spain interconnection

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Key facts

  • Around 25 billion Euros of investments during the period 2011-2015

    By the year 2020, the European transmission system operators will have replaced or developed 42,100 km of electrical lines to support the 3 European energy policy aims: consolidating the European market, ensuring security of electricity supply and integrating renewable technologies. Certain structures contribute to several of these aims.

A more in-depth view

The European Union’s energy policy: the history of its construction

1996: Setting up of the European electricity market

The European Union adopted the first electricity and gas market deregulation package, whose purpose is to develop a market where the consumers are free to choose their supplier.

For the members of the European Union, this directive implied the unbundling of electricity generation and transmission activities so as to be able to guarantee non-discriminatory and open grid access. An independent regulatory authority had to be set up in every country.

In France, this directive resulted in RTE being set up in the year 2000.

2003: Strengthened guarantees of transmission system operator independence

The second market deregulation package scheduled two stages for opening the market to competition:

  • 2004: opening for professional customers,
  • 2007: opening for individual customers.

In order to achieve the aim of non-discriminatory treatment, the obligation of unbundling of the grid activities, if they were carried out within vertically integrated undertakings was strengthened (legal and account unbundling).

On 1 September 2005, RTE became a limited company, a subsidiary of EDF, in order to fulfil the obligations of independence laid out by the second package.

2006: A major European incident

On 4 November 2006, an incident in Germany resulted in the splitting of the European grid into three asynchronous zones, whereas the European grid was meant to operate at a single frequency of 50 Hz. More than fifteen million European households were cut off.

Coordination between the TSOs prevented the total collapse of the German power grid. This incident shows the importance of mutual assistance between the TSOs based on interconnections and the advantage of operational coordination.

2008: Consolidated European grid integration

RTE participated in the setting up of the joint cross-border service provider known as the Capacity Allocation Service Company (CASC). This company coordinates trading at the borders between 5 countries (France, Belgium, Holland, Germany and Luxembourg). Its remit is to act as a one-stop counter running long-term allocation auctions of the trade capacity at the cross-border connections.

Along with the transmission system operator Elia, RTE set up Coreso, the first operational grid coordination centre. Sited in Brussels, Coreso operates 24 hours a day, 7 days a week and provides the transmission system operators with an extended view of the power grid, beyond the national borders.

RTE and its Spanish counterpart, REE, set up a joint venture company, INELFE, to build a new interconnection between France and Spain.

2008: Europe’s definition of energy and climate targets

With the energy and climate package, adopted in December 2008, the European Union defined medium-term targets for the first time (2020) to direct the European energy policy and combat global warming:

  • reduce greenhouse gas emissions by 20% compared to 1990,
  • integrate a 20% share of renewable energies in the European Union’s end energy consumption,
  • increase energy efficiency by 20% compared to 1990.

2009: A new legislative stage for construction of the internal energy market

The purpose of the third package adopted in July 2009, and carrying on from the previous legislation, was to transform the juxtaposition of grids and markets into a real European electricity system. 

In order to achieve this aim, the national regulators’ powers and independence were strengthened and transmission system operator independence was significantly enhanced.

Two new European community coordination institutions were set up: ACER, Agency for the Cooperation of Energy Regulators and ENTSO-E, the European Network of Transmission System Operators for Electricity, which is composed of 41 TSOs in 34 countries. 

In December 2009, the Treaty of Lisbon vested the European Union with legal jurisdiction to implement a European energy policy: the new Article 194 of the Treaty confirmed the three pillars of this policy.

In 2009, the National Grid, the British TSO, joined RTE and Elia as a new shareholder of Coreso.

2010-2012: Concrete progress for construction of the internal electricity market

In 2010, Coreso doubled its monitoring scope further to the buy-in of new shareholders: Terna and 50Hertz. 

ENTSO-E published its first European ten-yearly network development plan (TYNDP).

The setting up of the market coupling mechanism in Central Western Europe (CWE) increased the standardisation of bulk electricity prices.

In 2011, ACER was up and running. The Agency for the Cooperation of European Regulators was mainly in charge of defining the framework policy guidelines enabling ENTSO-E to draft the grid codes.

CASC rolled out its services to Central Southern Europe (CSE), henceforth acting on the behalf of 12 TSOs in Holland, Belgium, Italy, Greece, Slovenia, Austria, Switzerland, Germany, Luxembourg and France.

The work on the pilot grid code started up to establish the rules for connection to the means of generation.

In 2011, the European Union set itself the target of reducing its greenhouse gas emissions by between 80 and 95% compared to the level in 1990 by the year 2050 in order to contribute to limiting global warming to 2 °C. The energy roadmap 2050 published by the European Commission presents the various scenarios to meet this target: all based on a growing share of electricity in Europe’s energy consumption.

On 26 January 2012, the CRE certified RTE as the transmission system operator, attesting to the fact that RTE fulfils the requirements of neutrality to be an independent transmission system operator.

In 2012, ENTSO-E published the second version of its ten-yearly network development plan (TYNDP). It plans for significant increase in the needs for development, mainly due to mass integration of renewable energy generation.

In November 2012, the European Commission issued a press release entitled Making the internal energy market work, which lists the progress still to be made. 

2013: Identification of projects of common interest, with the continued aim of completion of the internal market

The rules for the trans-European power infrastructures were enforced as of 15 May 2013, with the priority aim of facilitating development of the power grids by the year 2020. Five cross-border connection projects were proposed by RTE and included in the list of 248 projects of common interest adopted by the European Commission.

The European Commission published a communication entitled ‘Delivering the internal electricity market and making the most of public intervention’. Its purpose is to provide Member States with non-restrictive guidance for the conditions of intervention on the electricity market (support schemes for renewable energies, capacity mechanisms and demand side management systems) so as to ensure that national initiatives remain in proportion and do not disturb the running of the internal market.

The 9 grid codes continued to be compiled according to the schedule specified.

2014: New energy and climate targets for 2030

In January 2014, further to extensive public consultation, the European Commission issued a white paper proposing new energy and climate targets for 2030: a 40%-reduction in greenhouse gas, a proposed share of 27% of renewable energies on the European scale and a 30%-target for energy efficiency. The white paper emphasises the importance of a robust, interconnected European electricity grid to meet these targets. In June 2014, spurred on by the Russian-Ukrainian crisis, the European Commission published a communication concerning security of power supply in Europe, mainly proposing an indicative target of interconnection between the Member States of 15% of installed capacity.

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