Network codes are sets of rules which apply to one or more parts of the energy sector. The need for them was identified during the course of developing the Third Energy Package. More specifically, Regulation (EC) 714/2009 sets out the areas in which network codes will be developed and a process for developing them. This is an overview on ENTSO-E’s network code work: the process of developing network codes, the content and level of development of each code, and how these different codes will fit together when implemented.

1. An Introduction to Network Codes
&
The Links Between Codes
April 2014

2. About ENTSO-E
41 TSOs
from 34 countries
532 million
citizens served
828 GW
generation
305 Thousand Km
of transmission lines
Ten-Year
Network
Development
Plans
Adequacy
forecasts
R&D plans
Tools for Market
Integration
Network Codes

3. The IEM: meeting Europe’s low carbon target
Variable generation Thousands of small units Huge flows all over Europe
System Stability, Resource Variability, Uncertainty, New connections, Changed power flows
Challenges

4. The IEM: creating benefits for European customers
Real choice
New
business
opportunities
Cross border
trade
•Efficiency
•Competitive prices
•Better service
•Security of supply
•Sustainability
Source: 3rd Energy package and EC communications
420 billion €
electricity sector’s annual turnover
80 % of power generation
still controlled by the long-established utilities
13 billion € / year
saved by EU customers through IEM

5. System operation:
Delivering coordinated schemes
Market:
Delivering well designed
pan-European markets
Infrastructure:
Delivering a fit for purpose network
Three pillars for delivering the IEM
Efficiency
Competitive prices
Better
service
Security of supply
Sustainability
System
stability
Resource
variability
Uncertainty
Changed
power flows
Konstantin Staschus | 6 February 2013 | Page 5

6. Therefore: network codes matter; they form the foundation
on which the IEM is being built
3Connection
Network Codes 3 Market
Network Codes 4Operational
Network Codes
set requirements for
- Generators
- Demand-side
- HVDC connections
set market rules for
- Day ahead/intraday &
Capacity calculation
- Long-term timeframes
- System balancing
set common rules for
- Assessing adequacy
- Planning outages
- System security
- Emergency situations
Internal electricity market
… day-ahead market
coupling…
…paving the way for
offshore wind…
…regional security
coordination initiatives…
Konstantin Staschus | 6 February 2013 | Page 6

7. What is a network code?
A set of rules applying to one
aspect of the energy sector
Which are developed by ACER,
ENTSO-E & market participants
And become legally binding
after the Comitology process
Hence they will have the same
status as any other Regulation

8. Article 4:
ENTSO
•Charged with
working to
complete the
internal energy
market.
Article 6:
Creating
network codes
•In line with ACER
framework
guidelines.
•Which become
binding.
•And involve
extensive
consultation.
Article 8; Para
7: The scope of
network codes
•Cross border &
market integration
issues.
•Without prejudice
to Member States’
right to establish
codes.
Article 8:
ENTSO-E’s
activities
•Network codes
•Ten-Year Network
Development
Plans.
•Generation
adequacy reports.
•Winter and
summer outlooks.
•Work programs
and annual reports.
ENTSO-E’s legal role
Under the designation of Regulation 714/2009

9. How are network codes developed?
Comitology process (where appropriate)
EC In consultation with all stakeholders resulting in a legally
binding network code
Assessment of network code
ACER Recommendation of network code to the European Commission
Period in which ENTSO-E can develop a network code (12 month period)
ENTSO-E In consultation with stakeholders according to FWGL
Request for ENTSO-E to draft a network code
EC According to FWGL submitted by ACER
Development of the FWGL (6 month period)
ACER In consultation with ENTSO-E, stakeholders and Expert Group
Request to draft a FWGL
EC On a topic identified in art.8 (6) of Regulation EC 714/2009
Development of
Framework
Guidelines
(FWGL)
Development of
network code
Assessment,
agreement &
entry into force
… through a collaborative process

10. Benefits
Security of
supply
Competitiv
eness
Sustainabili
ty
Enabling
renewables
Creating clear
connection
rules.
Providing
harmonisation
to benefit
manufacturers.
Creating
markets to
reduce risks.
Ensuring
security of
supply
A coordinated
approach to
system
operations.
Greater
optimisation to
enhance
efficiency.
More flexible
markets (e.g.
balancing).
Enhancing
competition
A single market
design across
Europe (in all
timescales).
Promoting
cross border
trade &
enhancing
liquidity.
Reducing risk
for all market
players

11. Overview of current & future network codes
• Requirements for Generators (RfG)
• Demand Connection Code (DCC)
• HVDC Connection Code (HVDC)
Grid
Connection
Related Codes
• Operational Security Network (OS)
• Operational Planning & Scheduling (OPS)
• Load Frequency Control & Reserves (LFCR)
• Operational Procedures in an Emergency (EP)
System
Operation
Related Codes
• Capacity Allocation & Congestion Management
(CACM)
• Forward Capacity Allocation (FCA)
• Balancing Network Code (EB)
Market Related
Codes

12. Order of work
Through a ‘Prio Decided by the EC rity List’ agreed upon through consultation
Influenced by and ENTSO-E’s Three- Year Work Plan
informs
HVDC High Voltage Direct Current Connection requirements
EB Electricity Balancing
FCA Forward Capacity Allocation
LFCR Load Frequency Control and Reserves
OPS Operational Planning and Scheduling
OS Operational Security
DCC Demand Connection Code
CACM Capacity Allocation and Congestion Management
RfG Requirement for Generators
Therefore
current
network codes
are developed
in this order

13. The jigsaw that is network codes
CACM
Network
Codes
FCA
EB
DCC
RfG
HVDC
EP
OS
OPS
LFCR

14. Grid connection related network codes
DCC
Both linked
to energy
efficiency
directive
RfG
All
connection
codes linked
to existing
standards
All
connection
codes link to
EB
HVDC
All
connection
codes link
to OS
Linked to
smart grid
initiatives
through DSR
• RfG was developed first
• Followed by DCC
• Next is HVDC
• These codes link into (and
are influenced by) several
important policy areas
• And are also related to
existing standards
Some of the more substantial
links to other codes are:
• Electricity Balancing and
• Operational Security

15. System operation related network codes
EP
LFCR/OS/
OPS all
linked
OS LFCR closely
linked to EB
OPS
OPS/OS link
to CC due to
CGM
LFCR
OS links to
all
connection
codes
• Operational Security was first
• Closely followed by Operational
Planning & Scheduling
• Next is Load Frequency Control &
Reserves
• They will be followed later by
Emergency Procedures
The operational codes have strong
links between themselves and to other
codes:
• OS links to all connection codes
• LFCR is closely tied to EB
• All the operational codes are linked
• OS and OPS are linked to the CC
part of CACM (because of the
Common Grid Model).

16. ID DA CC
Market related network codes
CACM
• Capacity Allocation and Congestion
Management was the first market
code to be developed
• It contains three main subsections
that were merged at an early stage:
• Intraday (ID)
• Day Ahead (DA)
• Capacity Calculation (CC)
• This was done to ensure
consistency between these heavily
interrelated areas
• The CACM code is based on the EU
wide “Target Model” for market
design.

17. Market related network codes
ID
DA/ID link to
EC
Governance
guideline
DA
CC link to
OS/OPS due
to CGM
CC
All market
codes link to
transparency
regulation
FCA
FCA Linked
to MIFID
EB
All
connection
codes link
to EB • Capacity Allocation and Congestion
Management was the first market code
to be developed
• Followed by Forward Capacity Allocation
• And Electricity Balancing
• All market related codes tie into
transparency regulation
• Day Ahead & Intraday are closely linked
to the EC Governance Guideline
• FCA links to financial regulation
These codes have direct links to others:
• EB to all connection codes
• Also to LFCR operational code
• Capacity Calculation links to both OS
and OPS
EB closely
linked to
LFCR

18. Network code overview
How do all the network codes fit together?
Network
Codes
ID
DA/ID link
to
Governance
guideline
CC
All market
codes link to
transparency
regulation
FCA
FCA Linked
to MIFID
EB
DCC
Both linked
to energy
efficiency
directive
RfG
All
connection
codes
linked to
existing
standards
HVDC
Linked to
smart grid
initiatives
through
DSR
All
connection
codes link
to EB
All
connection
codes link
to OS
CC link to
OS/OPS due
to CGM
LFCR
closely
linked to EB
OS
OPS EP
LFCR
LFCR/OS
closely
linked
DA

19. Of course this is not exhaustive.
There are further extensive links between codes…
Network
Codes
ID
DA/ID link to
Governance
guideline
DA
CC
All market
codes link to
transparency
regulation
FCA
FCA Linked
to MIFID
EB
DCC
Both linked
to energy
efficiency
directive
RfG
All
connection
codes linked
to existing
standards
HVDC
Linked to
smart grid
initiatives
through
DSR
All
connection
codes link
to EB
All
connection
codes link
to OS
CC link to
OS/OPS due
to CGM
LFCR closely
linked to EB OS
OPS EP
LFCR
LFCR/OS/
OPS all
linked

20. Network Code on: Requirements for Generators
6 Months
12 Months
3 Months
> 12 Months
Framework Guidelines
Drafting
Internal Approval
Public Consultation
Updating
Internal Approval
ACER Opinion
Comitology Process ….
Scoping
Development
Approval
Code Overview
Purpose:Provide a set of coherent requirements for generators (of all sizes) in order to meet the future power system challenges.
Status: An ACER recommendation to adopt the code was made on 27 March 2013. The EC is currently preparing the network code for entry into Comitology.
Contents:
•Requirements
•Operational Notification Procedure for Connection
•Compliance
•Derogations
Links to other codes/ areas
•DCC –Balances demand and generation requirements and uses similar processes..
•HVDC –Reference to part of the RfG requirements for offshore HVDC connected generation. Coherence in processes.
•OS –Technical requirements to strengthen coordination and system security.
•EB –Must ensure RfG characteristics are reflected in products.

21. Network Code on: Capacity Allocation and Congestion Management
6 Months
12 Months
3 Months
> 12 Months
Framework Guidelines
Drafting
Internal Approval
Public Consultation
Updating
Internal Approval
ACER Opinion
Comitology Process ….
Scoping
Development
Approval
Code Overview
Purpose:Translate the vision for a pan European Target Model into a binding set of rules.
Status: An ACER recommendation to adopt the code and proposals for change was made on 14 March 2013. The EC is currently preparing the network code for the Comitologyprocess.
Contents:
•Capacity Calculation
•Bidding Zones
•Day Ahead Markets
•Intraday Markets
•Remedial Actions
•Firmness rules
•Cost recovery
Links to other codes/areas
•OS/OPS –Build on the CGM in CACM.
•FCA –Bidding zones and capacity calculation are common. Structure is similar.
•EB –Strong link with intraday markets and common capacity calculation, bidding zones & structure.
•OPS –Schedules are relevant in day ahead markets.
•Transparency regulation –Vital to efficient market functioning.

22. Network Code on: Operational Security
6Months
12 Months
3 Months
> 12 Months
Framework Guidelines
Drafting
Internal Approval
Public Consultation
Updating
Internal Approval
ACER Opinion
Comitology Process ….
Scoping
Development
Approval
Code Overview
Purpose:To setcommon rules for ensuring the operational security of the pan-European power system.
Status: ENTSO-E has amended the network code in light of the ACER reasoned opinion and resubmitted it to ACER in late September. ACER will now assess the code.
Contents:
•Operational Security Requirements
•Testing and Investigation
•Data Exchange
•Training
•Compliance
•Staff Training
Links to other codes/areas
•OPS –Is an extension of the OS code prior to real time.
•LFCR –Frequency control operations uses the coordinated schedules from OPS.
•RfG/DCC –Contain technical requirements to strengthen coordination and system security.
•CACM –Capacity calculation uses a common grid model as does OS.

23. Network Code on: Operational Planning & Scheduling
6 Months
12 Months
3 Months
> 12 Months
Framework Guidelines
Drafting
Internal Approval
Public Consultation
Updating
Internal Approval
ACER Opinion
Comitology Process ….
Scoping
Development
Approval
Code Overview
Purpose: Sets requirements, ranging from the year ahead timeframe to real time, for assessing the adequacy and operational security of the interconnected power system and for planning outages required by TSO’s and grid users when they have cross-border impacts on power flows.
Status: ENTSO-E has amended the network code in light of the ACER reasoned opinion and resubmitted it to ACER in late September. ACER will now assess the code
Contents:
•Data For Operational Security Analysis in Operational Planning
•Operational Security Analysis in Operational Planning
•Outage Planning, Adequacy, Ancillary Services, Scheduling
•ENTSO-E Operational Planning Data Environment
Links to other codes/areas
•OS –Extension of OS requirements prior to real time. .
•CACM–An overlap with schedules in day ahead markets and the Common Grid Model.
•Market Codes –Planning and scheduling cooperation will unlock transmission capacity in the forward, DA, ID and – indirectly –balancing.
•LFCR –Frequency control operations: uses the coordinated schedules from the OPS.

24. Network Code on: Demand Connection
6Months
12 Months
3 Months
> 12 Months
Framework Guidelines
Drafting
Internal Approval
Public Consultation
Updating
Internal Approval
ACER Opinion
Comitology Process ….
Scoping
Development
Approval
Code Overview
Purpose:To setrequirements for new demand users and DSO connections and to outline demand side response requirements related to system frequency.
Status: An ACER opinion and recommendation to adopt the code was made on 27 March 2013. The EC is currently preparing the code for entry into the Comitologyprocess.
Contents:
•Requirements
•Operational Notification Procedure
•Compliance
•Derogations
Links to other codes/areas
•RfG/ HVDC –Balance between demand and generation requirements and coherence in processes.
•LFCR–Impact of DSR SFC on system reserve calculations.
•OS –Technical requirements to strengthen coordination and enhance system security.
•EB –Demand Response will be an ever more needed building block in balancing products.
•Ecodesign/labellingDirective –Vehicle to develop DSR requirements.
•Cenelec M490 –Work on-going to develop DSR standards.

25. Network Code on: Forward Capacity Allocation
6 Months
12 Months
3 Months
> 12 Months
Framework Guidelines
Drafting
Internal Approval
Public Consultation
Updating
Internal Approval
ACER Opinion
Comitology Process ….
Scoping
Development
Approval
Code Overview
Purpose:To set rules for calculating and buying capacity in timescales before day ahead and for hedging price risk between bidding zones.
Status: ENTSO-E will submit the network code to ACER in late September 2013
Contents:
•Governance
•Capacity Calculation for FCA
•Bidding Zones
•The Forward Capacity Market
•Single Platforms for Allocation and Secondary Trading
•Allocation Rules
•Firmness and Congestion Income Distribution
Links to other codes/areas
•CACM –Similar processes and consistency with capacity calculation.
•MIFID –Sets capital and organisational requirements for investment firms and markets operators when dealing with financial instruments/impact on TSOs and joint platforms.
•Transparency Regulation – Impacts on the information that is published.

26. Network Code on: Load Frequency Control and Reserves
6 Months
12 Months
3 Months
> 12 Months
Framework Guidelines
Drafting
Internal Approval
Public Consultation
Updating
Internal Approval
ACER Opinion
Comitology Process ….
Scoping
Development
Approval
Code Overview
Purpose:To set out coordinated and clearly specified load frequency control processes and rules regarding the levels and location of reserves (back-up) which TSOs need to hold.
Status: The ACER opinion is due on 25 September 2013.
Contents:
•Frequency Quality
•Load Frequency Control Structure
•Frequency Containment Reserves
•Frequency Restoration Reserves
•Replacement Reserves
•Exchange and Sharing of Reserves
•Co-operation with DSOs, Compliance
Links to other codes/areas
•EB –Specifies how the reserves determined under LFC will be procured.
•OS –Frequency quality; deviation management; improves operational security.
•OPS –Frequency control operations: uses the coordinated schedules from the OPS.
•DCC –Impact of DSR SFC on system reserve calculations.
•CACM –Operational limits: have an impact on transmission capacity available for XB exchanges.
•HVDC –Impact of loss of power (e.g. from an offshore wind farm) on system reserves.

27. Network Code on: Balancing
6 Months
12 Months
3 Months
> 12 Months
Framework Guidelines
Drafting
Internal Approval
Public Consultation
Updating
Internal Approval
ACER Opinion
Comitology Process ….
Scoping
Development
Approval
Code Overview
Purpose:To define rules for the development, implementation and operation of a pan-European balancing market.
Status: Over 2100 from 42 organisations were received via the public consultation which ended in mid August. ENTSO-E is now updating the code for delivery in December.
Contents:
•The Electricity Balancing System
•Procurement of Balancing Reserves
•Use; Allocation and Reservation of Cross Zonal Capacity for Balancing Reserves
•Settlement
•Balancing Algorithm Development
•Reporting, Transitional Arrangements
Links to other codes/areas
•LFCR –Strong link with LFCR setting rules for the volume of reserves to be procured & BAL creating rules to procure them.
•CACM –Overlap with capacity calculation and links to intraday markets (which close before balancing opens).
•RfG/DCC –Important that connection rules are reflected in products available on balancing markets.

28. Network Code on: HVDC Connection
6 Months
12 Months
3 Months
> 12 Months
Framework Guidelines
Drafting
Internal Approval
Public Consultation
Updating
Internal Approval
ACER Opinion
Comitology Process ….
Scoping
Development
Approval
Code Overview
Purpose:Sets requirements for HVDC connections and offshore DC connected generation.
Status: A Public Consultation on the Preliminary Scope finished on 7 June 2013. ENTSO-E is continuing to work with stakeholders to produce a draft; which will be consulted on in November.
Contents: Requirements for long distance DC connections, links between different synchronous area’s or DC connected Power Park Modules such as offshore wind farms,
Links to other codes/areas
•RfG –Reference to part of the RfG requirements for offshore HVDC connected generation. Coherence in processes.
•OS –Technical requirements supporting frequency and voltage stability, system stability robustness and system security.
•LFCR –Impact of loss of power (e.g. from an offshore wind farm) on system reserves.
•EB –Ensure balancing capabilities for reserve transactions across cross-border HVDC links where relevant.
•DCC –Coherence in processes (operational notification, derogations, …)

29. More info: http://networkcodes.entsoe.eu/
Please address any questions to:
Jean-Baptiste.Paquel@entsoe.eu