Electricity networks - or grids - are the indispensable link between electricity generation and consumption. They include both (high voltage) transmission infrastructure and (low voltage) distribution infrastructure which occupy various segments of the electricity transport chain. In general, transmission means transporting large blocks of power within or between countries or regions, from power plants to either large industrial consumers or to distribution networks. The power is then delivered through the distribution network to final consumers, via smaller power lines at lower voltage.

Electricity networks are deemed to be 'natural monopolies'. This means that one single company is able to operate a network area, benefitting from economies of scale. For this reason these activities are regulated by designated regulatory agencies in the twenty-seven EU member states. In order to facilitate the liberalised electricity market and avoid discrimination against new-entrant suppliers in the market, electricity companies that own networks are subject to rules requiring functional separation of activities, known as 'unbundling'. Accordingly, the transmission segment must be separated from the generation activity and the distribution operator separated from the retail arm.

The EU Electricity Market Directive currently in force makes clear provisions for informational, functional and legal unbundling of network activities from the competitive segments of the industry - power generation, trading and supply. EURELECTRIC is currently preparing a survey of how these 'Chinese Walls' are implemented and enforced for the distribution business in the various EU member states.

Responding to the European Commission's Green Paper on Energy Networks, EURELECTRIC's Networks Committee has identified several domains where the European Commission should take action. Our recommendations include inter alia setting a minimum requirement for EU-wide harmonisation of authorisation procedures for grid investments. The EU should fix a time-limit/time line that must not be exceeded by the parties involved in the consenting procedure.

Transmission networks enable the high-voltage transport of electricity between production and distribution points and have a key role to play in ensuring the existence and smooth functioning of the wholesale electricity market.

Transmission System Operators (TSOs) are responsible for the bulk transmission of electric power on the main high voltage electric networks. They provide grid access to the electricity market players - generating companies, traders, suppliers, distributors and directly connected (large) customers - according to non-discriminatory, transparent rules. With a view to supply security, they also guarantee the safe operation and maintenance of the system. In many countries, TSOs are also in charge of the development of the grid infrastructure. TSOs in the European Union internal electricity market are entities operating independently from the other electricity market players.

The European Union adopted new rules on the internal energy market in April 2009, with a third liberalisation package, entering into force in September. The new legislation is expected to strengthen the EU's internal energy market, give consumers more protection and the benefit of the lowest possible energy prices while offering companies the chance to compete on a level playing field. The main objective of the legislative package is to put in place the regulatory framework needed to make market opening fully effective.

The rules adopted are designed to provide for more effective regulatory oversight by truly independent and competent National Energy Regulators. Certain cross-border issues will be addressed by an EU Agency for the Cooperation of Energy Regulators (ACER). Increasing cross border collaboration and investment with a new association for TSOs, the European Network for Transmission System Operators for Electricity (ENTSO-E), which counts 42 members, is another objective of the legislative package. Grid operators in the European Union will have to develop common commercial and technical codes and security standards, and also coordinate the planning of capital investment projects needed at EU level.

ENTSO-E took over all operational tasks of the six existing TSO associations in Europe from 1 July 2009. It pursues co-operation between the European TSOs both on the pan-European and regional level, promotes the TSOs' interests and has also been allocated an important role in the rule-setting process in compliance with EU legislation. The objectives of ENTSO-E are to promote the reliable operation, optimal management and sound technical evolution of the European electricity transmission system in order to ensure security of supply and to meet the needs of the internal energy market.

Europe's power networks are interconnected, a development that gradually began from the early 20th century onwards. Within the EU, there are currently four synchronously connected high-voltage transmission systems: Continental Europe, the Nordic Countries, the UK and the Irish systems. Although EU member states, the Baltic States are nevertheless still synchronously interconnected to the IPS-UPS network based on the Commonwealth of Independent States (CIS).

At present interconnecting lines exist also towards non-EU neighbour countries: for example Russia, Ukraine, Turkey and North African countries, enabling limited exchanges of electricity with countries outside the EU. In future the system could be extended and reinforced further east and south.

As transmission is a regulated activity, it is crucial that the regulatory framework is conductive to investments in network infrastructure. A number of EU programmes, such as the Trans-European Networks for Energy (TEN-E) initiative, have been set up to facilitate investigation studies and - to some degree - investments in the networks.

EURELECTRIC maintains links to ENTSO-E. CIGRE , the International Council on Large Electric Systems is EURELECTRIC4s partner on technical questions concerning electricity transmission.

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