Closed Distribution Network
European Union Electricity Market Glossary

 


 

 

Closed Distribution Network means a network classified as Closed Distribution Network pursuant to Article 28(1) of Directive 2009/72/EC at national level.

 

 

'Closed distribution system' means a system classified pursuant to Article 28 of Directive 2009/72/EC as a closed distribution system by national regulatory authorities or by other competent authorities, where so provided by the Member State, which distributes electricity within a geographically confined industrial, commercial or shared services site and does not supply household customers, without prejudice to incidental use by a small number of households located within the area served by the system and with employment or similar associations with the owner of the system.

 

Article 2(5) of the Demand Connection Code (DCC)

 

Article 28 of Directive 2009/72/EC defines such a network as a system which distributes electricity within a geographically confined, industrial, commercial or shared services site and does not (without prejudice to a small number of households located within the area served by the system and with employment or similar associations with the owner of the system) supply households customers.

 

The Closed Distribution Network will either have its operations or the production process of the users of the system integrated for specific or technical reasons or distribute electricity primarily to the owner or operator of the Closed Distribution Network or their related undertakings.

 

 

 

Article 28 of the Directive 2009/72/EC

Closed distribution systems

 

1.   Member States may provide for national regulatory authorities or other competent authorities to classify a system which distributes electricity within a geographically confined industrial, commercial or shared services site and does not, without prejudice to paragraph 4, supply household customers, as a closed distribution system if:


(a) for specific technical or safety reasons, the operations or the production process of the users of that system are integrated; or


(b) that system distributes electricity primarily to the owner or operator of the system or their related undertakings.

 

2.   Member States may provide for national regulatory authorities to exempt the operator of a closed distribution system from:
(a) the requirement under Article 25(5) to procure the energy it uses to cover energy losses and reserve capacity in its system according to transparent, non-discriminatory and market based procedures;
(b) the requirement under Article 32(1) that tariffs, or the methodologies underlying their calculation, are approved prior to their entry into force in accordance with Article 37.

 

3.   Where an exemption is granted under paragraph 2, the applicable tariffs, or the methodologies underlying their calculation, shall be reviewed and approved in accordance with Article 37 upon request by a user of the closed distribution system.

 

4.   Incidental use by a small number of households with employment or similar associations with the owner of the distribution system and located within the area served by a closed distribution system shall not preclude an exemption under paragraph 2 being granted.

 

 

 

Winter Energy Package adds paragraph 5 to Article 28 of the Directive 2009/72/EC (renumbered Article 38 of the Proposal for a Directive of the European Parliament and of the Council on the internal market for electricity (recast) on common rules for the internal market in electricity (recast), 30.11.2016, COM(2016) 864 final 2016/0380 (COD)) with the following wording:

 

"Closed distribution systems shall be considered as distribution systems for the purpose of the Directive".

 

 

 

Recital 44 of the Proposal for a Directive of the European Parliament and of the Council on the internal market for electricity (recast) on common rules for the internal market in electricity (recast), 30.11.2016, COM(2016) 864 final 2016/0380 (COD) 

(Recital 30 of the Directive 2009/72/EC)

 

Where a closed distribution system is used to ensure the optimal efficiency of an integrated energy supply requiring specific operational standards, or a closed distribution system is maintained primarily for the use of the owner of the system, it should be possible to exempt the distribution system operator from obligations which would constitute an unnecessary administrative burden because of the particular nature of the relationship between the distribution system operator and the users of the system. Industrial, commercial or shared services sites such as train station buildings, airports, hospitals, large camping sites with integrated facilities or chemical industry sites can include closed distribution systems because of the specialised nature of their operations.

 

 

 

Documentation

 

 

Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC, Article 28(1), Recitals 30

 

Proposal for a Directive of the European Parliament and of the Council on the internal market for electricity (recast) on common rules for the internal market in electricity (recast), 30.11.2016, COM(2016) 864 final 2016/0380 (COD), Article 38, Recital 44

 

Demand Connection Code (DCC), Article 2(5)

 

 

Links

 

 

Distribution System Operators (DSOs)

 

Closed Distribution Network Operator (CDSO)

 

 

 

 

Last Updated on Friday, 09 June 2017 23:36
 

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