The European electricity system is governed by a complex set of rulebooks covering everything from price formation to grid access. But key pieces of that regulatory ‘software’ are languishing in a drawer in Brussels – thousands of lines of ‘network code’ that the industry says are urgently needed and could even have helped avoid the worst of last year’s Iberian blackout.
Europe’s vast power grid, which has been likened to ‘the world’s largest machine’, is estimated to boost the EU economy by more than €32 billion each year, after a process that got off to a flying start in 2009 with the creation of new ‘network codes’, establishing a shared language and legal framework that allowed electricity to be traded as a commodity across Europe.
But the 600-page framework was last updated in 2016 even as Europe’s power generation mix tilts increasingly towards intermittent wind and solar, causing the rules to look increasingly out-of-date. Some are warning the machine is falling apart.
“Revising of the EU’s outdated network codes is crucial,” said Anna Stürkgh, a liberal MEP from Austria, pointing to their role in integrating heat pumps, solar panels and electric vehicles. “A lack of those standards risks market fragmentation.”
A senior electricity industry insider, who asked not to be named, was blunt: “For three years, the Commission has made announcement after announcement without making any progress.”
Drifting apart
Energy regulators are well aware of the problem. “The delay has caused countries like Germany and the Netherlands to create their own network codes, risking fragmentation in Europe,” said Bram Claeys, who heads the pan-European association CEER.
If Europe’s loosely bound patchwork of national electricity grids starts coming apart at the seams, it would mark a major reversal of the project to create a pan-European ‘supergrid’.
The urgency for regulatory clarity is in some ways a result of the success of Europe’s energy transition – at least when it comes to power generation. When the network codes were last updated, wind and solar made up some 10% of electricity, a figure that has increased three-fold since then.
On-grid battery storage has grown exponentially, and is now heading towards 80 gigawatts of capacity. To cope with the increasing size of peaks and troughs in renewable power output, demand needs to be boosted or tempered to keep the system in balance.
The required software update, however, is missing.
“Delays in the Demand Response Network Code directly slow down the integration of flexibility,” said Catarina Augusto, a specialist in system integration at lobby group SolarPower Europe.
“Even if member states move ahead, this risks fragmented national approaches rather than a coordinated and harmonised EU framework,” Augusto told Euractiv.
Other desperately needed network codes include a rulebook for connecting generation capacity to the grid. Its absence may even have exacerbated the 2025 Iberian blackout, where a mass switch-off of solar panels occured that could have been prevented by a well-designed protocol for staggering their exit from the grid.
‘Serious consequences’
High-voltage grid operators flagged last year the “strategic importance” of updating the codes – but Brussels has made clear they are not a priority. Instead, the European Commission put forward a new swathe of legislation on electricity grid regulation.
The ‘grids package’ is intended in large part to drive electricity market integration by boosting investment in cross-border power lines – incidentally, something the original network codes were supposed to do.
But the EU executive’s push to centralise control of planning and, to a lesser extent, revenue quickly became yet another energy policy controversy in Brussels.
The Association for Electrical, Electronic & Information Technologies (VDE) in Germany has warned of “serious consequences” should the Commission continue to stall the publication of the remaining codes.
“The new codes were scheduled for summer 2025,” warned Heike Kerber, who manages VDE’s tech forum. “Their delay hinders the grid integration of new plants.”
Behind the scenes, the Commission insists the codes are imminent.
Vasiliki Klonari, who heads system integration work at lobby group WindEurope, warned that foot-dragging within the Commission’s Berlaymont headquarters risked undoing years of work done to date. “Every month of delay is pushing system operators to write their own national rules,” she said.
“The EU cannot ask industry to invest and then leave them guessing what the connection rules will be in different countries,” Klonari warned.
Florence showdown
The European Commission’s energy mandarins are well aware of this problem, too.
Since the EU started the process of deregulating – creating, even – a European market for electricity in the late 1990s, they have met periodically in Italy to discuss such arcana with specialists on energy regulation.
At the 41st Florence Forum last month, the Commission itself suggested solar arrays should have been able to “ride through faults” and provide “voltage support” instead of tripping and bringing much of Spain and Portugal to a literal standstill.
Politically, regulating cross-border flows of electricity has proven the most controversial aspect of power grid regulation.
The network code for Capacity Allocation & Congestion Management has been in place since 2015, and already revised twice. Brussels is due to pitch a third iteration in the coming weeks.
This is the one that governs access to cross-border power lines – and the one the EU executive needs to get right if Europe wants finally to create the supergrid it so desperately needs to get prices down. “The Commission must update the network codes without delay,” MEP Stürkgh said.
(rh, aw)
