S.10.2. Competition Law

D.10.2. Competition Law

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EC invites stakeholders to comment on TenneT proposed commitments to address antitrust concerns

Tuesday, March 27, 2018

The EC invited stakeholders to comment on German TenneT’s proposed commitments to increase capacity on the electricity interconnector between Western Denmark and Germany. The commitments are Germany’s largest TSO’s response to concerns raised by the EC that the capacity restrictions violate EU antitrust rules. The EU competition authorities officially started an investigation into the subject on 19 March 2018 (see news of 23 March 2018: ‘EC launches antitrust case against the largest German TSO’).

According to the initial statement of the EC when the investigation began, “any potential commitments would need to ensure that the maximum capacity of the interconnector between Western Denmark and Germany would be made available to the market”. The launch of the legal investigation allows “TenneT to formally submit a set of commitments to address the EC’s concerns”.

TenneT proposed to “ensure that the maximum capacity of the interconnector […] would be made available to the market, while preserving the security of the German high-voltage electricity network”. TenneT would also “offer a minimum guaranteed hourly capacity of 1,3 GW on the interconnector, corresponding to the capacity that can be made available on the interconnector under normal operating conditions”.

Furthermore, TenneT would not be allowed to reduce the offered capacity below the minimum guaranteed level unless a “limited number of exceptional circumstances required to ensure security of the high-voltage electricity network [are observed], such as outages of a critical network element, insufficient re-dispatch or countertrading capacity to relieve network congestion and requests for assistance by another transmission system operator”.

The EC invitation to submit opinions is addressed to all stakeholders, who will have four weeks to comment following the publication of the commitments in the EU Official Journal (OJ). The EU competition authorities will take into account the comments when deciding whether the commitments address their competition concerns.

If the commitments are found satisfactory, the EC will adopt a decision to make the commitments legally binding on TenneT, without concluding whether or not there was an infringement of EU antitrust rules. The proposed commitments are expected to remain in force for nine years and a trustee would be appointed to monitor whether TenneT complies with them.

If TenneT breaks the legally binding commitments, the EC may impose fines equaling up to 10% of TenneT’s global turnover, without having to find an infringement of EU antitrust rules.