EU Electricity Network Codes: Good Governance in a Network of Networks

This paper aims at contributing to the further development of the governance structure of the internal energy market by evaluating the process of the development of network codes, that is, the technical rules governing access to – and functioning of the cross border electricity grid, against principles of good governance. It finds that the governance structure does not sufficiently ensure responsiveness to stakeholder input. This is due to a lack of legal accountability mechanisms, which are only insufficiently complemented by means of political- , social-, vertical administrative- and peer-accountability. Legal accountability mechanisms are insufficient to guarantee adequate responsiveness to stakeholder input, due to rigid standing criteria for direct actions at the European Court of Justice against network codes adopted as delegated acts by the Commission. Moreover, there is insufficient possibility of judicial review as regards the roles of various network members in the development of network codes, in particular regarding soft law instruments used by ACER and ENTSO-E. Hence, their factual influence on the technical rules adopted as network codes is not appropriately met by legal accountability mechanisms that would ensure their stakeholder responsiveness. While current means of political-, social-, vertical administrative- and peer-accountability may improve responsiveness to stakeholder input, a thorough analysis of the network code development process shows that they are too weak to meet a level as required by principles of good governance. This lack of accountability also leads to a lack of participation and openness. The paper argues that alternative accountability mechanisms need to be strengthened in a way that adapts the present system of accountability mechanisms to the flexible means of exercising authority through network governance. In particular, it advocates a greater role for stakeholder committees as well as ACER in the development of network codes