Court of Justice of the European Communities (including Court of First Instance Decisions)

Provisional text

OPINION OF ADVOCATE GENERAL

RANTOS

delivered on 29 September 2022 (1)

Case C‑394/21

Bursa Română de Mărfuri SA

v

Autoritatea Naţională de Reglementare în domeniul Energiei (ANRE)

intervener:

Federaţia Europeană a Comercianţilor de Energie

(Request for a preliminary ruling from the Curtea de Apel Bucureşti (Court of Appeal, Bucharest, Romania)),

(Reference for a preliminary ruling – Electricity market – Regulation (EU) 2019/943 – Directive (EU) 2019/944 – Regulation (EU) 2015/1222 – National legislation providing for a single designated electricity market operator)

 Introduction

1.        This request for a preliminary ruling has been made by the Curtea de Apel București (Court of Appeal, Bucharest, Romania) in proceedings between Bursa Română de Mărfuri SA (‘BRM’) and the Autoritatea Naţională de Reglementare în domeniul Energiei (ANRE) (National Energy Sector Regulatory Authority, Romania; ‘ANRE’) in connection with the latter’s refusal to grant BRM a licence to organise and operate centralised electricity markets.

2.        The questions submitted for a preliminary ruling which will be considered in this targeted Opinion concern, first, whether Regulation (EU) 2019/943, (2) interpreted in the light of Directive (EU) 2019/944, (3) prohibits Member States from issuing a single licence to organise and operate electricity markets and requires them to bring an end to an existing legal monopoly in that field, and, second, whether the principles of free competition laid down in that regulation apply to the electricity market operator, having regard also to the concept of ‘electricity markets’ defined in that regulation by reference to that directive.

 Legal context

 European Union law

 Regulation 2019/943

3.        Article 1 of Regulation 2019/943, entitled ‘Subject matter and scope’, provides:

‘This Regulation aims to:

…

(b)      set fundamental principles for well-functioning, integrated electricity markets, which allow all resource providers and electricity customers non-discriminatory market access, empower consumers, ensure competitiveness on the global market as well as demand response, energy storage and energy efficiency, and facilitate aggregation of distributed demand and supply, and enable market and sectoral integration and market-based remuneration of electricity generated from renewable sources;

(c)      set fair rules for cross-border exchanges in electricity, thus enhancing competition within the internal market for electricity, taking into account the particular characteristics of national and regional markets …;

…’

4.        Article 2 of that regulation contains the following definitions:

‘The following definitions apply:

…

(7)      “market operator” means an entity that provides a service whereby the offers to sell electricity are matched with bids to buy electricity;

(8)      “nominated electricity market operator” or “NEMO” ^[(4)^] means a market operator designated by the competent authority to carry out tasks related to single day-ahead or single intraday coupling;

…

(25)      “market participant” means a natural or legal person who buys, sells or generates electricity, who is engaged in aggregation or who is an operator of demand response or energy storage services, including through the placing of orders to trade, in one or more electricity markets, including in balancing energy markets;

…

(40)      “electricity markets” means electricity markets as defined in point (9) of Article 2 of [Directive 2019/944];

…’

5.        Article 3 of Regulation 2019/943, entitled ‘Principles regarding the operation of electricity markets’, states:

‘Member States, regulatory authorities, transmission system operators, distribution system operators, market operators and delegated operators shall ensure that electricity markets are operated in accordance with the following principles:

(a)      prices shall be formed on the basis of demand and supply;

(b)      market rules shall encourage free price formation and shall avoid actions which prevent price formation on the basis of demand and supply;

(c)      market rules shall facilitate the development of more flexible generation, sustainable low carbon generation, and more flexible demand;

(d)      customers shall be enabled to benefit from market opportunities and increased competition on retail markets and shall be empowered to act as market participants in the energy market and the energy transition;

…

(h)      barriers to cross-border electricity flows between bidding zones or Member States and cross-border transactions on electricity markets and related services markets shall be progressively removed;

…

(o)      in order to allow market participants to be protected against price volatility risks on a market basis, and mitigate uncertainty on future returns on investment, long-term hedging products shall be tradable on exchanges in a transparent manner and long-term electricity supply contracts shall be negotiable over the counter, subject to compliance with Union competition law;

…’

6.        Article 10 of that regulation, entitled ‘Technical bidding limits’, provides in paragraphs 4 and 5:

‘4.      Regulatory authorities or … designated competent authorities … shall identify policies and measures applied within their territory that could contribute to indirectly restricting wholesale price formation, including limiting bids relating to the activation of balancing energy, capacity mechanisms, measures by the transmission system operators, measures intended to challenge market outcomes, or to prevent the abuse of dominant positions or inefficiently defined bidding zones.

5.      Where a regulatory authority or designated competent authority has identified a policy or measure which could serve to restrict wholesale price formation it shall take all appropriate actions to eliminate or, if not possible, to mitigate the impact of that policy or measure on bidding behaviour. …’

 Directive 2019/944

7.        Article 2 of Directive 2019/944 contains the following definition:

‘For the purposes of this Directive, the following definitions apply:

…

(9)      “electricity markets” means markets for electricity, including over-the-counter markets and electricity exchanges, markets for the trading of energy, capacity, balancing and ancillary services in all timeframes, including forward, day-ahead and intraday markets;

…’

8.        In accordance with Article 72 of Directive 2019/944, that directive repealed and replaced Directive 2009/72/EC (5) with effect from 1 January 2021, with most of the provisions of that new directive applying from that date, under Article 73 thereof.

 Regulation (EU) 2015/1222

9.        Article 4 of Regulation (EU) 2015/1222, (6) entitled ‘NEMOs designation and revocation of the designation’, provides in paragraph 1:

‘Each Member State electrically connected to a bidding zone in another Member State shall ensure that one or more NEMOs are designated … to perform the single day-ahead and/or intraday coupling. …’

10.      Article 5 of that regulation, entitled ‘NEMOs designation in case of a national legal monopoly for trading services’, provides:

‘1.      If a national legal monopoly for day-ahead and intraday trading services which excludes the designation of more than one NEMO already exists in a Member State or Member State’s bidding zone at the time of the entry into force of this Regulation, the Member State concerned must notify the Commission within two months after entry into force of this regulation and may refuse the designation of more than one NEMO per bidding zone.

…

2.      For the purposes of this regulation, a national legal monopoly is deemed to exist where national law expressly provides that no more than one entity within a Member State or Member State bidding zone can carry out day-ahead and intraday trading services.

3.      Two years after the entry into force of this Regulation, the Commission shall forward a report to the European Parliament and the Council … On the basis of that report, and if the Commission deems that there is no justification for the continuation of national legal monopolies …, the Commission may consider appropriate legislative or other appropriate measures to further increase competition and trade between and within Member States. …’

 Romanian law

11.      Article 10(2)(f) of the Legea energiei electrice şi a gazelor naturale nr. 123/2012 (7) provides:

‘The competent authority shall issue licences for:

…

(f)      the operation of centralised markets. In that connection, the electricity market operator and the balancing market operator shall each be granted a single licence.’

 The dispute in the main proceedings, the questions referred for a preliminary ruling and the procedure before the Court

12.      BRM is a company that, under Romanian law, has a general competence to operate markets of public interest.

13.      On 20 August 2020, it applied to ANRE for a licence to organise and operate centralised electricity markets. (8)

14.      ANRE rejected that application on the ground that the only licence available, under Article 10(2)(f) of Law No 123/2012, had been granted to the company OPCOM. BRM then brought an action before the referring court, the Curtea de Apel Bucureşti (Court of Appeal, Bucharest), seeking an order requiring ANRE to grant it the licence applied for. The Federaţia Europeană a Comercianţilor de Energie (European Federation of Energy Traders, Romania) intervened in those proceedings.

15.      In essence, BRM argued that Regulation 2019/943, read in conjunction with Directive 2019/944, required ANRE to prevent any monopoly on centralised electricity markets. For its part, ANRE contended that, on the date of entry into force of Law No 123/2012, a licence to operate centralised electricity markets had already been validly granted to OPCOM on the basis of Regulation 2015/1222 and that nothing in Regulation 2019/943 required Member States to designate several operators to perform the task of organising and operating those markets.

16.      In those circumstances the Curtea de Apel București (Court of Appeal, Bucharest) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)      Having regard to the provisions of [Directive 2019/944], does [Regulation 2019/943], in particular Article 1(b) and Article 3 thereof, prohibit, from the time of its entry into force, a Member State from continuing to grant one single licence to organise and operate the centralised electricity markets? Is there an obligation on the Romanian State, as of 1 January 2020, to bring to an end an existing monopoly on operation of the electricity market?

(2)      Does the scope ratione personae of the principles of free competition laid down in Regulation 2019/943, in particular in Article 1(b) and (c) and in Article 3 respectively, include the operator of an electricity market such as a commodities exchange? Is it relevant to this answer that, for the definition of the electricity market, point (40) of Article 2 of Regulation 2019/943 refers to the definition of electricity markets set out in point (9) of Article 2 of Directive 2019/944?

(3)      Must the grant by a Member State of one single licence to operate the electricity market be regarded as constituting a restriction of competition within the meaning of Articles 101 and 102 TFEU, in conjunction with Article 4(3) TEU and Article 106(1) TFEU?’

17.      Written observations were submitted by BRM, the Romanian, Greek, Italian and Cypriot Governments, and the European Commission. At the hearing on 22 June 2022, oral argument was also presented by BRM, the European Federation of Energy Traders, the Romanian and Greek Governments, and the Commission.

 Analysis

18.      In accordance with the Court’s request, this Opinion will focus on the examination of the first and second questions referred for a preliminary ruling.

 The first question

19.      By its first question, the referring court asks, in essence, whether Regulation 2019/943, in particular Article 1(b) and Article 3 thereof, having regard to the provisions of Directive 2019/944, is to be interpreted as prohibiting Member States, since the entry into force of that regulation, from issuing a single licence to organise and operate electricity markets and as requiring them to bring an end to an existing legal monopoly in that field.

20.      In that regard, it should be noted that in Romania, Article 10(2)(f) of Law No 123/2012 provides that only one licence may be granted to the electricity market operator and that ANRE awarded that licence to OPCOM. The activities for which that licence was issued include the operation of the centralised electricity market, which essentially involves managing trade of two types between sellers and purchasers of electricity: short-term transactions, namely contracts for the same-day or next-day supply of electricity, and long-term transactions, namely contracts for the supply of electricity in the longer term.

21.      In the first place, I note that Regulation 2019/943 and Directive 2019/944, (9) which establish the general principles regarding the operation of the electricity markets, do not lay down any specific rules governing trading services between sellers and purchasers on those markets.

22.      Article 1(b) and (c) and Article 3 of that regulation, which BRM invokes on the ground that they require national regulatory authorities to promote competition between operators on the electricity markets, do not in themselves preclude the existence of a monopoly for the organisation and operation of centralised electricity markets. Nor is that the effect of Article 10(4) and (5) of that regulation, also invoked by BRM on the ground that those provisions call on the competent authorities to identify policies and measures that could contribute indirectly to restricting wholesale price formation and, when they have identified such policies or measures, to take all appropriate steps to eliminate or mitigate their impact.

23.      In the second place, I recall that Regulation 2015/1222 lays down rules on the designation of electricity market operators (NEMOs) to perform single day-ahead or intraday coupling.

24.      Under Article 4 of that regulation, any candidate meeting the criteria set out in that article may be designated as a NEMO and such designation may be refused only if the designation criteria are not met or in the situation referred to in Article 5(1) of that regulation.

25.      The first subparagraph of Article 5(1) of that regulation lays down an exception allowing Member States to maintain a national legal monopoly for day-ahead and intraday electricity trading services. That exception covers only intraday and day-ahead services and, like all exceptions, must be interpreted strictly. (10) Accordingly, it cannot be extended to other electricity markets, such as the market for long-term trading services.

26.      To conclude, although the maintenance of a legal monopoly for day-ahead and intraday electricity trading services may be justified in accordance with the first subparagraph of Article 5(1) of Regulation 2015/1222, EU legislation governing the internal market for electricity, in particular Regulation 2019/943 and Directive 2019/944, does not contain any equivalent rule as regards the maintenance of a legal monopoly for long-term electricity trading services. (11)

27.      That being said, since the interpretation of EU legislation governing the electricity markets is not conclusive as regards the lawfulness of a legal monopoly for long-term electricity trading services, the question arises as to whether or not such a monopoly constitutes a restriction on the freedom of establishment enshrined in Article 49 TFEU or, as the case may be, the freedom to provide services enshrined in Article 56 TFEU (12) and, if so, whether it is justified by a reason in the public interest and is proportionate.

28.      According to the Court’s case-law, all measures which prohibit, impede or render less attractive the exercise of the freedom of establishment and the freedom to provide services must be regarded as restrictions on those freedoms. (13)

29.      Given that, under national law, it is impossible for undertakings from other Member States to provide intermediation services for energy transactions on the long-term market in Romania, through an establishment in that Member State or on a cross-border basis, since they cannot obtain a licence for that purpose, such legislation, which makes the exercise of an economic activity subject to an exclusive arrangement, may be regarded as a restriction on the freedom of establishment or the freedom to provide services.

30.      Therefore, Article 10(2)(f) of Law No 123/2012 may be considered to be compatible with Article 49 TFEU or Article 56 TFEU only if it is apparent that it is justified by an overriding reason in the public interest and proportionate to the objective pursued.

31.      However, since the referring court has not raised that question, it has not, in that respect, provided information on the legitimate reasons which might justify a restriction on the freedoms referred to above. (14) Against that background, I take the view that the Court is not in a position to rule on that question or, still less, on the consequential question of whether the restriction on the freedom of establishment or the freedom to provide services is necessary or proportionate.

32.      I therefore propose that the answer to the first question referred for a preliminary ruling should be that Regulation 2019/943, in particular Article 1(b) and Article 3 thereof, having regard to the provisions of Directive 2019/944, must be interpreted as not precluding national legislation which permits only one licence for day-ahead and intraday electricity trading services, in accordance with the first subparagraph of Article 5(1) of Regulation 2015/1222. Furthermore, that legislation must be interpreted as not precluding the maintenance of a legal monopoly for long-term electricity trading services, the lawfulness of which is to be assessed in the light, in particular, of the principles of freedom of establishment and freedom to provide services enshrined in Articles 49 and 56 TFEU.

 The second question

33.      By its second question, the referring court asks, in essence, whether Regulation 2019/943, in particular Article 1(b) and (c) and Article 3 thereof, are to be interpreted as meaning that the principles of free competition apply to the electricity market operator. It also asks whether the fact that the concept of ‘electricity markets’ in Article 2(40) of that regulation is defined by reference to the definition of that same concept in Article 2(9) of Directive 2019/944 is relevant in that regard.

34.      In view of the numerous definitions and cross-references, particularly in Regulation 2019/943 and Directive 2019/944, it seems to me that electricity market operators, like OPCOM, are covered by the provisions of that regulation.

35.      A designated electricity market operator or NEMO is caught either by the definition of ‘market operator’ within the meaning of Article 2(7) of Regulation 2019/943, which refers to ‘an entity that provides a service whereby the offers to sell electricity are matched with bids to buy electricity’, (15) or by the broader definition of ‘market participant’ within the meaning of Article 2(25) of that regulation, which refers to ‘a natural or legal person who buys, sells or generates electricity, who is engaged in aggregation or who is an operator of demand response or energy storage services, including through the placing of orders to trade, in one or more electricity markets, including in balancing energy markets’. (16)

36.      I therefore propose that the answer to the second question referred for a preliminary ruling should be that Regulation 2019/943, in particular Article 1(b) and (c) and Article 3 thereof, must be interpreted as meaning that the principles of free competition laid down apply to the electricity market operator.

 Conclusion

37.      In the light of the foregoing considerations, I propose that the Court answer the questions referred for a preliminary ruling by the Curtea de Apel Bucureşti (Court of Appeal, Bucharest, Romania) as follows:

(1)      Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity, in particular Article 1(b) and Article 3 thereof, having regard to the provisions of Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU,

must be interpreted as:

–        not precluding national legislation which permits only one licence for day-ahead and intraday electricity trading services, in accordance with the first subparagraph of Article 5(1) of Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management;

–        not precluding the maintenance of a legal monopoly for long-term electricity trading services, the lawfulness of which is to be assessed in the light, in particular, of the principles of freedom of establishment and freedom to provide services enshrined in Articles 49 and 56 TFEU.

(2)      Regulation 2019/943, in particular Article 1(b) and (c) and Article 3 thereof,

must be interpreted as meaning that the principles of free competition laid down apply to the electricity market operator.

1      Original language: French.

2      Regulation of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (OJ 2019 L 158, p. 54).

3      Directive of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU (OJ 2019 L 158, p. 125).

4      Footnote not relevant to the English-language version of this Opinion.

5      Directive 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 (OJ 2009 L 211, p. 55).

6      Commission Regulation of 24 July 2015 establishing a guideline on capacity allocation and congestion management (OJ 2015 L 197, p. 24).

7      Law No 123/2012 on electricity and natural gas of 10 July 2012 (Monitorul Oficial al României, Part I, No 485, of 16 July 2012) in the version applicable to the dispute in the main proceedings (‘Law No 123/2012’).

8      On that date, under Law No 123/2012, the company OPCOM was the only designated operator on the day-ahead and intraday electricity market and on the market for long-term electricity trading services for Romania’s bidding zone. According to information provided by the Romanian Government at the hearing, Romanian legislation abolished the single licence system with effect from 2022 and, that same year, BRM obtained a licence for long-term electricity trading services.

9      I would point out, incidentally, that although Directive 2019/944 does not apply ratione temporis to the facts of the present case, it may nevertheless provide a point of reference for the interpretation of Regulation 2019/943.

10      Even in the case of day-ahead and intraday trading services, the application of the legal monopoly model, permitted by that provision, constitutes an exception from the competitive model envisaged in the relevant legislation.

11      Moreover, neither Regulation 2019/943 nor Directive 2019/944 nor Regulation 2015/1222 implements full harmonisation. Regulation 2015/1222, in particular, simply sets out ‘minimum harmonised rules’ (see, inter alia, recital 3 thereof) and, moreover, applies only to single day-ahead and intraday coupling.

12      See judgment of 23 February 2016, Commission v Hungary (C‑179/14, EU:C:2016:108, paragraph 164 and the case-law cited).

13      See, in particular, to that effect, judgment of 21 July 2011, Commission v Portugal (C‑518/09, not published, EU:C:2011:501, paragraph 61 and the case-law cited).

14      In that regard, I would merely note that, as the Commission rightly points out, the legitimate reasons put forward by ANRE, namely the small size of the Romanian market and the presence of a single electricity market operator in other Member States (which, moreover, does not appear to reflect reality) are not, at first sight, capable of justifying such restrictions.

15      Also see Article 7(1) of Regulation 2015/1222, which provides that ‘NEMOs shall act as market operators in national or regional markets to perform in cooperation with [Transmission System Operators (TSOs)] single day-ahead and intraday coupling. …’ (emphasis added).

16      In addition, as the Commission points out, electricity market operators are also caught by the following definition of ‘electricity undertaking’ within the meaning of Article 2(57) of Directive 2019/944 – which does not apply ratione temporis to the facts of the present case – to which Article 2(40) of Regulation 2019/943 refers: ‘a natural or legal person who carries out at least one of the following functions: generation, transmission, distribution, aggregation, demand response, energy storage, supply or purchase of electricity, and who is responsible for the commercial, technical or maintenance tasks related to those functions, but does not include final customers’.

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