The Network Code on Demand Connection is closely linked to the Network Code on Requirements for Generators (NC RfG). Many of the principles in the DCC are closely related, or even identical, to those for generation requirements. This is because both codes set out requirements for parties connecting to the system and these requirements need to be fair and not discriminate between different system users. There will also be considerable synergies with the third network code covering connection requirements – the NC HVDC.

The code is also closely linked to the Network Code on Electricity Balancing (NC EB) and the Network Code on Operational Security (NC OS). The former stipulates requirements for market actors to keep the system in balance, while the latter specifies how the capabilities defined in the DCC are used in order to maintain the correct balance of electricity networks.

Yes, it does. This was  acknowledged in ACER’s reasoned Opinion and Recommendation to the EC (25 March 2013)

ENTSO-E involved stakeholders at each stage of the DCC drafting process.  A stakeholder group, made up of pan-European associations, met throughout the code development process and provided advice and support. Open workshops were also held, and two main consultation phases took place during the code development process: in April 2012 and from 27 June to 13 September 2012. This second phase of the consultation attracted almost 1500 individual comments and suggestions.

Throughout the process, ENTSO-E continuously engaged with a dedicated DSO Technical Expert Group on all items affecting distribution system operators (DSOs) in implementing the DCC, and a DCC User Group, which focused mainly on the DCC provisions on demand side response (DSR).

An overview of the key principles of the DCC and the motivation for the latest evolutions in the code were presented at a public information session in December 2012. Based on the feedback received from various organisations during this session, ENTSO-E amended several clauses of the DCC in order to clarify the process on compliance enforcement for DSR provided by small-scale demand users.

Recording the large volume of comments received during consultation was done using a specific template, which allowed comments on a particular code article to be considered and then validated and discussed by the various drafting teams.

The settlement of dispute provisions is commonly used for contractual types of relationships, which are outside the scope of the DCC.

In case of a dispute regarding the application of a network code provision, it will be referred to national courts – which are the usual courts in matters of European Union law – in accordance with national rules. Nevertheless, to ensure the effective and uniform application of European Union legislation, the national courts may, and sometimes must, refer to the Court of Justice to seek clarification on a point concerning the interpretation of EU law (in the network code provisions).

The ACER Framework Guidelines require that “The applicability of the standards and requirements to pre-existing significant users shall be decided on a national basis by NRA, based on a proposal from the relevant TSO, after a public consultation. The TSO proposal shall be made on the basis of a sound and transparent quantitative cost-benefit analysis that shall demonstrate socio-economic benefit, in particular of retroactive application of the minimum standards and requirements”.

Before any existing demand facility or existing connected distribution network will be required to comply with the requirements of DCC, the relevant transmission system operator (TSO) will have undertaken a cost-benefit analysis and carried out a public consultation. The National Regulatory Authority (NRA) will then make decision based on the information obtained from these exercises.

Facility owners or the distribution asset owners bear the responsibility for demonstrating compliance, including costs related to compliance tests and simulations. This would be done in alignment with the compliance principle set out in DCC.

The improvement of existing demand facilities or existing transmission connected distribution networks to achieve compliance with the DCC can only be enforced following a socio-economic cost-benefit analysis. As such, the cost of improving existing demand facilities or transmission connected distribution networks should be borne by the owners.

However, in the case of replacement/improvement/modernisation of existing demand facilities or existing transmission connected distribution networks, such installations must be compliant with the network code requirements, unless the demand facility or distribution asset owner applies and is granted a derogation from this obligation. A possible case for derogation could be the use of existing spare parts, if deemed appropriate.

The cost allocation of improvements is not specifically covered by the framework guidelines on electricity grid connections issued by ACER.

The ACER Framework Guidelines state that, “The network code(s) shall always require the system operators to optimise between the highest overall efficiency and lowest total cost for all involved stakeholders. In that respect, NRAs shall ensure, that, whatever the cost-sharing scheme is, the cost split follows the principles of non-discrimination, maximum transparency and assignment to the real originator of the costs.”

The potential impact of non-compliance with any element of a network code, namely a reduction in transmission system security, justifies robust operational notification and compliance testing in all of the grid connection codes (Requirements for Generators, Demand Connection and High Voltage Direct Current Connections).

The inclusion of operational notification procedures and the related compliance enforcement provisions within NC DCC is in line with the minimum standards and requirements for connections defined by the corresponding ACER framework guidelines:

“The network code(s) shall define clear and transparent criteria and methods for compliance monitoring, including the requirements for compliance testing.”

ENTSO-E agrees that how consumers are compensated for the DSR services they could provide to the system through the DCC must be addressed. However, the DCC cannot prescribe such compensation schemes as this goes beyond the scope of a connection code. The issue could be addressed through implementing legislation or by developing DSR markets at a later stage.

The cost of DSR SFC has already been analysed in several R&D projects in Europe and the US. These projects indicate an expected nominal additional cost per appliance (in the region of a few euros). Based on this assumption, several ENTSO-E case studies have assessed the net benefit of DSR compared to constraining renewable resources in case of high wind/sun, or demand disconnection in normal system defence plans, where some consumers would be left without power for some time in order to avoid a widespread blackout. Based on these studies, it has been concluded that DSR SFC is the most efficient and least costly option to deal with increased renewable generation.

Aggregated domestic load makes up 30-40 % of total energy consumption. Industrial loads can already provide demand response to suppliers and network operators (and many of them do). With renewable energy sources (RES) targets topping 50% in some countries, we  need to unlock the potential of demand flexibility for domestic loads in order to facilitate increased amounts of renewable electricity on the transmission system.

The focus is not only on fridges, but on all temperature-controlled technologies with the potential to benefit the system without adversely affecting customers.  However, the benefits of demand side response (DSR) can be easily illustrated using the example of fridges.

The benefit lies in the aggregated impact to the system. The average total consumption of all fridges/freezers in Continental Europe by 2020 is still expected to be about 13% of the total electricity consumed – as such, they are an incredibly large, and untapped, source of support to the electricity system.

For appliances to be fitted with DSR APC (active power control) capabilities, (i.e. for appliances to be made “DSR ready”), a standardised communication interface and an internal logic to modulate the consumption of the unit is required. For appliances to be fitted with DSR SFC (system frequency control), (i.e. appliances reacting autonomously to frequency deviations without consumer impact), an internal logic (a chip) with the ability to measure frequency and an option to adapt the temperature setting of the device is required. These devices operate mostly on hysteresis – when a normal freezer with a 4-degree set point switches on and off, its temperature cycles between e.g. 3.5 and 4.5 degrees.

The DCC stipulates that a joint proposal on appliances suitable for inbuilt DSR will be made by TSOs and will be submitted to the European Commission for consideration as an implementing measure following the passage of the Eco-Design Directive. Options include (but are not limited to) washing machines, heat pumps and dishwashers.

TSOs do not set the standards different consumer products should meet.  These standards are set by national or European laws. In the case of consumer goods, the Eco Design and Eco Labelling directives, which are pieces of European law, create a framework for discussing and implementing the standards.

At present it is not mandatory for a product to be capable of providing demand side response (DSR); though in the future, DSR could possibly be made obligatory for certain devices. The benefit of this approach is that with a large amount of appliances able to react to frequency disturbances, other more serious emergency measures, such as demand disconnection, could be avoided.

If a user decides to voluntarily provide DSR services, then a contract with a network operator, aggregator or other service provider will give details and conditions regarding how their  demand can be modified. Where domestic appliances are fitted with DSR system frequency control, they will respond automatically to extreme frequency changes on the transmission system. This response does not require external control, and is built into the device itself. It uses the inherent heat storage of some appliances (such as heating units or fridge freezers) to modulate electricity consumption without any noticeable impact on consumers or goods. As such, there is no impact on consumer privacy, nor health and safety.

The DCC defines a transparent process, using existing legislative routes, by which appliances could be made “DSR-ready”. For any such appliance, the DCC requirements give consumers the largest possible degree of flexibility with regard to opting in or out from the various services described in the DCC. Future ‘smart grid’ models with more consumer choices for demand response can build on the technical requirements of the DCC.

Electricity generation in Europe is changing. Dispersed generation (millions of smaller units compared to small numbers of large units) and the increasing use of renewable electricity are presenting new challenges for transmission system operators (TSOs), whose role it is to ensure the transmission system remains stable. Demand side response (DSR) is a tool that allows TSOs to respond to these challenges in a cost effective, environmentally responsible manner.

In simple terms, it means that if the electricity generated from wind were to fall off, rather than having to turn on an expensive fossil fuel generator to make up the shortfall, customers could bridge the gap between supply and demand by making small adjustments to their electricity consumption.

Today, most users of electricity are passive receivers, who don‘t participate in the operational management of the generation sources and the grid. However, in the last decade many countries have begun the process of liberalising their electricity systems, opening access to transmission and distribution grids and rolling out smart meters.

This has enabled intelligent and active electricity usage, which means that people can now play an active role in how and when they use electricity, resulting in benefits for them and the environment (more efficient electricity usage that facilitates the integration of renewable electricity sources into the system). This process is called demand side response (DSR).

Once retrospective application is approved and applied to an existing user, they will meet the requirements covered by the retrospective application, regardless of whether they possess a derogation from a relevant related requirement in the national code, issued on a national level before the network code entered into force.

Although existing derogations are no substitute for derogations from the DCC in case of retroactive application, such documentation can be useful background information when preparing the derogation application regarding the network code.

The user cannot pursue a derogation for specific requirements of the network code according to the procedure for derogation prescribed in the DCC, even if retrospective application has been approved by the NRA (Article 54).

A derogation is a provision in an EU legislative measure which allows for all or part of the legal measure to be applied differently, or not at all, to individuals, groups or organisations. Derogation is not a provision excluding application of the legal measure: it is a choice given to allow for greater flexibility in the application of the law, enabling Member States or social partners to take into account special circumstances.

As requested by the ACER Framework Guidelines, the network code requirements will apply to existing demand facilities and existing connected distribution networks only if the relevant TSO has proposed a retroactive application and this proposal has been approved by the National Regulatory Authority. A DCC requirement will apply to existing demand facilities and existing connected distribution networks only if it is demonstrated by a quantitative cost-benefit analysis that the costs to fulfill this requirement are lower than the benefits to the power system.

Given the rapid changes that have occurred in the electricity system over the past decade alone, uncertainty regarding the needs of the electricity system of the future naturally exists. However, as network codes will enter into force by means of European legislation, it is essential to have the option to apply network code requirements retroactively to existing plants or distribution networks should the need arise, rather than have to go through lengthy legislation amendment procedures. Such applications, if they did arise, would only be pursued in very particular and reasonable cases, with all the necessary safeguards and respecting the provision of ACER’s Framework Guidelines.

ENTSO-E has developed the DCC with relatively few deviations from existing requirements. However, it is inevitable that the DCC will not be in line with all existing requirements in every country because they are not currently harmonised (and to do so would add little value). Most countries will see differences from current practice due to ENTSO-E selecting the best practice elements of different national codes/regulations, which have proven their efficiency.

The DCC does not exclude the consideration of such specific conditions. The approach taken is to assess the capability of the industrial facility to meet the network code requirements without the embedded generation. This approach follows in the initial design, simulation or physical testing of the requirements.

Developing a single code for each type of demand facility and distribution network would have been highly inefficient and would have resulted in considerable duplication.

In the context of the DCC, an existing demand facility is a user which:

• Is physically connected to the Network, or
• Has a confirmation, provided in accordance with Article 7 of NC DCC by the demand facility owner, that a final and binding contract for the construction, assembly or purchase of the main plant, (i.e. motors, production plant, etc.) exists 30 months after the day of the entry into force of the network code.

An existing distribution network connection is one:

• Which is either physically connected to the network, or
• For which the substation to connect it to the transmission network has  a confirmation, provided in accordance with Article 7 of DCC by the distribution asset owner, that a final and binding contract for the construction, assembly or purchase of the main plant, (i.e. transformer, busbars etc.) of the Distribution Network Connection exists 30 months after the day of the entry into force of this network code

The definitions of existing demand facility and existing distribution network connection take into account possible future amendments of the network code. In this sense, a new user could become an existing user with respect to amended requirements with future evolutions of the code.

According to this definition, a distribution network which reinforces or expands its network without adaptations at a connection point to the transmission system will still have existing distribution network connections, for which the applicability of this network code will follow the prescriptions of Art 5 of the DCC.

The main aim of the Network Code on Demand Connection (DCC) is to specify a clear set of requirements for distribution networks and demand facilities across the EU, resulting in increased cost efficiency through technical standardisation and harmonisation.

However, complete harmonisation of all requirements for distribution networks and demand facilities is not possible or cost effective, because each country has developed and designed its transmission network based on its own historical requirements and specificities.

In these cases, each country is permitted (in accordance with the principle of subsidiarity) to set a value within a range specified within the DCC. This approach balances harmonisation and flexibility in a proportionate manner.

The DCC code will enter into force 20 days after it is published in the Official Journal of the EU.  However, because it requires various provisions to be developed over a period of time, the different requirements will apply from different points in time. 

Due to the need for regulatory approvals, it is impossible to say with absolute certainty when varying elements of the code will apply.  ENTSO-E understands that the Commission will finalise the adoption procedure in early 2014.

Historically, the ways in which customers (demand users) connected to electricity transmission systems were based on national or regional rules. Customers were seen as passive receivers of electricity and the lower voltage electricity distribution networks traditionally drew down power from the higher voltage transmission networks to supply homes and businesses.

This situation is changing rapidly. As ever-increasing numbers of small solar and wind-powered generators are installed, distribution networks are now becoming suppliers of electricity. However, perhaps the biggest change is in the role of the customer.  Smart grid technology (like smart meters) is enabling intelligent and active electricity usage. This means that everyone can play an active role in how and when electricity is used.  This is called demand side response.

We would not be able to manage these changes without clear connection rules, for everyone connecting to the grid (whether they are large or small, generator or customer).  Put simply, aligning Europe’s rules for connecting to the transmission system is a prerequisite for the secure operation of Europe’s electricity sector in the years ahead.  The NC DCC is one of three network codes (i.e. “Connection Codes”) to set out these rules.

The Demand Connection Code (DCC) includes requirements relating to:

• Transmission connected demand facilities (large users which connect directly to the transmission network). These are generally industrial in nature (for example data centres, steel works, aluminium smelters etc. );
• Transmission connected distribution networks;
• Grid users providing demand side response (DSR); and
• The roles and responsibilities of grid users and network operators.

The general requirements in the code define how to avoid and cope with extreme system events that could threaten the stability of the transmission system (including frequency and voltage ranges).

Further requirements outline the principles, procedures and parameters of user connection, with values that are closely related to those the Network Code on Requirements for Generators (including for existing users, compliance, and derogation).

Operational requirements contained within NC DCC ensure that information exchange, a system defence plan (including in instances of low frequency demand disconnection and low voltage demand disconnection), power flow control (demand side response) and voltage management (active control of reactive power) are possible.

The DCC sets out the connection requirements that DSR providers with cross-border relevance will be obliged to comply with (including rules regarding reaction times, communication and compliance testing).

Offering a reliable source of electricity to consumers is the objective of any electricity transmission system. To keep an electricity system stable, both supply and demand need to remain in balance at all times. Most European countries already have basic requirements in place for connecting users to transmission grids. These requirements can take the form of a national grid code, contractual agreements or a set of common practices.

However, a common set of rules for users across Europe has never until now, been developed.  The development of a single internal electricity market, an increase in the use of electricity from renewable sources, and ambitious targets for realising the potential of customers to contribute to managing the energy system using smart grid all make a consistent set of rules necessary.

The DCC (Network Code for Demand Connection) sets out common, transparent European rules for how large demand interacts with the electricity transmission system. The DCC sets out the requirements that will need to be met by large demand facilities (such as factories) connecting to the transmission; distribution networks connected to the transmission system and providers of demand side response.

The DCC also clarifies the role that demand side response (See Q X) will play in allowing greater amounts of electricity from renewable sources, such as wind or solar, to be safely integrated into the system. The code also specifies how electricity users who want to feed power back into the system from small-scale renewable generation technologies can do so.

As requested by the ACER Framework Guidelines, the DCC will apply to new users.

It will apply to existing demand users if the benefits of such applicability are expected to outweigh the incurred costs. This will be assessed by national TSOs and will ultimately be approved by National Regulatory Authorities.