Provisional text
OPINION OF ADVOCATE GENERAL
KOKOTT
delivered on 12 February 2026 (1)
Joined Cases C‑722/24 and C‑756/24
SIA ‘Elektro bizness’,
Other party:
Sabiedrisko pakalpojumu regulēšanas komisija (C‑722/24)
and
Sabiedrisko pakalpojumu regulēšanas komisija,
Other party:
SIA ‘Jelgavas autobusu Parks’ (C‑756/24)
(Requests for a preliminary ruling from the Augstākā tiesa (Senāts) (Supreme Court (Senate), Latvia))
( References for a preliminary ruling – Internal market for electricity – Directive (EU) 2019/944 – Article 2(41) – Concept of direct line – Customer’s freedom to
choose – Complete disconnection from the network – Connection of a customer to an existing electricity line – Connection of multiple customers )
Table of contents
I.
Introduction
II.
Legal framework
A.
European Union law
B.
Latvian law
III.
The disputes in the main proceedings and the questions referred for a preliminary ruling
A.
Case C722/24, Elektro bizness
B.
Case C756/24, Jelgavas autobusu parks
IV.
Legal assessment
A.
Whether a direct line is an alternative form of energy supply (second question in Case C722/24 and first and third questions in Case C756/24)
1.
The distinction between the first and second alternatives of point 41 of Article 2 of Directive 2019/944
2.
Concept of direct line in the second alternative of point 41 of Article 2 of Directive 2019/944 as an alternative to the network
(a)
Wording of the second alternative of point 41 of Article 2
(b)
Legislative history of point 41 of Article 2
(c)
Comparison with the Internal Gas Market Directive
(d)
Scheme of Directive 2019/944
(e)
The objectives of the directive
(1)
Liberalisation of the internal market for electricity
(2)
Objective of ecological transformation
(3)
Conflict with the objective of ensuring affordable energy prices
3.
Interim conclusion
B.
Complete disconnection from the system (second question in Case C756/24)
C.
Connection of multiple customers to the same line (second question in Case C722/24)
D.
The concept of ‘generation site’ (first question in Case C722/24)
E.
The criterion of the isolated customer and isolated generation site (first and second questions in Case C722/24 and third question in Case C756/24)
V.
Conclusion
I.      Introduction
1.        Is a direct line through which a customer obtains electricity from a producer without the intermediation of the network (and thus without paying the associated costs) reserved only for customers who, for technical or economic reasons, cannot be connected to the network? Or do Member States have room for manoeuvre to allow direct lines also in other cases (for example, promotion of industrial sites or the decentralised production and supply of ‘green’ energy)?
2.        That is, in essence, the question giving rise to the present requests for a preliminary ruling from the Augstākā tiesa (Senāts) (Supreme Court (Senate), Latvia).
3.        Since Directive 96/92/EC, (2) the direct line has been a recognised component of the internal market for electricity. In the directive on the internal market for electricity currently in force (Directive (EU) 2019/944), (3) the direct line is regulated in such a way as to enable a balance to be struck between the security of supply of all customers and the fair allocation of network costs, on the one hand, and the promotion of industry and the diversification of energy generation, on the other.
4.        The present two requests for a preliminary ruling from the Augstākā tiesa (Senāts) (Supreme Court (Senate)) now enable the Court of Justice to clarify the conditions for striking such a balance.
5.        The purpose of the electricity lines at issue in the main proceedings is, in each case, to connect a power plant with a customer. However, the two lines envisaged have certain particularities. In Case C‑722/24, the customer is to be connected via the electricity line at issue to an existing line which is connected to the network and through which other customers are already supplied. In Case C‑756/24, the customer is already connected to the network and wishes to retain that connection in the future as a back-up connection alongside the electricity line at issue.
II.    Legal framework
A.      European Union law
6.        Point 41 of Article 2 (‘Definitions’) of Directive 2019/944 includes a definition of the concept of direct line. For the purposes of that directive, the term designates:
‘“direct line” means either an electricity line linking an isolated generation site with an isolated customer or an electricity line linking a producer and an electricity supply undertaking to supply directly their own premises, subsidiaries and customers’.
7.        Article 7 of Directive 2019/944 (‘Direct lines’) is worded as follows:
‘1.      Member States shall take the measures necessary to enable:
(a)      all producers and electricity supply undertakings [(4)] established within their territory to supply their own premises, subsidiaries and customers through a direct line, without being subject to disproportionate administrative procedures or costs;
(b)      all customers within their territory, individually or jointly, to be supplied through a direct line by producers and electricity supply undertakings.
2.      Member States shall lay down the criteria for the grant of authorisations for the construction of direct lines in their territory. Those criteria shall be objective and non-discriminatory.
3.      The possibility of supplying electricity through a direct line as referred to in paragraph 1 of this Article shall not affect the possibility of contracting electricity in accordance with Article 6.
4.      Member States may issue authorisations to construct a direct line, subject either to the refusal of system access on the basis, as appropriate, of Article 6 or to the opening of a dispute settlement procedure under Article 60.
5.      Member States may refuse to authorise a direct line if the granting of such an authorisation would obstruct the application of the provisions on public service obligations in Article 9. Duly substantiated reasons shall be given for such a refusal.’
B.      Latvian law
8.        Point 29 of Article 1 of the Elektroenerģijas tirgus likums (‘Law on the electricity market’) of 5 May 2005 defines ‘direct line’ as:
‘an electricity line linking an isolated electricity generation site with an isolated customer, or an electricity line linking an isolated electricity producer and a trader which supplies directly to premises in its ownership or possession, to affiliated undertakings and to its own customers’.
9.        Article 25 of the Law on the electricity market (‘Installation of electricity lines’) provides, in
its
paragraph 2
and in point 1 of paragraph 3, as follows:
‘2.      The distribution system operator shall be entitled to install a distribution line in the area covered by its licence.
3.      A person other than the distribution system operator shall be entitled to install a distribution line in the area covered by the distribution system operator’s licence in the event that the line to be constructed is:
(1)      a direct line’.
10.      Article 26 of the Law on the electricity market (‘Direct line’) provides as follows:
‘1.      The producer shall be entitled to supply electricity to customers or to its own premises through a direct line connection.
2.      The authorisation to install the direct line connection shall be granted by the Regulator. The Regulator shall lay down objective and equitable criteria in accordance with which the authorisation for the installation of a direct line connection shall be granted.’
III. The disputes in the main proceedings and the questions referred for a preliminary ruling
A.      Case C‑722/24, Elektro bizness
11.      Elektro bizness operates a cogeneration plant. It is the owner not only of that power plant, but also of an underground cable connected to that plant (‘the existing line’), with a length of 7.6 kilometres, through which electricity with a voltage of 20 kilovolts is transported. The existing line was already owned by Elektro bizness before the Law on the electricity market came into force in 2005. Through that line, Elektro bizness transmits electricity to the network of the company Sadales tīkls. In addition, Elektro bizness
uses the existing line to supply electricity to six industrial customers without the intermediation of the network of Sadales tīkls.
12.      In 2021, Elektro bizness applied to the Sabiedrisko pakalpojumu regulēšanas komisija (Public Utilities Commission of Latvia; ‘the Regulator’) for authorisation to install a direct line. The planned line was to link the installation of a customer over a distance of approximately 400
metres to the existing line and to enable Elektro bizness to supply electricity to that
customer without the intermediation of the network of Sadales tīkls.
13.      By Decision No 65 of 10 June 2021, the Regulator refused to grant an authorisation for Elektro bizness to install the direct line. It based its decision on the fact that the planned line was not a direct line. According to the Regulator, since the existing line cannot be regarded as forming part of the ‘electricity generation site’, the planned line does not connect any customer to an isolated generation site.
14.      Elektro bizness subsequently brought an action before the Administratīvā apgabaltiesa (Regional Administrative Court, Latvia), which dismissed that action. That court shared the view of the Regulator that the existing line cannot be regarded as part of the generation site because it
is not used for generation but for transport of the electricity produced. Therefore, the customer is not directly linked to the power plant.
15.      Elektro bizness lodged an appeal on a point of law
against that decision with the Augstākā tiesa (Senāts) (Supreme Court, (Senate)), claiming that the existing line was an integral part of the operation of the power plant and should therefore be regarded as part of the generation site. Furthermore, according to Elektro bizness, the purpose of installing a direct line is to enable an electricity producer to supply the energy it generates directly to a customer, without the intermediation of the network.
16.      In those circumstances, the Augstākā tiesa (Senāts) (Supreme Court (Senate)) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
For the purposes of point 41 of Article 2 of Directive 2019/944:
(1)      Must the concept of ‘isolated generation site’
used in that provision be construed as also including an electricity line owned by a producer, connected to a generating station, intended to transmit generated electricity and extending beyond the boundaries of the location (postal address) of the generating station?
(2)      Does the definition of ‘direct line’
contained in that provision include an electricity line connecting a customer to an electricity generation site (cogeneration plant) through the deployment of a connection to a pre-constructed electricity line owned by a producer and intended to transmit electricity, if this has the result of ensuring the supply of electricity from the producer to the customer without the intermediation of the distribution network operator’s network? Would it have any bearing on the answer to this question if the pre-constructed electricity line owned by the producer and intended to transmit electricity, to which the proposed line would be connected in order to reach the new customer, were already being used to supply electricity to other customers?
B.      Case C‑756/24, Jelgavas autobusu parks
17.      Jelgavas autobusu parks carries out local passenger transport activities. It planned to use hydrogen-powered urban buses and to run a hydrogen plant for that purpose.
18.      In March 2021, Jelgavas autobusu parks approached the Regulator to request the grant
of an authorisation for the installation of an electricity line with a length of 6.5
kilometres connecting its hydrogen generation plant to a biomass power plant belonging to SIA Gren Latvija. Jelgavas autobusu parks wishes to obtain electricity directly from Gren Latvija in order, inter alia, to reduce the costs associated with an increase in connection capacity. Jegavas autobusu parks wishes to keep the existing connection to the network of the operator Sadales tīkls only as a back-up connection after installation of the planned electricity line. As long as it obtains
electricity via the direct line, there is no intention to obtain
electricity from the network.
19.      By Decision No 123 of 4 November 2021, the Regulator refused that request. In its view, no authorisation may be granted for the installation of a ‘direct line’, since Jelgavas autobusu parks cannot be regarded as an ‘isolated customer’. The network operator could ensure that Jelgavas autobusu parks would be supplied at reasonable costs even in the event of an increase in capacity. The installation of a direct line is permitted only where it is technically and economically justified. Jelgavas autobusu parks brought an action against the refusal of its request before the Administratīvā apgabaltiesa (Regional Administrative Court).
20.      The Administratīvā apgabaltiesa (Regional Administrative Court) upheld that action. According to that court, it is not apparent from the legal framework that the objective of the installation of direct lines is merely to ensure the supply of electricity to customers who are unable, or only able to a limited extent, to obtain the necessary electricity from the network. According to that court, it is true that a direct line requires disconnection from the system. However, Jelgavas autobusu parks made a statement to the effect that, during use of the direct line, its decoupling from the network of Sadales tīkls would be ensured. There is therefore sufficient disconnection.
21.      The Regulator brought an appeal on a point of law against that judgment before the Augstākā tiesa (Senāts) (Supreme Court (Senate)). That court decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
(1)      Must Article 7 of Directive 2019/944 be interpreted as meaning that a ‘direct line’
constitutes an alternative form of electricity supply if a customer so wishes or, on the contrary, as meaning that a direct line is acceptable only in exceptional cases?
(2)      Must point 41 of Article 2 of Directive 2019/944 be interpreted as meaning that a ‘direct line’
can be understood to mean an electricity line that is intended to be used to connect an electricity producer connected to the distribution system with an electricity customer connected to the distribution system, if that customer is to maintain that connection to the distribution system as a back-up connection after the planned electricity line has been constructed, but is to be disconnected from the distribution system while electricity is being supplied to it from the electricity producer by means of that direct line?
(3)      Must the concept of ‘isolated customer’
used in point 41 of Article 2 of Directive 2019/944 be understood as meaning only a customer that is not connected to the distribution system and for which the distribution system operator is not in a position to ensure the necessary capacity through the construction of a connection at reasonable cost?
22.      By decision of 6 December 2024, the President of the Court of Justice joined Cases C‑722/24, Elektro bizness, and C‑756/24, Jelgavas autobusu parks, for
the purposes of a joint written and oral procedure and a joint final judgment.
23.      The Regulator and the European Commission submitted written observations in both cases. The Italian Government submitted written observations in Case C‑722/24, Elektro bizness, and the Austrian Government did so in Case C‑756/24, Jelgavas autobusu parks. The Court decided not to hold a hearing pursuant to Article 76(2) of its Rules of Procedure.
IV.    Legal assessment
24.      The five questions referred for a preliminary ruling concern, in essence, two sets of questions, the examination of which requires an interpretation of the concept of direct line.
25.      In that regard, it must first be examined whether direct lines constitute an alternative form of energy supply or whether a direct line may be installed only if the customer cannot be connected to the system for technical or economic reasons (Section A) (second question in Case C‑722/24 and first and third questions in Case C‑756/24). Were the latter to be the case, it would not be necessary to examine the additional question of whether a back-up connection to the network may continue to exist in addition to the direct line (Section B) (second question in Case C‑756/24).
26.      In addition, the referring court asks whether only an isolated customer
or also multiple customers may be connected via the direct line and how the concept of ‘isolated generation site’ is to be understood (first and second questions in Case C‑722/24 and third question in Case C‑756/24) (Sections C to E).
A.      Whether a direct line is an alternative form of energy supply (second question in Case C‑722/24 and first and third questions in Case C‑756/24)
27.      By the first part of its second question referred for a preliminary ruling in Case C‑722/24, the referring court wishes to know whether the decisive feature of a direct line within the meaning of the definition in point 41 of Article 2 of Directive 2019/944 is that the electricity is supplied from the producer to the customer without the intermediation of the network operator’s network. Such a definition of direct line would be based on whether electricity is actually supplied and would be independent of the existence or possibility of a connection to the network.
28.      Clarification of that question is also necessary in order to determine whether supply through direct lines constitutes an alternative form of electricity supply or whether it is reserved only for exceptional cases, where another form of supply is not technically or economically possible (first and third questions in Case C‑756/24). If one were to focus on the absence of a possibility to connect, existing customers already connected to the network or new customers who have such a possibility would not be able to choose to be supplied via a direct line.
29.      Point 41 of Article 2 of Directive 2019/944 defines two cases of direct lines. According to that provision, ‘direct line’ means either ‘an electricity line linking an isolated generation site with an isolated customer’ (first alternative) or ‘an electricity line linking a producer and an electricity supply undertaking to supply directly their own premises, subsidiaries and customers’ (second alternative).
30.      I shall first explain how those two alternatives are to be distinguished from each other and why the second is relevant to the electricity lines at issue (Section 1). It is clear from the analysis below that the direct line is conceived as an alternative to the supply of electricity via the network (Section 2).
1.      The distinction between the first and second alternatives of point 41 of Article 2 of Directive 2019/944
31.      The wording of the questions referred gives the impression that the referring court wishes to know whether the electricity lines at issue satisfy the conditions of the first alternative, that is to say, whether they can be classified as electricity lines ‘linking an isolated generation site with an isolated customer’. (5)
32.      However, as Austria submits in Case C‑756/24, the circumstances of the cases in the main proceedings raise the question whether the electricity lines at issue might not rather be covered by the second alternative, that is to say, electricity lines ‘linking a producer … to supply directly … [its] customers’. Thus, the electricity line at issue in Case C‑722/24 seeks to connect Elektro bizness to its new customer through the existing line, by which it already provides six other customers without the intermediation of the network. The electricity line at issue in Case C‑756/24 is intended to connect Jelgavas autobusu parks to the biomass power plant of Gren Latvija for direct supply, although that undertaking is already connected to the network.
33.      In that regard, Austria claims that the first alternative of point 41 of Article 2 of Directive 2019/944 (‘an electricity line linking an isolated generation site with an isolated customer’) covers only ‘islanded locations’. In the case of those locations, a generation site, which is not connected to the network, is linked to a customer, who is also not connected to that network, through a ‘direct line’, with the result that they are both isolated from other lines and connections to the network. By contrast, the second alternative is to be understood more broadly and covers all cases in which an electricity line links a producer or an electricity supply undertaking directly to its own premises, subsidiary or customer. The conjunction ‘and’, used twice in the second alternative of point 41 of Article 2, must be understood as meaning ‘or’.
34.      That view is convincing.
35.      It is true that the wording of the second alternative, according to which the electricity line in question links ‘a producer and an electricity supply undertaking to supply directly their own premises, subsidiaries and customers’, (6) is misleading. That is because that wording, used in most language versions, (7) suggests at first sight that the producer and the electricity supply undertaking are to be linked by the direct line and that the electricity supply undertaking would then connect its premises, its subsidiaries and its customers via another electricity line. That impression results from the use of the conjunction ‘and’ instead of the conjunction ‘or’.
36.      However, grammatical considerations militate against that interpretation. The use of the plural (‘their premises, subsidiaries and customers’) (8) clearly shows that what is meant is the premises, subsidiaries and customers of both producers and electricity supply undertakings. Consequently, in the same sentence, it seems logical to understand both the first ‘and’ (‘producer and electricity supply undertaking’) and the second ‘and’ (‘their own premises, subsidiaries and customers’) as meaning ‘or’. It is clear that, in the latter case, the conjunction ‘and’ must be understood as meaning ‘or’ (‘their own premises, subsidiaries [or] customers’), given that not all producers or electricity supply undertakings necessarily have (additional) premises, subsidiaries and customers. (9)
37.      That view is also supported by considerations relating to the scheme of the directive. That is because Article 7(1) of Directive 2019/944, which gives specific expression to the right to construct a direct line, provides, in point (a) thereof, that Member States are to take the measures necessary to enable ‘all producers and electricity supply undertakings … to supply their own premises, subsidiaries and customers through a direct line …’. Here, too, it is clear that both producers and electricity supply undertakings are to have the right to supply their own premises, subsidiaries and (meaning ‘or’) customers through a direct line.
38.      Lastly, teleological considerations also support the view that the second alternative of point 41 of Article 2 of Directive 2019/944 must be understood as meaning that both producers and electricity supply undertakings may supply their respective premises, subsidiaries and, above all, customers through a direct line. As I shall explain in point 61 et seq. below, the direct line instrument is intended to contribute to the liberalisation of the internal market in electricity and offer flexibility with a view to its ecological transformation as an alternative to
mere network supply. That is consistent with the fact that that instrument may be used not only by a producer in combination with an electricity supply undertaking, but also by a producer
alone.
39.      An electricity line linking an isolated generation site with an isolated customer (first alternative) is always also a line between a producer and a customer (one of the situations in the second alternative). It follows that a direct line within the meaning of the first alternative is necessarily also a direct line within the meaning of the second alternative, that is to say, the first alternative is a subset of the second.
40.      Compared with the second alternative, the first alternative appears to impose more stringent requirements, as it refers to the producer’s ‘isolated generation site’ and the ‘isolated customer’. However, as far as can be seen, that does affect the rights of producers, electricity supply undertakings
and customers guaranteed by Article 7 of Directive 2019/944 only indirectly under paragraph 4 thereof, according to which Member States may issue authorisations to construct a direct line subject to the refusal of system access.
41.      Consequently, in order to provide the referring court with useful answers for the resolution of the disputes in the two cases in the main proceedings, I will examine both Elektro bizness’s planned electricity line (Case C‑722/24) and the planned line for connecting Jelgavas autobusu parks (Case C‑756/24) against the yardstick of the – more broadly conceived – second alternative of point 41 of Article 2 of Directive 2019/944.
2.      Concept of direct line in the second alternative of point 41 of Article 2 of Directive 2019/944 as an alternative to the network
42.      Is the direct line, in its broader form in accordance with the second alternative, that is to say, an ‘electricity line linking a producer and [(meaning ‘or’)] an electricity supply undertaking to supply directly their own premises, subsidiaries and [(meaning ‘or’)] customers’, intended to be an alternative to the network? The answer to that question follows from (a) the wording, (b) the legislative history, (c) the context, (d) the scheme and (e) the objectives of Directive 2019/944.
(a)    Wording of the second alternative of point 41 of Article 2
43.      It follows from the definition of the concept of ‘direct line’ in the second alternative of point 41 of Article 2 of Directive 2019/944 that the customer must be supplied with energy without the intermediation of the network. A direct line is an electricity line intended ‘to supply directly’. According to the general meaning of the term, a direct supply is an ‘unmediated’ supply, ‘made without detours’. It is therefore logical to interpret ‘to supply directly’ as meaning supply without the intermediation of the network.
44.      On the other hand, there is nothing in the wording to suggest a narrow definition of the concept to the effect that an existing or possible connection to the network would rule out a direct line. For the purposes of that definition, it is irrelevant whether there is a connection to the network or whether such a connection would be possible.
45.      The fact that the legislature did not base its definition of that concept on the circumstances of the connection, but on those of the supply also supports the view that only the type of supply is the decisive feature of a direct line.
(b)    Legislative history of point 41 of Article 2
46.      Where there is a difference in meaning between an old and a more recent version of a provision of EU law, it may be presumed that the authors of the new provision intended to depart from the former criterion. (10) Point 12 of Article 2
of Directive 96/92 concerning common rules for the internal market in electricity, the first directive on the internal market for electricity, defined direct line as ‘an electricity line complementary to the interconnected system’. The essential feature of the direct line was therefore complementarity with the system. However, that may mean both that direct lines generally exist in addition to the network (for the supply of isolated islanded locations, where customers are not connected to the network) and that a direct line exists, in the case of a specific customer, in addition to that customer’s connection to the network.
47.      Point 15 of Article 2 of Directive 2003/54/EC, (11) which repealed Directive 96/92, then introduced a new definition of direct line, the content of which, in essence, (12) is identical to that of the current version in Directive 2019/944.
48.      The fact that the complementarity between the network and the direct line was abandoned in the current definition could be seen as an indication that the legislature sought a more restrictive definition, according to which the direct line could exist, for a specific customer, only in place of the network, but not alongside it.
49.      However, such a conclusion is not convincing. Directive 2003/54 gave a significantly broader definition of direct line. The legislature therefore endeavoured to take account of various situations in which direct lines may be used. It cannot therefore be inferred from the legislative history of that instrument that the concept of direct line was to be limited to situations in which there is no access to the network.
(c)    Comparison with the Internal Gas Market Directive
50.      Nor can a narrow interpretation of that concept be inferred from a comparison with Directive (EU) 2024/1788 (‘Internal Gas Market Directive’), (13) which also includes a definition of ‘direct line’ (or, in some language versions, of ‘direct pipeline’). It is similar to the version used in Directive 96/92 and defines direct line as ‘a natural gas pipeline complementary to the interconnected system’.
51.      It does not follow from that, however, that the legislature intended to define the direct line differently – that is to say, more narrowly – than the direct pipeline in the internal market for electricity. As recital 18 of Directive 2019/944 shows, the approaches of the two directives to regulatory treatment are so different, due to the various differences between electricity supply and gas supply, for example with regard to storage capability, infrastructure, generation structures, and factors affecting system stability, that no conclusions may be drawn from that different wording.
(d)    Scheme of Directive 2019/944
52.      According to the Commission, inter alia, considerations relating to the scheme of the directive show that a customer is not entitled to opt for a connection to a direct line when that customer has an
existing connection to the network or such a connection is possible at reasonable prices. That is because a direct line is merely an exception to supply through networks, which takes priority. Because of that exceptional nature, only electricity lines for which there is no possibility of connection to the network can be regarded as direct lines.
53.      However, the assessment that direct lines constitute an exception in the scheme of Directive 2019/944 is not convincing.
54.      If one reads the definition of the concept in point 41 of Article 2 in conjunction with the other provisions of that directive, it is rather the opposite impression that is created. Article 7(1) obliges Member States to take ‘the measures necessary’ to enable ‘all customers within their territory, individually or jointly, to be supplied through a direct line by producers and electricity supply undertakings’. (14) Furthermore, under Article 4, ‘all customers are free to purchase electricity from the supplier of their choice’. (15) Those provisions do not therefore provide any basis for concluding that there is any restriction requiring electricity to be supplied through networks.
55.      In that context, it is necessary, in my view, to distinguish the conditions under which an electricity line must be classified as a direct line from those under which such a line may be authorised. That distinction is also presumed by Article 7 of Directive 2019/944.
56.      On the one hand, Article 7(1) establishes the fundamental right of customers to be supplied through a direct line and, conversely, the right of producers and electricity supply undertakings to supply their customers through a direct line. On the other hand, the subsequent paragraphs of Article 7 provide that Member States may make the authorisation of direct lines subject to compliance with objective and non-discriminatory criteria. However, if only lines for which
supply is not possible other than through a direct line could be regarded as direct lines, Article 7(2) to (5) would have only a very limited scope. In practice, Member States could then lay down the criteria only for cases where customers cannot be connected at all, either through a direct line or through the network.
57.      If the concept of direct line were to be interpreted narrowly, Article 7(4) in particular would not have any scope. Under that provision, Member States may limit the authorisation to construct a direct line to cases where system users are refused access to the systems in accordance with Article 6(2) because transmission and distribution system operators lack the necessary capacity or where a dispute settlement procedure has been opened in that regard.
58.      The same applies to Article 7(5). Under that provision, Member States may refuse to authorise a direct line if the granting of such an authorisation would obstruct the application of the provisions on public service obligations in Article 9 of the directive. That provision is likely aimed in particular at situations in which a direct line would, without justification, allow an economic operator to avoid paying network charges. That is also supported by the fact that, in accordance with Article 9(5), Member States may decide not to apply, inter alia, Article 7
in so far as its application would obstruct, in law or in fact, the performance of the obligations imposed on electricity undertakings in the general economic interest.
59.      Nor does the judgment in ENGIE Deutschland preclude the conclusion that a direct line is an alternative to supply through the network. It is true that, in that judgment, the Court emphasised the essential role assigned by Directive 2019/944 to system operators in completing the integration of national markets. (16) However, that decision concerned a situation in which the national legislature had created a new category, not provided for in the directive, which was capable of undermining the scheme of that directive. (17) The present case, in contrast, concerns direct lines, a category which is itself provided for in the directive.
60.      Consequently, considerations relating to the scheme of the directive militate, in my view, in favour of a broad understanding of the concept of direct line, according to which the only requirement is the absence of network intermediation.
(e)    The objectives of the directive
61.      That conclusion follows also from an overall assessment of the objectives pursued by Directive 2019/944. (18)
(1)    Liberalisation of the internal market for electricity
62.      First of all, the fact that Directive 2019/944 aims at comprehensive liberalisation of the internal market in electricity militates in favour of a broad understanding of the concept of direct line. (19)
63.      Before liberalisation, there were monopolies of electricity supply undertakings in many Member States. Since the adoption of Directive 96/92, (20) a common market for the supply of electricity has gradually opened up. The aim thereof is to achieve not only competitive prices and high standards of energy supply and grid stability, but also sustainability objectives. That is reflected in recital 2 of Directive 2019/944 currently in force. (21)
64.      Direct lines are an integral part of a fully open internal market for electricity. If the requirements for classifying lines as direct lines are less stringent, a larger number of customers can benefit from supply through direct lines. A broad understanding of the concept of direct line thus promotes the further liberalisation and integration of that market.
65.      According to recital 35 of Directive 96/92, ‘provision should be made for authorising the construction and use of direct lines.’ It is true that in the current version of the directive, the recitals no longer contain such an explicit reference to the role of direct lines in the aim of full liberalisation.
66.      However, the important role played by direct lines in the energy supply is clear from Article 7(1) of Directive 2019/944, even in the absence of an explicit mention in the recitals. Under that provision, Member States are to take the measures necessary to enable all producers and electricity supply undertakings to supply,
inter alia, their customers through direct lines and to enable all customers to be supplied through direct lines. It is true that the subsequent paragraphs of Article 7 give Member States the possibility to limit the authorisation of direct lines in specific circumstances. That confirms, however, that the concept of direct line in point 41 of Article 2 of Directive 2019/944 must in principle be interpreted broadly and that the installation of direct lines may at most be restricted by the Member States.
(2)    Objective of ecological transformation
67.      In accordance with the second paragraph of Article 1 thereof, Directive 2019/944 also aims to ensure a smooth transition towards a sustainable low-carbon energy system, using the advantages of an integrated market. Sustainability is also mentioned, inter alia, in recital 2, as an aim of that directive.
68.      Although direct lines are not limited to the supply of renewable energy, they can promote the aim of sustainability.
69.      That is because direct lines allow customers to use exclusively ‘green’ electricity, without having to take the detour of the public network in which electricity does not yet come entirely from renewable energy sources. A case in point is Jelgavas autobusu parks in Case C‑756/24, which wishes to obtain, by means of the direct line, electricity from a biomass power plant.
(3)    Conflict with the objective of ensuring affordable energy prices
70.      According to the second paragraph of Article 1 thereof, however, Directive 2019/944 also aims to ensure affordable, transparent energy prices and costs for consumers and a high degree of security of supply, using the advantages of an integrated market.
71.      According to the Commission, the concept of direct line should be interpreted restrictively, since electricity supplied through direct lines makes no contribution to the costs of the system as a whole, whereas customers supplied by the network must pay general network charges. The Commission thus draws attention to the valid concern that energy prices could increase, especially for household customers and small businesses, if customers (particularly large industrial customers) can be supplied by direct lines even when there is an existing connection to the network or such a connection is possible. That is because household customers and small businesses consume less electricity, making it unlikely to be worthwhile for producers and electricity supply undertakings to construct a direct line for those customers. At the same time, the costs of maintaining and operating the network for the network’s remaining customers increase when large energy customers leave the network and are supplied by direct lines, without paying network charges.
72.      Even if I share those concerns on the part of the Commission, I see no reason to infer that the legislature intended to address that problem by adopting a narrow understanding of the concept of direct line.
73.      As I have already explained in point 55 et seq., the fact that a line is classified as a direct line does not necessarily mean that that line will be authorised. On the contrary, Article 7(2) to (5) of Directive 2019/944 gives Member States the possibility to refuse authorisation to construct a direct line, provided they do so on the basis of objective and non-discriminatory criteria and take account of the assessments under
Article 7(1). Within the margin of discretion available to the Member States, the potential negative effects on energy prices for household customers and other small final customers may be taken into account in the authorisation decision (see specifically, as already explained in point 58 above, Article 7(5) and Article 9(5)). (22) In addition, according to
recital 58 of Directive 2019/944, Member States, as a general rule, should take the necessary measures to protect vulnerable and energy poor customers.
74.      It is for the referring court to ascertain whether, in the present case, the refusal to grant an authorisation to construct the lines at issue is due to the fear of specific negative effects and whether it is based on objective and non-discriminatory criteria. (23)
3.      Interim conclusion
75.      On the basis of the foregoing considerations, I conclude that the definition of a direct line does not depend on whether there is a connection to the network or whether such a connection is technically possible or economically reasonable. The definition of a direct line depends solely on whether the customer is supplied by the producer (24) without the intermediation of the network.
B.      Complete disconnection from the system (second question in Case C‑756/24)
76.      By its second question in Case C‑756/24, the referring court asks whether a customer previously connected to the network may be connected to a producer through a direct line even where, after construction of the planned line, the customer wishes to retain the existing connection to the network as a back-up connection.
77.      If, as stated above, the essential feature of a direct line is that the customer is supplied by the producer without the intermediation of the network, it cannot be decisive whether there is a back-up connection to the network or, as the case may be, whether that connection is used in parallel with the direct line.
78.      That view is confirmed by Article 4 of Directive 2019/944, which guarantees the customer the free choice of supplier. According to that provision, Member States are to ensure that customers are free to have several contracts for the supply of energy at the same time. Article 7(3) further specifies that that may also be a direct line and a connection to the network at the same time.
79.      As Austria submits, the (controlled) possibility of exchanging electricity between the direct line and the network is important precisely in view of the active role of customers,
currently provided for, as decentralised actors in the context of the use of renewable sources of energy, which is often complementary to the grid supply. (25)
80.      There is therefore no need for the customer to be fully disconnected from the system or for decoupling to take place (26) in order for that customer to be supplied through a direct line.
C.      Connection of multiple customers to the same line (second question in Case C‑722/24)
81.      By the second part of its second question in Case C‑722/24, the referring court seeks to ascertain whether multiple customers may be connected via the same direct line or whether a direct line may only be used to supply a single
customer.
82.      I am of the view that a line to which multiple customers are connected may also be classified as a direct line. In contrast to the first alternative of point 41 of Article 2 of Directive 2019/944, the legislature did not limit the second alternative to isolated customers. The linguistic difference between the two alternatives clearly shows that, in the second alternative, no further requirements are imposed on the customer.
83.      Furthermore, the objective of Directive 2019/944 referred to in point 79 above, that is to say, to give customers a decentralised and complementary role in the ecological transformation of the electricity market, militates in favour of the interpretation that multiple customers may be supplied via a direct line.
84.      Similarly, the fact that not only are other customers already connected to the existing line to which Elektro bizness wishes to connect its customer, but also that electricity is transported to the grid via that line, does not preclude the connection between Elektro bizness and the customer concerned from being classified as a direct line. In that regard, it is sufficient that Elektro bizness (also) supplies that customer directly (that is to say, without the intermediation of the network) and that technical measures prevent an uncontrolled flow of electricity from the network to that customer.
D.      The concept of ‘generation site’ (first question in Case C‑722/24)
85.      By its first question in Case C‑722/24, the referring court also asks whether an electricity line owned by the producer, connected to a power plant that serves to transmit generated electricity and extending beyond the boundaries of the site of the power plant, (27) is covered by the definition of an isolated generation site within the meaning of the first alternative of point 41 of Article 2 of Directive 2019/944. In that regard, it should be noted that, contrary to what is suggested
by the wording of the question referred, the referring court, by using the phrase ‘to transmit generated electricity’, does not limit its question to ‘transmission’ of electricity within the meaning of Article 2(34) of that directive, but refers, in a non-technical manner, to all forms of transporting electricity.
86.      Furthermore, it is not necessary to rule on whether the electricity line is part of an isolated generation site (first alternative) or whether it is ascribed to the producer’s site (second alternative). As I have already stated in point 39 above, the distinction between the two alternatives referred to in point 41 of Article 2 is not relevant in that regard.
87.      Nor, in essence, does the referring court seek to ascertain in what case the electricity line at issue in Case C‑722/24 should fall within the scope of point 41 of Article 2, which is ambiguously worded. Rather, it seeks to answer the general question whether an electricity line which links a customer not to the site of the producer but to an existing line leading to that site may be classified as a direct line.
88.      In my view, it is not the geographical delimitation of the site of the producer which must be taken into account in that regard, but the functional connection between the customer and the producer through the direct line. In other words, an electricity line is a direct line where it serves the direct supply to the customer by the producer, whether through the connection of the customer to the site of the producer or by a line linked to that site, as long as the general electricity network is not part of the connection.
E.      The criterion of the isolated customer and isolated generation site (first and second questions in Case C‑722/24 and third question in Case C‑756/24)
89.      As I stated in point 39 above, the two electricity lines whose authorisation is in dispute in the two cases in the main proceedings come, in any event, within the scope of the second alternative of point 41 of Article 2 of Directive 2019/944.
90.      By contrast, the electricity lines at issue are not covered by the first alternative of that provision, since, in both cases in the main proceedings, network connections exist.
91.      Although the language versions of Directive 2019/944
are not entirely identical as regards the location of the generation site and the customer in the first alternative of point 41 of Article 2, most of them are based on the separate and isolated nature of that location. Some language versions, including the English-, French- and Latvian-language versions, (28) emphasise the isolated, separate or detached location of the customer or generation site by using the terms ‘isolated customer’, ‘client isolé’ or ‘izolēts lietotājs’. In other language versions, such as the Estonian-, Finnish- and Polish-language versions, the similar term ‘separate’ is used (‘eraldiasetseva tarbijaga’, ‘erilliseen asiakkaaseen’ and ‘wydzielonym odbiorcą’, respectively). The terms ‘einzelner Kunden’ and ‘enskild kund’ used in the German- and Swedish-language versions, respectively, may also be understood as meaning ‘by itself’ or ‘isolated’.
92.      It therefore follows from an overall reading that the first alternative of point 41 of Article 2 of Directive 2019/944, as Austria maintains, covers the situation of so-called islanded locations which are not connected to the grid. It follows that, subject to verification by the referring court, the electricity lines at issue in the main proceedings do not come within the scope of that alternative because of the existing connections to the network.
V.      Conclusion
93.      On the basis of the foregoing considerations, I propose that the Court of Justice answer the questions referred for a preliminary ruling by the Augstākā tiesa (Senāts) (Supreme Court (Senate)) as follows:
Point 41 of Article 2 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, read in conjunction with Article 7 thereof,
must be interpreted as follows:
–        an electricity line may be regarded as a direct line where it is used for direct supply to the customer;
–        the only relevant question for the purpose of defining a direct line is whether the customer is supplied by the producer or the
electricity supply undertaking without the intermediation of the network;
–        a direct line may be a line intended to connect a producer connected to the network to a customer connected to the network, provided that the customer is supplied directly by the producer through that direct line without the intermediation of the network;
–        the definition of a direct line may also cover an electricity line used for the supply of electricity to multiple customers.
1      Original language: German.
2      Directive of the European Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity (OJ 1997 L 27, p. 20).
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      The repetition in the German-language version ‘Elektrizitätsversorgungsunternehmen Versorger’ appears to be a clerical error.
5      In Case C‑722/24, the two questions referred for a preliminary ruling concern the interpretation of the concept of ‘isolated generation site’ or ‘generation site’, which can be found only in the first alternative. The third question referred for a preliminary ruling in Case C‑756/24 asks about the interpretation of the concept of ‘isolated customer’, which can be found also only in the first alternative.
6      Emphasis added.
7      The Czech-language version, for example, uses the word ‘nebo’ (‘or’) for the second conjunction.
8      Emphasis added.
9      On that point, the Latvian Law on the electricity market, in point 29 of Article 1, departs from the wording of the directive by defining the second alternative as an electricity line ‘linking an isolated electricity producer and a trader which supplies directly to premises in its ownership or possession, to affiliated undertakings and to its own customers’. Nevertheless, it should be possible to interpret that provision in accordance with the directive as meaning that a producer, too, may supply its premises, affiliated undertakings and customers directly. That follows in particular from Article 26 of the Law on the electricity market, according to which ‘the producer … shall be entitled to supply electricity to customers or to its own premises through a direct line connection’.
10      That was the view also taken in the judgment of 1 June 1961, Simon v Court of Justice (15/60, EU:C:1961:11, p. 124). See also Opinion of Advocate General Trstenjak in Quelle (C‑404/06, EU:C:2007:682, point 58).
11      Directive of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC (OJ 2003 L 176, p. 37).
12      According to point 15 of Article 2 of Directive 2003/54, a direct line was ‘either an electricity line linking an isolated production site with an isolated customer or an electricity line linking an electricity producer and an electricity supply undertaking to supply directly their own premises, subsidiaries and eligible customers’.
13      Directive of the European Parliament and of the Council of 13 June 2024 on common rules for the internal markets for renewable gas, natural gas and hydrogen, amending Directive (EU) 2023/1791 and repealing Directive 2009/73/EC (OJ L, 2024/1788).
14      Emphasis added.
15      Emphasis added.
16      Judgment of 28 November 2024, ENGIE Deutschland (C‑293/23, EU:C:2024:992, paragraph 77).
17      By creating the category of ‘self-consumption facilities’ not provided for by the directive, the German legislature at the same time defined the concept of ‘distribution system’ more restrictively than provided for by the directive. Operators of self-consumption facilities were not subject to the obligations of distribution system operators, which was why there was reason to fear that the assessments under the directive would be circumvented.
18      The Court has consistently held that where a provision of EU law is open to several interpretations, preference must be given to the interpretation which ensures that the provision retains its effectiveness; see judgments of 22 September 1988, Land de Sarre and Others
(187/87, EU:C:1988:439, paragraph 19), and of 24 February 2000, Commission v
France
(C‑434/97, EU:C:2000:98, paragraph 21).
19      I have previously argued in this spirit in my Opinion in Sabatauskas and Others (C‑239/07, EU:C:2008:344, point 22).
20      Versions previously in force were Directive
2003/54, referred to above, and Directive 2009/72/EC 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).
21      According to that recital, the internal market for electricity aims, ‘by organising competitive electricity markets across country borders, to deliver real choice for all Union final customers, be they citizens or businesses, new business opportunities, competitive prices, efficient investment signals and higher standards of service, and to contribute to security of supply and sustainability.’ See also recital 4 of Directive 96/92, as well as recitals 3 and 5 of Directive 2009/72.
22      See, to that effect, my Opinion in Sabatauskas and Others (C‑239/07, EU:C:2008:344, point 43). See also judgment of 9 October 2008, Sabatauskas and Others (C‑239/07, EU:C:2008:551, paragraph 48), and Opinion of Advocate General Pitruzzella in Elektrorazpredelenie Yug (C‑31/18, EU:C:2019:421, point 43).
23      Judgment of 9 October 2008, Sabatauskas and Others
(C‑239/07, EU:C:2008:551, paragraph 48); Opinion of Advocate General Pitruzzella in Elektrorazpredelenie Yug (C‑31/18, EU:C:2019:421, point 43).
24      The same applies to the other situations covered by point 41 of Article 2.
25      See, for example, Article 15 (‘Active customers’) or Article 16 (‘Citizen energy communities’) as well as recitals 42 to 47 of Directive 2019/944.
26      Jelgavas autobusu parks made a statement to the Regulator to the effect that decoupling from the network would be ensured as long as there was a connection to the planned direct line.
27      The referring court wishes to define the site on the basis of its postal address.
28      Similar terms are used, for example, in the Danish-language (‘isoleret kunde’), Italian-language (‘cliente isolato’), and Portuguese-language (‘cliente isolado’) versions.