2004/920/EC: Commission Decision of 20 December 2004 on a derogation from certain provisions of Directive 2003/54/EC of the European Parliament and of the Council concerning the archipelago of the Azores (notified under document number C(2004) 4880)
Date: 2004-12-20
Institutions: European Commission
Subjects: Azores, derogation from EU law, electrical energy, energy distribution, energy production, energy supply, energy transport, single market

30.12.2004

EN

Official Journal of the European Union

L 389/31

COMMISSION

COMMISSION DECISION

of 20 December 2004

on a derogation from certain provisions of Directive 2003/54/EC of the European Parliament and of
the Council concerning the archipelago of the Azores

(notified under document number C(2004) 4880)

(Only the Portuguese text is authentic)

(2004/920/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(4)

Having regard to the Treaty
Community,

establishing the European

the European
Having regard to Directive 2003/54/EC of
Parliament and of the Council of 26 June 2003 concerning
common rules
in electricity and
the internal market
repealing Directive 96/92/EC) (1), and in particular Article
26(1) thereof,

for

(5)

Whereas:

(1)

(2)

(3)

into force,

Article 26(1) of Directive 2003/54/EC provides that
after
Member States which can demonstrate,
the
there are
Directive has been brought
substantial problems for the operation of
their small
isolated systems, may apply for derogations from the
relevant provisions of Chapters IV, V, VI, VII, as well
as Chapter III, in the case of micro isolated systems, as
far as refurbishing, upgrading and expansion of existing
capacity are concerned, which may be granted to them
by the Commission.

that

Portugal submitted to the Commission on 29 June 2004
an application for derogation for an indefinite period of
time from the provisions of Chapters III, IV, V, VI, VII
under Article 26(1) of Directive 2003/54/EC concerning
the archipelago of the Azores.

the Azores qualifies as a ‘micro
The archipelago of
isolated system’ as defined in Article 2(27) of Directive
2003/54/EC.

The archipelago of the Azores’ peculiar characteristics of
remoteness,
topography
insularity, small size, difficult
and climate, have been acknowledged in Article 299(2)
of the EC Treaty.

the presence of

The documents annexed to the Portuguese application
give sufficient evidence that the objective of a compe-
titive market in electricity is impossible or impractical to
achieve given the very small level of production and the
fact that the islands are also isolated from one another.
In such a very small system, it is often not possible to
have more than one generating facility per island, which
makes
competing generators very
unlikely. The size of the market will hardly stimulate
the application for authorisations or bids for tenders.
Furthermore,
there is no high voltage transmission
system, and without competition in production the
Directive’s requirements
regarding the unbundling of
distribution systems lose their justification. The same
considerations are valid concerning third party access
to the system.

(6)

The Commission, having examined the justification of
Portugal’s request,
is satisfied that the derogation and
the conditions for its application will not prejudice the
achievement of the objectives of the Directive.

(7)

However, possible technological developments in the
medium and long term that may bring about substantial
changes need to be taken into account.

(1) OJ L 176, 15.7.2003, p. 37. Directive as last amended by Council

Directive 2004/85/EC (OJ L 236, 7.7.2004, p. 10).

(8)

The Commission has consulted all Member States as
prescribed in Article 26(1) of Directive 2003/54/EC,

L 389/32

EN

Official Journal of the European Union

30.12.2004

HAS ADOPTED THIS DECISION:

Article 1

A derogation from the relevant provisions of Chapters IV, V, VI,
VII, as well as Chapter III, as far as refurbishing, upgrading and
expansion of existing capacity are concerned, is granted to the
Portuguese Republic for the nine isles of the archipelago of the
Azores.

Article 2

electricity sector of

The Portuguese energy regulator shall monitor the evolution of
to the
the
Commission any substantial change therein that may require
the review of the granted derogation. A first report shall be
submitted four years after the date of
this decision and a
second one nine years after that date.

the Azores

and report

Article 3

This derogation is valid for an indefinite period of time. It can
be reviewed by the Commission if substantial changes occur in
the electricity sector of the Azores.

Article 4

This Decision is addressed to the Portuguese Republic.

Done at Brussels, 20 December 2004.

For the Commission

Andris PIEBALGS
Member of the Commission