![Sample our Law journals, sign in here to start your FREE access for 14 days]({"type":"image" , "src" : "/sda/5942/TOC-Subject-Sample-2021-Law.jpg"})
Abstract
Integrating increasing shares of renewable electricity generation within the European Union electricity market requires that the electricity system is capable of withstanding intermittency. One of the principal means of achieving this is by activating the demand side in such a way as to enable a more flexible balance between demand and supply. In practice, initiatives and technological solutions to activate the demand side are well exemplified by smart meters, which collect and communicate information on electricity consumption. The existing legal framework and the 2016 legislative proposals for the electricity sector recognise that significant opportunities exist to utilise consumer data collected via smart metering and that these are of fundamental importance in creating more flexibility in the electricity market. However, the extensive utilisation of this data also raises questions concerning data privacy and data protection. This article examines the interface between data protection and energy law in the EU. The focus of the legal analysis is on the General Data Protection Regulation (GDPR) and the proposed rules contained in the Winter Package, which are systematically analysed to determine the conditions under which smart metering data can be utilised to further the objectives of EU energy law. The underlying argument of the article is that there is an apparent conflict between the objectives embedded in EU data protection law and those embedded in EU energy law. EU energy law addresses smart metering and the resulting data as means of achieving a more sustainable electricity system that benefits the final consumer. Conversely, EU data protection rules focus on the protection of a fundamental right and perceive the collection and processing of data as a risk to the very same consumer that is considered to benefit from smart metering data under EU energy law. This article demonstrates how this apparent conflict can be reconciled through interpretation of the relevant rules of EU law.
Notes
1 Commission, ‘Proposal for a Directive of the European Parliament and of the Council on common rules for the internal market in electricity (recast)’ COM(2016) 864 final/2 – (2016) 380 (COD) (hereinafter the ‘Recast Electricity Directive’), Art 2(18). Also see changes in European Parliament legislative resolution of 26 March 2019 on the proposal for a directive of the European Parliament and of the Council on common rules for the internal market in electricity (recast) (COM(2016)864 – C8-0495/2016 – 2016/380(COD)).
2 See, eg, 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 [2009] OJ L211/55 (hereinafter the ‘Electricity Directive’), Art 3(11); and Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC [2012] OJ L315/1 (hereinafter the ‘Energy Efficiency Directive’), Arts 9, 12 and 15.
3 ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank: Clean Energy For All Europeans’ COM(2016) 860 final; the Recast Electricity Directive and Commission, ‘Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast)’ COM(2016) 861 final/2 – (2016) 379 (COD) (hereinafter the ‘Recast Electricity Regulation’). Also see changes in European Parliament legislative resolution of 26 March 2019 on the proposal for a regulation of the European Parliament and of the Council on the internal market for electricity (recast) (COM(2016)861 – C8-0492/2016 – (2016)379(COD)).
4 Luis Boscán and Rahmat Poudineh, Flexibility-Enabling Contracts in Electricity Markets (Oxford Institute for Energy Studies 2016) www.oxfordenergy.org/wpcms/wp-content/uploads/2016/07/Flexibility-Enabling-Contracts-in-Electricity-Markets.pdf accessed 6 May 2019.
5 Kaisa Huhta, Capacity Mechanisms in EU Law: An Analysis of State-Driven Safeguards for Generation Adequacy (PhD thesis, University of Eastern Finland 2019) 32.
6 Not only in the EU, but also elsewhere. See Sonia McNeil, ‘Privacy and the Modern Grid’ (2011) 25 Harv J Law Technol 199.
7 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC [2016] OJ L119/1 (hereinafter the ‘General Data Protection Regulation’ or ‘GDPR’).
8 Changes have been followed until 19 May 2019.
9 Consolidated version of the Treaty on the Functioning of the European Union [2012] OJ C326/47 (hereinafter the TFEU), Art 288.
10 C–144/04 Werner Mangold v Rüdiger Helm [2005] ECR I–9981, para 72 and Elspeth Berry, Matthew Homewood and Barbara Bogusz, Complete EU Law: Text, Cases, and Materials (Oxford University Press 2017) 89.
11 On the Winter Package, see, among others, Giuseppe Bellantuono and Kaisa Huhta, Oil, Gas and Energy Law Special Issue on ‘The Energy Union in the Next Decade’ (2019) www.ogel.org accessed 8 May 2019. On the GDPR, see, among others, Peter Carey (ed), Data Protection: A Practical Guide to UK and EU Law (5th edn, Oxford University Press 2018); Paul Voigt and Axel von dem Bussche, The EU General Data Protection Regulation (GDPR): A Practical Guide (Springer 2017); P Hert and V Papakonstantinou, ‘The New General Data Protection Regulation: Still a Sound System for the Protection of Individuals?’ (2016) 32 Computer Law & Security Review 179; S Gutwirth and others (eds), European Data Protection: Coming of Age (Springer 2012); Christina Tikkinen-Piri, Anna Rohunen and Jouni Markkula, ‘EU General Data Protection Regulation: Changes and Implications for Personal Data Collecting Companies’ (2018) 34 Computer Law & Security Review 134; Michelle Goddard, ‘The EU General Data Protection Regulation (GDPR): European Regulation That Has a Global Impact’ (2017) 59 International Journal of Market Research 703.
12 See, eg, E McKenna, I Richardson and M Thomson, ‘Smart Meter Data: Balancing Consumer Privacy Concerns with Legitimate Applications’ (2012) 41 Energy Policy 807; C Cuijpers and B-J Koops, ‘Smart Metering and Privacy in Europe: Lessons from the Dutch Case’ in S Gutwirth and others (eds), European Data Protection: Coming of Age (Springer 2012) 269–93; R Knyrim and G Trieb, ‘Smart Metering under EU Data Protection Law’ (2011) 1 IDPL 121; Sarah J Darby, ‘Metering: EU Policy and Implications for Fuel Poor Households’ (2012) 49 Energy Policy 98; R Hoenkamp, G Huitema and A de Moor-van Vugt, ‘The Neglected Consumer: The Case of the Smart Meter Rollout in the Netherlands’ (2011) 2(4) RELP 269; Abbe Brown and Rónán Kennedy, ‘Regulating Intersectional Activity: Privacy and Energy Efficiency, Laws and Technology’ (2017) 31 Int Rev Law Comput Tech 340.
13 Charter of Fundamental Rights of the European Union [2012] OJ C326/391 (the Charter of Fundamental Rights), Art 8; and TFEU, Art 16(1).
14 For more on TFEU, Art 194, see Leigh Hancher and Francesco Maria Salerno, ‘Energy Policy after Lisbon’ in Andrea Biondi, Piet Eeckhout and Stefanie Ripley (eds), EU Law after Lisbon (Oxford University Press 2012) 367–402 and Bram Delvaux, EU Law and the Development of a Sustainable, Competitive and Secure Energy Policy: Opportunities and Shortcomings (Intersentia 2013) 328–68.
15 These targets include a 20 per cent cut in greenhouse gas emissions from 1990 levels, 20 per cent of EU energy from renewables, 20 per cent improvement in energy efficiency and a ten per cent improvement in energy savings. See TFEU, Art 194 for the objectives of EU energy law.
16 Capacity margins in the electricity market have gradually decreased since the 1990s, when European electricity markets were first liberalised. See Ignacio Perez-Arriaga and Carlos Batlle, ‘Impacts of Intermittent Renewables on Electricity Generation System Operation’ (2012) 1(2) EEEP 3; and David Newbery, ‘Missing Money and Missing Markets: Reliability, Capacity Auctions and Interconnectors’ (2016) 94 Energy Policy 401.
17 Recast Electricity Directive, Recital 33. For an analysis, see Kaisa Huhta, ‘Unleashing Consumer Potential in the Energy Transition: A Reflection of the Transforming Role of the EU Consumer’ (2019) Oil, Gas & Energy Law www.ogel.org accessed 8 May 2019.
18 Commission, ‘Proposal for a Directive of the European Parliament and of the Council on common rules for the internal market in electricity (recast)’ COM(2016) 864 final/2 – (2016) 380 (COD), 4, 6.
19 Saskia Lavrijssen and Arturo Carrillo Parra, ‘Radical Prosumer Innovations in the Electricity Sector and the Impact on Prosumer Regulation’ (2017) 9(7) Sustainability 1.
20 Ibid.
21 Eg, Wenpeng Luan and others, ‘Smart Meter Data Analytics for Distribution Network Connectivity Verification’ (2015) 6 IEEE Transactions on Smart Grid 1964; Damminda Alahakoon and Xinghuo Yu, ‘Advanced Analytics for Harnessing the Power of Smart Meter Big Data’ (2013) IWIES 40; and more generally on the challenges of big data Faye Fangfei Wang, ‘Big Data Regulatory Debates in the EU’ (2017) 28 EBLR 593; Henry Pearce, ‘Systems Thinking, Big Data and Data Protection Law’ (2016) 18 EJLR 478; Ugo Pagallo, ‘The Legal Challenges of Big Data: Putting Secondary Rules First in the Field of EU Data Protection’ (2017) 3 EDPL 36.
22 Commission, ‘Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast)’ COM(2016) 861 final/2 – 2016/379, 15.
23 To facilitate competition in the electricity markets, the legal framework for electricity aims to make supplier switching as easy as possible. Further provisions to this end are proposed in the Recast Electricity Directive. See, in particular, its Art 12.
24 Charter of Fundamental Rights, Arts 7 and 8 and TFEU, Art 16(1). For an overview of the right to data protection, see Gloria González Fuster, The Emergence of Personal Data Protection as a Fundamental Right of the EU (Springer 2014).
25 GDPR, Art 4(1).
26 For a thorough analysis of the privacy concerns associated with smart metering, see E McKenna, I Richardson and M Thomson, ‘Smart Meter Data: Balancing Consumer Privacy Concerns with Legitimate Applications’ (2012) 41 Energy Policy 807.
27 Ibid 809.
28 Profiling is defined in GDPR, Art 4(4) as ‘any form of automated processing of personal data consisting of the use of personal data to evaluate certain personal aspects relating to a natural person, in particular to analyse or predict aspects concerning that natural person's performance at work, economic situation, health, personal preferences, interests, reliability, behaviour, location or movements’.
29 C Cuijpers and B-J Koops, ‘Smart Metering and Privacy in Europe: Lessons from the Dutch Case’ in S Gutwirth and others (eds), European Data Protection: Coming of Age (Springer 2012) 269–93; and Maria Helen Murphy, ‘The Introduction of Smart Meters in Ireland: Privacy Implications and the Role of Privacy by Design’ (2015) 38(1) DULJ 191.
30 C Cuijpers and B-J Koops, ‘Smart Metering and Privacy in Europe: Lessons from the Dutch Case’ in S Gutwirth and others (eds), European Data Protection: Coming of Age (Springer 2012) 269–93. Critical voices have also made themselves heard in legal literature. See Tal Z. Zarsky, ‘Incompatible: The GDPR in the Age of Big Data’ (2017) 47 Seton Hall Law Rev 995; Sandra Wachter and Brent Mittelstadt, ‘A Right to Reasonable Inferences: Re-Thinking Data Protection Law in the Age of Big Data and AI’ (2019) CBLR 4 (forthcoming).
31 GDPR, Art 1.
32 Ibid.
33 GDPR, Recital 4.
34 Ibid.
35 See, eg, Electricity Directive, Arts 3(11) and 25(7) and Energy Efficiency Directive, Arts 9, 12 and 15.
36 Electricity Directive, Annex 1.
37 Ibid.
38 Recast Electricity Directive, Art 19(1).
39 The most important of these are Arts 19 to 24.
40 Recast Electricity Regulation, Arts 50 and 51.
41 Kaisa Huhta, ‘Unleashing Consumer Potential in the Energy Transition: A Reflection of the Transforming Role of the EU Consumer’ (2019) Oil, Gas & Energy Law www.ogel.org accessed 8 May 2019.
42 Annex III of the Recast Electricity Directive establishes a common methodology for conducting such an assessment.
43 Recast Electricity Directive, Art 19(5).
44 Recast Electricity Directive, Art 21.
45 See Institute of Communication & Computer Systems of the National Technical University of Athens, ‘Study on Cost Benefit Analysis of Smart Metering Systems in Member States’ (25 June 2015) https://ec.europa.eu/energy/sites/ener/files/documents/AF%20Mercados%20NTUA%20CBA%20Final%20Report%20June%2015.pdf accessed 8 May 2019.
46 Recast Electricity Directive, Annex III. Eg, the UK decided that every home in Great Britain should have a new smart meter by 2020. See ‘Smart Meters Act 2018’ (House of Commons Library brief, 17 August 2018) https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8120 accessed 8 May 2019.
47 Recast Electricity Directive, Art 20(a).
48 Recast Electricity Directive, Arts 20(a) and 23(4).
49 See, eg, Recast Electricity Directive, Arts 20 and 23.
50 For general discussion of this issue, see M Brkan, ‘Data Protection and Conflict-of-Laws: A Challenging Relationship’ (2016) 2 EDPL 324.
51 Recast Electricity Directive, Art 24(1). Saskia Lavrijssen and Arturo Carrillo Parra, ‘Radical Prosumer Innovations in the Electricity Sector and the Impact on Prosumer Regulation’ (2017) 9(7) Sustainability 1, 10.
52 Recast Electricity Directive, Art 24(1).
53 Recast Electricity Directive, Art 23(1).
54 Recast Electricity Directive, Arts 23 and 34.
55 Recast Electricity Directive, Art 23.
56 Commission, ‘Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast)’ COM(2016) 861 final/2 – 2016(379), 15.
57 Recast Electricity Directive, Art 23. Generally on the design of data aggregation, see An Braeken Pardeep Kumar and Andrew Martin, ‘Efficient and Privacy-Preserving Data Aggregation and Dynamic Billing in Smart Grid Metering Networks’ (2018) 11(8) Energies 2085; and Vitaly Ford, Ambareen Siraj and Mohammad Ashiqur Rahman, ‘Secure and Efficient Protection of Consumer Privacy in Advanced Metering Infrastructure Supporting Fine-Grained Data Analysis’ (2017) 83 Journal of Computer and System Sciences 84.
58 Recast Electricity Directive, Arts 23, 24 and 34.
59 Recast Electricity Directive, Art 23(1) and (2).
60 Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data [1995] OJ L281/31.
61 ‘Communication from the Commission to the European Parliament and the Council: Stronger protection, new opportunities – Commission guidance on the direct application of the General Data Protection Regulation as of 25 May 2018’ COM(2018) 43 final.
62 GDPR, Art 3 states that the Regulation ‘applies to the processing of personal data in the context of the activities of an establishment of a controller or a processor in the Union, regardless of whether the processing takes place in the Union or not’.
63 GDPR, Art 2(1); Paul Voigt and Axel von dem Bussche, The EU General Data Protection Regulation (GDPR): A Practical Guide (Springer 2017) 9–30.
64 GDPR, Art 4. On what constitutes ‘personal’ in the context of the GDPR, see GDPR, Recital 26.
65 GDPR, Art 4.
66 Ibid.
67 GDPR, Arts 13, 14, 18, 20, 21 and 15. In legal literature, see Peter Voigt and Axel von dem Bussche, The EU General Data Protection Regulation (GDPR): A Practical Guide (Springer 2017) 141–87.
68 Saskia Lavrijssen and Arturo Carrillo Parra, ‘Radical Prosumer Innovations in the Electricity Sector and the Impact on Prosumer Regulation’ (2017) 9(7) Sustainability 1, 10.
69 GDPR, Art 4(7).
70 Ibid.
71 R Knyrim and G Trieb, ‘Smart Metering under EU Data Protection Law’ (2011) 1 IDPL 121, 124.
72 Recast Electricity Directive, Art 20.
73 GDPR, Art 4(8).
74 The obligations addressed to controllers remain with them irrespective of whether management duties have been delegated to a service provider. However, the cost of such obligations may be further transferred to the processor by contractual means.
75 GDPR, Art 4(10).
76 GDPR, Art 4(9).
77 GDPR, Art 5(2).
78 GDPR, Art 5(1)(a).
79 GDPR, Art 5(1)(b).
80 GDPR, Art 5(1)(f).
81 GDPR, Art 5(1)(c).
82 GDPR, Art 5(1)(d).
83 GDPR, Art 5(1)(e).
84 GDPR, Art 5(2).
85 GDPR, Art 4(11).
86 GDPR, Recital 32. In literature, see E Carolan, ‘The Continuing Problems with Online Consent under the EU's Emerging Data Protection Principles’ (2016) 32 Computer Law & Security Review 462.
87 GDPR, Art 7(4).
88 GDPR, Art 7(1).
89 Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data [1995] OJ L281/31, Art 7.
90 GDPR, Art 7(3).
91 ‘Report from the Commission, Benchmarking smart metering deployment in the EU-27 with a focus on electricity’ COM(2014) 356 final, 4.
92 R Knyrim and G Trieb, ‘Smart Metering under EU Data Protection Law’ (2011) 1 IDPL 121, 126.
93 GDPR, Art 6(1)(b).
94 R Knyrim and G Trieb, ‘Smart Metering under EU Data Protection Law’ (2011) 1 IDPL 121, 124–25.
95 Ibid 124 and 128.
96 Commission, ‘Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast)’ COM(2016) 861 final/2 – 2016(379), 4.
97 Recast Electricity Directive, Art 18 and Annex II.
98 Recast Electricity Directive, Art 31(3).
99 Definition of a dynamic price contract is established in the Recast Electricity Directive, Art 2(11).
100 Recast Electricity Regulation, Art 3(1)(a).
101 Recast Electricity Regulation, Art 3(1)(b) and Recital 8.
102 GDPR, Art 6(1)(e) and (f).
103 GDPR, Art 6(3).
104 GDPR, Art 6(2).
105 Cases T–106/95 Fédération française des sociétés d'assurances (FFSA), Union des sociétés étrangères d'assurances (USEA), Groupe des assurances mutuelles agricoles (Groupama), Fédération nationale des syndicats d'agents généraux d'assurances (FNSAGA), Fédération française des courtiers d'assurances et de réassurances (FCA) and Bureau international des producteurs d'assurances et de réassurances (BIPAR) v Commission of the European Communities [1997] ECR II–229, para 99; T–17/02 Fred Olsen, SA v Commission of the European Communities [2005] ECR II–2031, para 216; T–289/03 British United Provident Association Ltd (BUPA), BUPA Insurance Ltd and BUPA Ireland Ltd v Commission of the European Communities [2008] ECR II–81, para 166; C–265/08 Federutility and Others v Autorità per l'energia elettrica e il gas [2010] ECR I–3377, para 29; C–67/96 Albany International BV v Stichting Bedrijfspensioenfonds Textielindustrie [1999] ECR I–5751, para 104.
106 C–326/07 Commission of the European Communities v Italian Republic [2009] ECR I–2291, para 70; C–54/99 Association Eglise de scientologie de Paris and Scientology International Reserves Trust v The Prime Minister [2000] ECR I–1335, para 17; C–83/94 Criminal proceedings against Peter Leifer, Reinhold Otto Krauskopf and Otto Holzer [1995] ECR I–3231, para 35. Kaisa Huhta, Capacity Mechanisms in EU Law: An Analysis of State-Driven Safeguards for Generation Adequacy (PhD thesis, University of Eastern Finland 2019) 83–86.
107 F Ferretti, ‘Data Protection and the Legitimate Interest of Data Controllers: Much Ado about Nothing or the Winter of Rights?’ (2014) 51 CMLR 843.
108 R Knyrim and G Trieb, ‘Smart Metering under EU Data Protection Law’ (2011) 1 IDPL 121, 126.
109 Case 72/83 Campus Oil v Minister for Industry and Energy [1984] ECR 2727.
110 Electricity Directive, Art 25 and Recast Electricity Directive, Art 31(1).