Energy in Annex I: sub-sectors and entity types, word for word

In this lesson

• Find the energy rows of Annex I and read each of the nineteen entity types in the exact words of the directive.
• Spot the qualifiers that narrow an entry, such as the ‘supply’ function for electricity undertakings and the three services for market participants.
• Tell the entries that borrow a definition from another Union act from those that stand on their own wording.
• Map each legal entity of an energy group to the annex row it falls under, before any question of size or class.

Where energy sits

Annex I, point 1

NIS2 does not apply to the energy sector as an idea. Article 2(1) applies it to “public or private entities of a type referred to in Annex I or II” that meet the size rule and provide their services or carry out their activities within the Union. Scope therefore starts with a matching exercise: which row of the annex describes what this legal entity does?

Annex I lists the sectors of high criticality and energy is its point 1. It has five subsectors: (a) electricity, (b) district heating and cooling, (c) oil, (d) gas and (e) hydrogen. Across them the annex lists nineteen types of entity: seven in electricity, one in district heating and cooling, three in oil, seven in gas and one in hydrogen. The registration data each entity gives its competent authority include, where applicable, “the relevant sector and subsector referred to in Annex I or II” (article 3(4)(c)), so the row you pick is not an internal note: it is what you declare.

Electricity: seven types

Annex I, 1(a)

The electricity subsector reads as follows. The wording is the directive's; the numbering in the left column is ours.

Three of these rows carry a qualifier that does real work.

• Row 1 is not every electricity undertaking. It covers electricity undertakings “which carry out the function of ‘supply’”, as that function is defined in the electricity market directive. An undertaking that performs none of that function is not caught by row 1, although it may be caught by another row, for example as a producer or a system operator.
• Row 6 is not every market participant. It covers market participants “providing aggregation, demand response or energy storage services”. A participant active in the market without providing any of those three services is not caught by row 6.
• Row 7 follows the operator, not the brand. The test is responsibility “for the management and operation of a recharging point” that provides a recharging service to end users. The closing words, “including in the name and on behalf of a mobility service provider”, mean the operator stays in the row when the driver is a customer of someone else.

Row 7 is also the only electricity row with no cross-reference to another act, so its own words govern. A car park company or a retailer that manages and operates public charging points is in the row; nothing requires it to be an energy company.

District heating and cooling: one type

Annex I, 1(b)

The subsector has a single row: “Operators of district heating or district cooling as defined in Article 2, point (19), of Directive (EU) 2018/2001 of the European Parliament and of the Council (3)”. The word “or” matters: an operator of district cooling alone is in the row as much as one that runs both networks.

Oil: three types

Annex I, 1(c)

• “Operators of oil transmission pipelines”
• “Operators of oil production, refining and treatment facilities, storage and transmission”
• “Central stockholding entities as defined in Article 2, point (f), of Council Directive 2009/119/EC (4)”

The first two rows have no cross-reference: their plain words govern. The second is wide: it names storage and transmission alongside production, refining and treatment facilities, so an oil storage operator is named without refining anything. The third borrows its definition from another act.

Gas: seven types

Annex I, 1(d)

• “Supply undertakings as defined in Article 2, point (8), of Directive 2009/73/EC of the European Parliament and of the Council (5)”
• “Distribution system operators as defined in Article 2, point (6), of Directive 2009/73/EC”
• “Transmission system operators as defined in Article 2, point (4), of Directive 2009/73/EC”
• “Storage system operators as defined in Article 2, point (10), of Directive 2009/73/EC”
• “LNG system operators as defined in Article 2, point (12), of Directive 2009/73/EC”
• “Natural gas undertakings as defined in Article 2, point (1), of Directive 2009/73/EC”
• “Operators of natural gas refining and treatment facilities”

Do not stop reading after the LNG system operators. The sixth row, natural gas undertakings, refers to its own definition in article 2(1) of Directive 2009/73/EC, and the seventh, operators of natural gas refining and treatment facilities, stands on its own words. A gas company that does not recognise itself in the first five rows must still test the last two.

Hydrogen: one type

Annex I, 1(e)

The row reads “Operators of hydrogen production, storage and transmission”. There is no cross-reference and no definition of hydrogen in the directive. Read the three activities literally: production, storage, transmission. An electrolyser operator producing hydrogen is named; so is a hydrogen storage operator.

The acts behind the definitions

Annex I, footnotes 1-5

Most energy rows do not define anything themselves. They point to definitions in five Union acts, which the annex identifies in its footnotes:

• (1) Directive (EU) 2019/944, on common rules for the internal market for electricity: rows 1 to 4 and the services of row 6;
• (2) Regulation (EU) 2019/943, on the internal market for electricity: rows 5 and 6;
• (3) Directive (EU) 2018/2001, on the promotion of the use of energy from renewable sources: district heating or cooling;
• (4) Council Directive 2009/119/EC, on minimum stocks of crude oil and/or petroleum products: central stockholding entities;
• (5) Directive 2009/73/EC, on common rules for the internal market in natural gas: six of the seven gas rows.

This course quotes the annex and does not restate those definitions. When a classification turns on one of them, the defining act is the authority, and the reasoning belongs in your scope file with the definition copied from its source. Five rows have no reference at all: recharging point operators, the two first oil rows, natural gas refining and treatment, and hydrogen.

Reading the annex without traps

Art. 2(1), 3(4)

• Assess legal entities, not groups. An integrated energy group may hold a distribution system operator, a supplier, generation companies and a charging subsidiary. Each legal entity is matched to its own row or rows, and each then goes through the size rule of lesson m1l2.
• One entity, several rows. A company can be both a producer and an electricity undertaking carrying out supply, or operate both district heating and gas distribution. Record every row that applies: they all appear in the registration data.
• The annex is not the CER annex. Directive (EU) 2022/2557 on the resilience of critical entities uses the same energy rows with one exception: its electricity list has no row for operators of recharging points. Copying a CER analysis into a NIS2 file will miss them; copying a NIS2 analysis into a CER file will add them wrongly.

What a supervisor will ask

• Which Annex I row or rows does each legal entity fall under? The answer is a scope register that quotes the row and names the act and point it refers to.
• Why is this entity not in scope? A written analysis showing each row tested, with the qualifier that excludes it, such as the absence of a supply function or of aggregation, demand response and storage services.
• Does the registration you submitted match the analysis? The sector and subsector declared under article 3(4)(c), and the date of the last update.

Key points

• Energy is point 1 of Annex I, with five subsectors and nineteen entity types: seven electricity, one district heating and cooling, three oil, seven gas, one hydrogen.
• Electricity undertakings are in scope only where they carry out the ‘supply’ function; market participants only where they provide aggregation, demand response or energy storage services.
• Operators of recharging points are named in their own words, with no cross-reference, and stay in scope when they serve the customers of a mobility service provider.
• The gas list ends with natural gas undertakings and operators of natural gas refining and treatment facilities; do not stop at LNG.
• Five rows have no cross-reference and are read literally; the others borrow definitions from five Union acts named in the annex footnotes.
• The CER annex has the same energy rows except recharging point operators.