In a further step towards Europe’s clean energy transition, ACER approves the methodology to be used nationally for identifying non-fossil flexibility needs. This is an important step in developing a common European basis for integrating more renewable energy into the electricity grid and meeting the EU’s decarbonisation targets. This ACER decision directly supports the EU’s Clean Industrial Deal by laying the groundwork for a more resilient electricity system that can power a competitive, low-carbon economy.

The flexibility needs assessment methodology (FNAM), developed by the European Network for Transmission System Operators for Electricity (ENTSO-E) and the EU Distribution System Operators Entity (EU DSO Entity), and approved by ACER, will guide Member States' electricity network operators in identifying how much clean and flexible energy their country needs to handle the variability of demand and supply in their power system. 

What is power system flexibility and why does it matter?

Clean flexibility is the energy system’s ability to adapt quickly to changes in electricity supply and demand, without relying on fossil fuels. It enables:

• Demand response, storage or flexible generation to balance the grid in real time.
• Shifting renewable energy from periods of excess (e.g. windy nights) to times of high demand. 
• Reducing renewables curtailment (wasting renewable energy when the grid can’t absorb it).

Unlocking clean flexibility will cut reliance on gas, enable energy transition in a cost -effective manner and help Member States deliver on the EU’s binding 2030 renewable targets (42.5%) and climate neutrality by 2050. 

What is the purpose of the national flexibility needs methodology?

The methodology distinguishes between two main types of flexibility needs: network flexibility needs and system flexibility needs. Network flexibility reflects the flexibility needed to adjust for grid availability, whereas system flexibility refers to the ability of the electricity system to adjust both power generation and consumption in response to signals from the market.

The flexibility needs assessment methodology provides a harmonised approach for transmission and distribution system operators (TSOs and DSOs) in analysing the national flexibility needs in terms of:

• the data they must collect; and
• how they should assess their national electricity flexibility needs.

This harmonised and unified approach serves both national and EU-wide estimations of flexibility needs, with results feeding into reports that will identify how much flexibility is needed, where and at what cost. 

Each EU Member State shall now:

• Conduct a national flexibility needs assessment (FNA) using the new methodology.
• Submit it to ACER and the European Commission (by July 2026).
• Use the findings to define indicative national targets for non-fossil flexibility (by January 2027).

ACER will then publish an EU-wide report to estimate the flexibility needs including a set of recommendations on issues of cross-border relevance at EU level (July 2027). 

What’s novel about this national electricity flexibility needs methodology? 

This new methodology brings several important advancements to how Europe plans for flexibility, as it:

• Builds on existing studies, such as the European resource adequacy assessment (ERAA) and national resource adequacy assessments (NRAAs), to ensure consistency and prevent overlap. 
• Covers distribution and transmission networks, enabling a full-system view of flexibility needs.
• Relies on distribution network development plans (DNDPs) to bring transparency to local flexibility gaps.
• Quantifies the amount of non-fossil flexibility needed per country to meet EU decarbonisation targets by identifying how much renewable energy can be cost-effectively shifted from periods of surplus to times of high demand – maximising clean energy use and reducing curtailment.
• Accounts for cross-border potential and the role of interconnections in meeting flexibility needs.
• Mandates the EU DSO Entity to issue a guidance, taking into account the ACER-CEER guidance on distribution network planning (issued today), to harmonise flexibility assessments across the EU and align with the EU Action Plan for Grids. 
• Identifies regulatory and market barriers, echoing ACER’s No-regret actions to remove barriers to demand response.

This coordinated approach is essential to delivering a climate-neutral power system, ensuring renewables are fully used.

What’s next?

Member States now have 12 months to prepare their national flexibility assessments. These reports will become vital tools in shaping clean energy investment decisions, grid expansion and modernisation and designing EU policy to accelerate flexibility deployment across borders. 

Learn more about flexibility and ACER's work in this area.

On 2 July 2025, electricity transmission system operators (TSOs) submitted to ACER their proposal to amend how capacity calculation regions (CCRs) are defined across Europe. ACER is now gathering stakeholder views to inform its assessment.

What are capacity calculation regions and why are they important? 

CCRs are cross-border zones where neighbouring TSOs coordinate how much electricity can safely flow between them. This cooperation helps boost cross-border trade, prevent grid congestion and price spikes, and support a more secure, integrated European energy market. 

There are currently nine CCRs in Europe: Nordic, Hansa, Core, Italy North, Central Europe (CE), Greece-Italy (GRIT), South-West Europe (SWE), Baltic and South-East Europe (SEE). They are key to ensuring efficient electricity use, especially as more countries and renewables come into play.

What is the amendment about?

The TSOs are proposing:

• adding three new CCRs to the South-East Europe region to cover borders with Energy Community countries (East-Central Europe (ECE), Italy-Montenegro (IT-ME) and Eastern Europe (EE)); and
• merging two existing regions (Core and Italy North) for several regional processes like intraday coordination and congestion management. 

Your view matters!

ACER is assessing whether the TSOs’ proposal supports market integration, ensures efficient use of the grid and supports the well-functioning of the EU electricity market.

To make an informed decision, ACER is organising a public consultation from 24 July 2025 to 3 September 2025. Submit your views here.

ACER aims to reach a decision by December 2025.

Today, ACER publishes its fifth report on cross-border cost allocation (CBCA) decisions for electricity and gas infrastructure projects.

Covering 50 decisions made between 2014 and 2024, the report provides insights into how these decisions, issued by national regulators, determine the cost distribution of major cross-border projects and support project development.

How cross-border cost allocation works

Cross-border cost allocation is a mechanism designed to fairly distribute the investment costs of projects of common interest (PCIs) and projects of mutual interest (PMIs) among the countries involved. It aims to support project implementation, especially in cases where some countries would otherwise bear significantly higher costs than the benefits the project provides.

Project promoters submit investment requests to national regulatory authorities, who review them and issue CBCA decisions to determine how project costs should be shared among involved countries. This cost-sharing arrangement is required for projects to receive financial support through the Connecting Europe Facility (CEF), a major funding programme that supports the development of strategic infrastructure across Europe. 

ACER monitors all submitted investment requests and decisions taken by national regulators and regularly reports on emerging trends.  

What trends did ACER monitoring find? 

ACER’s report shows:

• Fewer decisions overall: The number of CBCA decisions fell by around 65% in the second half of the monitoring period (2019-2024). This reflects a drop in the number of PCIs included in the EU project lists, partly due to completion of major energy infrastructure projects, but also the phase-out of natural gas and Brexit, which made several projects ineligible for inclusion in the PCI lists.
• Costs stay national in most cases: Member States usually agree to cover their own costs, as each one benefits sufficiently from the project.
• Connecting Europe Facility (CEF) is the key driver: Access to grants, not the need to share costs, is the main reason project promoters submit investment requests. 
• No CBCA decisions yet for hydrogen: The sector is still in an early stage of development, but with hydrogen projects becoming eligible for inclusion in the PCI and PMI lists since 2023, CBCA decisions are expected in the coming years.

ACER’s 2025 retail energy country sheets offer a concise overview of the national electricity and gas markets across EU Member States and Norway. For the first time, the country sheets cover both sectors, presenting: 

• market and competition metrics for electricity and gas; 
• consumer trends (including contract types, contract switching rates and bill breakdown); 
• progress towards enabling more flexible consumers (through smart meter roll-out, prosumer participation, deployment of electric vehicles and heat pumps, and biomethane production); and
• a high-level assessment highlighting each market’s strengths, weaknesses, opportunities and threats (SWOT analysis). 

ACER has also updated its retail pricing dashboard, which shows monthly changes in household energy prices across EU Member States and Norway from January 2019 to June 2025.

What are the main findings in retail markets?

Electricity market

• Smart meters, a key enabler for demand-side flexibility, are largely in place across the EU, but roll-out levels vary among EU Member States and Norway. In half of EU Member States, deployment has reached 80%, while in 7, deployment remains below 20% (or no data was provided). 
• Although 2024 saw an increased number of hours with low wholesale electricity prices (below €5/MWh), fixed price and/or regulated contracts still dominate in 15 Member States at the household level. This widespread uptake limits consumers’ exposure to real-time price signals, preventing cost savings and hindering more innovative and flexible contracts. The limited adoption of dynamic-price contracts suggests that demand-side flexibility potential remains untapped.
• In 21 Member States, prosumers account for between 1% and 10% of households. The highest shares are observed in Belgium (22%) and the Netherlands (30%). 

Gas market

• 82% of residential energy consumption is used for space and water heating, underlining the importance of energy efficiency and building renovation strategies to support decarbonisation.
• A decline in gas demand has been recorded in 21 Member States since 2022, while biomethane production remains relatively low.

Market structure

• Both electricity and gas retail markets show moderate to high concentration across the EU, meaning a small number of suppliers hold a large share of the national market. 
• 20 Member States either recorded low switching rates (below 10%) or did not provide data, indicating limited competition or low consumer engagement.

The country sheets complement ACER’s retail Monitoring Report (coming in November).

Retail prices: Latest trends from ACER’s dashboard 

ACER’s retail pricing dashboard highlights the main trends in household electricity and gas prices. 

• Electricity prices across Europe stabilised by June 2025, ending the decline observed since early spring. Spain and Portugal recorded the sharpest monthly rises (+7% and +6%, respectively), followed by more moderate increases in Greece, the Netherlands, Italy and Austria. In contrast, prices declined in Norway (-7%), Estonia (-3%), and in Belgium, Latvia, Sweden and Lithuania (-2%). Most other countries recorded no change. On an annual basis, EU household electricity prices rose by approximately 3%.

• Retail gas prices also remained largely stable, with minor monthly changes: Belgium and Portugal registered small increases (+1%), while Italy recorded the largest decrease (-4%), followed by France and Latvia (-2%), and the Netherlands, Estonia and Austria (-1%). While retail gas prices remained unchanged month-on-month in most Member States, retail offers were approximately 7% higher than those available during the same period last year. 

What are the main trends in wholesale gas markets? Prices remained elevated year-on-year but showed little monthly change, despite volatility driven by global trade and security shocks. More information is available in ACER’s monitoring report on key developments in gas wholesale markets report, published today.

Following a consultation process launched in March 2025, ACER has concluded that implementing peak-shaving products in the EU electricity market under normal conditions would bring more challenges than advantages.  

What are peak-shaving products?

Peak-shaving products are market-based tools that enable market participants to reduce their electricity consumption (during peak demand periods) in exchange for compensation.

Under the 2024 Electricity Market Design (EMD) Regulation, the Council of the EU can declare a regional or EU-wide crisis if wholesale electricity prices become excessively high. In such cases, Member States can direct system operators to use peak-shaving products to reduce power demand, helping stabilise the grid and lower prices.

Why an ACER assessment?

The EMD Regulation mandates ACER to assess the potential impact of developing peak-shaving products on Europe’s electricity market under normal (e.g. non-crisis) conditions. ACER’s assessment evaluates whether these products can be introduced without disrupting the normal functioning of electricity markets or redirecting demand response services towards peak-shaving products.

To strengthen its assessment, ACER engaged with more than 40 stakeholders, including through an Expert Group and a public consultation (spring 2025). 

What are ACER’s conclusions?

ACER’s assessment shows that the drawbacks of introducing peak-shaving products in the EU electricity market under normal conditions outweigh the potential benefits. Therefore, ACER does not recommend amending the existing legal framework to allow their use outside of electricity price crisis situations. Key concerns identified include:

• reduced overall socio-economic benefits;
• distorted cross-border competition; and
• weakened investment incentives for market-based demand response and flexibility.

In its assessment, ACER also provides recommendations to support Members States in implementing peak-shaving products during electricity price crises. These recommendations aim to enhance the products’ effectiveness and minimise any unintended consequences.

What’s next?

Based on ACER’s assessment, the European Commission will decide whether to propose amendments to the Electricity Regulation to allow peak-shaving products outside of electricity price crisis situations.

ACER is establishing a new European Stakeholder Group on demand response in the electricity sector. We invite associations that could offer a pan-European perspective on electricity markets to join. 

What’s the background?

On 7 March 2025, ACER submitted its proposal for a new EU-wide network code on demand response to the European Commission, in line with its framework guideline.

ACER’s proposal sets out common rules to ensure that demand response resources (such as consumers, storage providers and distributed generation) can fully participate in wholesale electricity markets, providing flexibility to the grid.

To support the implementation of these rules, ACER committed to coordinating stakeholder engagement on demand response topics by establishing a new dedicated European Stakeholder Group.

What will the demand response group do? 

The Demand Response European Stakeholder Group (DRESG) will act as an EU-level platform where ACER, the European Network of Transmission System Operators for Electricity (ENTSO-E) and the EU Distribution System Operators Entity (EU DSO Entity) engage with stakeholders on key matters of demand response. The group will focus on:

• discussing proposals for terms and conditions or methodologies required by the new network code;
• addressing broader issues related to demand response; and
• supporting the practical implementation of the network code.

Through this new stakeholder group, participating associations will:

• Monitor the implementation progress of the code, including how newly established processes function at local, regional and EU level.
• Share views and feedback on the code’s implementation, ensuring stakeholder input is taken into account.
• Support more informed decision-making on the methodologies and rules to be developed under the code.

By doing so, the group will support the flexibility required by the EU electricity system (increasingly powered by renewable energy), strengthening energy security and advancing the EU’s transition to clean energy.

Who can join?

Associations that could offer pan-European views on demand response in electricity markets are encouraged to apply. Bring your insights to the table and ensure that your voice shapes the future of demand response!

Deadline to apply is 15 August 2025, with the first meeting planned for October 2025. See how to apply.

See the Terms of reference for the demand response stakeholder group.

On 9 May 2025, the Swedish and Lithuanian national regulatory authorities (Energy Markets Inspectorate and National Energy Regulatory Council, respectively) requested from ACER a six-month extension to jointly decide on electricity cross-zonal risk hedging opportunities.

What are cross-zonal risk hedging opportunities? 

Cross-zonal risk hedging opportunities are strategies used by electricity market participants to mitigate price volatility risks across different bidding zones. They are important to ensure the proper functioning of the EU’s wholesale electricity markets and protecting market participants from price uncertainty.

Why an ACER Decision?

In accordance with the Forward Capacity Allocation network code, the Swedish and Lithuanian national regulators tasked transmission system operators to propose alternative measures to improve cross-zonal hedging opportunities in the Lithuanian bidding zone. 

The Swedish and Lithuanian transmission system operators submitted a joint proposal to their national regulators, but it contained some ambiguities. 

Therefore, both regulators requested ACER additional time to assess the system operators’ proposal. According to the ACER Regulation, ACER is mandated to grant this extension.

ACER intends to act promptly on this request, aiming to reach a decision by the end of September 2025.

ACER issues today its guide on benchmarking the costs and effectiveness of cybersecurity investments in the EU electricity sector.

This ACER guide is developed under the binding EU-wide network code on sector-specific rules for cybersecurity aspects of cross-border electricity flows. It aims to help national energy regulators conduct the benchmarking required by the network code.

Why is this benchmarking important?

Conducting benchmarking of cybersecurity investments will provide national regulatory authorities with an overview of:

• the costs of implementing cybersecurity controls, as well as their effectiveness and efficiency;
• prices of cybersecurity services, systems and products;
• the level of comparability of costs and functions of cybersecurity products and services. This analysis will also help identify possible opportunities to increase spending efficiency.

This will be the first EU-wide analysis on the topic.

What does ACER recommend?

ACER encourages national regulators to follow ten principles when conducting this benchmarking:

• Plan and execute benchmarking activities to ensure results can serve their intended purpose.
• Limit the scope and complexity of information to what is required by the benchmarking analysis.
• Use a consistent approach when conducting national analyses.
• Identify the stakeholders that will provide the data required by the benchmarking.
• Develop reference lists of items for the purpose of benchmarking. For example, considering assets that are relevant for Union-wide high and critical impact processes.
• Apply general accounting principles to assess the costs of benchmarked items.
• Include macroeconomic factors (e.g. inflation) in the analysis.
• Simplify how the effectiveness of investments is evaluated, considering this benchmarking assessment does not require the same level of detail as security assessments.
• Evaluate the effectiveness of cybersecurity investments following the benchmarking objectives of the network code.
• Explore different approaches for comparing the costs and functions of cybersecurity products and services.

What’s next?

From today’s publication, national regulatory authorities have one year to carry out the cybersecurity benchmarking analysis. 

Bidding zones are geographical areas where electricity is traded at uniform prices. Within a bidding zone, electricity bids and offers from market participants can be matched without the need to allocate cross-zonal capacity. Currently, most bidding zones in the EU are defined by national borders.

Under the EU Electricity Regulation, bidding zones must be configured in a way that maximises economic efficiency and cross-zonal trading opportunities, while ensuring security of supply. To achieve this, a review of the existing bidding zones was needed to identify structural grid congestions and evaluate the potential benefits of alternative configurations.

On 28 April 2025, European transmission system operators (TSOs) published their report on the electricity bidding zone review study. The report, which assesses 14 bidding zone configurations across Central and Northern Europe, is intended to support EU Member States in deciding whether to amend or maintain the current bidding zone configurations.

What is ACER’s role in the process?

ACER is responsible for setting the methodology and identifying alternative bidding zone configurations for TSOs to consider in their review.

Hence, in November 2020, ACER issued a decision establishing the bidding zone review methodology. In August 2022, ACER published a second decision on the alternative bidding zone configurations to be considered for Central Europe (Germany, France, Italy and the Netherlands) and the Nordic region (Sweden). A third decision, covering the Baltic region, was issued in December 2023.

As part of its mandate under the ACER Regulation, ACER will also publish an Opinion (addressed to the Council) to assess whether electricity system operators followed the agreed methodology in their bidding zone review study and evaluate the impact of any deviations.

What are the next steps? 

ACER aims to publish its Opinion by the end of September 2025. Update: ACER published its Opinion on 18 September 2025.

Following the publication of the TSOs’ bidding zone report, Member States have six months to decide whether to amend the existing bidding zones. If individual Member States wish to amend their bidding zone configuration, but no unanimous agreement is reached among the relevant parties, the European Commission (after consulting ACER) will have six months to decide.

ACER is establishing a new European Stakeholder Committee (ESC) on cybersecurity in the electricity sector. We invite industry associations that could offer a pan-European perspective on cybersecurity aspects of cross-border electricity flows to join. 

What’s behind this?

The Network Code for Cybersecurity for Electricity came into force in June 2024. It sets out common rules to boost cyber resilience across Europe’s power systems. It calls for ACER to coordinate stakeholder engagement, in close collaboration with the European Network of Transmission System Operators for Electricity (ENTSO-E) and the EU Distribution System Operators Entity (EU DSO Entity).

What will the cybersecurity committee do?

Through this new ACER cybersecurity committee, industry associations will cooperate with each other and with the authorities referred to in the Cybersecurity Network Code to:

• identify problems and propose improvements to the implementation of the existing cybersecurity network code;
• recommend future revisions of the network code;
• identify whether any additional risk prevention rules may be needed for the electricity sector; and
• respond to technological developments in the sector.

By tackling these points, the cybersecurity committee will help maintain a high, common level of cyber resilience in Europe’s electricity grid and adapt policy to evolving digital risks.

Who can join?

Industry associations that could offer pan-European views on cybersecurity aspects of cross-border electricity flows are encouraged to take part. It is a chance to bring your insights to the table and ensure the voice of industry shapes the future of electricity cybersecurity in Europe.

Deadline to apply is 2 July 2025, with the first meeting planned for early autumn 2025. See how to apply.

See the Terms of reference for the cybersecurity committee for electricity.