The EU Agency for the Cooperation of Energy Regulators (ACER) has reached a decision on the proposals for market-based cross-border capacity allocation processes in the Baltic and Core regions.

These processes aim to maximise the welfare generated by the provision of cross-border capacities to the day ahead energy and balancing capacity markets.

In February 2021, the national regulatory authorities for energy from both regions have asked ACER to decide on the respective methodologies.

The Core region includes 13 countries: Austria, Belgium, Czech Republic, Croatia, France, Germany, Hungary, Luxemburg, the Netherlands, Poland, Romania, Slovakia, Slovenia.

The Baltic region comprises of 6 countries: Estonia, Finland, Latvia, Lithuania, Poland and Sweden.

Two further proposals (submitted on a voluntary basis), respectively on the market-based cross-border capacity allocation process in the Hansa capacity calculation region (CCR) and on the regional cross-border capacity allocation process based on economic efficiency in the Core CCR, were withdrawn from the respective transmission system operators (TSOs).

Therefore, ACER will not take any decision on these two methodologies.

How did ACER contribute?

ACER revised both methodologies to improve the efficiency, transparency and non-discrimination of these capacity allocation processes for the exchange of balancing capacity or sharing of reserves.

Both ACER Decisions contribute to the integration of the balancing capacity markets by establishing the rules for allocating the cross-border capacity needed to facilitate the balancing capacity procurement at regional level.

Read more about ACER Decision 10-2021 on the Baltic CCR methodology and its Annexes.

Access ACER Decision 11-2021 on the Core CCR methodology and its Annexes.

Today, the EU Agency for the Cooperation of Energy Regulators (ACER) has published its non-binding Framework Guideline on sector-specific rules for cybersecurity aspects of cross-border electricity flows.

The Framework Guideline provides high-level principles for the development of a binding Cybersecurity Network Code that will further contribute to maintaining the security and resilience of the electricity system across Europe.

The Framework Guideline covers various security-related topics, such as:

• governance

• cross-border risk assessment & management (defining the scope of cross-border electricity flows’ cybersecurity risk assessment)

• a common electricity cybersecurity framework (defining both the basic and advanced lists of principles and requirements)

• information sharing and essential information flows

• incident handling and crisis management (including data collection)

• an electricity cybersecurity exercise framework

• protection of information exchange in the context of data processing

• monitoring, benchmarking and reporting

The journey towards a Network Code on Cybersecurity

In April 2021, ACER ran a public consultation for two months on the draft version of the Framework Guideline, inviting stakeholders to share their views on the document.

ACER received 42 responses to the consultation, the majority from energy industry companies or associations based within EU Member States.

The feedback collected showed:

• respondents welcome the draft Framework Guideline

• 88% believe the Framework Guideline contributes to further protecting cross-border electricity flows

• 65% say that there are still gaps concerning the cybersecurity of cross-border electricity flows, which the draft Framework Guideline proposal should address.

Main changes to the draft Framework Guideline

Following the feedback received, ACER revised the content of its draft Framework Guideline.

It now includes:

• An improved risk assessment methodology: tailored for the cybersecurity network code.

• A more balanced role and governance for ENTSO-E and the EU DSO entity in implementing the risk assessment of cross-border electricity flows, while reducing the role of Regional Coordination Centers.

• An updated verification methodology to prove compliance with a common cybersecurity framework: allowing the use of three different paths to verification (including certification, government inspection and peer review schemes).

• The possibility for Computer Security Incident Response Teams (CSIRTs) to withhold information from the information sharing network where dissemination is considered a risk.   

• The right for Cyber Security National Competent Authorities and national energy regulatory authorities to issue derogations for maximum two years for any entities that do not directly or indirectly affect cross-border electricity flows.

• A possibility for those stakeholders not listed as entities in scope of the network code to still be nominated and covered by it, e.g. small and micro entities.

What are the next steps?

ACER has now submitted the non-binding Framework Guideline to the European Commission.

As a next step, a specific drafting committee for the cooperation of ENTSO-E and the EU DSO entity will prepare a proposal for the network code based on the ACER Framework Guidelines. This proposal shall be submitted to ACER within 12 months after ENTSO-E receives the European Commission’s request.

ACER will then review the proposed network code to ensure compliance with its Framework Guideline and make sure it does not hamper market integration, nor the market’s efficient functioning.

ACER shall submit the revised network code to the European Commission within six months.

Would you like to find out more?

Framework Guideline on sector-specific rules for cybersecurity aspects of cross-border electricity flows.

ACER and energy regulators will draft new Framework Guidelines on sector-specific cybersecurity rules for cross-border electricity flows.

ACER and Cybersecurity.

The EU Agency for the Cooperation of Energy Regulators (ACER) has published its bi-annual Opinion on the electricity national development plans (NDPs).

Why are NDPs relevant?

The development of the electricity transmission network is key to reach the energy policy goals set by the European Union. In particular, the Union-wide Network Development Plan (EU TYNDP), developed by ENTSO-E, is a crucial tool for coordinated network planning across the countries.

The EU TYNDP (and its implementation) strongly depends on the national development plans, calling for the consistency (and the two-way interaction) between these two infrastructure-planning instruments.

What is ACER’s opinion?

In the Opinion, ACER identifies several improvements compared to its previous NDPs’ review (2019), acknowledging that several countries followed its recommendations.

Among the others, more countries:

• adopted a two-years frequency for elaborating the NDPs
• introduced stronger scrutiny by national regulatory authorities (NRAs)
• ensured systematic stakeholders’ involvement in the process
• improved the assessment and transparency of the projects.

ACER welcomes these developments and continues to encourage NRAs and other relevant parties to consider ACER’s recommendations and implement them.

What are ACER’s current recommendations?

ACER highlights the need for:

• a single NDP for electricity infrastructure development per country
• a biennial frequency for elaborating the NDPs (a monitoring update should be issued  between two NDPs)
• stronger NRA scrutiny
• the use of at least one robust EU TYNDP scenario
• public consultations of NDPs
• publication of NDPs and of the corresponding formal acts (e.g. NRA’s opinion)
• transparency on projects’ key information (including commissioning date, project status, project costs), their cross-border and/or cross-zonal relevance and impact on the environment
• inclusion and proper assessment of third-party (so non-TSO) transmission projects
• a proper national coding system of projects and cross-references with the EU TYNDP.

For additional information, access the Opinion on the electricity NDPs. 

The EU Agency for the Cooperation of Energy Regulators (ACER) launches today a public consultation on the harmonised allocation rules for long-term transmission rights (HAR).

All interested parties are invited to submit their comments by 27 August 2021.

Why should you contribute?

The harmonised allocation rules ensure a transparent and non-discriminatory capacity allocation of long-term transmission rights to all market participants and are proposed by all Transmission System Operators (TSOs).

In this consultation, ACER focuses mainly on the proposed cap for remuneration of long-term transmission rights (LTTRs).

What are the next steps?

ACER expects to reach its decision by 30 November 2021 to allow for a timely implementation of the newly amended HAR before the yearly LTTR auction that will take place in December 2021. The legal deadline to reach the decision is 25 December.

Find out more about the Public Consultation.

The EU Agency for the Cooperation of Energy Regulators (ACER) has received on 9th July 2021 all transmission system operators (TSOs)’ proposal establishing the congestion income distribution methodology for European electricity markets.

ACER will reach a decision on the proposal by 9th January 2022.

To take an informed decision, ACER will collect inputs by discussing with TSOs and NRAs in the course of the decision making process.

What is the benefit of having a congestion income distribution methodology for Europe?

The methodology ensures a transparent and non-discriminatory sharing of congestion income among TSOs. Congestion income is defined as the revenue resulting from the capacity allocation in the single day-ahead and intraday market coupling.

Thereby, the methodology:

• facilitates the efficient long-term operation and development of the electricity transmission system,
• simplifies the efficient operation of the EU internal electricity market,
• allows for reasonable financial planning and
• reflects the general principles for congestion management provided by the Regulation on the internal market for electricity.

How does ACER contribute?

ACER ensures the decision on all-TSOs’ proposal is in line with the objectives of the CACM Regulation and fulfils the legal obligations set out by its Article 73.

ACER is gathering views from stakeholders in an attempt to improve the high-level approach for identifying alternative bidding zone configurations to be considered for the bidding zone review. This public consultation is launched following the public webinar held on 24 June 2021.

The consultation will run until 3 August 2021, 23:59 hrs (CET).​

Access the Consultation. 

Background

On 24 November 2020, ACER adopted a Decision on the methodology and assumptions to be used in the bidding zone review process and for the alternative bidding zone configurations to be considered, according to the EU Regulation on the internal market for electricity. The proposed package for the bidding zone review was developed by the Transmission System Operators (TSOs) and was referred to ACER in July 2020 by the relevant regulatory authorities, as a unanimous agreement could not be found.

Next steps

In the absence of a TSOs’ proposal for alternative configurations for a large part of Europe, ACER envisaged to take two separate decisions. The first decision included the approval of the bidding zone review methodology and assumptions to be used for the bidding zone review process, subject to the necessary amendments, and a request to TSOs to provide the results derived from a Locational Marginal Pricing (LMP) analysis to enable ACER to take a decision on alternative bidding zone configurations. The second decision, expected to be taken in the first half of 2022, will include the approval of alternative biding zone configurations to be studied by TSOs during the bidding zone review.

The latest version of the ACER market monitoring report states that while the electricity wholesale markets continue to integrate across the EU, some significant challenges remain. The upcoming edition of the report will confirm that observation. In particular, the available cross border capacity remains insufficient, and this is partly due to important levels of unscheduled flows (UFs).

What are the unscheduled flows? Why are they relevant?

Discrepancies exist between the physical paths followed by power flows at a given moment in time and the paths anticipated from transactions triggering such flows. These discrepancies take the form of various “distortive” flows in the system, called unscheduled flows.

Transmission System Operators (TSOs) must anticipate the impact of unscheduled flows to ensure the integrity of the system. In doing so, they reduce the amount of capacity available for trade by the amount necessary to cope with unscheduled flows. As a consequence, unscheduled flows cause social welfare losses and hamper market integration.

What is ACER’s position?

ACER believes that improving the capacity calculation methodologies and the bidding zone configurations will mitigate the impact of unscheduled flows in the short term. In the longer term, loop flows will be alleviated by investments in the transmission network.

ACER has been monitoring the evolution of unscheduled flows in Europe since 2012. Specifically, ACER monitors unscheduled flows as the sum of unscheduled allocated flows and loop flows. Unscheduled allocated flows stem from insufficient coordination in capacity calculation and allocation processes. Loop flows within a bidding zone result from electricity exchanges inside other bidding zones [1].

What are the main findings?

In 2020, total unscheduled flows amounted to 111 TWh, which represents an overall increase of 2% compared to 2019. In particular, in the Core (excluding CWE) [2] region, unscheduled flows increased by almost 8% compared to 2019. Overall, this region had the larger share of UFs, more than 46% of all UFs in Europe. In the Core (CWE) region, unscheduled flows decreased by more than 5% year-on-year.

Main average oriented unscheduled flows in Continental Europe - 2015 to 2020

Source: ACER calculations based on ENTSO-E and Vulcanus data. 

Note: The arrow is red when unscheduled flows are in the same direction as the physical flow, and yellow when they are opposite to physical flows. The width of the arrows is proportionate to the flows. For each year, the specific value of each flow in MW is detailed in the corresponding MMR edition.

The animation shows the prevailing direction of unscheduled flows from 2015 to 2020. An overall pattern through the years consists of two major loops, from Germany to Switzerland to the south west, and to Poland to the east.

Another significant pattern can be observed from the north to the south of Germany, via the Netherlands, Belgium and France. The animation shows that this pattern changed over the last two years. In particular, since 2019, the overall shift from coal to gas led to reduce the amount of electricity imported from Germany to the Netherlands while the amount of electricity exports from the Netherlands increased. This caused the level of unscheduled flows to decrease in the area.

For a complete analysis of the evolution of unscheduled flows in 2020, consult our publication.

The next edition of the ACER Market Monitoring Report (2020) will be published in November 2021.

[1] The definitions of the flows and the methodology for the calculations underpinning results in this Annex are provided in the methodological paper on UFs.

[2] The Core region involves 13 Member States of Central Europe; CWE stands for Central-West Europe.

The National Regulatory Authorities of the Core region asked the EU Agency for the Cooperation of Energy Regulators (ACER) to decide on the long-term capacity calculation methodology (LT CCM) for the region.

To take an informed decision, ACER is inviting all interested parties to submit their comments by 31 July 2021.​

The Core region comprises of 13 countries: Austria, Belgium, Czech Republic, Croatia, France, Germany, Hungary, Luxemburg, the Netherlands, Poland, Romania, Slovakia and Slovenia.

Find out more about the Public Consultation.

What are the benefits?

Long‐term cross border capacity calculation promotes effective long‐term cross‐zonal trade. By calculating reliable capacities and making them available to market participants at an early stage, long-term capacity calculation allows for long‐term planning and provides hedging opportunities.

The long-term capacity calculation methodology for the Core region shall cover yearly and monthly capacity calculation processes, by applying the flow-based approach.

How does ACER contribute?

ACER’s decision will contribute to the effectiveness and integration of the Core electricity markets by establishing the common rules for calculating the long-term cross-zonal capacity at regional level.

Among the next steps:

ACER expects to reach its decision by 3rd November 2021.

Would you like to learn more about the topic? Join the ACER public workshop on 9th July (10:00 – 11:15 am).

The EU Agency for the Cooperation of Energy Regulators (ACER) has received on 25th June 2021 transmission system operators' (TSOs) proposal to amend the harmonised allocation rules for long-term transmission rights.

ACER will reach a decision on the proposal by 22 December 2021.

To take an informed decision, ACER will collect inputs during the course of the decision making process by consulting with market participants, TSOs and regulatory authorities.

ACER will run a six-week public consultation, from 19 July to 30 August 2021.

What are the benefits of having harmonised allocation rules across Europe?

The harmonised allocation rules ensure a transparent and non-discriminatory capacity allocation of long-term transmission rights to all market participants by, among the others:

• harmonising definitions,
• establishing the contractual framework between the single allocation platform and market participants,
• harmonising the use-it-or-sell-it provisions,
• describing the types of long-term transmission rights, the nomination rules and the forward capacity allocation process,
• harmonising financial requirements and settlement.

How does ACER contribute?

ACER ensures the decision on all-TSOs’ proposal is in line with the objectives of the FCA Regulation and fulfils all the legal obligations set out by its Article 51.