Today, ACER releases its Opinion, addressed to the European Parliament and European Commission, highlighting the urgency for Transmission System Operators (TSOs) to meet their obligation of making 70% of transmission capacity available for cross-border electricity trading by the end of 2025. The urgency relates to the approaching legal deadline and the delays with many of the necessary steps to reach the 70% transmission capacity rule that is needed to achieve the ambitious political objectives set for renewable generation. The ACER opinion makes clear that without significant uptake in progress on the “70% rule”, such ambitions will be hard to achieve.

Electricity transmission capacity connects Europe’s markets and benefits consumers

Transmission capacity is essential for cross-border trade of electricity, as it connects supply and demand. TSOs delivering maximal transmission capacity to trade electricity is therefore an essential condition to achieving the ambitious political objectives set for renewable generation.

What is the minimum 70% capacity requirement and where are we on the path?

When more capacity being made available for trading electricity with neighbouring countries did not happen fast enough, EU legislators introduced (in 2019) rules that require grid operators to ensure that at least 70% of their physical transmission capacity is available for cross-border electricity trading by the end of 2025 at the latest. ACER has reported yearly that significant steps remain to be taken for TSOs to fulfil this obligation. As the end of 2025 legal deadline approaches, ACER enlists the support of the European Parliament and the European Commission so that the final necessary steps are taken.

The last ACER report (July 2023) found that most Member States in highly meshed areas of the power grid made available on average 30-50% of the capacity for certain network elements. In parallel, the costs of managing grid congestions in the EU exceeded €4 billion in 2022.

Why is maximising transmission capacity important?

Maximising grid capacity refers not just to the ‘physical’ grid (high voltage lines) but also to the transmission capacity that TSOs make available on those lines for trading (‘commercial transmission capacity’) with neighbours.

Maximising interconnection capacity by reaching the minimum 70% requirement:

• is a pre-requisite for the energy transition;
• enhances security of electricity supply by optimising the use of the existing grid;
• mitigates prices and price volatility;
• provides the market with much-needed flexibility; and
• ensures a level playing field between domestic and cross-border trades.

There is much at stake in not reaching the minimum 70% requirement and Member States are still far off it. What does ACER call for to reach the 70% minimum requirement?

This ACER Opinion calls for the swift implementation by Member States and TSOs of the 3 tools foreseen by EU rules to get us to the 70% minimum requirement:

1. TSOs to do optimised and coordinated reduction of grid congestion. Such ‘remedial actions’ include coordinated re-dispatching and countertrading by TSOs (which relieves congestion and frees up more transmission capacity to the market). Currently, grid congestion is assessed mostly at national level. Fully coordinated processes and an adequate cost-sharing is yet to be done by TSOs.
2. TSOs to undertake targeted grid developments within specific bidding zones and targeted at reducing congestion in that zone.
3. TSOs to complete the technical assessment of the ongoing review of the EU’s bidding zones (and Member States/European Commission to then decide) to ensure alignment of the bidding zone configurations with structural grid congestion. The results of the EU electricity bidding zone review are expected, after several delays, by the end of 2024. In this review process, Member States, and if necessary, the European Commission, will have a key role to play in confirming or re-defining (as appropriate) the bidding zone configuration.

What are the next steps?

In June, ACER intends to publish its new Market Monitoring Report (MMR) on the capacity made available (in the year 2023) for cross-border trade with neighbours. This report will be followed by a public webinar.

ACER is seeking for applicants to join a new consultative expert group, which will work on Power Purchase Agreements (PPAs).

The main focus of the new expert group will be to advise on the need for standardised PPA contracts within the European energy market, exploring their feasibility, main benefits and drawbacks. Experts will help ACER assess whether standardised PPAs will foster the transparency, efficiency and integration of the European internal energy market, and will build the necessary knowledge to ensure alignment with other European energy policies and objectives.

The expert group will operate from spring to summer 2024, with the possibility of extending into 2025 for further analysis on the development of such contracts.

How to apply?

ACER is seeking for a diverse group of experts with experience in legal, financial, and technical fields related to energy regulation (especially electricity markets).

To apply, please follow the instructions in the Open Letter and make sure you fulfil all the application criteria​.

Application deadline is Friday 19 April 2024.​

In November 2023, Transmission System Operators (TSOs) submitted to ACER their proposal to amend the definition of two European electricity Capacity Calculation Regions (CCR).

On 19 March 2024, with its Decision No 04/2024, ACER has approved the amendments to the Core and Italy North CCRs.

What are the capacity calculation regions and why are they important?

CCRs define the geographic areas (i.e. by listing bidding zone borders) across the EU where TSOs coordinate the capacity calculation and other processes (i.e. subject to regional methodologies).

Currently, there are eight CCRs in the EU: Nordic, Baltic, Hansa, Core, Italy North, Greece-Italy (GRIT), South-West Europe (SWE) and South-East Europe (SEE).

Having an efficient definition of CCRs benefits European consumers and producers:

• It allows TSOs to run regional processes related to capacity calculation, re-dispatch and countertrading more effectively.
• It optimises the provision of cross-zonal capacity, allows for more cross-zonal trade and ensures security of supply.

What has changed?

• The Core CCR will include the Celtic interconnector, an undersea cable between Ireland and France. This will facilitate Ireland’s further integration into the European electricity market.
• The Core and Italy North CCRs will be merged and form a new CCR called Central Europe. Initially, this merger will only apply to the day-ahead capacity calculation process. It will improve the coordination and efficiency of capacity calculation and allocation processes in continental Europe.

How did ACER contribute?

ACER assessed whether the TSOs’ proposal contributes to market integration, non-discrimination, effective competition, and the proper functioning of the EU electricity market.

To make an informed decision, ACER consulted with stakeholders in winter 2023-2024.

Next steps

The Celtic interconnector will become part the Core CCR once it becomes operational (expected in 2026).

The TSOs shall submit the day-ahead flow-based capacity calculation methodology for the newly formed Central Europe CCR by January 2025.

The ACER report on key developments in the electricity wholesale markets presents the main results of monitoring the EU electricity wholesale market in 2023 and recommends further actions to foster its integration. It also presents some data on the Energy Community region.

What 2023 electricity trends did ACER’s monitoring and data insights find?

Electricity from renewable energy sources (RES) reached record heights surpassing and replacing fossil fuels. The facts in this ACER report attests to renewable growth driving the EU’s clean energy transition. Coal-fired and gas-fired power plants usage declined.

• Renewables rose to a record 45% of overall electricity generation. Wind and solar are powering this growth in renewables generation.
• Big renewable capacity additions reduce the need for fossils. Renewables account for more than half of the overall installed capacity for the first time, with wind and solar contributing the most. For conventional power plants, the installed capacity remained stable.
• Electricity demand fell significantly, playing a key role in cutting Europe’s reliance on fossil fuel.
• The fall in gas prices led to lower electricity wholesale prices, but they remain higher and more volatile than before the energy crisis. Imbalance- and intra-day prices followed the trends in the day-ahead market.
• The EU faced record negative wholesale prices due to the speeding up of renewable growth to meet sustainability goals.
• Further interconnectivity and enhanced EU electricity market integration is still needed including tackling barriers to cross-zonal trade and reinforcing the EU network.

Access the report.

Along with ACER’s report on the key developments in the gas wholesale markets, today marks the beginning of ACER’s 2024 Market Monitoring Report (MMR) series.

In April 2023, the regulatory authorities of the Core capacity calculation region referred to ACER two proposals from the Transmission System Operators (TSOs) to amend the Core region’s Intraday Capacity Calculation Methodology (Core ID CCM).

After extensive discussions with Core TSOs and regulatory authorities, and having consulted with stakeholders in summer 2023, ACER has decided to approve the proposals, with some amendments.

The Core region comprises 13 Member States: Austria, Belgium, Czech Republic, Croatia, France, Germany, Hungary, Luxembourg, the Netherlands, Poland, Romania, Slovakia and Slovenia.

What's new?

Since June 2022, the intraday capacity calculation methodology in the Core region has been based on a flow-based approach, which is aligned with the day-ahead flow-based market coupling. This approach helps determine how much electricity can be sent across borders based on the current network conditions, aiming for a more efficient grid use.

The TSOs have proposed two amendments with the following objectives:

• Ensure the methodology aligns with the parallel Regional Operational Security Coordination (ROSC) process, as the intraday capacity calculation will use the ROSC outputs (such as common grid models and selected remedial actions).

• On top of the flow-based validation (performed for each critical network element), introduce the Available Transfer Capacity (ATC) validation step as a transitional solution. ATC helps verifying the amount of electricity that can be safely traded across borders. This temporary validation step will give Core TSOs additional time to further develop the flow-based validation.

By approving these amendments, ACER will facilitate the first implementation of intraday flow-based capacity calculation in Europe. This will enhance the efficiency of the intraday electricity market in the Core region and its further alignment with the congestion management process.

What are the next steps?

The first intraday flow-based capacity calculations are to be implemented by early July 2024. 

Access the updated methodology.

Today, ACER publishes its first monitoring report on the reporting obligations of the Regional Coordination Centres (RCCs).

The Regional Coordination Centres (RCCs) were introduced in 2022 with the Electricity Regulation. Their purpose is to facilitate and enhance coordination among electricity Transmission System Operators (TSOs) across regions, enhancing grid stability, fostering security of supply, and contributing to Europe’s climate and energy goals.

The RCCs’ annual reporting obligations include detailing the outcomes of their:

• operational performance monitoring,
• coordinated actions,
• recommendations issued and
• designated tasks.

What is ACER’s first RCC monitoring report about?

Since 2023, ACER is monitoring the regular reporting obligations of the RCCs, as required by the ACER Regulation, and intends to report annually on the topic.

This first ACER report was drafted in close cooperation with National Regulatory Authorities (NRAs), with input from the European Network of Transmission System Operators for Electricity (ENTSO-E) and RCCs. It covers the reporting period of second half of 2022 (reported by RCCs during 2023).

What did ACER monitoring find?

• The majority of RCCs have reported on 7 out of 16 mandatory tasks, focusing on:
  • coordinated capacity calculation,
  • coordinated security assessment,
  • common grid model,
  • consistency defence and restoration plans,
  • short term adequacy,
  • outage planning coordination, and
  • post-disturbance analysis.
• RCCs have generally submitted comprehensive reports to ACER and NRAs on tasks that are either fully or partially implemented, detailing the implementation status and timelines for each.
• RCCs have not reported on tasks that are under development or without an established methodology. This led to a reporting gap on 5 tasks, which are dependent on the methodologies’ implementation progresses as of 2022.

What does ACER recommend?

ACER identifies areas where the RCC reporting can improve in clarity. Particularly, ACER suggests to better define the:

• Key performance indicators used in the reports to ensure transparency and consistent monitoring.
• Terminology used for different tasks implementation stages.
• Monitoring process.

ACER offers recommendations for future reports, suggesting RCCs to:

• Detail their implementation timeline or plan.
• Explain the rotation of tasks, where relevant.
• Justify the reasons that delay the task implementation where a methodology is in place.

What are the next steps?

In the future, the number of tasks and obligations that RCCs will cover in their monitoring is expected to increase. This expansion depends on:

• the approval and implementation of the methodologies related to specific tasks, and
• their subsequent implementation by the RCCs.

The next ACER monitoring report is planned for early 2025 and will cover the 2023 RCC reporting period (monitored by ACER during 2024).

What else is new?

ACER recently amended the methodology for identifying regional electricity crisis scenarios. ENTSO-E will now work together with RCCs (and others) to identify the most relevant scenarios at regional level (including cross-border dependencies). Read more about it.

On 8 March 2024, with its Decision No 02/2024, ACER amended the methodology for identifying regional electricity crisis scenarios.

The amendment proposal was submitted to ACER by the European Network of Transmission System Operators for Electricity (ENTSO-E) on 8 January 2024.

What is the methodology about?

The methodology was first approved by ACER in 2020 under the EU Regulation on risk-preparedness in the electricity sector. The Regulation introduced a set of rules on how to prevent, prepare for and manage electricity crises, bringing more transparency in the preparation phase and during an electricity crisis and ensuring that measures are taken in a coordinated and effective manner.

The original methodology introduces a structured approach for regional electricity crisis scenarios (prepared by ENTSO-E) and national ones (prepared by national competent authorities) and thus serves as the basis  for the development of consistent risk-preparedness plans. The Regulation also provides for the methodology to be updated where significant new information becomes available. 

What are the main improvements in the methodology?

The key changes of the methodology are:

• A top-down process:
  • starting with 31 regional electricity crisis scenarios (from 2020);
  • merging certain scenarios or adding new ones; and
  • focusing on extreme scenarios with regional impact.
• Earlier engagement of Member States and competent authorities.
• A more pragmatic approach: ENTSO-E to undertake quantitative methods and model-based simulations where seasonal adequacy tools can be applied.

What are the next steps?

Within six months, ENTSO-E shall identify the most relevant electricity crisis scenarios at regional level (including cross-border dependencies).

ENTSO-E shall do so in close cooperation with the Electricity Coordination Group (ECG), Regional Coordination Centres (RCCs), and competent and regulatory authorities.

Learn more about the methodology.

On 17 January 2024, the National Regulatory Authorities (NRAs) of the Hansa capacity calculation region requested a six-month extension from ACER to agree on the Transmission System Operators’ (TSOs’) proposed cross-zonal capacity calculation methodology for the balancing timeframe in the Hansa region.

ACER has now granted the requested six-month extension to the EU Hansa NRAs (Denmark, Germany, the Netherlands, Poland, and Sweden).  

What is the methodology about?

The cross-zonal capacity calculation methodology for the balancing timeframe describes the rules for each Capacity Calculation Region (CCR) on calculating the amount of capacity available for the exchange of balancing energy or for operating the imbalance netting process.

Ultimately, this methodology supports TSOs in fulfilling their responsibility to maintain the stability of the electricity transmission system by ensuring an appropriate balance between electricity generation and consumption.

What are the next steps?

The Hansa NRAs have until 6 August 2024 to decide on the TSOs proposal for the cross-zonal capacity calculation methodology for the balancing timeframe in the region.

On 18 February 2024, the Dutch National Regulatory Authority (NRA), Autoriteit Consument & Markt (ACM), requested a six-month extension from ACER to adopt coordinated decisions with the Norwegian NRA, NVE-RME, on electricity cross-zonal risk hedging opportunities.

By February 2024, in accordance with the Regulation on forward capacity allocation, the Dutch and Norwegian NRAs were required to assess whether the electricity forward market in their respective bidding zone provides sufficient hedging opportunities. If these opportunities prove insufficient, the NRAs must take coordinated decisions to either:

• introduce long-term transmission rights; or
• task Transmission System Operators (TSOs) with implementing alternative measures to improve cross-zonal hedging opportunities.

What are the next steps?

ACER intends to act promptly on the ACM request, aiming to reach a decision in April 2024.

The EFTA Surveillance Authority (ESA) will decide on the extension request for NVE-RME, based on a draft from ACER, following the procedure of the Third Energy Package as outlined in the EEA Agreement.