European Resource Adequacy Assessment


European Resource Adequacy Assessment

What is it?

Mandated by the 2019 Clean Energy Package, the European Resource Adequacy Assessment (ERAA) is ENTSO-E’s annual assessment of the risks to EU security of electricity supply for up to 10 years ahead.

Following the approach of the ERAA methodology by ACER in October 2020, ENTSO-E must carry out an annual ERAA to assess whether the EU has sufficient electricity resources to meet its future demand.

At national level, Member States set their own electricity reliability standard to indicate the level of security of electricity supply they need.

At European level, ENTSO-E’s ERAA aims to identify potential electricity resource adequacy concerns in the EU and provide an objective basis for assessing the need for additional national measures ensuring security of electricity supply such as the introduction of temporary capacity mechanisms.

European Resource Adequacy Assessment

What is the role of ACER with respect to the ERAA?

ENTSO-E is required to assess, annually, the risks to EU security of supply in its ERAA. This assessment aims to provide an up-to-date outlook for 10 years ahead.

ACER has been closely involved in the development of the current EU adequacy framework and its implementation. ACER:

  • approves the methodologies associated with the ERAA,
  • engages with stakeholders and ENTSO-E to ensure the continuous improvement of the annual assessment,
  • reviews and approves ENTSO-E’s annual ERAA. ACER’s analysis includes the relevant scenarios, assumptions and results (see below the ACER decisions on the ERAAs).

ACER approved ERAA 2023, marking a milestone for the security of electricity supply across the EU and acknowledging interdependencies among Member States. It is the first time in three years of ENTSO-E’s assessment that ACER has approved it. The two previous assessments from ENTSO-E, ERAA 2022 and 2021, were not approved by ACER as they did not meet ACER’s expected standards.

However, ACER also calls for further enhancements in the next annual assessment (ERAA 2024).

European Resource Adequacy Assessment

ERAA 2023: access the latest ERAA

European Resource Adequacy Assessment

ERAA 2024: Track ACER's involvement

ACER engages throughout the year with ENTSO-E and other stakeholders, communicates its views and strives to resolve pressing matters.

 1. ENTSO-E webinar on input data – March 2024

During the ENTSO-E webinar on the preliminary input data, ACER:

  • highlighted the role of transparency and stakeholder involvement in ensuring data quality,
  • reiterated the need for reliable input data for robust ERAA results.

2. Response to the public consultation on input data – March 2024

ACER’s response to ENTSO-E’s public consultation:

  • provided concrete examples of where assumptions and data should be improved,
  • advocated for a consistent application of data within the two modules of ERAA,
  • shared the dynamic dashboard to facilitate stakeholders’ understanding of the data behind the ERAA.

3. ACER’s Decision on ERAA 2023 - May 2024

The ACER Decision on ERAA 2023 identified three priority areas where further improvements to modelling consistency are needed:

  • apply more robust approaches to model investment decisions,
  • use flow-based capacity calculation method to model cross-border electricity flows to reflect trade opportunities, and
  • fine-tune the modelling of investor’s risk aversion via hurdle rates and applying current market rules.

Failing to implement these improvements may compromise the robustness of the assessment. For example, without changing the modelling approaches, ERAA will be prone to inconsistencies between market entry and exit decisions and the estimated adequacy risks. Ultimately, the absence of improvements to ERAA would impede the adoption of robust security of supply decisions by Member States.

The same were already communicated by ACER in a letter to ENTSO-E and all EU Transmission System Operators (TSOs) in March 2024.

4. ENTSO-E methodology webinar – May 2024

  • ENTSO-E will organise a dedicated webinar to promote a better understanding on the ERAA methodology among stakeholders.

5. ENTSO-E should submit its proposal for ERAA 2024 for ACER approval in November 2024.

  • After receiving the draft ERAA 2004, ACER will conduct its review and will issue its decision in Q1 2025.