Implementation of guideline on capacity allocation and congestion management
The CACM Regulation sets out specific obligations for NEMOs, TSOs, regulatory authorities and the Agency regarding the development and approval of different terms and conditions or methodologies, which are considered as detailed rules for the operation of Internal Electricity Market in the day-ahead and intraday timeframe. Article 9 of CACM Regulation describes the process of adoption of these terms and conditions or methodologies. In accordance with Article 9(6) of CACM Regulation these terms and conditions or methodologies are divided into European, regional and national. They are developed either by TSOs or NEMOs and in specific cases the cooperation of both is required. A proposal from NEMOs or TSOs should typically be consulted upon in accordance with Article 12 of CACM Regulation and submitted to the concerned regulatory authorities and to the Agency in accordance Article 9(9) of CACM Regulation. The proposal should contain a timescale for implementation and the expected impact on the objectives of the CACM Regulation (Article 3).
Regulation (EC) No 713/2009 has been repealed and replaced by the Regulation (EU) 2019/942 of 5 June 2019 and amends some procedures established by either Regulation (EC) 713/2009 or Regulation (EC) 714/2009.
The ‘old’ procedure for adoption of the terms and conditions or methodologies (before 4 July 2019) now applies for only regional and national decision making processes:
The concerned regulatory authorities should take decisions concerning the proposed terms and conditions or methodologies from NEMOs and/or TSOs within six months after the receipt of the proposal. Where the regulatory authorities are not able to approve the proposal, they can request an amendment, which gives the concerned NEMOs or TSOs two months for amending the proposal. Subsequently the regulatory authorities need to approve the amended proposal within two months after receiving the amended proposal. If the regulatory authorities are not able to reach an agreement or upon their joint request, the Agency becomes competent to adopt a decision on the proposal within six months from the referral.
The ‘new’ procedure (after 4 July 2019) now applies for only those terms and condition or methodologies, which are subject to approval by all regulatory authorities, in accordance to Article 9(6) of the CACM Regulation:
The Agency should take decisions concerning the proposed terms and conditions or methodologies from NEMOs and/or TSOs within six months after the receipt of the proposal.
To enable a regular review of the terms and conditions or methodologies, the TSOs or NEMOs responsible for developing these terms and conditions or methodologies may propose amendments to them and submit them for approval to regulatory authorities or the Agency, respectively.
For the designation of NEMOs and reviewing the existing bidding zone configuration, different rules and procedures apply and are described in more detail in pages Designation of NEMOs and Bidding zone review.
The core elements
The core elements of CACM Regulation are:
Optimal definition of bidding zones. Bidding zones are geographic areas within which electricity exchanges are unrestricted, whereas exchanges between bidding zones require cross-zonal capacity - which is limited. Bidding zones should be defined to prevent structural congestions within a bidding zone. In case the existing bidding zone configuration is not efficient, TSOs need to review the structure and propose a more efficient one.
Calculation of capacities between bidding zones. Capacity calculation should be coordinated among TSOs to become as efficient as possible and transparent for market participants. As a result, TSOs can provide an optimal amount of cross-zonal capacity for allocation in the market.
Allocation of cross-zonal capacities with market coupling. The most efficient way to allocate cross-zonal capacity is the use of the Union-wide market coupling, which collects all bids and offers from the bidding zones within the European Union and maximises the economic surplus. For this purpose, NEMOs organize the day-ahead coupling as an implicit auction and the intraday coupling as continuous trading supplemented by numerous implicit auctions. The CACM Regulation also addresses the related post-coupling processes.
Management of residual congestions. Physical congestions, which were not prevented by capacity calculation and allocation, need to be managed by coordinated TSOs' actions -i.e. by using countertrading or re-dispatching.