28.2.2022

ACER has decided on the amendment of the common pricing methodology for European electricity balancing markets

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ACER has decided on the amendment of the common pricing methodology for European electricity balancing markets

What is it about?

The EU Agency for the Cooperation of Energy Regulators (ACER) has decided on the proposal by all Transmission System Operators (TSOs) to amend the common methodology for the pricing of balancing energy and cross-border capacity used for the exchange across the European electricity markets.

In particular, the amendment proposed is related to the technical price limit in the balancing timeframe.

The proposal was submitted to ACER in August 2021.

What are the benefits?

The methodology provides the common rules at European level for an efficient pricing of balancing energy, resulting from:

  • balancing energy bids activation
  • cross-border capacity used for the exchange of balancing energy.

What are the main elements of ACER’s decision?

ACER amended the TSOs’ proposal and included a transitory price limit of 15,000 €/MWh for the first 4 years of the European balancing platforms’ operations, until July 2026.

ACER understands that efficient market functioning is based on free price formation. As such, the technical price limit of 99,999 €/MWh (see ACER Decision 01/2020) has not changed.

The transitional price limit provides a safeguard for the first years of the European balancing platforms’ operations. This is a temporary measure for mitigating the possible risks of the initial phase of the European balancing platforms’ go-live and to allow TSOs and market participants to gather experience on their functioning. 

TSOs are also requested to closely follow the developments on the European platforms and report to ACER and national regulatory authorities, whenever needed.  

How did ACER contribute?

ACER has ensured that the decision is in line with the objectives of the Electricity Balancing Regulation and fulfils its legal obligations (Article 30(2)), as well as with those of the Regulation on the internal market for electricity.

In its decision, ACER also details the functioning of the European target model for the balancing markets and how this design facilitates the efficient functioning of the European internal electricity markets.

Access the ACER Decision 03/2022.