ACER publishes the 2021 monitoring report on security of electricity supply
What is the report about?
The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today its first stand-alone report on the performance of Member States (MSs) regarding security of electricity supply in 2021 (‘Report’). The Report extends the depth and scope of past reporting on the subject in ACER market monitoring reports.
The Report looks into three main areas:
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The implementation of the methodologies to calculate the value of lost load, the cost of new entry and the reliability standard by MSs;
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The short- and long-term adequacy assessments at European and national level; and
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The measures implemented by MSs to address security of electricity supply concerns.
The report does not cover measures deployed as a response to the current crisis.
What are the Report’s key findings?
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MSs gradually implement the ACER’s harmonised methodology to calculate the value of lost load, the cost of new entry and the reliability standard defining the necessary level of security of electricity supply. However, non-uniform approaches in implementation need further attention.
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The short-term and seasonal adequacy assessment framework is largely in place. Only two incidents were identified in 2021 and were tackled by Transmission System Operators (TSOs) in a coordinated manner to avoid possible supply interruptions.
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While ENTSO-E’s pan-European resource adequacy assessment is under development, MSs assess security of supply at a national level. Out of the 14 national assessments conducted in 2021, 7 revealed adequacy concerns in at least one of the next ten years.
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Cost of additional capacity mechanisms rises to €5 billion in 2021 (+81% from 2020) and is expected to reach €7 billion in 2023, largely directed to conventional power generation. ACER raises attention on potential lock-in effects stemming from long-term contracts and points to incompatibility of such capacity mechanisms’ outcomes with future climate and energy targets.
What are the next steps?
ACER will intensify efforts to monitor the implementation of the adequacy-related methodologies at European and national level and will continue to report on security of supply measures, including those applied as a response to the current energy crisis.