13.4.2022

ACER questions the decision of the postponement of the go-live of the Core Region flow-based project and invites national regulatory authorities to investigate it

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Electricity transmission line

ACER questions the decision of the postponement of the go-live of the Core Region flow-based project and invites national regulatory authorities to investigate it

What is it about?

On Friday 8 April 2022, electricity Transmission System Operators (TSOs) and Nominated Electricity Market Operators (NEMOs) from the Core region announced the postponement of the implementation of the Core flow-based market coupling project. This project is key to realise further benefits of EU electricity market integration; a process made even more important given the significant challenges currently facing European energy markets. The project (which was originally planned for completion in December 2020) has already been delayed twice. It was due to go live on 20 April 2022.

According to ACER’s information, the implementation has been prevented by three TSOs (supported by three NEMOs) expressing several concerns about the risk of insufficient cross-zonal capacities for go-live and the impact this would have on the market functioning. All other TSOs and NEMOs of the Core region, according to ACER’s information, considered that these risks were not significant enough to delay implementation.

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

ACER acknowledges that a well-functioning electricity market is an important objective and that the risk of low cross-zonal capacities could seriously undermine it. However, ACER notes that

1) TSOs are under an obligation to offer a minimum amount of cross-zonal capacities (the so-called 70% target) and claim so far to comply with this obligation (see for example the ENTSO-E Bidding Zone Configuration Technical Report 2021); and

2) the risk of insufficient cross-zonal capacities cannot be avoided completely, as TSOs have the legally defined rights, during individual validation, to reduce cross-zonal capacity in case of operational security problems.

For these reasons, and based on the information available, ACER considers that the decision by the TSOs and NEMOs to postpone the go-live of the Core flow-based project up until now has not been properly justified.

Given the importance of this project for the EU’s electricity market integration process, ACER invites the national regulatory authorities (NRAs) of the Core region to investigate whether this failure of TSOs to adhere to the implementation deadline for now the third time constitutes a breach of their compliance obligations. ACER urges the TSOs of the Core region to minimise this delay and to implement the flow-based market coupling project as soon as possible.