Security of EU electricity supply

2024 Monitoring Report

Ensuring a secure energy supply is key for the European households and broader economy.

ACER’s Monitoring Report on security of electricity supply shows that despite adverse conditions, the electricity system maintained reliable supply in 2022 and 2023. However, as electricity prices are still higher than pre-crisis levels, affordability remains a key concern (as Europe seeks to secure supplies while advancing the transition to clean energy).

What trends did ACER monitoring find?

  • The European Network of Transmission System Operators for Electricity (ENTSO-E) and Member States are not yet fully implementing the EU resource adequacy framework: In particular, ACER’s monitoring shows differences in how the adequacy metrics are calculated at national level. Full implementation is crucial, since selected methods, such as the estimation approach, can significantly impact the outcomes.
  • Progress at regional and European level:
  • 40% rise in the cost of capacity mechanisms: In 2023, the cost of capacity mechanisms in Europe increased by 40% to EUR 7.4 billion. As costs rise, the mechanisms for their recovery largely fail to provide consumers with adequate price signals, limiting their ability to adjust consumption and reduce peak demand effectively.
  • Fossil-fuels received 85% of EU capacity mechanisms payments for 2035: This fossil-fuel lock-in risks delaying the decarbonisation of the electricity sector, calling for improvements to the current capacity mechanism design.
  • 10 Member States provide support for non-fossil flexibility: These measures mainly target batteries to ensure there are enough flexible resources to integrate intermittent renewables.

What are ACER’s recommendations?

  • Foster market integration and remove barriers: Further integrating the European electricity market and dismantling barriers for demand response and new entrants can improve resource adequacy and system flexibility, while also reducing system costs.
  • Coordinate: To unlock further benefits for adequacy and flexibility, it is necessary to pursue more integrated approaches to security of supply (including stronger governance, trust and cooperation) between Member States.
  • Comply properly with the adequacy framework: Member States and ENTSO-E must properly implement the EU rules, focusing on enhancing the robustness of adequacy metric calculations, increasing cross-border participation in capacity mechanisms, and improving ENTSO-E’s annual European Resource Adequacy Assessment.
  • Identify best practices: Future support measures should be designed to align with affordability, competitiveness and sustainability objectives. Exploring synergies between flexibility support schemes and capacity mechanisms will also be important.

Security of EU electricity supply

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EU Security of Supply

Highlights

  • 100%

    reliable power supply and no demand disconnections due to insufficient supplies in 2023.

  • € 7.4 bn

    cost of capacity mechanisms in 2023. This is a 40% rise from 2022.

  • 85%

    of long-term contracts through capacity mechanisms directed to fossil-fuel generations in 2035.

Report

ACER’s annual monitoring report on security of EU electricity supply:

  • Examines implementation by Member States and ENTSO-E of the resource adequacy framework to safeguard Europe’s security of electricity supply.
  • Assesses whether national capacity mechanisms align with the European goals of decarbonisation and affordability.

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Infographic

Interested in the main highlights of the report?

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Additional information