24.3.2023

ACER approves the rules on cross-zonal capacity allocation in long-term electricity markets

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ACER approves the rules on cross-zonal capacity allocation in long-term electricity markets

What is it about?

Europe’s long-term electricity market relies on so-called long-term transmission rights (LTTRs), which allow market participants to hedge their exposure across bidding zones. The allocation of those LTTRs is currently not coordinated across different borders, which leads to inefficiencies in some capacity calculation regions (CCRs).

To enable the implementation of the long-term flow-based allocation in the Core and Nordic CCRs, ACER approved on 22 March 2023 three proposals from Transmission System Operators (TSOs) for amendments to the forward capacity allocation methodologies related to:

  • Single allocation platform, including the methodology for sharing costs for its establishment, development and operation (SAP);
  • Congestion income distribution (CID); and
  • Sharing costs incurred to ensure firmness and remuneration of LTTRs (FRC).


To ensure an informed decision, ACER organised a workshop on 17 November 2022 and ran a public consultation from 26 October to 28 November 2022 to gather stakeholders’ views.

What are the benefits of the new rules?

The newly approved methodologies include requirements for flow-based allocation of LTTRs, aiming to make the long-term market more efficient by allowing competition between the different bidding zone borders of a capacity calculation region and align it with the day-ahead market design. In particular, this revision was needed to enable the implementation of two ongoing projects for long-term flow-based capacity calculation and allocation; in the Core and the Nordic CCRs. To finalise this implementation, the last methodology still needs to be revised: the Harmonised Allocation Rules (HAR).

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

The Nordic region comprises 4 countries: Denmark, Finland, Norway and Sweden.

 

Access the ACER Decision 05/2023 on SAP and its Annex I, Annex Ia, Annex II.

Access the ACER Decision 06/2023 on CID and its Annex I, Annex Ia, Annex II.

Access the ACER Decision 07/2023 on FRC and its Annex I, Annex Ia, Annex II.

 

See the ACER Evaluation of Responses to the public consultation.