ACER to decide on amending the congestion income distribution methodology for European electricity markets
ACER to decide on amending the congestion income distribution methodology for European electricity markets
What is it about?
On 5th July 2023, ACER has received a proposal by transmission system operators (TSOs) to amend the congestion income distribution methodology for European electricity markets.
What is the congestion income distribution methodology about?
Congestion arises when there is limited capacity to transport electricity between different areas. The congestion income distribution methodology makes sure financial settlements are allocated when congestion occurs in the electricity transmission grid. It determines how the resulting revenues, generated from congestion, are distributed among the TSOs to ensure fairness and efficient operation of the electricity market.
Why change the rules?
The amendment proposal contains two main changes. In particular, it:
- Aims at providing solutions to address unintuitive flows (i.e. when electricity flows from an expensive zone to a cheaper one), in order to guarantee a non-discriminatory treatment of all TSOs (as required by the capacity allocation and congestion management (CACM) Regulation).
- Specifies how congestion incomes generated from the exchange of balancing capacity and the sharing of reserves should be distributed among TSOs.
What are the next steps?
ACER will reach a decision on the proposal by 5th January 2024.
To take an informed decision, ACER will engage in discussions with TSOs and national regulatory authorities (NRAs) as part of its decision-making process.
Access the public notice initiating the procedure.