ACER shares considerations on ENTSO-E’s electricity Adequacy Outlook for this winter

Electricity transmission pillars in winter with snow

ACER shares considerations on ENTSO-E’s electricity Adequacy Outlook for this winter

What is it about?

The EU Agency for the Cooperation of Energy Regulators (ACER) finds that ENTSO-E’s winter adequacy assessment is broadly consistent with its mandate and decided not to issue an opinion on it.

However, given the importance of the seasonal assessments and considering the increased public attention triggered by the high energy prices, ACER shares its considerations with ENTSO-E and other stakeholders.

ENTSO-E carries out the seasonal adequacy assessments twice a year to alert Member States and transmission system operators about risks related to the security of electricity supply that potentially might occur in the following six months.

What are the main highlights of ENTSO-E Winter Adequacy Outlook?

On 1 December 2021, ENTSO-E published its Winter Adequacy Outlook 2021/2022.

In the Outlook, ENTSO-E concluded that the current surge of gas prices in Europe should not pose adequacy risks, and that overall, there is no risk to electricity security of supply this winter.

What are ACER’s considerations?

- ACER broadly agrees with ENTSO-E, that the high energy prices likely do not have a direct impact on the short-term security of electricity supply. However, this assessment is subject to adequate gas supplies in Europe.

ACER has analysed ENTSOG’s winter gas supply assessment and emphasized, in its opinion, the value of including additional scenarios based on expected gas supplies.

Because of the interlinked nature of wholesale gas and electricity prices in Europe, it is important that ENTSO-E deepens the coordination with ENTSOG to ensure that inputs and assumptions to the seasonal assessments are consistent and reflective of cross-sectoral impacts.

- ACER observes that, as part of the common European risk-preparedness framework in the electricity sector, the Outlook effectively detects possible adequacy related problems for the winter season, complementing shorter-term regional and national assessments.

In late December 2021 (after the publication of the Outlook), following an additional unplanned outage of 4.5 GW of nuclear capacity, the French transmission system operator (RTE) re-assessed the short-term adequacy of the French power system and found that cold weather combined with low wind supply could strain supply margins during January and February 2022.

ENTSO-E updated its Outlook to provide a pan-European view, confirming that the new development in the French system had no anticipated adverse impact on neighbouring countries.

ACER recommends that these events are reflected in the Winter Review 2021/2022 published along with the next seasonal assessment. Such an ex-post comparison would give meaningful insight with respect to the completeness and accuracy of the ex-ante assessment.

- Lastly, ACER believes that an opinion on the Outlook would not bring significant new information, considering its involvement in the approval and in the implementation of the underlying methodology (through prior opinions).

The Outlook represents ENTSO-E’s fourth seasonal adequacy assessment delivered on the basis of the approved methodology. ACER has supported the implementation of the methodology by following up on the previous Outlooks by issuing opinions containing a set of recommendations.

As outlined in its latest opinion, ACER expects that the next seasonal assessment (Summer Outlook 2022) will fully comply with the approved methodology.

ACER, in close coordination with ENTSO-E and the national regulatory authorities, will continue to follow potential adequacy risks manifesting in the European electricity system.

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