In a further step towards Europe’s clean energy transition, ACER approves the methodology to be used nationally for identifying non-fossil flexibility needs. This is an important step in developing a common European basis for integrating more renewable energy into the electricity grid and meeting the EU’s decarbonisation targets. This ACER decision directly supports the EU’s Clean Industrial Deal by laying the groundwork for a more resilient electricity system that can power a competitive, low-carbon economy.

The flexibility needs assessment methodology (FNAM), developed by the European Network for Transmission System Operators for Electricity (ENTSO-E) and the EU Distribution System Operators Entity (EU DSO Entity), and approved by ACER, will guide Member States' electricity network operators in identifying how much clean and flexible energy their country needs to handle the variability of demand and supply in their power system. 

What is power system flexibility and why does it matter?

Flexibility is the energy system’s ability to adapt quickly to changes in electricity supply and demand, without relying on fossil fuels. It enables:

• Demand response, storage or flexible generation to balance the grid in real time.
• Shifting renewable energy from periods of excess (e.g. windy nights) to times of high demand. 
• Reducing renewables curtailment (wasting renewable energy when the grid can’t absorb it).

Unlocking flexibility will cut reliance on gas, enable energy transition in a cost -effective manner and help Member States deliver on the EU’s binding 2030 renewable targets (42.5%) and climate neutrality by 2050. 

What is the purpose of the national flexibility needs methodology?

The methodology distinguishes between two main types of flexibility needs: network flexibility needs and system flexibility needs. Network flexibility reflects the flexibility needed to adjust for grid availability, whereas system flexibility refers to the ability of the electricity system to adjust both power generation and consumption in response to signals from the market.

The flexibility needs assessment methodology provides a harmonised approach for transmission and distribution system operators (TSOs and DSOs) in analysing the national flexibility needs in terms of:

• the data they must collect; and
• how they should assess their national electricity flexibility needs.

This harmonised and unified approach serves both national and EU-wide estimations of flexibility needs, with results feeding into reports that will identify how much flexibility is needed, where and at what cost. 

Each EU Member State shall now:

• Conduct a national flexibility needs assessment (FNA) using the new methodology.
• Submit it to ACER and the European Commission (by July 2026).
• Use the findings to define indicative national targets for non-fossil flexibility (by January 2027).

ACER will then publish an EU-wide report to estimate the flexibility needs including a set of recommendations on issues of cross-border relevance at EU level (July 2027). 

What’s novel about this national electricity flexibility needs methodology? 

This new methodology brings several important advancements to how Europe plans for flexibility, as it:

• Builds on existing studies, such as the European resource adequacy assessment (ERAA) and national resource adequacy assessments (NRAAs), to ensure consistency and prevent overlap. 
• Covers distribution and transmission networks, enabling a full-system view of flexibility needs.
• Relies on distribution network development plans (DNDPs) to bring transparency to local flexibility gaps.
• Quantifies the amount of non-fossil flexibility needed per country to meet EU decarbonisation targets by identifying how much renewable energy can be cost-effectively shifted from periods of surplus to times of high demand – maximising clean energy use and reducing curtailment.
• Accounts for cross-border potential and the role of interconnections in meeting flexibility needs.
• Mandates the EU DSO Entity to issue a guidance, taking into account the ACER-CEER guidance on distribution network planning (issued today), to harmonise flexibility assessments across the EU and align with the EU Action Plan for Grids. 
• Identifies regulatory and market barriers, echoing ACER’s No-regret actions to remove barriers to demand response.

This coordinated approach is essential to delivering a climate-neutral power system, ensuring renewables are fully used.

What’s next?

Member States now have 12 months to prepare their national flexibility assessments. These reports will become vital tools in shaping clean energy investment decisions, grid expansion and modernisation and designing EU policy to accelerate flexibility deployment across borders. 

On 2 July 2025, electricity transmission system operators (TSOs) submitted to ACER their proposal to amend how capacity calculation regions (CCRs) are defined across Europe. ACER is now gathering stakeholder views to inform its assessment.

What are capacity calculation regions and why are they important? 

CCRs are cross-border zones where neighbouring TSOs coordinate how much electricity can safely flow between them. This cooperation helps boost cross-border trade, prevent grid congestion and price spikes, and support a more secure, integrated European energy market. 

There are currently nine CCRs in Europe: Nordic, Hansa, Core, Italy North, Central Europe (CE), Greece-Italy (GRIT), South-West Europe (SWE), Baltic and South-East Europe (SEE). They are key to ensuring efficient electricity use, especially as more countries and renewables come into play.

What is the amendment about?

The TSOs are proposing:

• adding three new CCRs to the South-East Europe region to cover borders with Energy Community countries (East-Central Europe (ECE), Italy-Montenegro (IT-ME) and Eastern Europe (EE)); and
• merging two existing regions (Core and Italy North) for several regional processes like intraday coordination and congestion management. 

Your view matters!

ACER is assessing whether the TSOs’ proposal supports market integration, ensures efficient use of the grid and supports the well-functioning of the EU electricity market.

To make an informed decision, ACER is organising a public consultation from 24 July 2025 to 3 September 2025. Submit your views here.

ACER aims to reach a decision by December 2025.

Today, ACER publishes its fifth report on cross-border cost allocation (CBCA) decisions for electricity and gas infrastructure projects.

Covering 50 decisions made between 2014 and 2024, the report provides insights into how these decisions, issued by national regulators, determine the cost distribution of major cross-border projects and support project development.

How cross-border cost allocation works

Cross-border cost allocation is a mechanism designed to fairly distribute the investment costs of projects of common interest (PCIs) and projects of mutual interest (PMIs) among the countries involved. It aims to support project implementation, especially in cases where some countries would otherwise bear significantly higher costs than the benefits the project provides.

Project promoters submit investment requests to national regulatory authorities, who review them and issue CBCA decisions to determine how project costs should be shared among involved countries. This cost-sharing arrangement is required for projects to receive financial support through the Connecting Europe Facility (CEF), a major funding programme that supports the development of strategic infrastructure across Europe. 

ACER monitors all submitted investment requests and decisions taken by national regulators and regularly reports on emerging trends.  

What trends did ACER monitoring find? 

ACER’s report shows:

• Fewer decisions overall: The number of CBCA decisions fell by around 65% in the second half of the monitoring period (2019-2024). This reflects a drop in the number of PCIs included in the EU project lists, partly due to completion of major energy infrastructure projects, but also the phase-out of natural gas and Brexit, which made several projects ineligible for inclusion in the PCI lists.
• Costs stay national in most cases: Member States usually agree to cover their own costs, as each one benefits sufficiently from the project.
• Connecting Europe Facility (CEF) is the key driver: Access to grants, not the need to share costs, is the main reason project promoters submit investment requests. 
• No CBCA decisions yet for hydrogen: The sector is still in an early stage of development, but with hydrogen projects becoming eligible for inclusion in the PCI and PMI lists since 2023, CBCA decisions are expected in the coming years.

As the EU accelerates its transition to renewable energy, electricity networks must keep pace with rising demand, decentralised generation and growing cross-border flows. Strategic grid investments play an important role in supporting this transition and ensuring a reliable and efficient energy system. 

To help advance these goals, ACER publishes today its Opinion on the alignment between national and EU-level electricity network development plans, identifying areas where greater consistency is needed to ensure grid planning keeps up with Europe’s evolving energy objectives.

What are electricity network plans?

To guide future grid investments, transmission system operators (TSOs) in each Member State regularly prepare national Network Development Plans (NDPs). At the European level, the European Network of Transmission System Operators for Electricity (ENTSO-E) publishes the Ten-Year Network Development Plan (EU TYNDP), which addresses cross-border infrastructure needs.

Every two years, ACER evaluates how well these national and European plans align and identifies areas for improvement. Enhancing this consistency is key for timely, efficient and future-proof grid development and supports broader EU efforts, including the upcoming European Grids Package, aimed at modernising electricity infrastructure and enabling a more integrated energy system. 

What trends has ACER identified?

In its latest Opinion, ACER highlights:

• Improved alignment in electricity network planning: Member States contributed to this progress by strengthening the role of national regulators, expanding public consultations, better synchronising the timing of their national plans with the EU TYNDP, and adopting scenarios similar to those in the EU plan.
• Remaining inconsistencies: Despite these improvements, significant differences remain between national and European planning efforts. These include misaligned planning cycles, TYNDP projects not reflected in corresponding national plans, and limited data transparency, all of which may hinder efficient and coordinated grid development. 

What does ACER recommend?

To further improve consistency, ACER suggests that entities responsible for NDPs: 

• Align national and EU planning cycles on a two-year basis.
• Improve coordination between transmission and distribution system operators.
• Strengthen the role of national regulators by granting them formal approval rights over draft NDPs.
• Consult publicly on early versions of NDPs and conduct more targeted consultations on planning scenarios and cost-benefit analyses.
• Increase transparency around project investment costs.
• Include projects not managed by TSOs in the planning process, while ensuring proper national regulatory oversight.

What are the next steps? 

ACER encourages relevant entities to consider these recommendations when preparing future electricity network development plans. 

ACER will continue working with Member States, ENTSO-E and the European Commission to promote more coherent and effective grid planning across the EU.

ACER’s 2025 retail energy country sheets offer a concise overview of the national electricity and gas markets across EU Member States and Norway. For the first time, the country sheets cover both sectors, presenting: 

• market and competition metrics for electricity and gas; 
• consumer trends (including contract types, contract switching rates and bill breakdown); 
• progress towards enabling more flexible consumers (through smart meter roll-out, prosumer participation, deployment of electric vehicles and heat pumps, and biomethane production); and
• a high-level assessment highlighting each market’s strengths, weaknesses, opportunities and threats (SWOT analysis). 

ACER has also updated its retail pricing dashboard, which shows monthly changes in household energy prices across EU Member States and Norway from January 2019 to June 2025.

What are the main findings in retail markets?

Electricity market

• Smart meters, a key enabler for demand-side flexibility, are largely in place across the EU, but roll-out levels vary among EU Member States and Norway. In half of EU Member States, deployment has reached 80%, while in 7, deployment remains below 20% (or no data was provided). 
• Although 2024 saw an increased number of hours with low wholesale electricity prices (below €5/MWh), fixed price and/or regulated contracts still dominate in 15 Member States at the household level. This widespread uptake limits consumers’ exposure to real-time price signals, preventing cost savings and hindering more innovative and flexible contracts. The limited adoption of dynamic-price contracts suggests that demand-side flexibility potential remains untapped.
• In 21 Member States, prosumers account for between 1% and 10% of households. The highest shares are observed in Belgium (22%) and the Netherlands (30%). 

Gas market

• 82% of residential energy consumption is used for space and water heating, underlining the importance of energy efficiency and building renovation strategies to support decarbonisation.
• A decline in gas demand has been recorded in 21 Member States since 2022, while biomethane production remains relatively low.

Market structure

• Both electricity and gas retail markets show moderate to high concentration across the EU, meaning a small number of suppliers hold a large share of the national market. 
• 20 Member States either recorded low switching rates (below 10%) or did not provide data, indicating limited competition or low consumer engagement.

The country sheets complement ACER’s retail Monitoring Report (coming in November).

Retail prices: Latest trends from ACER’s dashboard 

ACER’s retail pricing dashboard highlights the main trends in household electricity and gas prices. 

• Electricity prices across Europe stabilised by June 2025, ending the decline observed since early spring. Spain and Portugal recorded the sharpest monthly rises (+7% and +6%, respectively), followed by more moderate increases in Greece, the Netherlands, Italy and Austria. In contrast, prices declined in Norway (-7%), Estonia (-3%), and in Belgium, Latvia, Sweden and Lithuania (-2%). Most other countries recorded no change. On an annual basis, EU household electricity prices rose by approximately 3%.

• Retail gas prices also remained largely stable, with minor monthly changes: Belgium and Portugal registered small increases (+1%), while Italy recorded the largest decrease (-4%), followed by France and Latvia (-2%), and the Netherlands, Estonia and Austria (-1%). While retail gas prices remained unchanged month-on-month in most Member States, retail offers were approximately 7% higher than those available during the same period last year. 

What are the main trends in wholesale gas markets? Prices remained elevated year-on-year but showed little monthly change, despite volatility driven by global trade and security shocks. More information is available in ACER’s monitoring report on key developments in gas wholesale markets report, published today.

Published today, ACER’s latest report on key developments in European gas wholesale markets (Q2 2025) examines key trends in prices, supply and storage during the early months of the gas summer season. The analysis supports policy discussions on enhancing secure and competitively priced gas in Europe.

What trends did ACER monitoring find? 

• Gas wholesale prices and volatility: Average wholesale gas prices fell by over 20% compared to Q1 2025, following a high-price winter. Price volatility eased, but remained relatively high, while regional price differences widened.
• LNG imports: Liquefied natural gas (LNG) imports rose by more than a third year-on-year, supported by competitive hub prices, slack demand in Asia and expanded US liquefaction capacity.
• Pipeline imports: No major changes were observed except for Russian supply to the EU, which dropped by 45% year-on-year following the expiry of transit contracts via Ukraine. Deliveries now reach the EU only through the TurkStream pipeline.
• Gas storage: Gas injections increased by 75 TWh year-on-year, helping to reduce the gap in storage levels compared to previous years. This follows a relatively tight end-of-winter, when stocks were lower than in 2023 and 2024. 

Looking ahead

If current LNG inflows and storage injection levels continue, Europe is likely to enter winter with healthy reserves. Still, risks remain: extreme weather, disruptions to major supply sources, or geopolitical instability could alter the trajectory. On the supply side, the expected expansion of global LNG production in late 2025 and 2026 may help ease pressure.

Today, ACER hosted the Ukrainian energy regulator, NEURC, for a closed workshop on regulatory issues.

ACER Director, Christian Pilgaard Zinglersen, welcomed Mr Yuriy Vlasenko, NEURC Chairman, and Mr Oleksandr Formagei, Commissioner at NEURC, to ACER’s headquarters in Ljubljana, Slovenia.

The regulatory discussion focused on 3 energy issues:

• Ukraine’s integration into the EU electricity market;
• gas market developments and challenges; and
• implementation of REMIT (the EU framework that seeks to prevent market manipulation and abuse on wholesale energy markets) in Ukraine.

The Ukrainian regulator also spoke to the extensive damage done to energy infrastructure by Russian attacks - this making their simultaneous commitment to enact EU regulatory reforms all the more impressive.

The area of energy remains a key focus area, both during the current war in Ukraine and for post-war economic recovery. In February this year, the European Commission committed to Ukraine’s accelerated EU membership with a new package of support for energy security and Ukraine’s EU energy market integration.

Earlier this week, in Brussels, Ukraine completed its pre-accession screening process with the European Commission on energy issues and trans-European networks. This marks a key milestone of Ukraine’s fast-track path to EU membership.

Meanwhile this week, in Rome, at the Ukraine Recovery Conference, European Commission President Ursula von der Leyen unveiled a new €2.3 billion package of agreements with international and bilateral public financial institutions to support Ukraine's recovery and reconstruction efforts. The conference pointed to strengthening Ukrainian institutions and promoting long-term sustainability.

ACER’s workshop today in Ljubljana, technical in nature and focused on core energy regulatory issues, is yet another example of the EU’s steadfast commitment to Ukraine's future in the EU. It follows ACER’s recent visit (in May) to Kyiv and an earlier ACER workshop dedicated to NEURC in October 2023.

NEURC called for further collaboration with ACER to strengthen its capacity and help get ready for its EU-based future.

ACER Director, Christian Zinglersen, confirmed “ACER is fully committed to collaborate with our Ukrainian colleagues as they accelerate regulatory reforms and enhance their human, technical and IT capacities. We all know the end destination (EU membership) and ACER wants to do its bit to enable this sooner rather than later."

Following a consultation process launched in March 2025, ACER has concluded that implementing peak-shaving products in the EU electricity market under normal conditions would bring more challenges than advantages.  

What are peak-shaving products?

Peak-shaving products are market-based tools that enable market participants to reduce their electricity consumption (during peak demand periods) in exchange for compensation.

Under the 2024 Electricity Market Design (EMD) Regulation, the Council of the EU can declare a regional or EU-wide crisis if wholesale electricity prices become excessively high. In such cases, Member States can direct system operators to use peak-shaving products to reduce power demand, helping stabilise the grid and lower prices.

Why an ACER assessment?

The EMD Regulation mandates ACER to assess the potential impact of developing peak-shaving products on Europe’s electricity market under normal (e.g. non-crisis) conditions. ACER’s assessment evaluates whether these products can be introduced without disrupting the normal functioning of electricity markets or redirecting demand response services towards peak-shaving products.

To strengthen its assessment, ACER engaged with more than 40 stakeholders, including through an Expert Group and a public consultation (spring 2025). 

What are ACER’s conclusions?

ACER’s assessment shows that the drawbacks of introducing peak-shaving products in the EU electricity market under normal conditions outweigh the potential benefits. Therefore, ACER does not recommend amending the existing legal framework to allow their use outside of electricity price crisis situations. Key concerns identified include:

• reduced overall socio-economic benefits;
• distorted cross-border competition; and
• weakened investment incentives for market-based demand response and flexibility.

In its assessment, ACER also provides recommendations to support Members States in implementing peak-shaving products during electricity price crises. These recommendations aim to enhance the products’ effectiveness and minimise any unintended consequences.

What’s next?

Based on ACER’s assessment, the European Commission will decide whether to propose amendments to the Electricity Regulation to allow peak-shaving products outside of electricity price crisis situations.

ACER publishes its Opinion on the Summer Supply Outlook 2025 prepared by the European Network of Transmission System Operators for Gas (ENTSOG).

The Summer Outlook evaluates the ability of the EU’s gas system to meet demand and handle storage injections during the upcoming summer and winter seasons.

The expected gas demand and supply projections are modelled under a reference scenario, which is complemented with various challenges to the gas system (such as cold winters and disruptions in Russian gas supply). 

What are the 2025 Summer Outlook’s main highlights?

The Outlook examines the EU’s dependence on Russian gas supply:

• In all scenarios, gas imports via the TurkStream pipeline (running from Russia to Turkey) are minimised.
• Two additional Russian gas disruption scenarios are modelled: a complete disruption of TurkStream and a 20% reduction of liquefied natural gas (LNG) supply.

In all scenarios, the Outlook concludes that the current European gas infrastructure is adequate to ensure security of gas supply.

These scenarios broadly align with the recent proposal by the European Commission to coordinate a gradual phase-out of Russian gas imports by stopping existing spot contracts by mid-2026, with the aim of ending all remaining gas imports by the end of 2027.

What’s in the ACER Opinion?

ACER welcomes the timely publication of ENTSOG’s Summer Outlook (April 2025), the modelling updates to reflect recent changes in infrastructure (e.g. new LNG terminals and cross-border capacities) and to cover the potential EU gas transit via Ukraine. ACER also suggests further improvements to the Outlook’s future editions:

• Include a gradual phase-out of Russian gas supply in a sensitivity scenario, reflecting the roadmap of the European Commission.
• Focus on LNG import trends, as the increasing global LNG market expansion is influenced by geopolitical instabilities (e.g. the current conflict in Iran may impact gas supply and price due to the country’s strategic location for energy exports).
• Review transmission system operators’ demand estimates by comparing them with past demand, political and economic trends, as well as with third-party projections.
• Explore the impact of gas prices on gas supply and storage filling, as it may alter the typical supply pattern. This would provide a more realistic assessment of the gas system in the coming year.