Capacity Calculation

​​​​​​Definition of capacity calculation regions

What is it about?

This methodology groups all the bidding zone borders of the EU's internal energy market into the different capacity calculation regions (CCRs). This is relevant for the functioning of the internal energy market, as it simplifies processes by forming such regional sub-groups. The approach needs to consider for which bidding zone borders the need of coordination is the highest (e.g. taking into account the interdependencies) and where it is most efficient to apply cross regional coordination. Different regional methodologies (such as capacity calculation, redispatching and countertrading) will be applied on the various capacity calculation regions.

Legal basis: Article 15(1) of the CACM Regulation

Responsibility: all Transmission System Operators (TSOs)

Current status: The determination of capacity calculation regions was approved by ACER in March 2024. 

Implementation: The determination of capacity calculation regions is implemented. A future assessment is foreseen to assess the efficiency of the current CCR determination based on information from newly implemented regional methodologies.

Read more on the latest approved determination of capacity calculation regions.

Documentation on the approval process of this methodology.

Check out ENTSO-E’s interactive map of capacity calculation regions. 

 

Generation and load data provision

What is it about?

The generation and load data provision  methodology sets out requirements related to the delivery of the generation and load data needed to establish the common grid model. It specifies what units and which information need to be submitted to their respective TSOs, as well as their deadlines. 

Legal basis: Article 16 of the CACM Regulation

Responsibility: all TSOs

 Current status: The generation and load data provision methodology was approved by all regulatory authorities in July 2017.

Implementation: The methodology is implemented.

Read more on the latest approved generation and load data provision methodology.

Documentation on the approval process of this methodology.

 

Common grid model

What is it about?

The common grid model (created by merging all individual grid models of TSOs) provides the best forecast of perspective network states in the relevant market time units used for the day-ahead and intraday capacity calculation.

The methodology defines the rules and procedures for developing and merging the models, including the relevant parameters of network elements, generation and load patterns, net positions of modelled areas and network topology.

Legal basis: Article 17 of the CACM Regulation

Responsibility: all TSOs

Current status: The methodology was approved by all regulatory authorities in May 2017.

Implementation: The implementation deadline foresees the common grid model to become perational and available for the day-ahead and intraday time frames by June 2018. However, implementation is still ongoing.

Read more on the latest approved common grid model methodology for the day-ahead and intraday time frames.

Documentation on the approval process of this methodology.

 

Capacity calculation methodology

What is it about?

The day-ahead and intraday capacity calculation methodology describes the rules of each capacity calculation region on how to calculate the amount of capacity  available for trading between bidding zones at day-ahead and intraday market time frames. The methodology also complies with the network security standards.

The process

  • TSOs define capacity calculation inputs, such as hourly common grid models.

  • The inputs  are used by regional coordination centres to calculate the available amount of cross-zonal capacities either by using a flow-based or coordinated Net Transmission Capacity (NTC)  approach, depending on the respective region.

  • The final cross-zonal capacities are then made available to the market coupling were they are allocated, enabling trading among bidding zones.

Legal basis: Article 20 of the CACM Regulation

Responsibility: all TSOs in each capacity calculation region

Current status: The methodology was approved in all regions. Some regions also approved amendments, or they are currently under approval.

Implementation: Different regions have different implementation timelines. Some regions have already implemented the methodology, whereas some other are expected to do so by the end of 2022.

Read more on the latest approved capacity calculation methodologies of the respective capacity calculation region.

Documentation on the approval processes of the capacity calculation methodologies of each capacity calculation region.

Development of methodologies related to day-ahead and intraday capacity calculation
Documents
See Also

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Capacity Allocation and Congestion Management
Market Rules
See Also:

Bidding Zone Review

Bidding Zone Review

Reporting on existing bidding zones and their review

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What are the bidding zones and why the need to review them?

A bidding zone is the largest geographical area in which bids and offers from market participants can be matched without the need to attribute cross-zonal capacity. Currently, bidding zones in Europe are mostly defined by national borders.

The Electricity Regulation prescribes that the configuration of bidding zones in the EU should aim at maximising economic efficiency and cross-zonal trading opportunities, while ensuring security of supply. To achieve this, a review of the existing bidding zones needs to be carried out, to identify structural congestions and include an analysis of the different bidding zone configurations. Better defined bidding zone configurations can bring several benefits, including:

  • increased opportunities for cross-zonal trade;

  • more efficient network investments; and

  • cost-efficient integration of new technologies.

How is a bidding zone review launched?

Legal basis: Articles 32-34 of the CACM Regulation, Article 14 of the Electricity Regulation

Involved parties: Transmission System Operators (TSOs), National Regulatory Authorities (NRAs), ACER, Member States (MSs), European Commission (EC)

Current status: A pan-European bidding zone review process is currently ongoing.

The CACM Regulation specifies the parties entitled to trigger a bidding zone review as well as the conditions under which it may be launched. One of the conditions is that ACER may request TSOs to launch a review of the existing bidding zone configuration in case inefficiencies in the current arrangement are detected. The presence of any inefficiencies is to be identified in at least one of the following reports, which are drafted every three years:

  • ENTSO-E’s bidding zone technical report, which details the structural and major physical congestions in Europe, along with their location and frequency.

  • ACER’s market report, evaluating the impact of the current bidding zone configuration on market efficiency.

If ENTSO-E’s technical report concludes that structural congestions exist in the EU, the relevant Member State (in cooperation with the national TSOs) must decide, within six months, to establish either national or multinational action plans or to review and amend its bidding zone configuration.

Alternatively, the review of bidding zones can be triggered by:

  • A proposal from all European TSOs, which needs to detail the methodology and the assumptions that are to be used in the bidding zone review process, as well as the alternative bidding zone configurations.

  • A report, approved by the competent regulatory authority, drafted by one or more TSOs in their control areas.

Bidding Zone Review

How has the review of bidding zones worked in practice?

The first bidding zone review

A first bidding zone review was launched in 2018. The process concluded by maintaining the status quo, given the lack of evidence that modifying the bidding zone configuration would be beneficial.

The ongoing pan-EU bidding zone review

On 5 October 2019, all European TSOs submitted a bidding zone proposal to regulatory authorities for approval. This proposal lacked alternative bidding zone configurations for a large part of Europe. By 7 April 2020, TSOs submitted an updated version of the proposal to their respective regulatory authorities, which then referred it to ACER for decision.

ACER issued its first decision on 24 November 2020, adopting the methodology and the assumptions to be used in the bidding zone review process. At the same time, ACER requested TSOs to submit the results of the Locational Marginal Pricing (LMP) simulations to be able to decide on the alternative bidding zone configurations.

On 8 August 2022, ACER published a second decision on the alternative bidding zone configurations to be considered in Continental Europe (Germany, France, Italy and the Netherlands) and in the Nordic area (Sweden).

This decision could not cover the Baltic region, as the LMP results were still missing. As these results have been provided, ACER published a third decision on the alternative bidding zone configurations for the Baltic region on 22 December 2023. In its decision, ACER concluded that no alternative bidding zone configurations need to be investigated for the Baltics.

What are the next steps?

After the adoption of ACER’s decisions on the alternative configurations, TSOs have one year to carry out the bidding zone review and provide a recommendation on whether to keep or amend the bidding zone configuration. The study carried out by TSOs has been published in April 2025.

Member States have six months to decide on the TSOs’ recommendation. If Member States fail to reach a unanimous decision, the European Commission (after consulting with ACER) has six months to decide.

More information can be found on ENTSO-E’s website.

Related documents

Documents
See Also
Capacity Allocation and Congestion Management
Market Rules
See Also:

History

The development of the CACM Regulation started in 2011 when the Agency developed the Framework Guidelines on Capacity Allocation and Congestion Management  for electricity. These Framework Guidelines were adopted on 29 July 2011.     

Among other elements, the Framework Guidelines included provisions for the forthcoming development of the Network Code on Capacity Allocation and Congestion Management. The core of these requirements was centred around cross-zonal capacity calculation and allocation in the day-ahead and intraday timeframe.

Calculation of capacities between bidding zones should maximise the possibilities to trade between bidding zones taking into account the limitations of existing network infrastructure. Capacity calculation should be efficient, transparent, and strongly coordinated among TSOs. Flow-based capacity calculation should be applied in highly meshed networks, whereas coordinated net transmission capacity (CNTC) calculation may be used in less meshed networks. In the day-ahead timeframe cross-zonal capacity should be allocated via implicit auction (single coupling). For the intraday timeframe cross-zonal capacity should be allocated through implicit continuous allocation (single coupling), which can be complemented with implicit auctions in specific cases.

The Framework Guidelines also define a process to regularly investigate and report on whether existing bidding zones are efficient. In case inefficiencies are identified, the review of bidding zones should be triggered to compare the overall market efficiency of alternative bidding zones configurations against the existing one.

Based on these Framework Guidelines, ENTSO-E was tasked to develop the Network Code on Capacity Allocation and Congestion Management. Subsequently, the draft network code was submitted to the Agency for opinion based on which ENTSO-E revised the network code and resubmitted it to the Agency. Finally, the Agency adopted a recommendation to the European Commission to adopt the Network Code on Capacity Allocation and Congestion Management subject to specific amendments proposed by the Agency. Following this recommendation, the European Commission further revised the network code, which was then finally adopted as a Commission guideline in July 2015 and entered into force in August 2015.

The detailed dates and documents of the above actions are presented below:

Action 1: 29 July 2011: The Agency adopts the Framework Guidelines on Capacity Allocation and Congestion Management for Electricity

Action 2: 27 September 2012: ENTSO-E submits the Network Code on Capacity Allocation and Congestion Management to the Agency

Action 3: 19 December 2012: The Agency adopts the Opinion on the Network Code on Capacity Allocation and Congestion Management

Action 4: 14 March 2013: The Agency adopts the Recommendation on the Network Code on Capacity Allocation and Congestion Management

A brief historic introduction
Documents
See Also
Capacity allocation and congestion management
Implementation
Stakeholders' Involvement
Monitoring

Capacity allocation and congestion management

Capacity allocation and congestion management

The CACM Regulation

Electricity transmission line

The Capacity Allocation and Congestion Management (CACM Regulation) provides binding rules for the implementation and operation of EU-wide single market coupling in the day-ahead and intraday timeframes.

These rules apply to Transmission System Operators (TSOs), Nominated Electricity Market Operators (NEMOs), regulatory authorities and ACER.

What are its core elements?

  • Calculation of capacities between bidding zones: capacity calculation should be coordinated among TSOs to become as efficient as possible and transparent for market participants. As a result, TSOs can provide an optimal amount of cross-zonal capacity for allocation in the market.

  • Allocation of cross-zonal capacities with market coupling: the most efficient way to allocate cross-zonal capacity is by using the Union-wide market coupling, which collects all bids and offers from the bidding zones within the European Union and maximises the economic surplus. For this purpose, NEMOs organize the day-ahead coupling as an implicit auction and the intraday coupling as continuous trading supplemented by numerous implicit auctions. The CACM Regulation also addresses the related post-coupling processes.

  • Management of residual congestions: physical congestions, which were not prevented by capacity calculation and allocation, need to be managed by coordinated TSOs’ actions - i.e. by using countertrading or re-dispatching.

  • Optimal definition of bidding zones: bidding zones are geographic areas within which electricity exchanges are unrestricted, whereas exchanges between bidding zones require cross-zonal capacity - which is limited. Bidding zones should be defined to prevent structural congestions within a bidding zone. In case the existing bidding zone configuration is not efficient, TSOs need to review the structure and propose a more efficient one.

CACM Regulation
Documents
See Also
Market rules
Monitoring
Stakeholders' involvement
History

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Market rules

​Market rules, (or “market codes”) are binding EU rules that couple the national electricity markets and foster their integration into a single European electricity market. The rules promote:

  • Market integration

    • Allowing the most efficient use of infrastructure and resources available at European level

    • Creating hedging and new trading opportunities

    • Contributing to the creation of the European internal electricity market

    • Ensuring an adequate level of security of supply

    • Ensuring long-term operation and network development across the European Union

  • Fairness and non-discrimination

    • Access to cross-zonal capacity’s access

    • Creating a level playing field among the parties involved

    • Facilitating the participation of demand response and renewable energy sources

  • Transparency and reliability of information

  • Competition

    • Avoiding market distortions and entry barriers

    • Facilitating the formation of cost-reflective market prices.

The Regulation on the internal market for electricity and the three European Commission regulations on market rules constitute the main legal framework for the European electricity market.

The three regulations are:

  1. Forward Capacity Allocation (FCA) Regulation 2016/1719, covering the forward timeframe.

  2. Capacity Allocation and Congestion Management (CACM) Regulation 2015/1222, covering the day-ahead and intraday timeframe.

  3. Electricity Balancing (EB) Regulation 2017/2195, covering the balancing timeframe.

The regulations envisage the establishment of more detailed rules and procedures, called “terms and conditions or methodologies”, which need to be developed by Transmission System Operators (TSOs) or Nominated Electricity Market Operators (NEMOs) and approved by National Regulatory Authorities (NRAs) or ACER.

Read more on the different market rules for the various electricity market timeframes.

Fostering the integration of the European internal electricity market

Besides helping to shape the first generation of these common rules, ACER plays a key role in their future amendment to ensure they remain fit for purpose in the clean energy transition.

ACER consults with TSOs, NEMOs and NRAs when terms and conditions or methodologies are developed or approved.  Where terms and conditions or methodologies are developed by all European TSOs or NEMOs or if the NRAs cannot agree on them on a regional level, ACER is competent to review and decide on them.

Read more on the approval process of terms conditions and methodologies.

What's the role of ACER?
Capacity Allocation and Congestion Management
Forward Capacity Allocation
Electricity Balancing
Market rules for Different Electricity Market Timeframes
Terms and Conditions or Methodologies: the Approval Process
Monitoring the Implementation of the Market Codes
Stakeholders' Involvement in the Implementation of the Market Rules
Historical Development of the Market Codes
Expert Group on Peak-Shaving Products
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Requirements for Generators

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​​​​​​The network code on the requirements for generators (RfG Regulation​) establishes a set of harmonised rules for generators to connect to the grid, namely synchronous power-generating modules, power park modules and offshore power park modules. The RfG Regulation entered into force on 17 May 2016. ​

The RfG Regulation
Documents

​The RfG Regulation provides that:

  • The connection standards apply to new power-generating modules, such as a unit or ensemble of units generating electricity connected to the network or through power electronics; as well as to pump-storage power-generating modules if they fulfil all the relevant requirements. However, some provisions do not apply to facilities' power-generating modules for combined heat and power production embedded in the networks of industrial sites (unless otherwise stated in the national framework). ​

  • The connection of a power-generating module can be refused if it does not comply with the Regulation, and if it is not covered by a derogation.

  • The connection requirements does not apply to existing power-generating modules.

  • The requirements do not apply to the power-generating modules classified as an emerging technology.

  • The Regulation does not apply to power-generating modules connected to the transmission and distribution systems that are not operated synchronously with either Continental Europe, Great Britain, Nordic, Ireland and Northern Ireland or Baltic synchronous area. This system shares the same utility frequency and is electrically tied together during normal system conditions.

  • The Regulation does not apply to power-generating modules that do not have a permanent connection point and are used by the system operators to temporarily provide power when normal system capacity is partly or completely unavailable.

  • Storage devices are not subject to the Regulation.

The core elements
Connection Codes
Monitoring
Stakeholders' Involvement
History
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High-Voltage Direct Current Connections

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​​​​​The High Voltage Direct Current Connections Network Code (HVDC Regulation) establishes the requirements for the connection of HVDC systems and direct current-connected power park modules. The Regulation entered into force on 28 September 2016. ​

The HVDC Regulation
Documents

​This Regulation provides that:

  • The connection requirements apply to HVDC systems connecting synchronous or control areas, HVDC systems connecting power park modules to a transmission network or a distribution network, an embedded HVDC system within one control area and connected to the transmission network, and an embedded HVDC system within one control area and connected to the distribution network when a cross-border impact is demonstrated by the relevant TSO. The relevant system operator can refuse the connection of a new HVDC system or DC-connected power park module which does not comply with the requirements and is not covered by a derogation granted by the regulatory or other authority where applicable in a Member State.

  • The connection standards do not apply to HVDC systems whose connection point is below 110 kV unless they have a strong cross-border impact. The Regulation does not apply to HVDC systems or DC-connected power park modules connected to the transmission system and distribution systems of islands of Member States whose systems are not operated synchronously with either the Continental Europe, Great Britain, Nordic, Ireland and Northern Ireland or Baltic synchronous area.

  • Certain provisions of the Regulation do not apply to a system having at least one HVDC converter station owned by the relevant TSO or the HVDC system owned by an entity controlling the relevant TSO.

  • Existing HVDC systems and existing DC-connected power park modules are not subject to the Regulation.​
     

The core elements
Connection Codes
Implementation
Monitoring
Stakeholders' Involvement
History
See Also

Demand connection

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​​​​​​The Demand Connection Network Code (DCC Regulation) sets harmonised standards for connecting large renewable energy production plants and integrate demand response. The Regulation entered into force on 7 September 2016. ​

The DCC Regulation
Documents

​The DCC Regulation provides that:

  • The connection standards apply to new transmission-connected demand and distribution facilities, new distributions systems and to demand units providing demand response (including any pumping module within the station that provides pumping mode only).

  • The relevant system operator can refuse the connection when the requirements of the Regulation are not met, and when a derogation is not granted by a regulatory or other authority, where applicable in a Member State.
     

  • The connection requirements should not apply to demand facilities and distributions systems connected to transmission and distributions systems of islands of Member States which are not operated synchronously with either Continental Europe, Great Britain, Nordic, Ireland and Northern Ireland or Baltics synchronous area. The DCC Regulation shall not apply to an existing transmission connected demand facility or distribution facility or an existing distribution system with the exceptions defined.

The core elements
Connection Codes
Implementation
Monitoring
Stakeholders' Involvement
History
See Also

History

History

A brief historic introduction

​​​​The Framework Guidelines on Electricity Grid Connection, adopted by ACER on 20 July 2011, define the requirements to be developed in the respective network codes:

  • Minimum standards and requirements for connection,

  • Derogations,

  • Adaptation of existing arrangements to the network codes,

  • Compliance testing, monitoring and enforcement,

  • Exchange of information between parties and improved coordination.

The network codes that stem from these Framework Guidelines focus on meeting the renewable generation targets and providing a solution on the integration of demand-response.​

Three network codes were developed following the Framework Guidelines on Electricity Grid Connection:

  • The Network Code for Requirements for Grid Connection Applicable to all Generators (RfG Regulation, which entered into force on 17 May 2016),

  • The Network Code on Demand Connection (DCC Re​gulation, which entered into force on 7 September 2016),

  • The Network Code on HVDC Connections and DC Connected Power Park Modules (HVDC Regulation, which entered into force on 28 September 2016). ​

History

Amendment to the Grid Connection Codes

In 2022, the European Commission invited ACER to initiate the process to amend the Network Code on Requirements for Grid Connection of Generators (RfG Regulation), the Network Code on Demand Connection (DCC Regulation) and the Network Code on grid connection of high voltage direct current systems and direct current-connected power park modules (HVDC Regulation).

Amendments to the network codes were needed to support the EU power grid in integrating developments such as e-mobility, storage, and energy communities.

In December 2023, ACER submitted to the European Commission its reasoned proposals for amendments to the RfG Regulation and the DCC Regulation.

In December 2024, ACER submitted to the European Commission its reasoned proposals for amendments to the HVDC Regulation.

What were ACER’s main recommendations?

RfG Regulation:

  • Update definitions and expand scope of application to include new electricity storage and electric vehicles.
  • Introduce criteria for significant modernisation of the power generating modules following the TSOs’ proposals and regulatory approval.
  • Define new requirements for various types of electric vehicles, along with associated supply equipment (such as charging parks), and electricity storage modules.

DC Regulation:

  • Update definitions and expand scope of application to include new electric vehicles and associated supply equipment as well as power-to-gas units and heat pumps.
  • Introduce criteria for significant modernisation of transmission-connected demand facilities, transmission-connected distribution facilities, distribution systems and demand units used to provide demand response services following TSOs’ proposals and regulatory approval.
  • Introduce amendments to the requirements for transmission-connected demand facilities and distribution systems.

HVDC Regulation:

  • Expand the scope of the Network Code to include new offshore demand facilities, power-to-gas facilities (mainly electrolysis), offshore electricity storage and HVDC systems connecting isolated AC networks.
  • Introduce new technical requirements for HVDC systems, to support the interconnected and offshore system.
  • Introduce technical requirements to cover new offshore demand facilities, power-to-gas facilities (mainly electrolysis) and offshore electricity storage.

Steps in the amendment process: RfG and DC Regulations

ACER published a draft Policy Paper in May 2022 and gathered initial feedback from stakeholders during a public workshop and a public consultation in June 2022. Following this, ACER ran two full-fledged public consultations in autumn 2022 and summer 2023, inviting interested parties to submit their concrete amendment proposals.

Policy Paper on the amendments to the grid connection network codes

In its Policy Paper (published in September 2022), ACER provided a high-level outline of the main areas to improve the Network Code on Requirements for Grid Connection of Generators and the Network Code on Demand Connection.

The Policy Paper addressed potential amendments to the European network codes, including:

  • technical requirements for storage, mobile storage (e.g., electric vehicles), and electrical charging points;
  • requirements for mixed customer sites (MCSs), active customers, and energy communities;
  • significant modernisation of system users’ facilities and equipment;
  • advanced capabilities for grids with significant distributed energy resources (DER) and converter-based technologies; and
  • criteria to determine generators significant for the system.

2022 Public consultation

ACER evaluated the provided responses submitted by stakeholders in the course of the full-fledged 2022 public consultation.

While reviewing stakeholders’ input, ACER organised three public workshops, focusing on specific regulatory issues, namely:

In October 2022, ACER held a fourth workshop on the amendments to the grid connection network codes.

2023 Public consultation

ACER ran a second public consultation from 17 July to 25 September 2023 to collect stakeholders’ views on concrete amendment proposals on the two European electricity grid connection network codes. Stakeholders were able to submit their comments separately, to one or both network codes. 

Additionally, ACER organised a webinar on 19 July 2023 to: 

  • present ACER’s proposed amendments to the grid connection network codes;
  • explain the purpose, process, and timeline for the amendments, and the public consultation process; and 
  • address questions. 

ACER Recommendation 03-2023

In December 2023, ACER submitted to the European Commission its Recommendation 03-2023 on proposed amendments to the grid connection network codes (GC NCs).

Steps in the amendment process – HVDC Regulation

2024 Public consultation

ACER ran a public consultation from 17 June to 8 September 2024 to gather stakeholders’ views on ACER’s concrete amendment proposals to the network code on grid connection requirements for high voltage direct current systems and related power park modules (NC HVDC).

In the context of the public consultation, ACER organised a webinar on 24 June 2024 in order to:

  • present ACER’s proposed amendments to the grid connection network code;
  • provide any necessary clarifications on the purpose, process and timeline for the amendments, and
  • inform stakeholders on how they can comment on these amendments through their participation in the public consultation.

ACER Recommendation 01-2024

In December 2024, ACER submitted to the European Commission its Recommendation 01-2024 on proposed amendments to the grid connection network code HVDC.

↓ See also

Connection Codes
Monitoring
Stakeholders' Involvement
See Also
Find out more:

Stakeholders' Involvement

Stakeholders' Involvement

The Grid Connection European Stakeholders Committee

Group meeting

ACER and ENTSO-E have established the Grid Connection European Stakeholders Committee (GC ESC) to involve stakeholders in:

  • Monitoring the implementation of the network codes.
  • Identifying potential issues or amendments.
  • Proposing operational improvements.
  • Sharing views and express feedback on different processes.

The ESC meets at least four times a year.

The Chairperson (following a recommendation of the ESC) can propose to set up ad-hoc Expert Groups (EGs) to focus on specific issues and projects. These groups report to the ESC, which may provide input to their discussions and request specific actions, reports or explanations.

Find out more

↓ See also

Connection Codes
Monitoring
History
Documents
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