ACER’s REMIT Quarterly provides updates on the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) and related activities, including insights into the 2024 revision of the REMIT Regulation to help stakeholders stay informed on changes that enhance transparency and integrity in the European energy market.

What is in the latest REMIT Quarterly?

The 39th edition covers the fourth quarter of 2024 and includes:

• ACER’s work on data reporting following the revised REMIT.
• Key takeaways from two joint roundtable meetings (26 and 28 November 2024) with Registered Reporting Mechanisms (RRMs), Inside Information Platforms (IIPs), Associations of Energy Market Participants (AEMPs) and Organised Market Places (OMPs), which discussed the upcoming revision of the REMIT Implementing Regulation, and shared updates on data reporting guidance.
• Minutes of the 3rd and 4th Expert groups’ meetings on Wholesale Energy Market Data Reporting and on Wholesale Energy Market Integrity and Transparency.
• Obligations for hydrogen market participants to disclose inside information.
• Updates on guidance documents on REMIT transaction reporting and trends in data reporting, including top 5 reporting entities.
• Overview of REMIT breach cases in 2024, with 390 cases under review at the end of Q4.
• Summary of 2024 trading activities on Organised Market Places.

Today, 31 January, marks the final day of the EU’s gas Market Correction Mechanism (MCM).

Established by the MCM Regulation in December 2022, in the midst of the energy crisis, this mechanism was designed to protect EU citizens and the economy against excessively high energy prices.

It tasked ACER with the calculation and publication of a daily MCM reference price. It entered into force on 1 February 2023 for an initial year and was later extended to 31 January 2025.

What is the MCM?

The MCM was a safeguard to cap gas prices in the EU. It would activate only if:

1. Gas prices at EU hubs exceeded €180/MWh for three consecutive working days.
2. These prices were at least €35/MWh higher than the MCM reference price during the same period.

Upon activation, a bidding limit would cap gas trading prices to protect the market from further escalation.

The MCM was never activated, as market conditions never met these thresholds.

The MCM’s effects on energy and financial markets have been closely monitored by ACER and by ESMA (European Securities and Markets Authority) respectively - no significant impacts on the market have been directly attributed to it. 

Read more about the MCM.

ACER has updated its data dashboard, which tracks monthly changes in household energy prices across EU Member States and Norway from January 2019 to December 2024.

The dashboard provides valuable insights for policymakers, consumer protection groups, and EU citizens by highlighting trends in end-user electricity and gas prices, supporting informed decisions on energy affordability and system costs.

What are the key findings?

Electricity prices: In 2024, household electricity prices decreased by 5% compared to 2023. This was mainly due to a 17% fall in the energy component of prices. However, this decline was partially offset by higher network costs and the phasing out of certain subsidies. In Q4, prices and their composition remained steady, showing no significant changes compared to the previous quarter.

Gas prices: Similarly, household gas prices fell by an average of 7% in 2024, driven by the 20% drop in the energy component. Removal of subsidies contributed to a rise in the tax component, partially offsetting the decrease. In the last quarter, the average end-user gas prices slightly increased.

What lies ahead?

The drop in energy costs reflects the impact of Europe's growing use of renewable energy. However, as renewable energy generation expands, there will be a need for substantial investment in energy infrastructure, which could lead to higher network costs in the future.

The European Commission’s upcoming Action Plan on Energy Affordability will be key in addressing these challenges. The current trends highlight the importance of looking at the overall costs of the energy system (including network and infrastructure expenses), rather than focusing solely on commodity costs.

ACER will continue updating the dashboard quarterly to monitor the developments in energy affordability for European consumers.

In July 2024, ACER received a proposal from Transmission System Operators (TSOs) to amend the methodology for harmonising cross-zonal capacity allocation for the exchange of balancing capacity or sharing of reserves.

After consulting with stakeholders in the autumn of 2024, ACER revised the TSOs’ proposal. Today, with its Decision 01-2025, ACER has adopted the amended methodology.

The methodology (approved by ACER in 2023) harmonises the processes (i.e., market-based and co-optimisation) that compare the market value of cross-zonal capacity between balancing capacity and day-ahead electricity markets. These processes rely on an algorithm that optimises the allocation of available cross-zonal capacity in a way that maximises overall market welfare.

Why did ACER amend the methodology and what’s new?

The updated methodology:

• clarifies the governance of the market-based process to ensure its efficient implementation and operation;
• allows to establish rules for distributing congestion income resulting from cross-zonal capacity allocation among TSOs.

ACER’s Decision also grants TSOs more time to develop the harmonised market-based software and offers flexibility to those already operating regional market-based processes to adapt to the methodology’s new requirements.

What are the next steps?

TSOs are required to develop the harmonised market-based software by June 2026.

Full implementation of the harmonised market-based allocation process is not expected before September 2027, pending approval from the relevant National Regulatory Authorities (NRAs).

ACER is establishing an Expert Group to assess flexibility needs in the EU electricity system. We are looking for professionals with expertise in power market modelling, energy markets, energy systems, energy economics, energy policy and energy regulations.

What will be the Expert Group’s focus?

Due to the massive ramp up of renewable energy, the EU’s power system flexibility needs are expected to double by 2030. The recently adopted Electricity Market Design (EMD) Regulation (2024) mandates ACER to conduct a pan-European flexibility needs assessment. The assessment, expected to be published in July 2027, will be based on the methodology currently being developed by the European Network of Transmission System Operators for Electricity (ENTSO-E) and DSO Entity.

Through this assessment, ACER will evaluate how well the EU’s electricity system can adapt to fluctuating demand and generation patterns to cost-effectively integrate increasing shares of variable renewables while ensuring security of supply. It will also evaluate the potential impact of introducing new measures to unlock flexibility on the European electricity markets.

This harmonised assessment will further provide the European Commission and other stakeholders with essential data and insights to inform policy decisions aimed at enhancing the resilience, stability, and efficiency of the EU's electricity market.

The Expert Group will support ACER in the development of a robust analytical tool to complete this assessment.

Experts will provide valuable insights and recommendations on:

• modelling techniques and their implementation;
• solutions to simulate and quantify the flexibility needs of the system; and
• other key topics related to improving system flexibility. 

The group will operate for two years, i.e. until April 2027, with the possibility of extension if further engagement is needed.

How to apply?

Follow the instructions in the Open Letter, ensuring that you fulfil all the criteria. The deadline for applications is 10 February 2025.

Today, ACER releases a new tool to simulate price correlations for electricity forward trading with potential virtual hub prices.

The ACER’s electricity virtual hub price simulator tool shows correlations between prices in any EU electricity bidding zone and various configurations of a virtual hub price. A virtual hub price is currently in use in the Nordic market region (i.e., the Nordic System Price), and could potentially also be introduced for Continental Europe as part of the upcoming revision of the Forward Capacity Allocation (FCA) Regulation by the European Commission. The Commission will assess whether there is a need for regional virtual hubs for forward markets. This ACER virtual price correlation simulators helps inform the debate on this topic.

Why did ACER develop this simulator?

The 2022 energy crisis revealed the high vulnerability to extreme day-ahead electricity prices in the absence of effective hedging, highlighting the importance of well-functioning electricity forward markets.

In 2023, ACER published its policy paper to further develop the EU electricity forward market. The paper identified the need for better allocation of long-term cross-zonal capacities to support forward electricity trading. It proposed shifting away from long-term transmission rights (LTTRs) for individual bidding zone border towards LTTRs between bidding zones and a virtual regional hub. To enable this approach (should the Commission decide to go this route), the revised FCA Regulation would need to establish a methodology that defines virtual hub prices.

What is proxy hedging and why could a virtual hub price be relevant?

Market participants who lack sufficiently liquid forward electricity products for their bidding zone may want to address their hedging needs via a similar but more liquid electricity forward product. The efficiency of using such an alternative forward electricity product (known as ‘proxy hedge’) depends on:

• Liquidity: the proxy product must be actively traded to ensure it can be easily bought and sold.
• Price correlation: the proxy’s price must closely reflect price movements in the bidding zone where the market participant has an open risk position.

Currently, many market participants use the (large and liquid) German forward market as a proxy for their hedging needs. A virtual hub forward electricity product, with better price correlation to EU bidding zones, may offer an efficient alternative for proxy hedging under a future integrated European forward electricity market design.

How can a market participant use ACER’s electricity virtual hub price simulator?

ACER’s virtual hub price correlation simulator is based on real day-ahead prices and enables users to explore different geographical configurations for potential hubs to hedge electricity prices. It shows how the prices of these virtual hubs would have correlated with current EU bidding zones over the past years.

The dashboard also displays the correlations between EU bidding zone prices and the currently used proxy hedging products (such as the German bidding zone price).

Can any initial findings be drawn from the data?

ACER’s virtual hub price correlation simulator provides statistical insights that support the recommendations in ACER’s (2023) policy paper. The data suggests that a well-designed virtual hub price would have stronger correlations with most bidding zone prices than the forward products currently used as proxies for hedging.

What are the next steps?

The European Commission is conducting an impact assessment to identify ways to improve the forward electricity market. Based on this assessment, the FCA Regulation is expected to be revised in 2026.

Today, ACER issues its Recommendation proposing potential improvements to the gas Capacity Allocation Mechanisms Network Code (CAM NC).

The CAM NC harmonises how Transmission System Operators (TSOs) offer and allocate available gas transmission pipeline capacity to network users. The network code, last amended in 2017, needs to be updated to reflect Europe’s decarbonisation goals and the evolving gas market.

The revision process

In 2023, ACER initiated the revision process, as invited by the European Commission. The revision process was informed by new regulatory elements from the hydrogen and gas decarbonisation package, ACER’s initial analysis of the network code's achievements and areas for improvement, and dialogue with stakeholders.

Following the analysis of inputs received during the last consultation (September-October 2024), ACER concluded the revision process by issuing its Recommendation to the European Commission on 20 December 2024.

What are the main recommendations?

• Utilise the current gas system efficiently and strengthen its monitoring by improving transparency on how capacity is maximised, and enhance coordination and consultation among relevant regulatory authorities, TSOs and network users.  
• Enhance transmission capacity that is made available by increasing auction opportunities for existing capacity products and introducing a capacity offer between monthly and daily auctions, thereby contributing to security of supply.
• Allow a quick modification of non-essential auction details to ensure auctions can reflect the evolving market conditions, while maintaining harmonised rules for capacity allocation across all interconnection points.

What are the next steps?

The European Commission can amend the network code following the comitology process. ACER’s Recommendation offers a starting point for that process.

ACER has released its multi-annual 'Single programming document 2025-2027', outlining its strategic goals and priorities for the coming years. The document also includes ACER’s 2025 Annual Work Programme, which focuses on advancing the EU energy market while tackling emerging regulatory challenges.

Which are ACER’s priorities for 2025-27?

ACER's will continue its work on:

• the EU energy market;
• infrastructure and security of supply;
• the integrity and transparency of wholesale energy markets; and
• longer-term regulatory challenges.

The 2025 annual work programme incorporates the new tasks given to ACER by different legislative packages adopted in 2024:

• the Hydrogen and decarbonised gas market package of laws;
• the Methane Emissions Regulation;
• the reforms of the Electricity Market Design; and
• the revisions of the Regulation on Energy Market Integrity and Transparency (REMIT).

Access previous editions.

Today, ACER has submitted to the European Commission its Recommendation to amend the HVDC Network Code, which sets binding rules for connecting high-voltage direct current (HVDC) systems and direct current (DC) connected ‘power park modules’ to the grid. 

Why amend the rules? 

These amendments aim to safeguard future energy system needs in the EU. Substantial growth in generation capacity of isolated offshore Alternating Current (AC) networks (or AC hubs) is expected. 

This ACER Recommendation aims to address the changes in the electricity sector, focusing on the growing role of offshore power park modules, demand facilities, power-to-gas units (e.g., electrolysers for renewable hydrogen), electricity storage, and HVDC systems connecting isolated (AC) networks.  

Key terms explained:  

• Power park modules refer to offshore generators, comprising a single or a set of generating units connected to the offshore AC network (e.g., wind, solar, wave, etc.). 

• AC hubs will connect large-scale (tens of GW) offshore power generation and large-scale industrial demand (electrolysers) along with storage and other demand. 

• Demand refers to system users that are consuming electricity from the network (e.g., power-to-gas units, industrial consumers, etc). 

What is this ACER Recommendation about? 

In December 2023, ACER recommended amending the Network Codes on requirements for grid connection of generators and demand connection. To ensure consistency in grid connection rules and address new system needs (e.g., offshore networks and new system users like storage and demand facilities), ACER initiated the amendment process of the HVDC Regulation. 

ACER proposes: 

• Expanding the Network Code’s scope to include new offshore demand facilities, power-to-gas facilities (mainly electrolysers), offshore electricity storage, and HVDC systems connecting isolated AC networks. 

• Introducing technical requirements for new offshore demand facilities, power-to-gas facilities (mainly electrolysers), and offshore electricity storage to support both interconnected and offshore systems. 

Process and next steps 

This ACER Recommendation is the result of extensive engagement including: 

• Public consultation (June-September 2024).   

• Webinar (June 2024).

ACER reviewed the stakeholders’ feedback and consulted the European Network of Transmission System Operators for Electricity (ENTSO-E) and other stakeholders to finalise the Recommendation.  

The next step is for the European Commission to adopt the Network Code in line with the Electricity Regulation.