ACER launches today a public consultation inviting stakeholders to submit their proposals for amendments to the Network Code on Requirements for Grid Connection of Generators, and the Network Code on Demand Connection.
The aim is to update the network codes to further support the EU power grid embracing emerging developments such as e-mobility, storage and energy communities.
The European Commission invited ACER to initiate the process to amend the existing EU network codes. 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 (access the responses of the June 2022 public consultation in the Evaluation of Responses Report).
The public consultation runs from 26 September until 21 November 2022.
ACER sets out in its Policy Paper published today potential ways to improve the Network Code on Requirements for Grid Connection of Generators and the Network Code on Demand Connection.
The ACER Policy Paper on Grid Connection Network Codes reflects ACER’s conclusions on possible amendments to the grid connection network codes following input received from stakeholders during the summer 2022.
The Policy Paper addresses potential amendments to the European network codes concerning:
A public workshop on the amendment to the grid connection network codes will be held on 25 October.
Following this process, ACER plans to submit to the European Commission its proposed amendments to the grid connection network codes by the end of 2023.
Europe’s electricity spot markets have an automatic maximum price adjustment mechanism in case of extraordinary high prices. ACER is reviewing the methodologies for automatically increasing the maximum price limit in case of price spikes. As part of its review, ACER seeks stakeholder input via a public consultation and a public workshop (3 October).
With expected high prices on the electricity markets ahead, on 2 September, ACER urged the Nominated Electricity Market Operators (NEMOs) to submit proposals to amend the Capacity Allocation and Congestion Management methodologies related to:
These methodologies define Europe’s single day-ahead and intraday electricity markets maximum and minimum price limits. Following receipt of the NEMOs’ proposals on 15 September, ACER is now conducting its review of the HMMCP methodologies.
With expected high prices on the electricity markets ahead, ACER considers this review as a high priority. The aim of the review is to limit the frequency of increases of the maximum clearing price in the spot markets, allowing consumers and market participants to gradually and better adapt to the scarcity situation in the market.
In addition to this urgent review, a full HMMCP SIDC methodology revision is needed to account for the forthcoming implementation of the SIDC auctions as well as for a newly developed automatic mechanism for adapting the maximum and minimum clearing price limits of the SIDC continuous market.
ACER ensures that the amendments proposed by all NEMOs are in line with the Regulation on the internal market for electricity, the Capacity Allocation and Congestion Management guideline and fulfil the legal obligations. ACER will assess if the proposed amendments are fit-for-purpose considering the exceptional market situation and its possible evolution.
ACER formally has six months (until 15 March 2022) to reach a decision on the NEMOs’ proposals but the Agency aims to conclude its review much faster.
To collect the views of the stakeholders, an ACER public consultation on the NEMOs proposed amendments runs from 19 September to 9 October 2022.
ACER also invites interested stakeholders to a public workshop on 3 October 2022.
Price spikes can occur more frequently if not enough cross-border interconnector capacity is made available for trade and/or demand response is not being brought to the market. In some instances, this may even endanger security of supply.
Therefore, and irrespective of the ongoing review of the mechanism, in the coming months, ACER calls on:
Access the Public Notice.
Access the Public Consultation page.
Access the Public Workshop page.
The EU Agency for the Cooperation of Energy Regulators (ACER) has reached a decision on how to address the insufficient risk hedging opportunities on the bidding zone borders between Finland and Sweden.
An assessment performed by the National Regulatory Authorities (NRAs) indicated insufficient hedging opportunities in the Finnish bidding zone. To improve such opportunities, NRAs can request their Transmission System Operators (TSOs) either to issue long-term transmission rights (LTTRs) or to ensure the availability of other long-term cross-zonal hedging products that support the functioning of the wholesale electricity markets. As the NRAs could not reach an agreement on this matter, they have referred to ACER for decision.
Having assessed the case, ACER considered that issuing LTTRs on the bidding zone borders between Finland and Sweden would come with considerable risks for the existing electricity forward market design in the Nordic region. ACER also noted that there are other less intrusive measures that could be at least as effective in improving hedging opportunities; for example measures to support the existing contracts for difference, called Electricity Price Area Differentials (EPADs).
ACER’s decision requests the Finnish and the Swedish TSOs not to issue LTTRs but instead to ensure the availability of other long-term cross-zonal hedging products. Since EPAD coupling appears to be the most effective solution, ACER recommends the TSOs to submit a proposal for EPAD coupling to their NRAs.
EPAD coupling is a solution where long-term cross-zonal capacity from TSOs can be implicitly allocated in an auction of EPADs for the relevant bidding zones. With such implicit allocation, a bid for hedging demand in one bidding zone could be directly matched with a supply bid in another bidding zone if more efficient. This can ensure an optimal use of cross-zonal capacity and provides the need hedging opportunities.
ACER’s decision aims to promote long-term cross-zonal trade by improving the availability of long-term cross-zonal risk hedging opportunities on the bidding zone borders between Finland and Sweden.
Access the Decision 12-2022.
