On 1 March 2023, ACER received the Transmission System Operators (TSOs) proposal for the amendment of the Harmonised Allocation Rules (HAR) for long-term electricity transmission rights, mainly to allow for their long-term flow-based allocation. ACER launched a public consultation on 29 August 2023 on the amendments to the rules.

Why change the rules?

Cross-zonal capacity is currently allocated in the long-term electricity market with no coordination between different bidding zone borders, causing inefficiencies in some capacity calculation regions. This HAR amendment is needed to introduce the flow-based allocation of long-term transmission rights, enabling cross-zonal coordination. This will make the long-term market more efficient and aligned with the day-ahead market design.

What is the flow-based approach and what are its benefits?

Flow-based allocation of long-term transmission rights is a mechanism that efficiently allocates cross-border transmission capacity in the electricity market. It takes into account the physical reality of the transmission network by calculating the available capacities of physical network elements (so-called Remaining Available Margins) for electricity exchanges between different areas, as well as sensitivity factors (so-called Power Transfer Distribution Factors).

A flow-based mechanism enables cross-zonal coordination in long term electricity markets, leading to better network representation and more accurate price signals for cross-border trade, reducing market distortions and ensuring that the prices reflect the true cost of generating and transmitting electricity.

Amending the rules will allow the implementation of two projects for long-term flow-based capacity calculation and allocation; in the Core and the Nordic capacity calculation regions. The HAR revision is the final step needed for the implementation of these projects, following the approval of the single allocation platform, the congestion income distribution and sharing costs incurred to ensure firmness and remuneration of long-term transmission rights on 22 March 2023.

What are the next steps?

In addition to this proposal, TSOs submitted to ACER their proposal for amending the HAR provisions on collaterals by 1 August 2023.

ACER will decide on both proposals for amending the rules in a single procedure by the end of 2023.  

To make an informed decision, ACER runs a public consultation (from 29 August to 26 September 2023) on the amendments to harmonised allocation rules for long-term electricity transmission rights.

Public notice.

Update of 22 December 2023

On 22 December 2023, with its Decision 18/2023, ACER approved the TSOs' proposal to amend the Harmonised Allocation Rules (HAR) for long-term electricity transmission rights. 

On 31 March 2023, ACER issued an Opinion on the revised statutory documents of the European Network of Transmission System Operators for Electricity (ENTSO-E).

To inform its assessment, ACER consulted, from 3 to 17 February 2023, stakeholder organisations, in particular organisations representing the system users, including customers.

What are the next steps?

ACER's opinion is addressed to the European Commission. Following ACER’s opinion, the Commission has three months to provide its own opinion to the transmission system operators (TSOs). Subject to a favourable opinion of the Commission, the TSOs must adopt and publish the revised statutory documents.

Access the Opinion.

The European Union Agency for the Cooperation of Energy Regulators (ACER) launched its daily Liquefied Natural Gas (LNG) benchmark on Friday, 31 March 2023, as required by Council Regulation (EU) 2022/2576.

The LNG benchmark provides for greater market transparency based on mandatory data reporting, and hence is expected to reflect real-world prices for LNG. Stakeholders may use the LNG benchmark voluntarily.

The daily LNG benchmark complements ACER’s daily LNG price assessments, launched on 13 January 2023.

Access the LNG Price Assessment and LNG benchmark (of 31 March 2023).

Learn more about the LNG price assessment and benchmarks.

What is the difference between the LNG price assessment and the LNG benchmark?

ACER publishes three distinct and independently calculated Delivered Ex-Ship (DES) Spot LNG price assessments: for Europe (EU), for North West Europe (NWE) and South Europe (SE).

In addition, ACER publishes a daily LNG benchmark determined by the spread between the daily LNG price assessment for DES LNG Spot EU and the settlement price for the TTF Gas Futures front-month contract established by ICE Endex Markets B.V.

How is the LNG benchmark determined?

ACER’s daily LNG benchmark (published daily from 31 March 2023) is determined by the spread between ACER’s daily LNG price assessment for ‘delivery ex-ship’ (DES) LNG Spot EU and the settlement price for the TTF Gas Futures front-month contract established by ICE Endex Markets B.V.

When and where will the daily benchmark be published?

ACER will publish the LNG benchmark every weekday as soon as technically possible. The results will be published on TERMINAL.

How has ACER’s price assessment methodology evolved so far?

ACER published the first beta version of its LNG price assessment methodology on 13 January 2023 and the second one on 8 March 2023. The second version increased the robustness of the methodology and reduced the time-lag resulting from the rolling window used to calculate the price (see 6 March news).

The latest version, published on 23 March 2023 and with effect from 31 March 2023, covers both the LNG price assessment methodology and the benchmark methodology.

ACER will continue to periodically revise the methodology and the guidance on reporting LNG market data, in consultation with stakeholders.

Check out ACER’s LNG price assessment methodology documents.

When will the methodology be revised next?

The exact date of the next update is not determined yet.

ACER publishes today its report on Lithuania’s proposed gas transmission tariffs.

ACER provides recommendations to the Lithuanian national regulatory authority (NRA), VERT, particularly regarding the existing regional networks and the need to enhance transparency on the proposed asset splits.

What is in the report?

ACER assessed the proposed methodology to calculate the gas tariffs, including:

• The treatment of regional networks;
• The tariffs applicable to the transmission service to the Kaliningrad District; and
• The tariffs applicable to the domestic exit to the Achema fertilizer plant.

What are ACER’s main findings?

ACER recommends to the Lithuanian NRA, VERT, to implement improvements:

• On regional networks, ACER recommends that VERT changes the category of regional networks from transmission to distribution.
• On the asset split applicable for the transmission to Kaliningrad, VERT should provide clarity on the criteria used to establish the asset split.
• On the proposed tariff differentiation to the domestic exit point to the Achema fertilizer plant, ACER recommends specifying the criteria on which a consumer, including Achema, could get a different tariff compared to all other regional network exits.

Access the report on the Lithuanian gas tariffs.

Access all ACER reports on national tariff consultation documents.

ACER is organising three hybrid workshops in its premises in Ljubljana and online in April/May 2023 on certain technical requirements related to the electricity grid connection network codes:

• ACER workshop on electromobility, power-to-gas demand units and heat-pumps (17 April 2023);
• ACER workshop on rate of change of frequency and grid forming capabilities (10 May 2023); and
• ACER workshop on electricity storage (11 May 2023).

The objectives of these workshops are:

• To present and discuss potential amendments to two network codes namely the Network Code on Requirements for Grid Connection of Generators and the Network Code on Demand Connection; and
• To clarify the purpose, process and timeline for the amendments of the network codes.

EU stakeholder associations that are interested in presenting their views (up to 10 slots of 8 min each) on the topics tackled in the workshops should contact ACER on ACER-ELE-2022-015(at)acer.europa.eu before the deadline indicated in the event pages. ACER will consider the expressions of interest and will announce the final agendas ahead of the events.

What are the next steps?

These workshops precede a Public Consultation, to be organised later in 2023 on concrete amendment proposals regarding the two network codes.