Today, ACER releases its Opinion on the All-Island Resource Adequacy Assessments for Ireland, Northern Ireland and the Single Electricity Market (SEM) as a whole. The assessment was jointly prepared by the transmission system operators (TSOs) of both jurisdictions (EirGrid and SONI), complementing the European Resource Adequacy Assessment (ERAA) 2025.

What is a resource adequacy assessment?

The ERAA evaluates electricity resource adequacy across the EU and provides a consistent framework to assess whether additional national measures are needed to ensure security of supply. It is carried out annually by the European Network of Transmission System Operators for Electricity (ENTSO-E) and reviewed by ACER.

Member States can complement the European analysis through national adequacy assessments (NRAAs) to reflect local conditions. When a national assessment identifies differences from the European assessment, ACER issues an opinion.

What did ACER find?

ACER finds that most differences between the All-Island Resource Adequacy Assessment and the ERAA are justified, as they reflect national trends and include additional modelling detail, enhancing accuracy. 

ACER also highlights two factors with a major impact on adequacy:

• The planned second North-South Interconnector is included only in the SEM-wide assessment, meaning its contribution to adequacy is not captured in all three analyses. Once operational (expected by 2031), it would help keep adequacy risks in the SEM within the reliability standard in 2033 and 2035, strengthening security of supply across the island and highlighting the importance of increased cross-zonal capacity for resource adequacy.
• The rapid growth of data centres in Ireland (which accounted for 22% of national electricity demand in 2024 and could reach 31% by 2034) poses a key adequacy risk. New policy updates now require data centres to provide onsite or nearby generation equal to peak demand, helping reduce grid reliance and improve flexibility during stress periods. Future adequacy assessments should better reflect both the demand impact of data centres and the extent to which policy measures can mitigate adequacy risks.

What are ACER’s recommendations?

To further strengthen the assessment, ACER recommends that TSOs:

• Include a viability assessment of adequacy resources in the central scenario to confirm the required resources are realistically available. 
• Ensure revenue consistency between market viability and dispatch models so that both tools reflect aligned market revenues and investment signals. 
• Consider multiple revenue streams in the assessment to provide a more robust evaluation of resource profitability. 
• Include the planned second North-South Interconnector in all the three analyses. 
• Consider greater operational flexibility for gas units during periods of scarcity. 
• Incorporate storage and demand response expansion, including flexibility from data centres, for all target years till 2035. 

What are the next steps?

ACER encourages TSOs to consider these recommendations to ensure a more accurate assessment of adequacy risks.

ACER approves the European Resource Adequacy Assessment proposed by the European Network of Transmission System Operators for Electricity (ENTSO-E) for 2025 (ERAA 2025). This draft ERAA was submitted in December 2025 for ACER’s review.

While this marks an important step towards securing Europe’s electricity supply, the ACER approval decision is accompanied by a letter addressed to ENTSO-E. The letter raises concerns about the assessment, in particular persistent methodological gaps and last-minute changes introduced by ENTSO-E shortly before submission, without proper stakeholder consultation. These include a supplementary approach to modelling investment behaviour, which led to a second, less robust set of results that ACER removed to ensure overall robustness.

As the ERAA is increasingly used to justify national measures (such as capacity mechanisms under the EU State aid framework), ACER emphasises the need to safeguard its technical integrity and ensure early, transparent cooperation. 

What does ACER say about the ERAA 2025? 

While the ERAA 2025 provides an important 10-year outlook on resource adequacy, ACER’s analysis identifies several critical areas where further improvements were needed:

• Address model inconsistencies between the investment and adequacy modules, which may otherwise systematically overstate adequacy concerns, leading to unnecessary or costly market interventions.
• Move towards a revenue-based investment module to better reflect whether market revenues can sustain existing capacity and support new investments, particularly in flexible resources (e.g. batteries).
• Reinforce procedural transparency to ensure significant changes are introduced in a timely manner and subject to proper stakeholder consultation. This includes greater transparency on ENTSO-E’s website on what is still a draft ERAA, hence subject to ACER's approval.

Without these improvements, the ERAA risks losing its usefulness as a reference for policy decisions.

What’s next? 

The ERAA 2025 was the last edition before the entry into force of the amended ERAA methodology (March 2026). From the upcoming 2026 edition, ENTSO-E will progressively integrate the amended methodology into future reports. 

ACER will hold a webinar on the updated ERAA methodology on 26 May 2026.

Full implementation of this methodology is needed to support the fast-track approval of capacity mechanisms under the Clean Industrial State-Aid Framework, such as indicating how much firm capacity is needed and calibrating technology-specific derating factors to determine how much each technology can be relied on to deliver when needed. 

Looking ahead, ACER identifies several priorities for ENTSO-E for the ERAA 2026:

• Adopt a revenue-based investment module to improve model coherence and provide a more realistic view of which capacities remain economically viable.
• Work on the full implementation of the amended methodology, introducing the "Trends and Projections" scenario to reflect the observed pace of the energy transition, and deliver capacity mechanism-related parameters to support the fast-track State aid approval process for capacity mechanisms.
• Ensure a more transparent and cooperative development process, including early alignment on methodological changes to ensure timely and efficient delivery of future ERAA annual assessments.
• Strengthen the hurdle rate method used in the assessment to better reflect investors’ risk aversion.

On 22 January 2026, the transmission system operators (TSOs) of the Core capacity calculation region submitted a proposal to their national regulatory authorities to amend the day-ahead capacity calculation methodology. As the national regulators could not reach an agreement, the proposal was referred to ACER on 30 March 2026 under the Capacity Calculation and Congestion Management Regulation.

The Core capacity calculation region comprises of 13 Member States: Austria, Belgium, Czech Republic, Croatia, France, Germany, Hungary, Luxembourg, the Netherlands, Poland, Romania, Slovakia and Slovenia.

Capacity calculation regions define the geographic areas across Europe where TSOs coordinate the capacity calculation and other processes subject to regional methodologies.

What is the methodology about?

The Core day-ahead capacity calculation methodology (initially established by ACER in 2019 and first implemented in June 2022) aims to maximise the capacity made available to the market while maintaining operational security.

This methodology is based on a flow-based approach, meaning cross-zonal capacities are calculated by taking into account transmission networks’ physical constraints. This approach significantly improves the efficiency of cross-zonal capacity allocation, as it better reflects real network conditions. 

Why change the rules?

Core TSOs propose to amend the methodology to better harmonise it with other electricity market timeframes (i.e. intraday and long-term capacity calculation) operating in the same region.

The main purpose of this amendment is to remove long-term allocations from the day-ahead capacity calculation. This change is a prerequisite for the adoption and implementation of the flow-based capacity calculation methodology in the long-term timeframe (Core LT CCM), which is currently under review by ACER following its referral by Core regulatory authorities in February 2026.

Removing long-term allocations from the day-ahead capacity calculation decouples operational safety from long-term capacity volumes, allowing their determination without direct operational security constraints. This will improve the efficiency of the process, as long-term capacities will be calculated independently, reflecting the separation between the day-ahead and long-term frameworks. 

What are the next steps?

ACER, in cooperation with relevant energy regulators and TSOs, will reach a decision by 30 September 2026.

Today, ACER publishes its report on distribution system operator (DSO) investments and revenue setting. 

The report: 

• finds a major upscaling in electricity distribution grid investment trends across Europe;
• identifies some factors that may hinder efficient investments; 
• reviews the DSO landscape in Europe; 
• explores ways to address the challenges facing DSOs;
• proposes a set of 10 recommendations to optimise the ramp-up of distribution grid investment and improve services to grid user.

What are the main findings?

To accelerate decarbonisation, significantly more grid capacity is needed for electrification and renewables’ growth. This is driving a visible rise in electricity distribution grid investments across Europe. In 2024, annual distribution grid investments increased by over 50% to €35.3 billion (compared to €23.5 billion in 2021). Distribution grid investment is projected to approach €47 billion in 2027.

Beyond the investment challenge, DSOs face expanded roles under EU legislation. They must be active system operators (e.g. managing the system, utilising flexibility services, optimising electricity flows on the grid), market facilitators, data hubs, and innovation drivers – responsibilities that require new tools, specialised skills, and stronger coordination. 

Europe needs DSOs who provide high quality distribution services. As the system evolves, regulatory frameworks must adapt alongside it. 

This ACER report highlights several elements that might hinder efficient investments:

• Size matters. DSOs must be equipped to deal with evolving responsibilities for grid planning, flexibility solutions, grids’ digitalisation and resilience, to ensure all customers have equal access to high-quality and cost-efficient distribution services. Robust system planning and efficient regulatory scrutiny should not be compromised by fragmented and uncoordinated network development. 
• DSOs should adopt the most efficient solutions for network development – whether grid-based or non-grid (e.g. flexibility). The regulatory focus must expand beyond cost-cutting and maximise the benefits for society. Reducing capital expenditure (CAPEX) bias, still present in several countries, is key for improving regulatory regimes. 
• Rigid expenditure caps should not hinder nor distort key investments needed for the clean energy transition. 
• Distribution grid use and planned development should be more transparent. DSOs should strive to publish their mid-term cost trajectories and monitor grid utilisation to improve planning and operations.

ACER’s report offers 10 recommendations for legislators, regulators and system operators to optimise the ramp-up of distribution grid investment and improve services to grid users. These aim to ensure adequate competences, proper transparency and unlock efficient investments. National regulatory authorities should consider these recommendations when setting or approving their distribution revenue methodologies.

What are the next steps?

ACER will continue to:

• facilitate best-practice sharing among national regulatory authorities; and
• engage with stakeholders to gather insights.

In 2027, ACER will publish the next edition of its report on network tariff practices. ACER’s next report on revenue setting practices will be in 2028.

On 25 March 2026, ACER received a proposal from the European Network of Transmission System Operators for Electricity (ENTSO-E) to amend the methodology for the regional sizing of reserve capacity. 

What is the methodology about?

Balancing resources are necessary to manage differences between electricity supply and demand, keeping the grid stable in real time. To maintain this balance, transmission system operators (TSOs) determine the volume of reserve capacity needed at national level. 

At regional level, the methodology for the regional sizing of reserve capacity allows regional coordination centres (RCCs) to assess reserve needs across countries, taking into account volumes shared between TSOs through bilateral agreements. This coordination helps reduce procurement costs and ensure a more efficient distribution of reserves across Europe.

Based on their assessment, RCCs provide TSOs with recommendations on how to optimise reserve capacity volumes, thereby leveraging the flexibility of the EU electricity system.

Why amend the methodology?

As requested by ACER in 2023, ENTSO-E proposes to:

• determine the appropriate time span of historical data that RCCs should use to assess the minimum volume of reserves needed for the following year, ensuring the data used reflects relevant system conditions;
• specify how much reserve capacity is needed to cover positive and negative imbalances for a defined percentage of time.

These changes will help RCCs size reserve capacity more efficiently, address TSOs’ operational risks and enhance the process’ transparency and coordination.

ENTSO-E also proposes a new 24-month implementation deadline for assessing the short-term availability of reserve capacity that TSOs have agreed to share, starting from the date each agreement is signed. This deadline concerns only newly established agreements and reflects the voluntary nature of the task (i.e. it applies only where sharing agreements between TSOs are in place).

What are the next steps? 

ACER will decide whether to amend the methodology by 25 June 2026.

Interested parties are encouraged to submit comments or questions to ACER-ELE-2026-002@acer.europa.eu by 30 April 2026.

ACER has published its Recommendation to the European Commission on measures to speed up the effective implementation of EU electricity market rules. 

ACER’s monitoring found that major delays in implementing these rules hinder the proper functioning of Europe’s electricity system, resulting in economic costs for market participants and consumers.

Background

The EU electricity market is grounded in a comprehensive legal and regulatory framework. This includes EU-wide network codes and guidelines and the adoption of detailed rules (e.g. terms and conditions or methodologies (TCMs)), designed to ensure that the market operates efficiently. 

These rules set out key responsibilities for transmission system operators (TSOs), nominated electricity market operators (NEMOs), the European Network of Transmission System Operators for Electricity (ENTSO-E) and regional coordination centres (RCCs). 

Why an ACER Recommendation to the European Commission?

ACER’s (2024) monitoring found major delays in implementing the TCMs both at EU and regional level, affecting key areas such as electricity balancing, system operation and forward capacity. Delays in some TCMs had a domino effect, as they stalled progress of other TCMs.

This ACER Recommendation responds to the European Commission’s (2024) request for advice on how to strengthen the regulatory framework to reduce delays, with a focus on enforcement, governance and incentives.

What are ACER’s findings and recommendations? 

ACER’s Recommendation identifies challenges in three main areas:

• Implementation timelines: deadlines are often unclear or lack sufficient justification, making it difficult to track progress.
• Non-compliance: the decision-making process for addressing non-compliance by ENTSO-E and RCCs has room for improvement.
• Collective non-compliance: while the enforcement of individual obligations of TSOs and NEMOs poses no problem, current enforcement processes could fall short when tackling delayed implementation or failure to comply in cases where, across Union obligations, all TSOs or all NEMOs are tasked with jointly carrying out an obligation and collectively fail.

ACER recommends that the European Commission strengthen the regulatory framework by:

• Improving implementation and monitoring, introducing clearer deadlines and reporting requirements to reduce delays.
• Strengthening the enforcement framework in the ACER Regulation to ensure non-compliance by ENTSO-E and RCCs is addressed consistently and effectively.
• Assessing how to further improve enforcement for collective obligations (i.e. all TSOs and all NEMOs obligations).

Today, ACER publishes its Recommendation on how national regulatory authorities (NRAs) should report barriers to non-fossil flexibility. The document provides clear guidance and indicators to ensure consistent reporting across Member States and help NRAs and relevant entities evaluate these barriers as part of their flexibility needs assessments.

What is non-fossil flexibility? 

Non-fossil flexibility is the energy system’s ability to quickly adapt to changes in electricity supply and demand, without relying on fossil fuels or costly grid expansions. It does so by shifting electricity consumption or generation to times or locations where the system is less constrained.

Unlocking flexibility helps foster a more efficient electricity system, supports the integration of renewables and contributes to lowering consumer bills. 

Why an ACER Recommendation?

The EU Electricity Regulation requires Member States to carry out flexibility needs assessments to determine how much clean flexibility their electricity systems require, including identifying existing barriers. These national assessments are harmonised across the EU through a common methodology approved by ACER in July 2025. 

This ACER Recommendation complements this process, by: 

• Setting out clear guidance on which barriers, indicators and evaluation methods Member States may consider when preparing their assessments.
• Streamlining the assessment process, consolidating ACER’s prior work on barriers (2023 and 2025) across all types of non-fossil flexibility and incorporating stakeholder input (winter 2023-2024).
• Ensuring comparable reporting across countries, supporting ACER’s forthcoming EU-wide analysis of barriers to clean flexibility identified in national assessments.

What does ACER recommend? 

ACER recommends that NRAs, in coordination with relevant entities, consider the main barriers to non-fossil flexibility when drafting their national reports. These include:

• Lack of proper legal framework for households, new entrants or aggregators to participate in electricity markets and system operation services.
• Lack of enablers and incentives for flexibility, such as smart meters and flexible retail contracts that help consumers shift their consumption.
• Restrictive rules to provide balancing and congestion management services.
• Complex, lengthy and discriminatory administrative requirements, including inefficient grid connection processes.
• Limited regulatory incentives for system operators to invest in non-wire, innovative grid technologies. 

What are the next steps? 

Member States are expected to complete their flexibility needs assessments by July 2026. ACER will then have a year to analyse the findings and publish an EU-wide analysis to:

• estimate flexibility needs across the EU;
• evaluate existing barriers to clean flexibility, including those identified in national assessments; and
• provide recommendations on issues of cross-border relevance (including measures to remove barriers to non-fossil flexibility).

Today, ACER publishes its Decision amending the European Resource Adequacy Assessment methodology, following the proposal submitted by the European Network of Transmission System Operators for Electricity (ENTSO-E) in November 2025.

What is the methodology about?

The ERAA, mandated by the Clean Energy Package (2019), is ENTSO-E’s annual assessment of the EU’s electricity supply adequacy for the next decade. Its purpose is to evaluate whether the EU has sufficient electricity resources to meet future demand and to identify potential risks to security of supply. Each year, the assessment is subject to ACER approval.

At national level, Member States define their own reliability standards (based on ACER’s methodology) to set the level of security of electricity supply they require. The ERAA annual assessment provides a consistent, objective tool to evaluate adequacy risks against those standards and whether the introduction of national measures (such as capacity mechanisms) is needed.

Why amend the methodology?

In its streamlining report (March 2025), the European Commission requested ACER to amend the ERAA methodology to streamline the capacity mechanisms’ approval process. ACER subsequently required ENTSO-E to propose the necessary amendments.

In August 2025, the Commission also adopted the Clean Industrial State Aid Framework, which introduces a fast-track process for approving capacity mechanisms. To support this framework, the ERAA methodology needs to define the procedure for calculating, within the ERAA annual process, the parameters necessary for Member States to make use of the fast-track approval process.

What are the main amendments?

The updated ERAA methodology focuses on:

1. Supporting capacity mechanisms approval

• Introducing capacity mechanism-related parameters derived from the ERAA model, which Member States may use to benefit from the fast-track process.

These parameters:

• improve the clarity of ERAA results by quantifying the size of the adequacy concern (adequacy gap and total firm capacity needs) and how different technologies contribute to system adequacy (de-rating-factors);
• can be used by Member States to size their capacity mechanisms (when applying for fast-track approval).

2.  Simplifying the methodology 

• Focusing the model on key target years (instead of explicitly modelling every year of the next decade).
• Introducing simplified approaches for key methodological components (e.g. estimating flexibility resource revenues and developing scenarios that reflect the impact of capacity mechanisms across Europe).
• Streamlining how Member States’ efforts to avoid regulatory distortions or market failures are represented in the ERAA.

3.   Improving adequacy modelling 

• Developing a new Trends and Projections scenario to better reflect the actual pace of the energy transition.
• Improving the modelling of investors’ risk aversions and introducing a more realistic representation of flexible resources’ (e.g. batteries and demand response) business case.

What are the next steps?

ENTSO-E will progressively integrate the amended ERAA methodology into future ERAA reports (starting with the upcoming 2026 edition). As part of this implementation, capacity-mechanism-related parameters will be introduced in the ERAA framework. These parameters will help improve coordination of capacity mechanisms across Europe, increase their efficiency and help reduce costs for consumers.

Based on the ERAA results, Member States may also use these parameters when applying for the fast-track approval process for capacity mechanisms.

The image shows how coordinating capacity mechanisms across EU borders reduces procurement needs and lowers costs for consumers. Source: ACER Monitoring Report on security of EU electricity supply (2025).

ACER kicks off its 2026 Monitoring Report series with key insights into the EU energy markets, highlighting major developments in 2025 and examining the interplay between gas and electricity markets in the energy transition.

What are the key findings?

The report shows solid progress in Europe’s clean energy transition. It also underlines persistent structural challenges (such as price volatility, system flexibility and supply risks) and how to address them.

• Wholesale energy prices continued to decline, but global competitiveness remains a challenge, with both gas and electricity prices structurally higher than in the US.
• Household gas and electricity prices remain high despite falling wholesale prices.
• Renewables lead the power mix, providing 50% of total EU electricity generation. Solar drives the energy transition, with investments in solar generation rising by 41 TWh compared to 2024. 
• Electricity price volatility increased: Daily wholesale power price swings were around five times higher than in 2020, highlighting the growing need for flexibility. 
• Gas provides evening flexibility: As solar generation drops in the evening, gas-fired power plants are increasingly used to meet demand, pushing wholesale prices upward.
• Extreme weather drives price spikes: A heatwave on 1 July 2025 reduced cooling efficiency at thermal and nuclear plants, pushing power prices in Poland to around 470 EUR/MWh. 
• Regional price differences highlight the value of interconnections: Different generation mixes and system flexibility across countries offer opportunities when systems are well interconnected. 
• Gas markets remained stable, with hub spreads generally below 2 EUR/MWh.
• EU slashed its reliance on Russian gas, replacing it with global LNG: Russian pipeline imports to the EU fell by about 162 TWh compared to 2024 and were fully offset by record-high LNG imports.
• Low year-end gas storage: Heavy winter withdrawals left storage levels 10% below 2024.

What are ACER’s recommendations? 

To support global competitiveness and decarbonisation, Europe should step up efforts to expand energy market integration:

• Make energy prices more efficient and transparent: Ensure efficiency across all price components (energy and supply, network charges and taxation) to improve household affordability and industrial competitiveness.
• Harness flexibility: Expand demand response, electric vehicles (EVs) and battery use to balance supply and demand, reduce price swings and strengthen grid resilience.
• Strengthen market integration: Expand interconnections to support cross-border use of renewables, reduce fossil fuel dependence and improve system flexibility and security.
• Diversify gas supply: Higher LNG supplies replaced Russian pipeline gas but increased reliance on US LNG imports. Greater supply diversification, including domestic decarbonised gases, would reduce vulnerability and mitigate the impact of global price volatility.
• Reduce reliance on conventional gas: With gas consumption still well above 2030 targets, further action is needed to cut demand and accelerate the uptake of renewable gases.

On 31 March 2026, ACER will open a public consultation on developments in the EU Power Purchase Agreements (PPAs) market. The aim is to identify existing initiatives and challenges faced by market participants across Member States.

What are Power Purchase Agreements (PPAs)?

PPAs are long-term contracts between electricity producers (often renewable energy generators) and buyers. By providing renewable electricity at mutually agreed rates, these contracts foster long-term price stability and investment predictability for both parties. This helps reduce exposure to market volatility and encourages investments in renewable energy, limiting reliance on subsidy schemes. 

Under the revised Renewable Energy Directive, Member States are required to facilitate the uptake of renewable PPAs by removing unjustified barriers and disproportionate or discriminatory practices. However, the availability and functioning of these contracts vary significantly across the EU due to different national regulatory frameworks and financing mechanisms.

Why consult?

ACER is responsible for monitoring the PPAs market and publishing an annual assessment of its development at both EU and Member State level. 

To this end, ACER is launching a consultation to identify key regulatory, market and financial factors affecting the development and functioning of PPAs across Member States.

Get involved!

The public consultation will run from 31 March to 8 May 2026.

Feedback received will inform ACER’s 2026 annual assessment of the EU PPAs market.