Peak-shaving products are market-based tools that enable market participants to reduce their electricity consumption during peak demand periods in exchange for compensation.

Under the 2024 Electricity Market Design (EMD) Regulation, the Council can declare a regional or EU-wide electricity crisis if wholesale prices become excessively high. In such cases, Member States can instruct system operators to use peak-shaving products to reduce power demand, helping to stabilise the grid and lower prices.

ACER assessment

The EMD Regulation mandates ACER to assess the potential impact of developing peak-shaving products on the EU’s electricity market under normal market conditions. This assessment should also evaluate whether these products can be introduced without disrupting the functioning of electricity markets or redirecting demand response services towards peak-shaving products.

In February 2025, ACER established an Expert Group to provide guidance on the topic. To further strengthen this assessment, ACER will gather inputs from stakeholders through a public consultation from 20 March 2025 until 17 April 2025. 

Next steps

Based on the findings of ACER’s assessment (expected in summer 2025), the European Commission may propose amendments to the Electricity Regulation to introduce peak-shaving products beyond electricity price crisis situations. 

On 31 January 2025, ACER received a proposal from the Nominated Electricity Market Operators (NEMOs) for the Market Coupling Operation (MCO) integration plan.

What is the MCO integration plan?

The MCO integration plan aims to integrate NEMOs from Energy Community countries into the EU’s electricity day-ahead and intraday market coupling system. To achieve this, the plan should include:

• a detailed explanation of how the integration will work;
• a proposed timeline for implementation; and
• an assessment of how the integration may impact MCO functions.

The plan should also align with the existing MCO framework, which defines how EU NEMOs collaborate to establish and perform MCO functions (e.g. market coupling operations, algorithm management, capacity data processing), needed to ensure that electricity markets across countries operate efficiently.

Why is a decision needed?

The Capacity Allocation and Congestion Management Regulation, as adapted and adopted for the Energy Community, requires all NEMOs to submit a proposal for the MCO integration plan to ACER, regulatory authorities and the Energy Community Regulatory Board.

ACER is responsible for reviewing and approving the plan, ensuring it aligns with the EU electricity market framework.

What are the next steps?

ACER expects to decide on the MCO integration plan by July 2025.

Contact information 

Interested parties may contact ACER on this matter at ACER-ELE-2025-001@acer.europa.eu by 31 March 2025 at the latest.

Relevant documents

All NEMOs' proposal for the MCO integration plan.

Explanatory note.

Today, ACER releases its Opinion on the National Resource Adequacy Assessment of Poland. This is the second ACER Opinion on a National Resource Adequacy Assessment (NRAA).

What is a resource adequacy assessment?

The European Resource Adequacy Assessment (ERAA) evaluates electricity resource adequacy across the EU and provides an objective framework to assess the need for additional national measures to ensure security of supply. ERAA 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 with their own national assessments (NRAAs). While the latter follow the ERAA methodology, they may capture new developments or national specificities that have not been reflected in the latest ERAA.

When a national assessment identifies new adequacy concerns, and the Member State informs ACER, ACER must issue an Opinion on the differences between the national and European assessments.

What are ACER’s findings?

In its Opinion, ACER identified three main differences between the Polish NRAA and ERAA.

ACER finds that Poland’s assessment:

• Updates assumptions on capacity resources, for example, by using revised estimates for nuclear and renewable energy capacity.
• Introduces additional modelling elements, e.g. thoroughly assessing the economics of capacity resources by analysing their revenues and costs. However, it does not fully account for the development of demand response and battery storage in the Polish market.
• Does not adequately consider the interconnected nature of Europe’s electricity market, as:
  • the country’s maximum import capacity indicated in the NRAA is more constrained than in practice (as shown in the figure below); and
  • exports are not considered.

This simplification does not highlight the benefits of cross-border electricity exchanges, which help reduce overall system costs and improve adequacy.

The figure compares the import (1.8 GW) and export (0 GW) limits in the Polish NRAA (yellow) with Poland's actual net import in 2023 (blue, where a positive value indicates net import).

ACER also notes that some issues (and their potential effects) identified in Poland’s NRAA were already observed in other monitoring activities:

• The Polish Transmission System Operator (TSO) applies “allocation constraints” (i.e. temporary measures foreseen by the regulation). In its report on cross-zonal capacities (July 2024), ACER found that these constraints occasionally limit electricity exports from Poland, even when its neighbours are in need. This has a stronger impact during Dunkelflaute events, i.e. when renewable energy production is reduced due to weather conditions. As a result, Poland’s electricity prices do not reflect regional shortages effectively, limiting earnings for local generators and demand response providers (see figure below).
• In its report on barriers to demand-side flexibility (December 2023), ACER found several barriers to demand response and other distributed resources in Poland. Addressing these barriers would facilitate the uptake of these resources, helping to alleviate concerns that might otherwise justify extending the existing capacity mechanism.

During a dunkelflaute event on 12 December 2024 at 16:00-17:00, the electricity price in Poland (165 euros/MWh) was several times lower than in its neighbouring countries. Source: ACER based on ENTSO-E Transparency Platform.

What are the next steps?

ACER recommends that the Polish Ministry of Climate and Environment and the Polish TSO take these findings into account and, if necessary, revise the NRAA.

This would improve the robustness of the Polish assessment and provide a more accurate picture of the country’s electricity adequacy. 

On 16 August 2024, the National Regulatory Authority (NRA) of the Netherlands asked ACER to decide on how to address insufficient risk hedging opportunities at the bidding zone border between the Netherlands and Norway (NL-NO2).

After consulting with stakeholders in autumn 2024 and assessing the potential impact of long-term transmission rights (LTTRs) on the NL-NO2 bidding zone border, ACER has now issued its Decision 02-2025.

Why was a decision needed?

The assessments performed by the Dutch and Norwegian NRAs found insufficient opportunities to hedge electricity prices in their respective bidding zones. Sufficient long-term hedging opportunities are important for market participants to hedge against price volatility and to mitigate uncertainty on future investment returns.

To address this issue, national regulators can request their Transmission System Operators (TSOs) to:

• Issue long-term transmission rights (LTTRs); or
• Ensure the availability of other long-term cross-zonal hedging products that can support the functioning of the wholesale electricity market.

Since the Dutch and Norwegian regulators could not reach an agreement, the decision was referred to ACER and the EFTA Surveillance Authority.

What are long-term transmission rights?

Long-term transmission rights are cross-border hedging tools provided by TSOs, enabling market players to manage price differences between bidding zones and reduce financial risks.

What did ACER decide?

ACER decided against the introduction of long-term transmission rights on the NL-NO2 bidding zone border. ACER’s assessment showed that:

• LTTRs would offer limited improvements to hedging opportunities in the Dutch and NO2 bidding zones;
• Financial LTTRs on this border would likely be undervalued, resulting in higher costs for consumers.

For this reason, ACER has asked the Dutch TSO to explore alternative measures to address insufficient hedging opportunities in these bidding zones.

The EFTA Surveillance Authority will issue a decision for Norway, following the procedure outlined in the EEA Agreement.

What are the next steps?

The Dutch TSO has six months to submit an alternative proposal to its NRA, outlining arrangements to improve hedging opportunities in these bidding zones.

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 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.  

ACER is forming a new Expert Group to provide advice on peak-shaving products. We are looking for experts (e.g. engineers and/or economists) with relevant expertise in electricity markets.

What are peak-shaving products?

Peak-shaving products are market-based tools that enable market participants to reduce their electricity consumption during peak demand periods in exchange for compensation.

Under the Electricity Market Design (EMD) Regulation, the Council can declare a regional or EU-wide electricity crisis if wholesale prices become excessively high. In such cases, Member States can direct system operators to use peak-shaving products to reduce power demand, helping to stabilise the grid and lower prices.

The EMD Regulation also mandates ACER to assess the potential impact of developing peak-shaving products on Europe’s electricity market under normal market conditions. To this end, ACER will launch a public consultation in spring 2025.

What will the Expert Group do?

The Expert Group will advise ACER on how developing peak-shaving products (i.e., products aiming to reduce electricity consumption during peak hours) might affect the EU electricity market. Experts will explore the products’ feasibility, main benefits, and potential drawbacks. They will also advise ACER in assessing whether these products can be introduced without disrupting the functioning of electricity markets or redirecting existing demand response services towards peak-shaving products.

The group will operate until summer 2025, with the possibility of extending throughout the year for further analysis.

How to apply?

Follow the instructions in the Open Letter, ensuring that you fulfill all the criteria. The deadline for application is Monday, 20 January 2025.

Read more about the Expert Group.