Today, ACER publishes its 2024 Market Monitoring Report on capacities for cross-zonal trade of electricity (including the progress in reaching the so-called ‘70% requirement’) and congestion management.

ACER highlights the urgency for Transmission System Operators (TSOs) to meet their obligation of making 70% of transmission capacity available for cross-border electricity trading by the end of 2025.

What are ACER’s key findings?

Already in April 2024, ACER alerted the European Parliament and Commission that there is much at stake in not meeting the minimum 70% requirement by the end of 2025 and that there are still significant challenges ahead to do so.

Today’s report by ACER finds that:

• The EU power grid is increasingly congested (remedial actions like redispatching rose by 14.5% in 2023). The cost of managing this congestion in 2023 was EUR 4 billion.
• Some TSOs in highly meshed areas of the EU power grid made available, on average, between 30% and 50% of the physical capacity of certain network elements in 2023, thus far from reaching 70%.
• There are still significant benefits from improving how cross-zonal capacity is calculated in the EU, as demonstrated by the introduction of flow-based market coupling in the Core region.

Furthermore, the recent report by the European Commission’s Joint Research Centre forecasts that power grid congestion will significantly worsen in the coming years, even in an optimistic grid development scenario.

How to meet the 70% minimum requirement by the end of 2025?

Meeting the 70% requirement needs a unified approach – each Member State’s actions (or inactions) impact others and ultimately EU consumers. ACER calls for the swift implementation by Member States and TSOs of the 3 tools foreseen by EU rules to reach the 70% minimum requirement:

• TSOs to swiftly implement coordinated processes to first calculate capacity and then manage congestion. Moving toward a more regional approach will ensure that the Member States causing loop flows will bear their cost, allowing for more capacity to be made available.
• TSOs to undertake targeted grid developments, focusing on most congested areas of the grid.
• Improve the bidding zones configuration: if consistently unable to meet the 70% requirement, better align the bidding zone borders with where the structural grid congestion occurs.

What’s next?

10 July 2024: ACER-JRC webinar. Register (for free) to learn more about the topic.

Read more about the report.

Expanding the capacity of the European electricity system requires not only securing investments but also enhancing the efficiency of infrastructure by deploying smart solutions, which can be faster and more cost-effective than conventional grid options.

Energy regulators play an important role in ensuring efficient infrastructure, which is the foundation of secure system operation, well-functioning electricity markets as well as facilitating the roll-out of more renewables, by:

• encouraging network operators to effectively deploy all types of network technologies;

• promoting cost-efficient investments; and

• maximising the value of grid investments for network users.

The 2023 Energy Infrastructure Forum’s conclusions tasked ACER and CEER to develop discussion papers on smart grids’ key performance indicators for electricity transmission and distribution networks.

What is in the guidance paper?

In this context, ACER and CEER have jointly developed a set of guiding principles to evaluate the performance and efficiency of European electricity smart grids.

The guidance paper published today, ahead of the 2024 Energy Infrastructure (Copenhagen) Forum (27 June 2024):

• Sets the framework of smart-grid performance indicators.

• Offers an overview on the responsibilities of network operators.

• Describes the potential applications of network performance indicators and how they support EU energy targets.

• Explains the relationship between input and output performance indicators and defines responsibilities for each.

What are the next steps?

ACER and CEER invite feedback on the guiding principles by 28 July, after which the aim is to develop concrete smart-grid Key Performance Indicators (KPIs) for both Transmission and Distribution System Operators.

Submit your feedback to diana.ivanova-vanbeers@ceer.eu or KPI_ESN@acer.europa.eu by 28 July.