Today, ACER publishes its Monitoring Reports on electricity infrastructure, and security of electricity supply respectively.

ACER’s first electricity infrastructure Monitoring Report:

• Assesses the cost impacts of investing in electricity transmission and distribution networks to keep pace with the energy transition.

• Analyses how cross-border electricity network planning aligns with grid capacity needs.

ACER’s annual Monitoring Report on security of EU electricity supply:

• Examines implementation by Member States and the European Network of Transmission System Operators for Electricity (ENTSO-E) of the resource adequacy framework to safeguard Europe’s security of electricity supply.

• Provides new information on measures aimed at securing electricity supplies (i.e. national capacity mechanisms) and supporting non-fossil flexibility.

• Assesses whether national capacity mechanisms align with the European goals of decarbonisation and affordability.

What are ACER’s key findings?

• The stakes are high for the clean energy transition. Failing to address power grid capacity needs and the persistent support of fossil-fuel generators by capacity mechanisms risks delaying the energy transition. Europe has a unique opportunity. Speeding up grid development and increasing the capacity of existing grids play a big role in enabling decarbonisation.

• Containing system costs (one of the main drivers of electricity costs) is key for EU competitiveness: System costs refer to the expenses incurred beyond the cost of energy. These include grid-related costs, expenses associated with support schemes such as national capacity mechanisms, and other related expenditures which together add up significantly. ACER points to the need to contain the rise in costs: in 2023 the costs of capacity mechanisms increased by 40%. ACER’s monitoring forecasts network cost increase of 20-40% by 2030, and possibly up to 100% by 2050; if so, possibly endangering the overall affordability of electricity bills.  ACER points out that in many cases, increasing the capacity of existing electricity grids could be a less expensive alternative to new lines build-out.

• Implementation of the infrastructure planning and resource adequacy frameworks has advanced, but much more is needed promptly. For example, there is still no joined up (electricity and gas) infrastructure planning by the European gas and electricity transmission system operator bodies.

What are ACER’s recommendations?

• Prioritise efficiency:
  • Make better use of existing grids to increase grid capacity before building new ones.  
  • Ensure that any national capacity mechanism is firstly needed, well-designed, open to cross-border participation, and coordinated with any support schemes for flexibility to control costs.

• Further implement and improve the security of supply and infrastructure planning frameworks.

• Foster a more coordinated approach between Member States to lower security of supply costs and accelerate cost-efficient investments in regional infrastructure.

• Carefully monitor investments across all grid levels to track how grid developments align with the energy transition.

Would you like to find out more?

Dive into the reports and infographics:

Electricity infrastructure Monitoring Report.

Security of EU electricity supply Monitoring Report.

For the first time, ACER publishes its Country Sheets to present key metrics on retail electricity markets across EU Member States and Norway. These short 1-pagers provide insights into:

• key market facts;
• consumer trends, including contract uptake and bill breakdown;
• national progress towards 2030’s decarbonisation targets, showing status of electric vehicles’ (EVs') uptake, EV’s charging stations, the installation of heat pumps and the share of final renewable energy consumption;
• a high-level SWOT analysis to show strengths, weaknesses, opportunities and threats of each market.  

What are the key findings? 

ACER finds that demand-side flexibility remains limited: the majority of consumers in most countries are on fixed-price contracts, hindering their active participation in electricity markets.

This is despite in many cases, the access to smart metering should enable the provision and uptake of more flexible contracts for both household and non-household consumers.

ACER’s Country Sheets complement the annual Retail Market Monitoring Report and accompanying retail (electricity and gas) data dashboard.

The annual ACER report on EU electricity wholesale market integration:

• Evaluates progress in EU electricity market integration across all market time periods (forward, day-ahead, intraday).
• Highlights challenges in integrating balancing markets, developing forward markets, and the slow progress in implementing methodologies that define operations in day-ahead and intraday markets.
• Outlines ACER's recommendations and ongoing efforts to improve electricity market efficiency, infrastructure investment and usage, and enhance flexibility through demand response.

Check out ACER’s new interactive electricity dashboards

For the first time, this annual monitoring report is accompanied by three separate dashboards on key market indicators such as prices and churn rates (a liquidity metric), balancing data (e.g., volumes, prices and cross border exchanges of balancing services) and data on long-term transmission rights (including risk premia).

What are the key findings?

In March 2024, ACER reported frequent occurrences of negative electricity prices in the EU. In June 2024, the Agency warned of rising congestion management costs in the EU power grid, which reached €4 billion in 2023. ACER emphasised the importance of increased cross-zonal trading capacity.

Today’s report by ACER finds that:

• With the expansion of renewable energy, the role of fossil fuels in electricity systems is diminishing. The new generation mix is marked by a 10% rise in hours of mostly non-responsive generation (generation that does not adapt to short-term changes in demand) in 2023. ACER stresses the need to enhance power system flexibility for an efficient energy transition.
• However, delays in implementing market design changes hinder flexibility. 27% of the market design rules (methodologies, terms, and conditions) are delayed in terms of implementation.
• Balancing market integration remains limited in 2023. The Transmission System Operators (TSOs) of only four Member States have joined the balancing platforms which went live in 2022. ACER encourages more TSOs to join the balancing energy platforms, highlighting that increased participation can expand cross-zonal exchanges and reduce occurrences of high electricity balancing prices.
• Current electricity forward markets offer investors visibility on future electricity prices for only up to one year. ACER has identified shortcomings in regulatory measures aimed at addressing this challenge and proposed improvements.

What are ACER’s recommendations?

The report contains a suite of recommendations. In short, ACER:

• Recommends taking a proactive approach to further integrate power markets and strengthen connections.
• Recommends an efficiency-first approach for both power infrastructure investments and usage, ensuring that every installed megawatt is fully used.
• Stresses that improving long-term investment structures and ensuring better market integration will drive Europe's energy transition and economic growth.

What’s next?

ACER will:

• Publish a new report on power infrastructure investment in December 2024.
• Review the rules (terms, conditions and methodologies) that define market operations starting in 2025.
• Propose a network code on demand-side flexibility to the European Commission by March 2025.
• Continue to monitor power TSOs' involvement in balancing platforms.

These steps aim to enhance market efficiency and contribute to a resilient, flexible electricity infrastructure that can support Europe’s energy transition and long-term economic stability.

On 21 October 2024, ACER received a proposal from Nominated Electricity Market Operators (NEMOs) to amend the single intraday coupling (SIDC) products methodology.

What is the methodology about?

The SIDC products methodology is defined by the Capacity Allocation and Congestion Management (CACM) Regulation. The methodology specifies the types of products that can be traded within the EU’s continuous single intraday market and in intraday auctions (IDAs). Here, trading begins the day before delivery and continues through the day of delivery, supporting real-time adjustments to supply and demand across borders.

Why amend the methodology?

In September 2024, ACER amended the single day-ahead coupling (SDAC) products methodology (where trades occur the day before delivery) to allow the introduction of 15-minute trading products (Decision 13/2024). The proposed changes for the SIDC products methodology aim to align with this update, allowing the introduction of 15-minute trading products in both day-ahead and intraday markets.

Harmonising the rules across both markets is necessary to comply with the EU Electricity Regulation and reduce entry barriers for market participants trading short-term products. These updates will enable participants to trade electricity in 15-minute intervals throughout the day, enhancing market flexibility.

What are the next steps?

ACER expects to decide on the amended methodology by April 2025.

Contact information

Interested parties may contact ACER on this matter at ACER-ELE-2024-012@acer.europa.eu by 11 December 2024 at the latest.

Relevant documents

All NEMO's proposal to amend the SIDC products methodology.

All NEMO's proposal to amend the SIDC products methodology (in track changes).

Explanatory note.

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

Why is a decision needed?

The assessments performed by the Dutch and Norwegian NRAs found insufficient hedging opportunities in their respective bidding zones. Sufficient long-term hedging opportunities are important to allow market participants to be protected against price volatility risks and to mitigate uncertainty on future returns on investments.

To improve this, NRAs can:

• Request their Transmission System Operators to issue long-term transmission rights.
• Ensure the availability of other long-term cross-zonal hedging products that can support the wholesale electricity market functioning.

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

What are the next steps?

To inform its decision-making process, ACER will run a public consultation from today until 22 November and will take a decision on the referral from the Dutch NRA by 17 February 2025.

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

The EU Agency for the Cooperation of Energy Regulators (ACER) concludes that there is no need for developing new voluntary Power Purchase Agreement (PPA) templates in the EU energy market.

What are the PPAs?

PPAs are contractual arrangements between electricity producers (often renewable energy generators) and buyers. By providing renewable electricity at mutually agreed rates, these contracts foster stability for both parties and promote renewable energy sources (RES).

What is the ACER assessment about?

The (2024) Electricity Market Design (EMD) Regulation promotes PPAs as long-term instruments for ensuring price stability. As part of the EMD reforms, ACER was tasked with assessing whether additional voluntary PPA contract templates are needed to foster the transparency, efficiency and integration of the European internal energy market.

In conducting its assessment, ACER engaged with more than a 100 diverse stakeholders including through an expert group and a public consultation over summer 2024.

What are ACER’s conclusions?

ACER’s engagement with stakeholders showed that:

• Existing templates, developed by industry associations and national bodies, are largely sufficient for current market needs.

• These templates help market participants (especially newer or smaller players) reduce legal costs and streamline the initial phases of the contracting process.

• Addressing critical market barriers, such as project development bottlenecks, would have a more meaningful impact on fostering the PPA market.

ACER concludes that there is no need to introduce new voluntary PPA contract templates. Instead, ACER will provide recommendations on how to improve existing ones and advise on how to remove barriers to market integration.

What are the next steps?

ACER will continue to monitor the PPA market as part of its reporting obligations and to support market participants by addressing structural barriers in its recommendations.

Updates will be regularly shared with stakeholders on the ACER’s website and via the newsletter.