The EU Agency for the Cooperation of Energy Regulators (ACER) has reached a decision on alternative electricity bidding zone configurations. Transmission System Operators (TSOs) have 12 months to conduct the bidding zone review and to recommend whether to keep or amend the existing bidding zones.

What are bidding zones and why are their alternative configurations relevant?

A bidding zone is the largest geographical area within which market participants are able to exchange energy without capacity allocation. Currently, bidding zones in Europe are mostly defined by national borders. However, the existing European electricity target model requires defining bidding zones based on network congestions. Hence, alternative bidding zone configurations based on this principle need to be examined.

What are the Decision’s main highlights?

ACER’s Decision is based on stakeholder input (via a stakeholder consultation in 2021), as well as on the extensive information provided by TSOs. This information included alternative configurations previously submitted to ACER, the outcome of locational marginal pricing simulations (in accordance with the bidding zone review methodology approved in November 2020) and additional feedback received by TSOs.

In its Decision, ACER proposes alternative bidding zone configurations for five Member States.

• In Continental Europe, alternative configurations are proposed for Germany (4 alternatives), France (1), Italy (1) and the Netherlands (1).
• In the Nordic area, 4 alternative configurations are proposed for Sweden.

What’s next?

Following ACER’s Decision, TSOs have 12 months to conduct the bidding zone review and provide a recommendation on whether to keep or amend the existing bidding zones. Member States will then decide whether or not to change the bidding zones accordingly.

What are the benefits?

Better defined bidding zone configurations (i.e. whose borders are based on long-term, structural congestions) can bring several benefits including:

• increased opportunities for cross-zonal trade,
• more efficient network investments, and
• cost-efficient integration of new technologies.

Read more on the ACER's Decision 11-2022. 

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today the first Implementation Monitoring Report on the progresses made in implementing the EU-wide guideline on electricity transmission system operation (the System Operation Guideline).

The System Operation Guideline provides the rules and responsibilities for the coordination and data exchange between transmission system operators (TSOs), between TSOs and distribution system operators (DSOs), as well as between TSOs or DSOs and significant grid users (SGUs) in planning and in close to real-time operations.

In particular, the report analyses the implementation status of the following areas:

• applicability and scope of the data exchange,

• approval of the key organisation requirements, roles and responsibilities (KORRR) and the implementation of specific aspects of the data exchange,

• agreements on processes and format for data exchanges between TSOs and relevant DSOs,

• provision of data between TSOs, DSOs and SGUs.

What are the key findings?

ACER’s report  shows an incomplete and insufficiently uniform implementation of the data exchange provisions of the System Operation Guideline across the European Union:

• In 70% of the Member States, the provisions on the applicability and scope of the data exchange are either fully or partially implemented.

• The majority of national regulatory authorities (NRAs) reported implementing or approving the KORRR in relation to data exchange. 60% of NRAs confirmed their respective TSOs and DSOs reached agreements on effective, efficient and proportional processes regarding data exchanges and the data exchange format.

• NRAs reported a wide range of parameters and thresholds when specifying the responsibilities of the SGUs required for exchanging data. ACER questions whether these differences limit a level playing field and recommends proportionate changes to the rules.

• Rules on the provision of data between TSOs, DSOs and SGUs are specified in most Member States. The implementation of the data exchange schemes is deemed outstanding in over 35% of countries. Furthermore, the implementation of the DSOs' obligation to provide data on generating capacity of the small generating modules (type A PGMs) is not satisfactory.

The report acknowledges that TSOs’ obligations have mostly been implemented. The highest implementation levels were reported for:

• the refresh rate for real-time data

• the review of structural data shared with other TSOs

• the exchange of real-time data between TSOs.

Some specific KORRR obligations, however, remain outstanding. 

ACER’s key recommendations:

ACER recommends NRAs to perform or promote a prompt implementation of the relevant provisions of the System Operation Guideline in their countries.

Where TSOs have not yet developed specific proposals subject to approval (i.e. on the applicability and scope of data exchange) or have not yet implemented relevant provisions, ACER encourages NRAs to monitor the process or liaise with TSOs to define a detailed roadmap towards the implementation of the System Operation Guideline.

ACER also suggests considering further changes to the data exchange rules aiming at efficient harmonisation of applicable criteria for SGUs definition.

Access the report.

The EU Agency for the Cooperation of Energy Regulators (ACER) has decided on the Transmission System Operators (TSOs)’ proposal to amend the Forward Capacity Allocation methodologies related to:

• the establishment of a Single Allocation Platform and the requirements for sharing the costs of its establishment and operation,
• the Congestion Income Distribution.

The approved amendments extend the application of those methodologies to Fingrid (the Finnish TSO).

What are the benefits?

The amended methodologies will enable the issuing of long-term transmission rights on the Finnish – Estonian bidding zone borders and therefore provide the long-term cross-zonal hedging opportunities needed by the Baltic market participants.

To accelerate the availability of the long-term transmission rights on the Finnish-Estonian border, ACER promptly approved the amendments to the methodologies, issuing the Decisions more than three months ahead of the legal deadline.

Access ACER Decision 09-2022 on amendments to Single Allocation Platform (SAP) and ACER Decision 10-2022 on amendments to Congestion Income Distribution Methodology (CIDM).

The EU Agency for the Cooperation of Energy Regulators (ACER) adopted a decision granting National Regulatory Authorities (NRAs) of the Continental Europe Synchronous Area (CE SA) an extension of six months to decide on the minimum activation period of frequency containment reserves (FCR) providers.

The adoption of this decision followed the joint request from the NRAs, which was submitted to ACER in May 2022. NRAs have now until 3 December 2022 to agree on the Transmission System Operators' (TSOs) proposal regarding the minimum activation period to be ensured by those FCR providers having units or groups with limited energy reservoirs to remain available during alert state.

What do frequency containment reserves (FCR) mean?

FCR (also known as primary control reserves) help maintain the power balance across the EU electricity grid. FCR are one of the balancing services to level out frequency deviations in the power grid. The FCR is the first response to frequency disturbances (e.g. following a planned/unplanned power plant outage). The minimum activation period must be ensured by the FCR providers. If the frequency deviation persists, the Frequency Restoration Reserves (FRR) subsequently replace the primary control reserve.

Access ACER’s Decision.