Today, ACER publishes its first monitoring report on the reporting obligations of the Regional Coordination Centres (RCCs).

The Regional Coordination Centres (RCCs) were introduced in 2022 with the Electricity Regulation. Their purpose is to facilitate and enhance coordination among electricity Transmission System Operators (TSOs) across regions, enhancing grid stability, fostering security of supply, and contributing to Europe’s climate and energy goals.

The RCCs’ annual reporting obligations include detailing the outcomes of their:

• operational performance monitoring,
• coordinated actions,
• recommendations issued and
• designated tasks.

What is ACER’s first RCC monitoring report about?

Since 2023, ACER is monitoring the regular reporting obligations of the RCCs, as required by the ACER Regulation, and intends to report annually on the topic.

This first ACER report was drafted in close cooperation with National Regulatory Authorities (NRAs), with input from the European Network of Transmission System Operators for Electricity (ENTSO-E) and RCCs. It covers the reporting period of second half of 2022 (reported by RCCs during 2023).

What did ACER monitoring find?

• The majority of RCCs have reported on 7 out of 16 mandatory tasks, focusing on:
  • coordinated capacity calculation,
  • coordinated security assessment,
  • common grid model,
  • consistency defence and restoration plans,
  • short term adequacy,
  • outage planning coordination, and
  • post-disturbance analysis.
• RCCs have generally submitted comprehensive reports to ACER and NRAs on tasks that are either fully or partially implemented, detailing the implementation status and timelines for each.
• RCCs have not reported on tasks that are under development or without an established methodology. This led to a reporting gap on 5 tasks, which are dependent on the methodologies’ implementation progresses as of 2022.

What does ACER recommend?

ACER identifies areas where the RCC reporting can improve in clarity. Particularly, ACER suggests to better define the:

• Key performance indicators used in the reports to ensure transparency and consistent monitoring.
• Terminology used for different tasks implementation stages.
• Monitoring process.

ACER offers recommendations for future reports, suggesting RCCs to:

• Detail their implementation timeline or plan.
• Explain the rotation of tasks, where relevant.
• Justify the reasons that delay the task implementation where a methodology is in place.

What are the next steps?

In the future, the number of tasks and obligations that RCCs will cover in their monitoring is expected to increase. This expansion depends on:

• the approval and implementation of the methodologies related to specific tasks, and
• their subsequent implementation by the RCCs.

The next ACER monitoring report is planned for early 2025 and will cover the 2023 RCC reporting period (monitored by ACER during 2024).

What else is new?

ACER recently amended the methodology for identifying regional electricity crisis scenarios. ENTSO-E will now work together with RCCs (and others) to identify the most relevant scenarios at regional level (including cross-border dependencies). Read more about it.

On 8 March 2024, with its Decision No 02/2024, ACER amended the methodology for identifying regional electricity crisis scenarios.

The amendment proposal was submitted to ACER by the European Network of Transmission System Operators for Electricity (ENTSO-E) on 8 January 2024.

What is the methodology about?

The methodology was first approved by ACER in 2020 under the EU Regulation on risk-preparedness in the electricity sector. The Regulation introduced a set of rules on how to prevent, prepare for and manage electricity crises, bringing more transparency in the preparation phase and during an electricity crisis and ensuring that measures are taken in a coordinated and effective manner.

The original methodology introduces a structured approach for regional electricity crisis scenarios (prepared by ENTSO-E) and national ones (prepared by national competent authorities) and thus serves as the basis  for the development of consistent risk-preparedness plans. The Regulation also provides for the methodology to be updated where significant new information becomes available. 

What are the main improvements in the methodology?

The key changes of the methodology are:

• A top-down process:
  • starting with 31 regional electricity crisis scenarios (from 2020);
  • merging certain scenarios or adding new ones; and
  • focusing on extreme scenarios with regional impact.
• Earlier engagement of Member States and competent authorities.
• A more pragmatic approach: ENTSO-E to undertake quantitative methods and model-based simulations where seasonal adequacy tools can be applied.

What are the next steps?

Within six months, ENTSO-E shall identify the most relevant electricity crisis scenarios at regional level (including cross-border dependencies).

ENTSO-E shall do so in close cooperation with the Electricity Coordination Group (ECG), Regional Coordination Centres (RCCs), and competent and regulatory authorities.

Learn more about the methodology.

On 17 January 2024, the National Regulatory Authorities (NRAs) of the Hansa capacity calculation region requested a six-month extension from ACER to agree on the Transmission System Operators’ (TSOs’) proposed cross-zonal capacity calculation methodology for the balancing timeframe in the Hansa region.

ACER has now granted the requested six-month extension to the EU Hansa NRAs (Denmark, Germany, the Netherlands, Poland, and Sweden).  

What is the methodology about?

The cross-zonal capacity calculation methodology for the balancing timeframe describes the rules for each Capacity Calculation Region (CCR) on calculating the amount of capacity available for the exchange of balancing energy or for operating the imbalance netting process.

Ultimately, this methodology supports TSOs in fulfilling their responsibility to maintain the stability of the electricity transmission system by ensuring an appropriate balance between electricity generation and consumption.

What are the next steps?

The Hansa NRAs have until 6 August 2024 to decide on the TSOs proposal for the cross-zonal capacity calculation methodology for the balancing timeframe in the region.

On 18 February 2024, the Dutch National Regulatory Authority (NRA), Autoriteit Consument & Markt (ACM), requested a six-month extension from ACER to adopt coordinated decisions with the Norwegian NRA, NVE-RME, on electricity cross-zonal risk hedging opportunities.

By February 2024, in accordance with the Regulation on forward capacity allocation, the Dutch and Norwegian NRAs were required to assess whether the electricity forward market in their respective bidding zone provides sufficient hedging opportunities. If these opportunities prove insufficient, the NRAs must take coordinated decisions to either:

• introduce long-term transmission rights; or
• task Transmission System Operators (TSOs) with implementing alternative measures to improve cross-zonal hedging opportunities.

What are the next steps?

ACER intends to act promptly on the ACM request, aiming to reach a decision in April 2024.

The EFTA Surveillance Authority (ESA) will decide on the extension request for NVE-RME, based on a draft from ACER, following the procedure of the Third Energy Package as outlined in the EEA Agreement.  

On 7 February 2024, ACER has received the transmission system operators’ (TSOs’) proposal to amend:

• the common methodology for harmonising the pricing balancing energy and cross-border capacity; and

• the implementation framework for a European platform for the exchange of balancing energy from frequency restoration reserves with automatic activation (aFRR).

The pricing methodology establishes a harmonised approach for calculating prices across the different EU balancing platforms and increases the efficiency of the balancing energy markets.

The aFRR implementation framework describes the design of the platform for the international coordination of automated frequency restoration and stable system operation (PICASSO), which is a key element in the European balancing markets integration.

What are the amendments about?

In relation to the pricing methodology, the TSOs are proposing to:

• Reduce the technical price limits of the integrated balancing energy markets from 99,999 to 15,000 EUR/MWh. This implies that balance service providers will not be allowed to bid below -15,000 EUR/MWh or above 15,000 EUR/MWh, after July 2026.

• Lower the transitional price limit (valid until July 2026) to 10,000 EUR/MWh. Similarly, during this transitional period, balance service providers will only be allowed to bid between the price range from -10,000 to 10,000 EUR/MWh.

• Use an alternative way to compute the prices from the PICASSO platform to better reflect the bids activated by the TSOs.

In terms of the aFRR implementation framework, the TSOs propose introducing the possibility of using an elastic demand. This would allow them to price a segment of their demand and therefore establish a threshold beyond which they are unwilling to activate balancing energy. This would improve the TSOs' ability to manage the balance between cost efficiency and the need for maintaining high-quality frequency.

How does ACER contribute?

ACER will review the TSOs’ proposals to ensure they align with the Regulation on electricity balancing and fulfil the obligations set out by the Regulation on the internal market for electricity.

What are the next steps?

To gather inputs from stakeholders and inform its decision-making process, ACER will:

• run a public consultation from 26 March to 23 April 2024;

• hold a webinar on 8 April 2024 to present and discuss the main elements of ACER’s public consultation.

ACER will reach a decision by 7 August 2024.

On 17 January 2024, the National Regulatory Authorities (NRAs) of the Hansa capacity calculation region requested a six-month extension from ACER to agree on the Transmission System Operators’ (TSOs’) proposed cross-zonal capacity calculation methodology for the balancing timeframe in the Hansa region.

The Hansa region comprises 6 countries: Denmark, Germany, the Netherlands, Norway, Poland, and Sweden.

What is the methodology about?

The cross-zonal capacity calculation methodology for the balancing timeframe describes the rules for each Capacity Calculation Region (CCR) on how to calculate the amount of capacity available for the exchange of balancing energy or for operating the imbalance netting process.

This methodology is relevant for ensuring a balance between the electricity’s generation and consumption and support TSOs as they are ultimately responsible to ensure the stability of the electricity transmission system and to effectively run its operations.

What are the next steps?

ACER intends to act promptly on this request, aiming to reach a decision by mid-March.

Access the Public notice

On 8 January 2024, ACER has received an amendment proposal by the European Network of Transmission System Operators for electricity (ENTSO-E) to amend the methodology for identifying regional electricity crisis scenarios.

What is the methodology about?

The methodology for identifying regional electricity crisis scenarios was first approved by ACER in 2020 under the EU Regulation on risk-preparedness in the electricity sector. The Regulation introduces a set of rules on how to prevent, prepare for and manage electricity crises, bringing more transparency in the preparation phase and during an electricity crisis and ensuring that measures are taken in a coordinated and effective manner.

The methodology introduces a structured approach for regional electricity crisis scenarios (prepared by ENTSO-E) and national ones (prepared by national competent authorities) and thus serves as a foundation for the development of consistent risk-preparedness plans.

What is the proposal about?

The key changes of the amendment proposal are:

• Introducing a top-down process, starting with 31 regional electricity crisis scenarios, merging certain ones or adding new ones and focusing on extreme scenarios with regional impact.
• Earlier engagement of Member States and competent authorities.
• More pragmatic approach: ENTSO-E to undertake quantitative methods and model-based simulations where seasonal adequacy tools can be applied.

When approved, ENTSO-E shall use the methodology to identify the most relevant electricity crisis scenarios at regional level (including cross-border dependencies) and update the regional electricity crisis scenarios at least every four years.

What are the next steps?

ACER has 2 months (i.e. by 8 March 2024) to decide on the proposed amendment.

To make an informed decision, ACER will consult National Regulatory Authorities (NRAs), ENTSO-E and the Electricity Coordination Group (ECG) during the amendment process.

Learn more about the methodology and the amendment process.

On 22 December 2023, with its Decision 18/2023, ACER approved the proposal of the Transmission System Operators (TSOs) to amend the Harmonised Allocation Rules (HAR) for long-term electricity transmission rights.

What is it about?

On 1 March 2023, ACER received the TSOs’ proposal for amending the HAR for long-term transmission rights under the Regulation on forward capacity allocation. On 1 August 2023, the TSOs completed their proposal with amendments to the provisions on collaterals.

To take an informed decision, ACER engaged with stakeholders through a public consultation and a workshop in summer 2023.

Why were the rules amended?

Amending the HAR was needed to introduce the flow-based allocation of long-term transmission rights and enable cross-zonal coordination. This will make the long-term electricity market more efficient and aligned with the day-ahead market design.

Flow-based allocation of long-term transmission rights is a mechanism that efficiently allocates cross-border transmission capacity in the electricity market. It takes into account the physical reality of the transmission network by calculating the available capacities of physical network elements for electricity exchanges between different areas, as well as sensitivity factors.

A flow-based mechanism enables cross-zonal coordination in the long-term electricity markets, which provides more accurate price signals for cross-border trade, reduces market distortions and ensures that the prices reflect the true cost of generating and transmitting electricity.

The amendment of the HAR allows for the implementation of two projects for long-term flow-based capacity calculation and allocation in the Core and Nordic capacity calculation regions. The HAR revision was the final step needed for the implementation of these projects, following ACER’s approval of other related methodologies in March 2023.

What are the next steps?

The amended HAR will apply from the date specified in the amendment notice published by the Joint Allocation Office.

Ahead of every winter and summer, the European Network of Transmission System Operators for Electricity (ENTSO-E) assesses the potential risks to the European security of electricity supply for the six months ahead. This analysis allows Transmission System Operators (TSOs) and Member States to take relevant actions and ensure the European consumers are supplied without interruption.

What are the risks this winter?

ENTSO-E’s Winter Outlook 2023-2024 finds that the situation in the European power system for this winter is more secure than last year.

• Risk of power interruption appears in the islands of Ireland, Malta, and Cyprus – a pattern that has repeated in past seasonal outlooks. With limited interconnections, islands need to rely mostly on their own resources. This highlights the major role played by interconnectivity in the security of supply. Finland may also face risk in the event of exceptionally adverse conditions.
• Regional risks: the Outlook also identified a potential risk associated with a surge in French demand, triggered by the drop in temperatures. This demand increase could impact Belgium and Great Britain, showcasing the importance of effective coordination to solve potential regional risks.

What does ACER say?

• Continuing good practice: ACER appreciates that the Winter Outlook continues to analyse the electricity saving potential and the critical gas volume needed to ensure security of electricity supply. This addition provides complementary information to Member States, system operators, and other stakeholders to take relevant actions.
• Collaboration with Ukraine and Moldova: ACER welcomes the enhanced cooperation efforts with the Ukrainian and Moldovan system operators. These efforts contribute to reducing the system risks following Russia’s invasion of Ukraine and addressing the challenges faced.
• Improve the methodology: ACER stresses the methodological gap persisting in the seasonal outlooks, as highlighted in the last opinions. Particularly, ENTSO-E does not apply the flow-based market coupling in its model, although it has already been in place for several years, helping the Transmission System Operators (TSOs) to allocate cross-border capacities more efficiently. Without this approach, the forecasts may diverge from real outcomes and from national seasonal assessments.