Capacity allocation and congestion management
The CACM Regulation
The Capacity Allocation and Congestion Management (CACM Regulation) provides binding rules for the implementation and operation of EU-wide single market coupling in the day-ahead and intraday timeframes.
These rules apply to Transmission System Operators (TSOs), Nominated Electricity Market Operators (NEMOs), regulatory authorities and ACER.
What are its core elements?
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Calculation of capacities between bidding zones: capacity calculation should be coordinated among TSOs to become as efficient as possible and transparent for market participants. As a result, TSOs can provide an optimal amount of cross-zonal capacity for allocation in the market.
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Allocation of cross-zonal capacities with market coupling: the most efficient way to allocate cross-zonal capacity is by using the Union-wide market coupling, which collects all bids and offers from the bidding zones within the European Union and maximises the economic surplus. For this purpose, NEMOs organize the day-ahead coupling as an implicit auction and the intraday coupling as continuous trading supplemented by numerous implicit auctions. The CACM Regulation also addresses the related post-coupling processes.
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Management of residual congestions: physical congestions, which were not prevented by capacity calculation and allocation, need to be managed by coordinated TSOs’ actions - i.e. by using countertrading or re-dispatching.
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Optimal definition of bidding zones: bidding zones are geographic areas within which electricity exchanges are unrestricted, whereas exchanges between bidding zones require cross-zonal capacity - which is limited. Bidding zones should be defined to prevent structural congestions within a bidding zone. In case the existing bidding zone configuration is not efficient, TSOs need to review the structure and propose a more efficient one.
