Forward Capacity Allocation

The Forward Capacity Allocation (FCA Regulation) provides rules on cross-zonal capacity calculation and allocation in the forward timeframe. These binding requirements support a proper functioning of the European electricity markets in the forward timeframe and regulate the relevant activities of Transmission System Operators (TSOs), national regulatory authorities and ACER.

What are its core elements?

• Forward calculation of capacities between bidding zones for the year- and month-ahead market time frames. This coordinated calculation ensures reliable and transparent information to market participants. As a result of this calculation, TSOs provide the optimal amount of long-term cross-zonal capacities for allocation of long-term transmission rights (LTTRs). LTTRs allow market participants to hedge their positions on the long-term electricity markets.

• Forward allocation of cross-zonal capacities: market participants need to be provided sufficient hedging opportunities and equal access to long-term markets. This is ensured by allocating LTTRs and with the use of harmonised allocation rules across Europe.

• Establishment of a Single Allocation Platform: the platform has been developed by all European TSOs to facilitate the allocation of LTTRs to market participants. The platform applies the harmonised allocation rules and reduces barriers for all European market participants by providing equal access to the platform which issues all LTTRs in the European Union in a centralised way.