ACER calls for stronger monitoring and enforcement to tackle delays in implementing EU electricity market rules

ACER has published its Recommendation to the European Commission on measures to speed up the effective implementation of EU electricity market rules. 

ACER’s monitoring found that major delays in implementing these rules hinder the proper functioning of Europe’s electricity system, resulting in economic costs for market participants and consumers.

Background

The EU electricity market is grounded in a comprehensive legal and regulatory framework. This includes EU-wide network codes and guidelines and the adoption of detailed rules (e.g. terms and conditions or methodologies (TCMs)), designed to ensure that the market operates efficiently. 

These rules set out key responsibilities for transmission system operators (TSOs), nominated electricity market operators (NEMOs), the European Network of Transmission System Operators for Electricity (ENTSO-E) and regional coordination centres (RCCs). 

Why an ACER Recommendation to the European Commission?

ACER’s (2024) monitoring found major delays in implementing the TCMs both at EU and regional level, affecting key areas such as electricity balancing, system operation and forward capacity. Delays in some TCMs had a domino effect, as they stalled progress of other TCMs.

This ACER Recommendation responds to the European Commission’s (2024) request for advice on how to strengthen the regulatory framework to reduce delays, with a focus on enforcement, governance and incentives.

What are ACER’s findings and recommendations? 

ACER’s Recommendation identifies challenges in three main areas:

• Implementation timelines: deadlines are often unclear or lack sufficient justification, making it difficult to track progress.
• Non-compliance: the decision-making process for addressing non-compliance by ENTSO-E and RCCs has room for improvement.
• Collective non-compliance: while the enforcement of individual obligations of TSOs and NEMOs poses no problem, current enforcement processes could fall short when tackling delayed implementation or failure to comply in cases where, across Union obligations, all TSOs or all NEMOs are tasked with jointly carrying out an obligation and collectively fail.

ACER recommends that the European Commission strengthen the regulatory framework by:

• Improving implementation and monitoring, introducing clearer deadlines and reporting requirements to reduce delays.
• Strengthening the enforcement framework in the ACER Regulation to ensure non-compliance by ENTSO-E and RCCs is addressed consistently and effectively.
• Assessing how to further improve enforcement for collective obligations (i.e. all TSOs and all NEMOs obligations).