The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today a decision approving the harmonised allocation rules for long-term transmission rights (HAR) proposed by all Transmission System Operators (TSOs) for electricity. These rules should ensure a transparent and non-discriminatory capacity allocation of long-term transmission rights to all market participants.

The HAR entail a uniform set of forward market rules for the whole EU that promotes the development of a liquid and competitive market, while providing market participants with equal opportunities to hedge their risk associated with cross-zonal electricity trading.

What common requirements do they set?

The HAR set out common requirements for participation in auctions, provide details on collaterals, specify the organization of auctions, specify the returns and transfers of long-term transmission rights, determine the rules for remuneration and compensation of long-term transmission rights, determine the fallback procedures, describe the principles of invoicing and payments and other related aspects needed for a proper functioning of forward capacity allocation.

The principles set out by the HAR will be applied together with the regional annexes that are approved by the concerned regulatory authorities. These annexes may introduce regional or bidding zone border specific requirements describing a particular type of long-term transmission rights, their remuneration regime, alternative fallback mechanism and compensation rules defining regional firmness.

Access the decision.

On 16 November 2021, the EU Agency for the Cooperation of Energy Regulators (ACER) received a proposal from the European Network of Transmission System Operators for Electricity (ENTSO-E) for the first pan-European resource adequacy assessment (ERAA 2021). The purpose of the assessment is to monitor the risks to security of electricity supply and identify adequacy concerns.

​​​Following the approval of the ERAA methodology in October 2020, ENTSO-E needs to carry out an annual ERAA to assess whether the EU has sufficient electricity resources to meet its future demand. ERAA describes the expected level of security of supply for a ten-year horizon.

Member States set their own electricity reliability standards based on the value of lost load and the cost of new entry for generation or demand response. The reliability standard indicates the necessary level of security of electricity supply for a given Member State.

By comparing these results, ERAA aims to identify potential resource adequacy concerns in the EU and provide an objective basis for assessing the need for additional national measures ensuring security of electricity supply such as the introduction of temporary capacity mechanisms.

To date, ENTSO-E performed the European Mid-term Adequacy Forecast (MAF) with the same ten-year time horizon. Mandated by the Clean Energy Package legislation and based on ACER-approved methodologies, ERAA replaces the MAF and will be key in improving the monitoring of security of electricity supply in Europe.

In order to inform its assessment, ACER invites interested third parties to submit their observations by 7 December 2021 to ACER-ELE-2021-011(at)acer.europa.eu.

The deadline for ACER to reach a decision on ERAA 2021 is 17 February 2022.​

Access the related ACER public notice. 

The European Green Deal sets ambitious targets that require vast investments into the electricity network. Some estimates claim the sector will need to double the investments rate into new infrastructure to help enable the green transition.

While recognising different hurdles on this path, from financing to public acceptance, the EU Agency for the Cooperation of Energy Regulators (ACER) believes special focus should be given on how to facilitate the most efficient use of the existing grid and technologies. In this context, the regulatory framework has an important role to play in promoting innovative investments and providing the right incentives to increase the efficiency of the electricity transmission network and therefore unlock its full potential.

How can the regulatory framework incentivise smart investments?

ACER has inquired the role of regulation in incentivising smart investments to improve the efficient use of electricity transmission assets in a new position paper, published today.  

In its position paper, ACER:

• Recognises the need to improve incentives for innovative solutions, especially those focusing on network efficiency and bringing immediate benefits to end consumers.

• Acknowledges the traditional regulatory framework favours high cost solutions over less costly ones - therefore affecting the setting Transmission System Operators (TSOs)’ work in and influencing their choices.

• Suggests a paradigm shift promoting a benefit-sharing regime to complement the classical cost-based remuneration scheme of the rate-of-return regulation. This will improve the efficiency in the usage of existing infrastructure and provide the incentives to invest in innovative assets.

• Explores the potential introduction of Key Performance Indicators (KPIs) to measure, in a harmonised way across Europe, the impacts and benefits of TSOs investments, as well as of KPI-based incentives to sustain innovative solutions.

What are the main conclusions?

ACER concludes the introduction of a benefit-based remuneration scheme can potentially represent a strong incentive for regulated entities to improve their efficiency, both when utilising future and existing infrastructure.

What comes next?

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Read ACER Position Paper to find out more.

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today its second report on the implementation of the EU Network Code on Harmonised Transmission Tariff Structures for Gas in Slovenia. In the report, ACER recommends that the Slovenian national regulatory authority for energy (NRA) improves the compliance of the reference price methodology with the requirements of the Tariff Network Code, including on transparency and on the choice of the cost drivers used to derive tariffs for all points of the network.

In addition, the Agency recommends that the NRA provides a clarification on the Transmission System Operator (TSO) revenue to be recovered through tariffs and on the reconciliation of past under-recoveries. This should improve transparency on the revenue to be recovered by the TSO and predictability on the calculation of future tariffs.

The recommendations made by the Agency aim at ensuring several requirements laid out in the Network Code, which relate to transparency, cost reflectivity and to preventing undue cross-subsidisation when setting transmission tariffs. These rules contribute to market integration, enhancing security of supply and promoting the interconnection between gas networks.

The Slovenian NRA shall take a motivated decision by 23 January 2022.

Access the report.

Find out more and access all ACER reports on national tariff consultation documents.