​Development and amendments to the FCA Regulation

The FCA Regulation has been developed in close cooperation with the Agency, ENTSO-E and stakeholders, in order to adopt effective, balanced and proportionate rules in a transparent and participative manner. In accordance with Article 18(3) of the Regulation (EC) No 714/2009, the Commission will consult the Agency, ENTSO-E and other relevant stakeholders, before proposing any amendment to the FCA Regulation.

Development of terms and conditions or methodologies

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Every proposal for the terms and conditions or methodologies should be submitted to public consultation before its submission for regulatory approval, in accordance with Article 6 of the FCA Regulation. The entities responsible for performing the consultation should duly consider the views of stakeholders resulting from the consultation, prior to its submission for regulatory approval. In all cases, a clear and robust justification for including or not the views resulting from the consultation should be developed and published in a timely manner before or simultaneously with the publication of the respective proposal.​

Implementation of the FCA Regulation​

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Pursuant to Article 5 of the FCA Regulation, the Agency, in close cooperation with ENTSO-E, has established the Market European Stakeholder Committee (MESC), in order to organise stakeholder involvement regarding the aspects of the implementation of the FCA Regulation and holds regular meetings with stakeholders to identify problems and propose improvements notably related to the operation and development of the issues described in the FCA Regulation.

Details of the activities of MESC can be found here.​

​​The FCA Regulation together with Regulation (EU) 2019/942 sets out the obligations for TSOs, ENTSO-E, regulatory authorities and ACER regarding the development and approval of terms and conditions or methodologies. The terms and conditions or methodologies should be consulted on, contain a timescale for implementation and the expected impact on the objectives of the FCA Regulation.

While terms and conditions or methodologies developed by all TSOs are directly submitted to ACER for approval, regional terms and conditions or methodologies are submitted to the relevant national regulatory authorities for a regional approval process. Once submitted, the relevant regulatory authorities or ACER should take decisions concerning the proposed terms and conditions or methodologies within six months after the receipt of the proposal. 

Where the regulatory authorities are not able to agree on the approval of the proposal, they can request an amendment, which gives TSOs an extra two months for amending the proposal and another two months for the regulatory authorities to approve the amended proposal. If, in case of a regional approval process, the regulatory authorities are not able to reach unanimous agreement or upon their joint request, ACER shall adopt a decision within six months from the referral.

After the adoption of the terms and conditions or methodologies, the TSOs responsible for developing the respective proposals or the regulatory authorities responsible for their adoption, may request amendments of these terms and conditions or methodologies. In that case the proposals for amendment to the terms and conditions or methodologies shall be submitted to consultation and follow the approval procedure as described above.​

​​Generation and load data provision (GLDP)

What is it about?

The generation and load data provision methodology sets out the requirements for the delivery of generation and load data required to establish an EU-wide common grid model to facilitate the coordination and harmonisation of capacity calculation and allocation in the long-term timeframe. The methodology takes into account and complements the generation and load data provision methodology according to Article 16 of the CACM Regulation.

Legal basis: Article 17 of the FCA Regulation

Responsibility: all Transmission System Operators (TSOs)

Current status: The generation and load data provision methodology was approved by all regulatory authorities in March 2018

Implementation: The methodology is implemented.

Read more on the latest approved generation and load data provision methodology for long-term time frames.

Documentation on the approval process of this methodology.

Common grid model (CGM)

What is it about?

The  long-term time frames provides the best forecast of perspective network states (“scenarios”) used for the forward capacity calculation.

The methodology follows the respective methodology for day-ahead and intraday pursuant to the Capacity Allocation and Congestion Management (CACM) Regulation. It provides rules and procedures for developing and merging the individual models, including the parameters of network elements, generation and load pattern, net positions of modelled areas and network topology. Since the long-term common grid model needs to simulate different forward time frames (e.g. year-ahead, month-ahead), it allows the definition of  multiple sets of scenarios (such as season, peak/valley market time unit).

Legal basis: Article 18 of the FCA Regulation

Responsibility: all TSOs

Current status: The Common Grid Model (CGM) methodology for long-term time frames was approved by all regulatory authorities in May 2017

Implementation: The implementation deadline foresees an operational and available CGM for the long-term time frames by June 2018. However, its implementation is still ongoing.

Read more on the latest approved CGM methodology for long-term time frames.

Documentation on the approval process of this methodology.

Capacity calculation methodology

What is it about?

The long term capacity calculation methodology (LT CCM) describes the rules  of  each capacity calculation region on how to calculate the amount of capacity available for trading between bidding zones at long-term time frames. The methodology is also used to calculate the amount of capacity  that complies with network security standards.

The calculation process

• TSOs of each capacity calculation region define capacity calculation inputs, such as the long-term scenarios and corresponding common grid models

• Inputs  are used by regional coordination centers to calculate the available amount of cross-zonal capacities either by using  the flow-based or coordinated Net Transmission Capacity (NTC) approach, depending on the respective region.

• The final cross-zonal capacities are then made available for allocation, enabling transmission among bidding zones.

• This methodology shall be fully compatible with the capacity calculation methodology for the day-ahead and intraday time frames.

Legal basis: Article 10 of the FCA Regulation

Responsibility: all TSOs in each capacity calculation region

Current status: The methodology was approved for most capacity calculation regions. The LT CCM for some regions are currently under approval or still need to be submitted.

Implementation: Different regions have different implementation timelines. The implementation of LT CCM for all regions is expected by the end of 2025.

Read more on the latest approved LT CCMs of the respective capacity calculation region.

Documentation on the approval processes for each capacity calculation region’s LT CCMs.

Methodology for splitting cross-zonal capacity

What is about?

This methodology defines how to split the calculated long-term cross-zonal capacity among the different long-term time frames for allocation. The long-term cross-zonal capacity needs to be allocated at least to annual and monthly time frames and should be split to meet the hedging needs of market participants.

Legal basis: Article 16(1) of the FCA Regulation

Responsibility: all TSOs in each capacity calculation region

Current status: The methodology was approved in all capacity calculation regions. Some capacity calculation regions also approved amendments.

Implementation: The implementation is  connected with the implementation of the capacity calculation methodology within their respective capacity calculation region (Article 10). Some regions have already implemented the methodology, whereas some others are expected to do so by 2025.

Read more on the latest approved methodologies for splitting long-term cross-zonal capacity of the respective capacity calculation region.

Documentation on the approval processes of this methodology  for each capacity calculation region.

Regional design of long-term transmission rights (LTTRs)

What is it about?

The regional design determines in which form long-term transmission rights (LTTRs)  are offered for allocation per each of the different bidding zone borders in the capacity calculation regions. Long-term transmission rights can be offered as physical transmission rights (with a use-it-or-sell-it principle) or as financial transmission rights (as options or obligations), which can cover different profiles (e.g. base load, peak load) and different long-term time frames (e.g. annual, monthly).

Legal basis: Article 31(3) of the FCA Regulation

Responsibility: all Transmission System Operators (TSOs) in each capacity calculation region

Current status: The regional design of long-term transmission rights was approved in all capacity calculation regions.  Some of them also approved amendments.

Implementation: The regional design of long-term transmission rights is implemented in all capacity calculation regions where long-term transmission rights are allocated. Some changes from recently approved amendments are not implemented yet.

Read more on the latest approved methodologies for regional design of long-term transmission rights of the respective capacity calculation region.

Documentation on the approval processes of this methodology  for each capacity calculation region.

Harmonised allocation rules

What is it about?

The harmonised allocation rules apply to all allocations of long-term transmission rights performed in the European Union. These rules provide specifications for the auctioning of long-term transmission rights, including eligibility requirements, provisions on collaterals, use and curtailment of long-term transmission rights, invoicing and payment.

Legal basis: Article 51(1) of the FCA Regulation

Responsibility: all TSOs

Current status: The harmonised allocation rules were first approved by ACER in October 2017, and subsequently amended in 2019, 2021 and 2023.

Implementation: The harmonised allocation rules are implemented. ACER approved the latest amendment in December 2023.

Read more on the latest approved harmonised allocation rules.

Documentation on the approval process of this methodology.

Regional or border specific requirements of harmonised allocation rules

What is it about?

The harmonised allocation rules for the long-term transmission rights (LTTRs) can have regional annexes which are mainly addressing the introduction of compensation caps for curtailed LTTRs and other specific provisions per bidding zone border or region.

Legal basis: Article 52(3) of the FCA Regulation

Responsibility: all TSOs in each capacity calculation region

Current status: Regional annexes to the harmonised allocation rules were approved in all regions. In some, amendments were also approved or are currently under approval.

Implementation: Regional annexes to the harmonised allocation rules are implemented.

Read more on the latest approved regional annexes to the harmonised allocation rules of the respective capacity calculation region.

Documentation on the approval processes of the regional annexes to the harmonised allocation rules for each capacity calculation region.

Congestion income distribution methodology

What is it about?

The congestion income distribution methodology sets out the rules for collecting and distributing the congestion income on the bidding zone borders from forward capacity allocation and distributing it among the TSOs. It follows the requirements from the methodology for sharing congestion income developed under the CACM Regulation.

Legal basis: Article 57 of the FCA Regulation

Responsibility: all TSOs

Current status: The first congestion income distribution methodology was approved by all regulatory authorities in July 2018. It has been amended once since. The currently approved congestion income distribution methodology addresses only the distribution of congestion income on the bidding zone borders applying coordinated net transfer capacity approach.

Implementation: The implementation is connected with the implementation of the capacity calculation methodology within the respective capacity calculation region (Article 10 of the FCA Regulation). As a result, different regions had different implementation timelines.

Read more on the latest approved congestion income distribution methodology.

Documentation on the approval process of this methodology.

Sharing of LTTRs’ firmness and remuneration costs

What is it about?

The methodology for sharing costs incurred to ensure firmness and remuneration of the long-term transmission rights (LTTRs) describes how TSOs spend their congestion income to remunerate the eligible long-term transmission rights ‘holders in case the day-ahead price difference between two bidding zones is positive and in the direction of the long-term transmission right. Moreover, it describes the sharing of compensation costs in case of long- term transmission rights‘ curtailment prior the day-ahead firmness deadline (due to operational security) and after the same deadline (due to force majeure or an emergency situation).

Legal basis: Article 61(3) of the FCA Regulation

Responsibility: all TSOs

Current status: The methodology was approved by ACER in October 2020. There is an ongoing amendment process based on the decision of ACER’s Board of Appeal. A new decision was taken by the end of 2021.  

Implementation: The implementation of this methodology is linked to the implementation of the capacity calculation methodology within the respective capacity calculation region (Article 10 of the FCA Regulation).

Read more on the latest approved methodology for sharing costs incurred to ensure firmness and remuneration of long-term transmission rights.

Documentation on the approval process of this methodology.

Decision on cross-zonal risk hedging opportunities

What is it about?

The national regulatory authorities on bidding zone borders where no long-term transmission rights are allocated, are required to assess (at least every 4 years) whether the electricity forward market provides sufficient hedging opportunities. If the assessment (including a consultation of market participants and an evaluation of several market indicators) shows that the hedging opportunities are insufficient, the regulatory authorities shall request the TSOs on the respective bidding zone border to issue long-term transmission rights or to ensure sufficient availability of other hedging instruments.

Legal basis: Article 30 of the FCA Regulation

Current status: Find the overview of the existing cross-zonal hedging instruments for all bidding zone borders.

Documentation on the decisions on cross-zonal hedging opportunities.

Nomination rules for physical transmission right

What is it about?

These nomination rules describe the entitlement and minimum technical requirements of a physical transmission rights holder to nominate electricity exchange schedules, as well as the description of the nomination process,  timings, format of nomination and communication.

Legal basis: Article 36 of the FCA Regulation

Responsibility: all TSOs issuing physical transmission rights on a bidding zone border

Current status: Nomination rules were approved for all bidding zone borders where physical transmission rights  were issued. In some regions, amendments were also approved or are currently under approval.

An increasing amount of bidding zone borders are issuing long-term transmission rights in the form of financial transmission rights which do not follow these rules.

Read more on the latest approved and currently applicable nomination rules.

Single allocation platform: set of requirements and methodology for sharing costs related to its establishment and operation

What is it about?

These rules and procedures address the single allocation platform’s functional requirements, governance, liabilities and cost sharing. The single allocation platform performs the execution of the long-term auctions in accordance with the harmonised allocation rules and any additional tasks required for the provision of long term transmission rights. All TSOs appointed the Joint Allocation Office (JAO) as the single allocation platform.

Legal basis: Article 49(1) and Article 59 of the FCA Regulation

Responsibility: all Transmission System Operators (TSOs)

Current status: The set of requirements and the methodology for sharing the costs of establishing, developing and operating the single allocation platform were approved by all regulatory authorities in September 2017.

Implementation: The single allocation platform is established and operating. The cost sharing methodology is implemented.

Read more on the latest approved single allocation platform methodology.

Documentation on the approval process of this methodology.

​​The development of the FCA Regulation started in 2011 when the Agency developed the Framework Guidelines on Capacity Allocation and Congestion Management  for electricity. These framework guidelines were adopted on 29 July 2011.     

Among other elements, the Framework Guidelines included provisions for the forthcoming development of the Network Code on Forward Capacity Allocation. The core of these requirements was centred around forward capacity allocation based on explicit auctions in a form of Physical or Financial Transmission Rights allocated based on harmonised allocation rules and through single allocation platform. Other elements included requirements on the firmness of long term cross-zonal capacities, efficient definition of bidding zones as well as efficient and coordinated capacity calculation in forward timeframe.

Based on these Framework Guidelines, ENTSO-E was tasked to develop the Network Code on Forward Capacity Allocation. Subsequently, the draft network code was submitted to the Agency for opinion based on which ENTSO-E revised the network code and resubmitted it to the Agency. Finally, the Agency adopted a recommendation to the European Commission to adopt the Network Code on Forward Capacity Allocation subject to specific amendments proposed by the Agency. Following this recommendation, the European Commission also revised the network code, which was then finally adopted as a Commission guideline in September 2016 and entered into force in October 2016.​

The detailed dates and documents of the above actions are presented below:

Action 1: 29 July 2011: The Agency adopts the Framework Guidelines on Capacity Allocation and Congestion Management for Electricity

Action 2: 1 October 2013: ENTSO-E submits the Network Code on Forward Capacity Allocation to the Agency

Action 3: 18 December 2013: The Agency adopts the Opinion on the Network Code on Forward Capacity Allocation

Action 4: 3 April 2014: ENTSO-E resubmits the amended Network Code on Forward Capacity Allocation to the Agency

Action 5: 22 May 2014: The Agency adopts the Recommendation on the Network Code on Forward Capacity Allocation

​​​​​​Development and amendments to EB Regulation

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The EB Regulation has been developed in close cooperation with the Agency, ENTSO-E and stakeholders, in order to adopt effective, balanced and proportionate rules in a transparent and participative manner. In accordance with Article 18(3) of Regulation (EC) No 714/2009, the Commission will consult the Agency, ENTSO-E and other relevant stakeholders, before proposing any amendment to EB Regulation.

Development of terms and conditions or methodologies

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Every proposal for the terms and conditions or methodologies should be submitted to public consultation before its submission for regulatory approval, in accordance with Article 10 of the EB Regulation. The entities responsible for performing the consultation should duly consider the views of stakeholders resulting from the consultation, prior to its submission for regulatory approval. In all cases, a clear and robust justification for including or not the views resulting from the consultation should be developed and published in a timely manner before or simultaneously with the publication of the respective proposal.

Implementation of EB Regulation

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Market European Stakeholder Committee (MESC): Pursuant to Article 9 of the EB Regulation, the Agency, in close cooperation with ENTSO-E, has established the Market European Stakeholder Committee (MESC), in order to organise stakeholder involvement regarding general aspects of the implementat​ion of the EB Regulation and holds regular meetings with stakeholders to identify problems and propose improvements notably related to the integration of electricity balancing market.

Details on the activities of MESC

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Electricity Balancing Stakeholder Group (EBSG): Pursuant to Article 9 of the EB Regulation, the Agency, in close cooperation with ENTSO-E, has also established the Electricity Balancing Stakeholder Group (EBSG), in order to organise specific stakeholder involvement regarding the implementation of EB Regulation. EBSG holds regular meetings with stakeholders to identify problems and propose improvements related to the integrated electricity balancing market.

Details of the activities of EBSG