The EU Agency for the Cooperation of Energy Regulators (ACER) is running a public consultation on the Transmission System Operators’ (TSOs’) proposal to include Norway in the capacity calculation regions (CCRs).

What are the capacity calculation regions and why are they important?

CCRs define the geographic areas (i.e. by listing bidding zone borders) across the EU in which the task of capacity calculation and other processes are coordinated by TSOs (i.e. subject to regional methodologies).

There are 8 CCRs in Europe: Nordic, Hansa, Core, Italy North, Greece-Italy (GRIT), South-west Europe (SWE), Baltic and South-east Europe (SEE).

In 2021, the CACM Regulation has also become binding for Norway. The TSOs’ amendment proposes to add the Norwegian bidding zone borders into the Hansa and Nordic CCRs.

Forming CCRs benefit European consumers, as:

• Dividing Europe into different CCRs allows TSOs to run regional processes related to capacity calculation, re-dispatch & countertrading more effectively;
• Having an efficient determination of CCRs facilitates the optimal provision of cross-zonal capacity, which allows more cross-zonal trade while remaining security of supply; and
• The addition of the Norwegian bidding zone borders further facilitates welfare increases by integrating these bidding zone borders in European and regional processes.

What is the process to amend the current bidding zones?

Any amendments proposed by TSOs to the definition of CCRs are subject to the approval of ACER.

ACER has six months (until 13 April 2023) to decide on the TSOs’ proposal.

Next steps

ACER will assess whether the TSOs’ proposals contribute to market integration, non-discrimination, effective competition and the proper functioning of the EU electricity market.

To collect views of the stakeholders, a public consultation on the TSOs proposed amendments runs from 28 October to 25 November 2022.

Access the Public Consultation.

Access the Public Notice.

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes its report on Denmark’s proposed tariffs applicable for filling gas storages and for the emergency gas supply to non-protected consumers.

What is in the report?

ACER assesses the proposed tariffs, which have two components:

• A postage stamp ex-ante tariff used to store gas in Danish storages for non-protected consumers; and
• An ex-post tariff used to charge non-protected consumers for the gas supplied in case of an emergency event.

What are ACER’s main findings?

ACER considers that the proposed tariffs are compliant with the EU Network Code on Gas Transmission Tariffs.

ACER recommends the Danish National Regulatory Authority (NRA), Forsyningstilsynet, to provide greater transparency on the proposed tariffs by describing with greater detail the ex-ante and ex-post components.

Background

ACER provided its preliminary conclusions to the NRA on 28 September 2022. The NRA published its final decision on the proposed tariffs on 30 September 2022. The report published today is the result of complete analysis performed on the compliance of the proposed tariffs.

Access the report on the Danish gas tariffs.

Access all ACER reports on national tariff consultation documents.

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today the 30th edition of its REMIT Quarterly, covering the third quarter of 2022.

REMIT (Regulation on Wholesale Energy Market Integrity and Transparency) sets the ground for increased market transparency and integrity of the energy markets to ensure trust in the functioning of these markets and fosters market integration. It also deters market participants from manipulating the market. Thus it has an important role in protecting the interests of companies and consumers.

What is the REMIT Quarterly?

The REMIT Quarterly is ACER’s main channel of communication with stakeholders on REMIT-related matters, and provides updates on ACER’s REMIT activities.

The new edition features:

• An article on a REMIT breach in the Netherlands which resulted in a fine imposed on a Dutch company for failure to publish inside information;
• The statistics on registered reporting mechanisms’ (RRM) contingency reports;
• The recent updates of the REMIT documentation; and
• An updated overview of the sanction decisions for the last four quarters.

Read more. 

The EU Agency for the Cooperation of Energy Regulators (ACER) has decided not to grant the Swedish Transmission System Operator (TSO) a derogation from the requirement to provide minimally 70% of the transmission capacity for cross-zonal trade (‘70% requirement’).

What is the decision about?

The 70% requirement is one of the cornerstones of the internal market for electricity. However, the relevant  Regulation 2019/943 on the internal market for electricity (Regulation) allows a temporary derogation for the TSOs who cannot comply with this requirement. The derogation may be granted under strict conditions and is subject to the agreement between the concerned National Regulatory Authorities (NRAs) or, in case of their disagreement, the decision on granting such a derogation is submitted to ACER.

Background

On 6 October 2021, the Swedish NRA (Energy Markets Inspectorate, Ei) received the request from the Swedish TSO (Svenska kraftnät, Svk) for a derogation from the 70% requirement for multiple electricity interconnections for the year 2022.

Ei decided that Svk should be granted the derogation for the interconnectors between the bidding zones Finland – Sweden 3 (FI-SE3) and Sweden 3 - Denmark 1 (SE3-DK1). However, the Finnish NRA (EV) and the Danish NRA (DUR) opposed granting the derogations to Svk due to various reasons. Among others, EV and DUR highlighted that the Svk’s request for derogation is incomplete and that Svk does not provide sufficient efforts to ensure required level of redispatching and countertrading to support the 70% requirement. The question of derogation was therefore submitted to ACER.

In its decision of 26 October 2022, ACER concluded that the derogation from the 70% requirement should not be granted to Svk.

How did ACER contribute?

ACER has thoroughly assessed Svk’s derogation request against the relevant requirements specified in the Article 16(9) of the Regulation, and analysed the Svk’s application of the 70% requirement in the previous years.

The assessment confirmed that:

• The derogation was not necessary for maintaining operational security;
• The derogation request did not provide the minimum capacity targets,
• The derogation request did not provide the methodology on how to avoid the discrimination between internal and cross-zonal exchanges.

Based on the above, ACER has concluded the derogation should not be granted.

Access the Decision 17-2022.

Europe’s long-term electricity market relies on so-called long-term transmission rights (LTTRs), which allow market participants to hedge their exposure across bidding zones. The allocation of those LTTRs is currently not coordinated across different borders, which leads to inefficiencies in some capacity calculation regions (CCRs).

To enable the implementation of the long-term flow-based allocation in the Core and Nordic CCRs, and following the all Transmission System Operators’ (TSOs’) proposals, the EU Agency for the Cooperation of Energy Regulators (ACER) is reviewing three proposals for amendments of forward capacity allocation methodologies related to:

• Single allocation platform, including the methodology for sharing costs for its establishment, development and operation;
• Congestion income distribution; and
• Sharing costs incurred to ensure firmness and remuneration of LTTRs.

As part of its review, ACER seeks stakeholder input via:

• Public Consultation, which runs from 26 October to 23 November 2022;
• Public Workshop on 17 November 2022.

Why change the rules?

Cross-zonal capacity is currently allocated at the long-term electricity market with no coordination between different borders (i.e. using a flow-based allocation approach), which leads to inefficiencies in some CCRs. The proposed amendments include requirements for flow-based allocation of LTTRs, aiming to make the long-term market more efficient and align it with the day-ahead market design.

In particular, this revision is needed to enable the implementation of two ongoing projects for long-term flow-based capacity calculation and allocation in the Core and the Nordic CCRs.

How does ACER contribute?

ACER will assess the amendments proposed by all TSOs and revise them where necessary in order to ensure their contribution to market integration, non-discrimination, effective competition, proper functioning of the market, and their compliance with the Regulation on the internal market for electricity and the Forward capacity allocation guideline.

What are the next steps?

ACER has six months (until 28 March 2023) to decide on the TSOs’ proposals.

To collect the views of the stakeholders, ACER’s Public Consultation on the TSOs’ proposed amendments runs from 26 October to 23 November 2022.

ACER invites interested stakeholders to register for a Public Workshop, which will take place on 17 November 2022.

Access the Public Notice.

ACER sees the coming months as a likely key ‘make or break’ moment for EU energy market integration; one where fully making available cross-border capacities for gas and electricity flows will prove key.

Europe’s energy solidarity is being tested with the continuing war in Ukraine. Prices are high. Using different gas supply routes has resulted in network congestion and disrupted gas market’s price integration (see graphs 1 and 2 in Annex). Some Member States face significant supply challenges that are unlikely to go away soon. Other Member States, even if net exporters of energy, depend on imports for significant hours during the year.

If some countries were to pursue strictly national short-term energy interests, e.g. via restricting energy exports, others would likely suffer.

This requires heightened vigilance from regulators, system operators and governments alike.

The solution needs to be European solidarity. Why?

• Maximising capacities for cross-border trade will improve the security of supply of the EU as a whole and help to stabilise electricity and gas prices.
• Cross-border capacity is crucial for market integration (see graph 3 below in Annex), and it is even more critical during an energy crisis where supply margins can become much tighter.
• Electricity imports could be essential for all (see graph 4 below of the import ~ export swings from 2021 to 2022, and how reaching the ‘70% target’ of making electricity interconnection capacity available for cross-border trade be vitally important for many Member States, including those that are predominant electricity exporters)
• Restricting flows between countries is often claimed to be a ‘last resort’, but experience shows that it may be deployed early on to protect what are perceived to be national interests. If all Member States were to ‘play it safe’ and restrict trade, many countries would sooner or later find themselves worse off.

Hence, important role for Member State governments, network operators and regulators to:

• Refrain from announcing export restrictions (‘do not count on me’) which may lead to a contagious effect.
• Make themselves aware of current grid congestion and, alongside system operators, pursue near-term practices to help alleviate this.
• Refrain from reducing cross-border capacity and strive hard to meet the EU rule of 70% of electricity interconnection capacity being made available for trade with neighbours (see graph 5 below which shows critical challenges in meeting the minimum 70% target for electricity).
• Maximise available interconnection capacity for gas flows (implementing congestion management procedures, careful maintenance planning, dynamic recalculation of available capacity, etc.).
• Increase monitoring and, where relevant, enforcement actions towards rules related to cross-border energy trade.
• Raise awareness of how cross-border energy trade is vital to keeping the lights on and houses warm.

See further details, including graphs, in the ACER Press Release.