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, ACER approved on 22 March 2023 three proposals from Transmission System Operators (TSOs) for amendments to the forward capacity allocation methodologies related to:

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

To ensure an informed decision, ACER organised a workshop on 17 November 2022 and ran a public consultation from 26 October to 28 November 2022 to gather stakeholders’ views.

What are the benefits of the new rules?

The newly approved methodologies include requirements for flow-based allocation of LTTRs, aiming to make the long-term market more efficient by allowing competition between the different bidding zone borders of a capacity calculation region and align it with the day-ahead market design. In particular, this revision was 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. To finalise this implementation, the last methodology still needs to be revised: the Harmonised Allocation Rules (HAR).

The Core region comprises 13 countries: Austria, Belgium, Czech Republic, Croatia, France, Germany, Hungary, Luxemburg, the Netherlands, Poland, Romania, Slovakia and Slovenia.

The Nordic region comprises 4 countries: Denmark, Finland, Norway and Sweden.

Access the ACER Decision 05/2023 on SAP and its Annex I, Annex Ia, Annex II.

Access the ACER Decision 06/2023 on CID and its Annex I, Annex Ia, Annex II.

Access the ACER Decision 07/2023 on FRC and its Annex I, Annex Ia, Annex II.

See the ACER Evaluation of Responses to the public consultation. 

ACER’s Position Paper towards greater consistency of cost benefit analysis methodologies, published today, identifies topics where consistency is needed across the Cost Benefit Analysis methodologies (CBA methodologies) currently under development by the European Commission and the European electricity and gas grid operators.

Greater consistency of CBA methodologies will enable a more efficient energy system across Europe by ensuring similar terms of assessment of projects in a technology neutral way.

Why did ACER issue this Position Paper?

The updated TEN-E Regulation (Regulation (EU) 2022/869) introduced the task of the development of separate CBA methodologies for the various energy infrastructure categories and by different entities:  

• The EU network of transmission system operators for electricity (ENTSO-E) for electricity transmission projects (including offshore grids);
• The EU network of transmission system operators for gas (ENTSOG)  for hydrogen projects; and
• The European Commission (EC) for projects of energy storage, electricity smart grids, gas smart grids, electrolysers and CO2 networks and facilities.

ACER must provide opinions on the ENTSO-E and ENTSOG CBA methodologies and on the draft lists of PCIs prepared by the EC. The Regulation tasks ACER with promoting consistency in the CBA methodologies developed by the EC with the CBA methodologies elaborated by ENTSO-E and ENTSOG.

To this end, ACER’s Position Paper sets out the topics where consistency should be promoted among all CBA methodologies.

Where is consistency of CBA methodologies needed?

1. Common input data set and assumptions;
2. Selection and use of scenarios and ways to deal with uncertainty;
3. Length of assessment period, residual value of projects, and social discount rate;
4. Definition of reference case networks;
5. Treatment of interdependency with other projects;
6. Project implementation status;
7. Clustering rules;
8. Criteria to assess the plausibility of projects’ commissioning dates;
9. Implementation Guidelines;
10. Definition and handling of capital and operational expenditures;
11. Consideration of the impact of the future extreme weather events on infrastructure resilience;
12. Approach to calculate social and environmental impacts of projects;
13. Methodology to calculate the benefit-to-cost ratio and Net Present Value of projects;
14. Sensitivities;
15. Modelling interlinkages of CBA methodologies;
16. Presentation of CBA results.

Next steps

The ACER Position Paper could serve as a reference document, e.g. during the cooperation with the EC and the ENTSOs during the development phase of their CBA methodologies, as well as when drafting the ACER opinions on the ENTSOs’ CBA methodologies, or when the EC Advisory Board for Climate Change forms their views on the methodologies.

Access the ACER Position Paper.

In response to the energy crisis, every Member State introduced emergency measures to support their citizens and economy, and to mitigate security of energy supply risks.

Today, ACER publishes an inventory of 400+ measures adopted by Member States to cope with the energy crisis. ACER publishes its inventory in the form of an interactive dashboard, providing a high-level analysis of the measures. In a second step, ACER will proceed with an assessment of the measures, focusing on lessons learned and publishing a fuller report in July 2023.

How is ACER’s inventory of energy measures relevant?

ACER’s detailed EU-wide picture of the energy emergency measures adopted across Europe is timely:

• As energy and fiscal policy makers consider next steps now to cope with persistent short term energy challenges;
• With Member States starting to re-evaluate their energy emergency support measures in the context of falling energy prices; and
• Given recent calls (by certain EU bodies) for fiscal policy (in the current high inflation environment) to be targeted, tailored and temporary.

Lessons from measures taken over the past year and a half could help Member States direct any future energy emergency support measures, when and where deemed appropriate, to those who need it most.

What is ACER’s inventory of emergency measures about?

• The inventory collects over 400 measures implemented by Member States from July 2021 until February 2023.
• It relies on information collected by the European Commission, directly from Member States, as well as on publicly available information. National regulators validated and complemented the information.
• ACER clusters the measures related to gas and electricity into categories according to criteria, such as the primary purpose of the measure or the specific group of (targeted) consumers.

What are ACER’s high-level findings to date?

• Every Member State has adopted energy emergency support measures.
• 1/3 of the measures aim at what we have labelled broader security of supply objectives, while 2/3 aim to tackle affordability for end-consumers.
• Almost 1/2 of the measures take the form of direct support to final consumers.
• 1/2 of the measures targeting broader security of supply objectives aim at increasing energy efficiency and renewable generation uptake, thereby also contributing to the Green Deal and Fit-for-55 policy goals.
• Some measures aiming at replacing the use of gas for heating or for producing electricity could, however, hamper the decarbonisation goals; hence, their use should be limited to areas where alternatives to safeguarding security of supply are not readily available.
• 40% of the measures aiming at tackling energy affordability target households (sometimes inter alia with other consumer groups) but less than 1/4 of them target vulnerable consumers.
• 60% of the measures aiming at providing direct support to consumers come in the form of income support (e.g. one-off cash payments), while the rest come in the form of discounts in the energy bills (price support).

What’s next?

ACER plans to publish a fuller analysis of emergency measures in July 2023 to further assist policy makers.

As this ACER inventory might not be complete, ACER welcomes feedback on its inventory (by 16 April 2023), to be sent to 2023_emergency_measures(at)acer.europa.eu.

Access the Emergency Measures inventory.

Some regions of Europe’s electricity single day-ahead coupling (SDAC) rely on so-called “second auctions” in case of extremely high or low prices. Those auctions, only triggered by extreme prices, allow market participants to adapt their bids prior to a second run of the SDAC auction.

Recently, Transmission System Operators (TSOs) and Nominated Electricity Market Operators (NEMOs) have introduced second auctions in the bidding zones of the Baltic region.

Hence, ACER would like to better understand how EU market participants consider the current functioning and potential evolutions of second auctions. ACER therefore invites EU market participants to fill in a survey by Thursday, 30 March 2023.

Enter the survey.