ACER runs a public consultation from 17 July 2023 to 25 September 2023 to gather stakeholders’ views on concrete amendment proposals on two European electricity grid connection network codes:

• Network Code on Requirements for Grid Connection of Generators; and 
• Network Code on Demand Connection.

Stakeholders can submit their comments separately, to one or both GC NCs.

The public consultation will last for 10 weeks.

Why change the rules?

Since the development of the first European grid connection codes in 2012, there have been important policy developments in decarbonising Europe’s energy and transport sectors.

The revisions of network codes are needed to update the existing regulatory framework to ensure Europe’s interconnected power system adapts to emerging trends, such as increasing number of electricity storage modules, electrical charging points for e-vehicles, or the proliferation of distributed energy resources.

What is the process of amending the rules?

In September 2022, the European Commission asked ACER to initiate the process of amending the existing European network codes. Since then, ACER has:

• published a Policy Paper;
• launched an initial public consultation to gather amendment proposals from stakeholders;
• held workshops on different technical topics; and
• developed concrete amendment proposals to the network codes for stakeholders' consultation.

On the basis of the input from this summer consultation, ACER prepared a recommendation for amendments to the European Commission later in 2023.

Access the public consultation page.

Learn more about the electricity grid connection codes.

Subscribe to receive automatic notifications on ACER’s public consultations.

On 30 May 2023, ACER approved the Transmission System Operators’ (TSOs’) proposal of 20 December 2022 to amend the methodology for calculating scheduled exchanges resulting from single day-ahead coupling (SDAC).

What is it about?

On 25 January 2023, the EU National Regulatory Authorities (NRAs) referred to ACER a joint TSOs’ proposal on the amendments to the methodology for calculating scheduled exchanges resulting from SDAC under the Capacity allocation and congestion management (CACM) Regulation.

What are the amendments about?

Having gained experience from multiple nominated electricity market operator (NEMO) arrangements, TSOs identified improvements to the methodology, particularly for calculating scheduled exchanges between NEMO trading hubs.

Before approving the TSOs’ proposal, ACER assessed whether changes would contribute to market integration, non-discrimination, effective competition and proper functioning of the EU electricity market. To make an informed decision, ACER also consulted stakeholders in March 2023.

What are the next steps?

TSOs shall implement the methodology for calculating scheduled exchanges resulting from SDAC no later than three months after its approval, i.e. by 30 August 2023.

Access the:

• ACER Decision 10/2023 on the methodology for calculating scheduled exchanges resulting from single day-ahead coupling 
• Annex I
• Annex Ia
• Annex II

In January 2020, the European Federation of Energy Traders (EFET) reported a functionality process issue to the Functionality Platform and proposed to enhance the availability of firm gas capacity at interconnection points (IPs).

ACER and the European Network of Transmission System Operators for Gas (ENTSOG) have published a series of proposals that address the issue by providing shippers with greater flexibility to book firm capacity at IPs.

What is the functionality process issue about?

EFET considers that the current Network Code on Capacity Allocation Mechanisms (CAM NC) standard auction timetable limits gas trading opportunities, which could affect market efficiency and the quantity of capacity sold by Transmission System Operators (TSOs).

What is the proposed solution?

EFET’s proposal suggests enabling TSOs to sell firm IP capacity in uniform price allocation (UPA) auctions outside the current yearly, quarterly and monthly auctions envisaged by the CAM NC.

The ACER and ENTSOG proposed solutions go beyond the initial EFET proposal. They aim at enhancing the effectiveness of the capacity allocation rules of the CAM NC, while ensuring their adaptability with market conditions and market participants’ needs by:

• Introducing additional booking opportunities;
• Allowing for advance booking of monthly and daily capacity products;
• Improving the efficiency of allocation process; and
• Introducing more flexibility to adapt several CAM rules and parameters.    

What are the next steps?

The Issue Solution Note and the Issue Supporting Note (Annex I) are available at the case page: Greater flexibility to book firm capacity at IPs.

ACER and ENTSOG will publish additional documents (Annex II to the Solution Note) to propose corresponding amendments to the CAM NC.

In the wake of the Russian invasion of Ukraine, the changes in supply and demand created transportation bottlenecks as the gas system was originally designed for optimal transportation of Russian supplies. With liquified natural gas (LNG) and increased pipeline supplies primarily entering the EU from the west, bottlenecks in transportation occurred.

Due to physical congestion at LNG terminals and at cross-border pipelines in North-West Europe, the system was used at full capacity and gas could not easily flow to where it was needed most during the 2022 energy crisis, which drove hub price-spreads high. To address these bottlenecks in the short term, the existing infrastructure must be optimised to accommodate new supply routes. 

In the gas market crisis, short-term mitigating actions are important. The voluntary gas-demand reduction target has been extended until 31 March 2024 and storage-filling trajectories for 2023 have been updated. Addressing the most acute bottlenecks presents a no-regret measure to improve market efficiency in the short term.

In addition to its annual monitoring of congestion, ACER made a focused research of how congestion emerged in the most acutely congested markets of Belgium, France, Germany and the Netherlands, and how the respective transmission system operators (TSOs) and national regulatory authorities (NRAs) addressed the bottlenecks.

ACER’s preliminary findings

• Coordination between TSOs weakened while maximising the availability of firm and interruptible capacities at either side of the respective borders between Belgium, France, Germany and the Netherlands, leading to mismatched transmission capacities; and
• Gas flows from Belgium to the Netherlands, from Belgium to Germany and from France to Germany suffered from physical bottlenecks.

What does ACER recommend?

ACER expects the TSOs to:

• Extensively coordinate their operational actions;
• Jointly optimise the network to accommodate the restructured supply routes;
• Jointly maximise marketing of firm bundled capacities;
• Optimise the sale of interruptible capacities;
• Efficiently bring back unused capacities to the market via congestion management procedures (CMPs); and
• Carefully consider if investment is needed where physical bottlenecks remain after the operational optimisation of the existing network.

ACER expects NRAs to:

• Extensively coordinate;
• Remove any regulatory obstacles that prevent an optimal use of the network to accommodate the new supply routes, e.g., addressing different odourisation practices on the route from France to Germany; and
• While congestion revenues may be used to finance network investment that removes structural bottlenecks, NRAs shall carefully assess the appropriateness of such investment considering the Union’s energy and climate policies.

What are the next steps?

In summer 2023, ACER will publish a report specifically on congestion in North-West Europe with findings and recommendations.

In its 10th Report on Congestion in the EU Gas Markets and How it is Managed, ACER finds a tripling of network congestion. ACER calls on gas Transmission System Operators (TSOs) and National Regulatory Authorities (NRAs) to relieve the bottlenecks.

In the gas market crisis, short-term mitigating actions are important. Europe’s voluntary gas-demand reduction target has been extended until 31 March 2024 and storage-filling trajectories for 2023 have been updated. Addressing the most acute bottlenecks presents a no-regret measure to improve market efficiency in the short term.

Understanding congestion and shift in gas supply routes

Congestion occurs first at the level of contracts when network users cannot obtain the capacity contract they need to flow gas. It is addressed by bringing any unused capacity back to the market.

In the wake of the Russian invasion of Ukraine, the changes in supply and demand created gas transportation bottlenecks. With liquified natural gas (LNG) and increased pipeline supplies primarily entering the EU from the west (in a system originally designed for transporting Russian supplies to Europe), bottlenecks in transportation occurred.

Due to physical congestion at LNG terminals and at cross-border pipelines in North-West Europe, the system was used at full capacity and gas could not easily flow to where it was needed most during the 2022 energy crisis, which drove hub price-spreads high. To address these bottlenecks in the short term, the existing gas infrastructure must be optimised to accommodate new supply routes.  

What are Report’s key findings?

• Congestion emerged at 50 interconnection points following tight market conditions and the need to reroute gas flows away from historic east-west routes to predominantly west-east routes in Europe (with the Russian invasion of Ukraine);
• Congestion revenues collected by TSOs rose sharply from €55 million in 2021 to around €3.4 billion in 2022;
• In North-West Europe, congestion was also physical, meaning that LNG terminals and gas pipelines in North-West Europe were fully used; and
• The most used mitigating measure to avoid unused capacity was selling interruptible capacity, while oversubscription remained the most used among the congestion management procedures (CMPs) that aim to make (unused) firm capacity available.

What does ACER recommend?

ACER urges:

• TSOs to address congestions and maximise availability of capacities;
• NRAs to monitor the congestion in their markets more closely to contribute to the efficient functioning of the internal market for gas.

Access ACER’s 10th Report on Congestion and its technical annex.

ACER invites EU electricity experts to help identify and define 'structural congestion”, in electricity networks. The Regulation on capacity allocation and congestion management (CACM) defines structural congestion in rather vague terms as congestion:

• that can be unambiguously defined;
• is predictable;
• is geographically stable over time; and
• is frequently recurring under normal power system conditions.

ACER considers that the current definition of structural congestion needs to be improved and would benefit from quantitative criteria to better identify such congestion.

Hence, ACER seeks EU electricity network experts' views on how structural congestion should be defined quantitatively and invites them to fill in a survey by 15 June 2023.