On 18 February 2024, the Dutch National Regulatory Authority (NRA), Autoriteit Consument & Markt (ACM), requested a six-month extension from ACER to adopt coordinated decisions with the Norwegian NRA (NVE-RME) on electricity cross-zonal risk hedging opportunities.

ACER has now granted the requested six-month extension to ACM. The EFTA Surveillance Authority (ESA) will decide on the extension request for NVE-RME, based on a draft from ACER, following the procedure of the Third Energy Package as outlined in the EEA Agreement.

What are the coordinated decisions about?

The Regulation on forward capacity allocation requires the Dutch and Norwegian NRAs to assess whether the electricity forward market in their respective bidding zone provides sufficient hedging opportunities. If these opportunities prove insufficient, the NRAs must take coordinated decisions to either:

• introduce long-term transmission rights or

• task Transmission System Operators (TSOs) with implementing alternative measures to improve cross-zonal hedging opportunities.

Adopting coordinated decisions is important to ensure that the electricity forward market provides adequate hedging opportunities to market participants, which contributes to stabilising electricity prices.

What are the next steps?

ACM has until 19 August 2024 to take coordinated decisions with NVE-RME on cross-zonal risk hedging opportunities. 

In November 2023, ACER received a proposal from Nominated Electricity Market Operators (NEMOs) for amending the ACER’s 2020 methodology for the price coupling algorithm and the continuous trading matching algorithm.

The methodology sets the regulatory framework for:

• the algorithms used for matching bids from market participants; and
• allocating cross-zonal capacities in the European day-ahead and intraday electricity markets.

Thanks to a coordinated calculation of prices and flows, which is referred to as market coupling, available cross-zonal capacity is used more efficiently and price differences are reduced.

Amending the methodology, in particular the day-ahead coupling algorithm, is needed to enable a co-optimised allocation of cross-zonal capacity for the exchange of balancing capacity or sharing of reserves. This would facilitate the integration of the balancing capacity markets and allow for a more efficient use of cross-zonal capacity.

Where does ACER stand in the process?

Following the receipt of the NEMOs’ proposal in November 2023, ACER initiated a procedure to decide on the proposed amendments within six months. To collect inputs from relevant stakeholders and inform its decision-making process, ACER ran a public consultation and hosted a workshop in early 2024.

In October 2023, ACER commissioned a consultancy study to assess the expected benefits of implementing co-optimisation in the day-ahead coupling algorithm as compared to the current market design. The study includes insights on the design of bids that would allow to best capture the interactions between day-ahead and balancing capacity markets, while maximising the expected benefits of co-optimisation. The study could not be completed in time to be part of ACER’s public consultation in early 2024.

For this reason, and based on stakeholders’ input collected so far, ACER will conduct a second public consultation (from 27 May to 19 June 2024). This consultation aims to gather stakeholders’ perspectives on the study’s findings and identify further research and development necessary for implementing co-optimisation.

Interested in the study? Register for our webinar (10 June 2024) to explore the study’s key findings, discuss opportunities and challenges of implementing co-optimisation, and engage with experts.

ACER will consider the consultation and webinar outcomes when drafting the proposed amendments to the methodology.

What are the key dates?

• Publication of the consultancy study: 27 May 2024.
• ACER public consultation: 27 May - 19 June 2024.
• ACER webinar: 10 June 2024.

ACER expects to decide on the amended methodology for the price coupling algorithm and the continuous trading matching algorithm by early autumn 2024.

On 16 April 2024, the Bulgarian Energy and Water Regulatory Commission (EWRC) adopted a decision imposing a fine of BGN 604,064 (approximatively €300,000) on Kozloduy NPP EAD for insider trading on the Bulgarian wholesale electricity market.

The EU Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) prohibits trading based on inside information in Europe’s wholesale energy markets.

In the context of the unavailability of the Kozloduy nuclear power plant, EWRC found that on 31 October and 01 November 2021, Kozloduy NPP EAD executed sales transactions in the Bulgarian electricity Intraday and Day ahead markets (IBEX), using inside information on the return of the power plant’s availability.

Under the REMIT Regulation, using inside information by acquiring/disposing of wholesale energy products to which that information relates or disclosing inside information to any other person (unless such disclosure is part of the normal exercise of their employment, profession or duties) is prohibited.

EWRC found that Kozloduy NPP’s conduct breached Article 3 of the REMIT Regulation. This is the fourth REMIT decision issued by the Bulgarian regulator in two years, the other ones imposed on Energy MT EAD, Grand Energy Distribution EOOD, Interelektrik EOOD, Interprom EOOD, Most Energy AD and National Electric Company EAD – NEK EAD; on Energy Supply EOOD; and on Most Energy EAD and Kumer OOD.

The decision may be appealed before the Administrative Court in Sofia within 14 days of its notification.

Access EWRC’s press release (in Bulgarian and in English).

Check the ACER REMIT Guidance (6th edition) for more information on insider trading under REMIT.

See the latest table of REMIT breach sanction decisions adopted by national regulatory authorities.

Additional material on enforcement decisions under REMIT is accessible in the REMIT Quarterly reports that ACER publishes each quarter.

ACER publishes today its report on the proposed gas transmission tariff methodology for Interconnector Limited (INT), the natural gas pipeline in the North Sea connecting the United Kingdom (UK) and Belgium, allowing bidirectional flows to supply gas to continental Europe. INT is a merchant pipeline, previously known as Interconnector (UK) Limited (‘IUK’).

The report analyses the proposed reference price methodology, consulted upon by the Transmission System Operator (TSO) to set the tariffs for the INT pipeline.

What is the methodology about?

This interconnector falls under the regulatory jurisdiction of the British National Regulatory Authority (NRA), the Office of Gas and Electricity Markets (Ofgem), and the Belgian NRA, Federal Commission for Electricity and Gas Regulation (CREG).

As a merchant pipeline, INT differs from regulated assets built or operated by TSOs, including the absence of:

• an allowed or target revenue set by the NRA (as theirs does not have a regulatory asset base);
• captive consumers directly connected to its infrastructure.

Accordingly, INT (formerly IUK) was granted a derogation (in 2018) by the British and Belgian NRAs from a number of provisions of the EU Network Code on Harmonised Transmission Tariff Structures (NC TAR).

INT’s proposed methodology aims at setting transmission tariffs that can be adjusted to market conditions in the UK and Belgium.

What does ACER say?

ACER’s report on the proposed reference price methodology finds that the information provided by INT in the consultation document is insufficient for ACER to conduct a complete compliance analysis of the proposed tariff methodology with the EU gas tariffs Network Code. Furthermore, the ACER report refers to the requirements in the EU Network Code that are applicable to the INT pipeline.

What are the next steps?

CREG shall take a motivated decision on the methodology to set the tariff methodology for INT.

Access the report.

Access all ACER reports on national tariff consultation documents.

Today, ACER releases its report on the Czech gas transmission tariffs proposed for 2025 by the Energetický regulační úřad (ERO), the National Regulatory Authority (NRA) of the Czech Republic.

Recent changes in the patterns of the European gas imports (resulting from Russia’s invasion of Ukraine) have led to the underutilisation of the Czech natural gas transmission infrastructure. Additionally, future flows into the network face considerable uncertainty due to the termination of the transit contract for gas transportation through Ukraine scheduled by the end of 2025.

To address these issues, ERO proposes to apply:

• A capacity weighted distance methodology as the reference price methodology (RPM).

• Several mechanisms to address this volume risk, including the implementation of a price cap regime and a risk premium. These mechanisms aim at allocating the existing risk to the TSO. The NRA recommends applying these measures until the end of 2025, when greater stability and visibility on gas flows across the EU is expected.

What does ACER recommend?

ACER analysed the information provided by ERO and assessed the compliance of the proposed RPM against the requirements of the Network Code on Harmonised Transmission Tariff Structures (NC TAR), providing the following recommendations:

• Ensure transparency and consistency of the proposed reference price methodology.

• Provide additional information on the risk premium collected by the TSO in 2021 and 2022.

• Provide further details on the revenue reconciliation and revenue sharing mechanisms, proposed by ERO to mitigate the volume risk of the network.

• Monitor and analyse the differences between the flow-based charge applicable to domestic exit points and the one applied to Interconnection Points’ (IPs’) exits.

What are the next steps?

By 19 October 2024, ERO shall adopt a motivated decision on the new tariff methodology to be applied to the Czech transmission network, taking into account ACER’s analysis.

Access the report.

Access all ACER reports on national tariff consultation documents.