The EU Agency for the Cooperation of Energy Regulators (ACER) launches today a public consultation on how to address the insufficient risk hedging opportunities on the bidding zone borders between Finland and Sweden. In its upcoming decision, ACER can request the relevant Transmission System Operators either to issue long-term transmission rights or to ensure the availability of other long-term cross-zonal hedging products that support the functioning of the wholesale electricity markets.

All interested parties are invited to share their views by 3 May 2022, 23:59 hrs (CET).

Why is this important?

An assessment performed by the National Regulatory Authorities (NRAs) indicated insufficient hedging opportunities in the Finnish bidding zone. Contributions to this public consultation will help ACER in taking an informed decision on how to improve the cross-zonal hedging opportunities on the bidding zone borders between Finland and Sweden for the benefit of market participants.

ACER’s decision will promote long-term cross-zonal trade by improving the availability of long-term cross-zonal risk hedging opportunities.

Access the Public Consultation.

The EU Agency for the Cooperation of Energy Regulators has decided on the Regional Coordination Centre (RCC) post-operation and post-disturbances analysis and reporting methodology.

What are the Regional Coordination Centres (RCCs)?

The Regional Coordination Centres (RCCs) are established by the Electricity Regulation and replace the regional security coordinators (RSCs) foreseen by the System Operation Guideline. RCCs cover the tasks carried out by RSCs as well as additional system operation, market related and risk preparedness tasks.

Their tasks include: 

• supporting the consistency assessment of transmission system operators' defence and restoration plans,

• carrying out regional outage planning coordination,

• carrying out post-operation and post-disturbances analysis, and

• training and certification of staff working for RCCs.

In performing their tasks, RCCs contribute to the achievement of the 2030 and 2050 objectives set by the climate and energy policy frameworks (particularly in relation to fostering security of supply and efficiency, as well as increasing the electrification of the energy sector).

Given the entering into force of operation of RCCs this year, ACER needs to adopt various methodologies related to their different tasks.

What is the methodology about?

In particular, the Regional Coordination Centre post-operation and post-disturbances analysis and reporting methodology was adopted by ACER following the assessment of the proposal submitted by the European Network of Transmission System Operators for Electricity (ENTSO-E) to ACER in January 2022.

This methodology:

• prescribes the preconditions for launching the RCC investigation,

• explains the data collection process,

• sets the work of the expert panel and the RCC investigation subgroup (which analyses the incidents related to the RCC tasks), and

• guides the RCCs in preparing the post-disturbances reports.

How did ACER contribute?

ACER reviewed ENTSO-E’s proposal and ensured that the decision is in line with the objectives of the Electricity Regulation and fulfils its legal obligations.

Access ACER’s Decision 04-2022.

Following a five-month consultation with stakeholders aimed at improving REMIT data reporting, the EU Agency for the Cooperation of Energy Regulators (ACER) publishes today the updated Transaction Reporting User Manual (TRUM) and its Annex II.

The amendments provide guidance on the reporting of transactions related to the transportation of natural gas, which need to be reported to ACER according to the REMIT Implementing Regulation.

The updated guidance aims to:

• update and clarify the data field descriptions related to gas transportation contracts,

• clarify and ensure consistency on the reporting of gas transportation contracts,

• include new examples of transaction reporting based on ACER’s analysis and the interaction with National Regulatory Authorities (NRAs) and stakeholders.

The consultation included input from different stakeholders, including associations of market participants, organised market places, and registered reporting mechanisms.

Access the new version of the Transaction Reporting User Manual and its Annex II.

ACER also provides the updated 13th edition of the FAQs on REMIT transaction reporting. Intended to foster clarity and simplify cooperation with reporting parties, the new edition of the FAQs includes new frequently asked questions to better reflect the evolution of the trading activity on EU markets. Facilitating the correct reporting of data is key to ensure the integrity and transparency of the markets.

Access the new version of the FAQs on transaction reporting.

In addition, ACER has also published the 27th edition of the Q&As on REMIT policy, which introduces three new Q&As coordinated with the relevant NRAs. The new edition clarifies the application of REMIT when dealing with the disclosure of inside information, guarantees of origin, and renewable energy aggregators.

Access the new edition of the Q&As on REMIT policy topics.

All documents are accessible via the new REMIT Knowledge Base, which is now available and fully integrated with the ACER website.

• No major damage to the power system but some customers were disconnected

• Avoiding tripping of generation connected to distribution systems is essential to maintaining system security

The Expert Panel composed of ENTSO-E and the relevant Transmission System Operators (TSOs) as well as ACER and relevant National Regulatory Authority (NRA) representatives publish their Final Report on an incident which separated on 24 July 2021 for about an hour the Iberian Peninsula from the rest of the Continental Europe power system.

In view of the customer disconnections, the incident was ranked level two according to the ICS Methodology and an expert panel was set up on 22 October 2021 to carry out an investigation.

Today, after several months of intensive and close collaboration of all parties involved, the expert panel issues its final report. It provides a comprehensive analytical overview of the incident – the causes and the consequences - and proposes recommendations to prevent and mitigate the consequences of similar events in the future.

The Expert Panel’s analysis concludes that this incident was atypical in that it resulted from the failure of an efficient and suitable communication channel between the emergency services and the TSO. It did not originate from any faults in system operation or planning. The system defence plans functioned properly and coordinated measures were activated quickly.

Avoiding tripping of generation connected to distribution systems is essential to maintaining system security

The incident revealed that the limits of stable system operation can be reached, even if all security evaluations are executed correctly and timely. With the increase in distributed generation connected to the grid to achieve the de-carbonisation of the energy system, non-compliance with the technical requirements of the binding EU network codes may generate uncontrollable and unmanageable breaches of the security of the electricity system.

Key Recommendations

The expert panel makes several recommendations and in particular,

• One key recommendation is that that NRAs, TSOs, Distribution System Operators (DSOs) and owners of distributed generation units work together to ensure that the mandatory system security requirements are implemented and monitored for their compliance. The Expert Panel recommends that this issue is addressed at the European level.

• A second key recommendation is for TSOs to continuously develop and improve their environmental risk identification and mitigation processes to be prepared for a potential increase in their occurrence due to the effects of climate change.

The Expert Panel calls for ENTSO-E/TSOs and ACER/national regulators to follow up on the implementation of these recommendations to prevent and mitigate the consequences of similar incidents in the future.

Related links:

Executive summary

Main report

Annexes

Notes:

Press contact for ENTSO-E: claire.camus(at)entsoe.eu; T: 0032 476 97 50 93.

Press contact for ACER: una.shortall(at)acer.europea.eu; T: 0032 484 66 85 99.

The Expert Panel composed of ENTSO-E, Polskie Sieci Elektroenergetyczne S.A. (PSE, the Polish Transmission System Operator (TSO)), ACER and relevant National Regulatory Authority (NRA) representatives publish their Final Report on the Local Grid Incident in Rogowiec (Poland) substation that occurred on 17 May 2021, issued in accordance with the System Operation Guideline (SO GL) and the Incident Classification Scale (ICS) Methodology.

The report is published on the ENTSO-E website.

The incident – classified as a scale 2 incident according to the ICS Methodology – led to the tripping of ten generation units of the Bełchatów power plant and to a loss of 3,322 MW of generation capacity. The cause of the incident was a human error. Incorrect manipulation of the line earthing switch led to a short circuit in the 400 kV Rogowiec switchyard.

Thanks to the swift remedial actions taken by PSE, as well as the emergency support from neighbouring TSOs and cooperation with the coordination centre, the power system was operating within the security limits for approximately 20 minutes. The market continued to function according to the standard procedures in all timeframes. No consumer was disconnected and there was no negative impact on the operation of the synchronously interconnected power system of Continental Europe.

Following the investigation, the Expert Panel presents its report which includes a few recommendations.

Recommendations of the Expert Panel

1. In substations where a large-scale incident can lead to more than 3000 MW of generation lost, the TSO shall:

• Possess a document showing the compliance of the grounding circuits to technical requirements coming from the tests done during the commissioning of the substation, or

• Possess a document showing the compliance of the grounding circuits to technical requirements coming from the tests done after any substantial modifications of the grounding circuits, or

• Measure and check the compliance of the grounding circuits to technical requirements in case documents mentioned in paragraphs a. and b. are not available.

2. In order to guarantee a better resilience, in the relevant substations and double lines of the network which can cause at least scale 2 incident according to ICS methodology, have a dedicated reinforced maintenance of these structures.

Notes

1. Incident Classification Scale. The ICS Methodology has been developed in accordance with Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019. It was updated in 2019, to fulfil the objectives of Article 15 of SO GL quoted above.

2. Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a guideline on electricity transmission system operation (System Operation Guideline, SO GL).

• Energy regulators offer support in the emergency situation in Ukraine, and today’s successful power grid synchronisation with Continental Europe

• Regulators work to ensure stability of the European energy system and in particular in the Member States adjacent to Ukraine

Europe’s energy regulators represented by their EU Agency, ACER, and the national regulators’ association, CEER, offer support to the massive efforts to address the emergency situation in Ukraine to ensure uninterrupted and safe energy supply. Today, the Transmission System Operators (TSOs) of Continental Europe completed the emergency synchronisation of the Ukrainian and Moldovan power grids with Continental Europe (see the ENTSO-E press release).

ACER and CEER offer support to the regulator of Ukraine and those of the bordering countries, that is Hungary, Moldova, Poland, Romania and Slovakia, so that they can react quickly to upcoming needs. Already some measures have been taken by regulators and others to ensure firm reverse flow capacities into Ukraine so that they can continue to receive gas from the EU. ACER and CEER recognise the work of the Energy Community colleagues in coordinating regulatory support to Ukraine and we in turn offer our support and services to the Energy Community.

Regulators remain committed, in close coordination with EU policy makers and TSOs, to ensure security of energy supply in Europe in the coming period.

Commenting on the situation, the ACER Director, Christian Zinglersen, stated:

“We applaud the round-the-clock efforts of the Transmission System Operators (TSOs) of the Regional Group Continental Europe (RGCE), ENTSO-E, ENTSOG, Ministries, the European Commission, the Energy Community, regulators, industry and others who are working tirelessly to help the Ukrainian TSO and regulator to power and warm homes and hospitals in Ukraine in these difficult times”.

On the diverse CEER support for Ukraine, the CEER President, Annegret Groebel, added:

“CEER represents 39 European national regulatory authorities for energy. We are all united in sympathy for the suffering of the Ukrainian people and our concern for colleagues in the National Energy and Utilities Regulatory Commission (NEURC) of Ukraine. We stand in solidarity with Ukraine.”

Access ACER-CEER Press Release.

The National Regulatory Authorities (NRAs) for energy from Finland and Sweden asked the EU Agency for the Cooperation of Energy Regulators (ACER) to decide on how to address the insufficient risk hedging opportunities on the bidding zone borders between Finland and Sweden.

An assessment performed by the NRAs indicated insufficient hedging opportunities in the Finnish bidding zone. To improve this, NRAs can either request their Transmission System Operators to issue long-term transmission rights or ensure the availability of other long-term cross-zonal hedging products that can support the functioning of the wholesale electricity markets.

As the NRAs could not reach an agreement, they referred the decision to ACER.

What are the consequences of insufficient risk hedging opportunities?

Hedging opportunities are needed for market participants to address their risk exposure to the volatility of the electricity price. Not being able to address such exposure would result in societal costs (e.g. higher costs of supply, higher premiums, less competition, entry barriers, higher risk of default).

The long-term electricity markets should provide market participants with access to long-term electricity products, allowing them to hedge their open long-term position for electricity. If the long-term electricity markets are not able to provide this, they should be supported by a regulatory intervention.

How does ACER contribute?

ACER’s decision will promote long-term cross-zonal trade by improving  the availability of long-term cross-zonal risk hedging opportunities for market participants.

ACER will open a public consultation for four weeks in early April and invite interested stakeholders to submit their inputs. As a next step, ACER will organise a public workshop around mid-April.

In doing so, ACER aims at collecting different views to inform its decision–making process.

A decision will be reached by 12th September 2022.

Read more on the Public Notice.