ACER publishes today its Report on the implementation of the Inter-Transmission System Operator Compensation mechanism (ITC) covering the year 2021.

ACER issues these yearly monitoring reports since 2012, as required by the European Commission Regulation no. 838/2010.

What is the ITC Fund?

The ITC fund compensates transmission system operators (TSOs) for the costs incurred on national power systems for hosting cross-border flows of electricity (transits). The ITC fund seeks to cover the costs of:

• The incurred transmission losses;
• Making infrastructure available.

What did the 2021 ITC monitoring report find?

• The ITC fund in 2021 amounted to €364.5 million, reaching its highest-ever value for the third year in a row. For 2021, this is explained by an almost 20% rise in the volume of transmission losses due to transits.
• There is a decrease in the value of losses for the vast majority of the ITC Parties (TSOs or groups of TSOs participating in the ITC mechanism) in 2021 compared to 2020.
• The losses values of individual ITC Parties that are rather volatile from year to year plus the changing volumes of losses due to transits significantly affect the net ITC compensation of several ITC Parties. The volatility occurs mainly because:
  • Power exchange prices are most frequently used as a basis to value the losses;
  • ITC Parties determine ex ante the value of losses for the ITC mechanism on a yearly basis.
• In 2021, the ITC Parties contributed 96.6% to the ITC fund, while the contribution of the Perimeter countries (non-participating countries connected to the ITC Parties’ networks) remained around 3%. The reasons for the significant decrease of Perimeter countries’ compared to the 2011-2019 period are:
  • Decrease of the volume of the scheduled flows between the Perimeter countries and the ITC Parties;
  • Decreased Perimeter countries’ fee; and
  • Increased overall amount of the ITC fund.

What are ACER’s next steps?

ACER considers that in light of extreme price volatility and in line with the general tarification principle of cost reflectivity introduced by the Regulation on the internal market for electricity, there may be room for improvements on how, when and/or how often the values of losses are determined for the purpose of the ITC mechanism.

Access the Report.

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes an Opinion assessing the consistency of the most recently published national gas and hydrogen network development plans (NDPs) with the EU-wide Ten-Year Network Development Plan (EU TYNDP).

The comprehensive review is carried out biannually and is based on the information provided by national regulatory authorities (NRAs).

ACER analyses the regulatory aspects and key features of the gas NDPs, as well as the inputs, the methodology used and the resulting outputs, focusing on changes observed during the last two years.

The review also analyses whether the gas NDPs cover energy transition aspects, such as the hydrogen and biomethane developments, the blending of hydrogen and biomethane in gas transmission networks, the existence of hydrogen blending targets, hydrogen strategies and plans for dedicated hydrogen networks.

Project-consistency of national and European gas network plans

ACER is concerned by a continuous falling level of project consistency between gas NDPs and the draft EU TYNDP 2022, compared to previous editions of the EU TYNDP. This is largely explained by the inclusion of hydrogen and biomethane projects in the draft EU TYNDP 2022 which, however, are often not part of the most recent gas NDPs.

ACER Recommendations

ACERs recommendations aim to improve the consistency of national and European plans and to align network plans with decarbonisation efforts.

NDPs should:

• Focus on investments allowing low-carbon and renewable gases to be injected into the networks;
• Consider possible future needs to decommission gas infrastructure;
• Be better coordinated with neighbouring Member States for cross-border issues;
• Include project cost data;
• Include soon-to-be-operational infrastructure aimed to phase out Russian gas;
• Build on compatible scenarios aligned with targets of decarbonisation and phase out dependency on Russian gas.

The EU TYNDP should:

• Reconcile the large number of investment projects with the projected downward gas demand;
• Make gas decarbonisation a main driver of network development;
• Include project costs and monetised benefits data (as it is already the case in the electricity TYNDP);
• Be primarily based on NDPs;
• Include suitable areas for location of power-to-gas assets, in coordination with electricity TYNDP assessments;
• Synchronise expectations of uptick of supply and demand of renewable hydrogen and biomethane with a prudent assessment of need of transportation services.

Key findings on aligning national and EU network plans with decarbonisation targets:

• NRAs would support an EU-wide approach to hydrogen blending limits;
• Hydrogen blending is likely to be a temporary or transitional solution towards decarbonisation;
• Essential network adaptations are required to allow for hydrogen injection in the transmission network;
• The number of Member States with hydrogen strategies doubled in the last two years. However, limited progress is observed regarding the readiness of gas transmission networks and national legislations for accommodating hydrogen.

Access the ACER Opinion and its Annexes I and II and Annex III, which provide comprehensive information on the most recent gas and hydrogen plans. Slides summarise selective findings of this ACER assessment of the gas TYNDP.

The EU Agency for the Cooperation of Energy Regulators (ACER) has published the 28th edition of the Questions & Answers (Q&As) on REMIT (Regulation on Wholesale Energy Market Integrity and Transparency). This edition includes new reporting guidance on:

• battery storage contracts (Q&A III.3.51);

• electric vehicle charging stations (Q&A III.3.52);

• reliability options contracts (Q&A III.3.53); and

• metering data-based nominations (Q&A III.4.7).

The updated Q&As also clarify the reporting of external factors affecting the production of a unit (Q&A III.7.16) and the qualification of inside information for non-EU facilities (Q&A III.7.24).

Additionally, the updated Q&As on REMIT recall that as of 1 January 2023 the disclosure of inside information is expected to take place exclusively through Inside Information Platforms, meaning that market participants will no longer be able to use their corporate websites for that purpose either as a primary or backup solution. ACER’s REMIT Portal provides a list of available Inside Information Platforms that comply with the minimum quality requirements for effective disclosure of inside information, as per the ACER Guidance, and ensure that inside information is disclosed to as wide a public as possible on a non-discriminatory basis[1].Moreover, the market participants may consider the use of Inside Information Platforms and Transparency platforms as effective backup solutions.

Find out more here. 

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[1] For more information on the use of Inside Information Platforms and the development of minimum quality requirements for effective disclosure of inside information, see ACER Guidance on the application of REMIT, p 44 et seq.

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today its Opinion on the Winter Supply Outlook for 2022/2023 of the European Network of Transmission System Operators for Gas (ENTSOG).

What are the supply outlooks about?

The short-term supply outlooks issued by the European Network of Transmission System Operators for Gas (ENTSOG) and Electricity (ENTSO-E) provide relevant information to EU decision-makers in the current times of unusual developments in the energy sector. ACER monitors and assesses ENTSOs’ summer and winter supply outlooks, and issues recommendations to further improve their methodologies.

Winter supply outlook 2022/2023: what are the main findings?

ACER highlights the following findings and conclusions from the ENTSOG’s Outlook:

• The EU storage level on 1 October 2022 (89%) is one of the highest in recent years and meets the objectives set out in the EU gas storage regulation;

• The European gas infrastructure offers sufficient flexibility to dispatch gas supply to meet demand, assuming that there is cooperation among Member States and that sufficient gas reaches the EU. However, under specific scenarios of high demand and prolonged disruption of Russian gas supply, some possible demand curtailments are possible;

• In case of a “cold winter”, all European countries would be exposed to a risk of 10% demand curtailment for the entire winter season and from 10% to 27% in case of a “peak day”;

• Cooperation between Member States, additional gas supply, LNG infrastructure and a demand reduction of ca. 15% would efficiently mitigate the risk of demand curtailment;

• Early and significant withdrawal of gas from storages will result in low storage levels at the end of the winter season, having a negative impact on the flexibility of the gas system.

What is ACER’s assessment?

ACER appreciates that the Outlook assumptions and methodology were revised to consider already reduced gas flows from Russia and that it includes a scenario of full disruption of Russian gas.

Storage filling levels: ACER welcomes that the 80% EU storage filling objective was already achieved by the end of August, and that storage filling levels have to increased close to 95% by 1 November 2022. Strengthened national and EU gas storage regulations and other regulatory interventions have played a role in the successful replenishment of storages.

Use of gas storage during the winter: ACER highlights the critical importance of having adequate storage levels towards the end of the winter in case of high demand or supply disruption situations. ACER expects storage users to withdraw gas from storage prudently, and national competent authorities to monitor the withdrawal pattern in view of the filling targets for 2023, set out by European Commission.

Gas demand savings: The implementation of gas savings is fundamental for improving preparedness for this and next winter. ENTSOG should have used a “baseline scenario” of gas demand for the winter outlook consistent with the EU targets for reduction of gas demand set out under the EU Regulation on coordinated gas demand-reduction.

New infrastructure projects and maximisation of gas import and cross-border capacities: ACER welcomes that physical gas flows from France to Germany are possible since October 2022; that major gas infrastructure projects increasing the LNG import regasification capacities by more than 30 bcm and the gas connectivity across the EU have recently been commissioned or are expected to become online soon. The rapid finalisation of these projects should become a priority.

Recommendations to improve the Outlook methodology: ENTSOG should consider improving the Winter Supply Outlook assumptions and methodology, in particular by using a complementary scenario based on expected gas supply and booked capacities and estimating the effects of high gas prices on gas demand in the Outlook.     

ACER highlights the importance of close cooperation between ENTSOG and ENTSO-E to ensure, where relevant, consistent assumptions and results in their respective seasonal assessments.

Read more about the ACER’s Opinion. 

On 30 November 2022, the European Network of Transmission System Operators for Electricity (ENTSO-E) submitted to the EU Agency for the Cooperation of Energy Regulators (ACER) its proposal for the European Resource Adequacy Assessment (ERAA 2022). The assessment is mandated by the Clean Energy Package legislation and its purpose is to monitor the risks to security of electricity supply and identify adequacy concerns up to 10 years ahead.​​​

Following the approval of the ERAA methodology by ACER in October 2020, ENTSO-E needs to carry out an annual ERAA to assess whether the EU has sufficient electricity resources to meet its future demand.

Member States set their own electricity reliability standard that indicates their necessary level of security of electricity supply.

By comparing these results, ERAA aims to identify potential resource adequacy concerns in the EU and provide an objective basis for assessing the need for additional national measures ensuring security of electricity supply such as the introduction of temporary capacity mechanisms.

What are the next steps?

ACER has 3 months, until 28 February 2023, to reach a decision on ERAA 2022. Given this short timeline, ACER is not going to carry out a public consultation. However, interested third parties may submit observations on ERAA 2022 to ACER-ELE-2022-21(at)acer.europa.eu.

Deadline for submitting observations is 30 December 2022.

Access the related ACER public notice, including instructions for submitting any observations.

The EU Agency for the Cooperation of Energy Regulators (ACER) is establishing an Expert Group on LNG Price Assessment/Benchmarks.

Application deadline is 14 December 2022.

The proposed new Council regulation on enhancing solidarity through better coordination of gas purchases, exchanges of gas across borders and reliable price benchmarks tasks ACER with developing an LNG price assessment tool by collecting real-time information on all daily transactions.

The new Expert Group on LNG Price Assessment/Benchmarks will build on the experience of previous Expert Groups organised by ACER, providing expert views and opinions on the development of regulatory policies and measures related to LNG price assessments and/or benchmarks.   

The terms of reference for the Expert Group and the specific criteria for the experts are set out in the Open Letter on the Establishment of an Expert Group on LNG Price Assessment/Benchmarks. The work of the expert group shall begin following publication of the regulation in the Official Journal of the European Union.

Read the Open Letter on the Establishment of an Expert Group on LNG Price Assessment/Benchmarks.

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today a progress report on European wholesale electricity market integration, as part of its 2021 Market Monitoring Report (MMR).

What is the progress report on European wholesale electricity market integration about?

The MMR presents the main results of monitoring the European electricity and gas markets and recommends further actions to foster their integration.

In 2022, unlike during previous years, ACER does not publish a single report gathering all monitored aspects of wholesale electricity markets but rather a series of brief overviews of electricity markets in 2021. The progress report on European wholesale electricity market integration is the third of these publications. It follows the ACER overview of the key developments in European wholesale electricity markets in 2021 (February 2022) and the ACER security of supply report (October 2022). In addition, ACER published its Final Assessment of the EU Wholesale Electricity Market Design in April 2022.

What are the main highlights?

The main wholesale electricity market integration trends identified in 2021:

• Moderate increases in levels of cross-zonal capacity where Net Transfer Capacity calculations apply, consistent with ACER's 70% monitoring report;
• Progress in the integration of EU markets in day-ahead, intraday (instrumental for the large scale integration of renewable energy resources) and in particular balancing markets;
• A European platform for operating the imbalance netting process was achieved (24 June 2021). The platform coordinates ‘imbalance netting’, a process optimising the use of frequency restoration reserves among Transmission System Operators (TSOs);
• Although forward market liquidity generally decreased in 2021, liquidity remained stable in day-ahead markets, and continued increasing in intraday markets. Overall, intraday liquidity has been increasing steadily since 2019; and
• TSOs need to make a further 40% of cross-zonal capacity on electricity interconnectors available to meet the minimum 70% target.

Access the ACER progress report on European wholesale electricity market integration.