ENTSO-E’s Summer and Winter Outlooks alert Member States and Transmission System Operators (TSOs) about potential risks related to security of electricity supply that could occur six months ahead.

The importance of these reports is heightened in the context of Russia’s continued military aggression against Ukraine.

ACER acknowledges ENTSO-E’s efforts to take account of the changing wartime situation as reflected in the recent Summer Outlook. ACER also provides some considerations for ENTSO-E’s upcoming Winter Outlook report.

Highlights of ENTSO-E’s Summer Outlook (2022)

ENTSO-E’s Summer Outlook Report 2022 (June 2022) found no major summer-time risk to electricity supply in Europe. However, it pointed to the need for close monitoring of electricity and gas sectors and enhanced coordination for the winter period.

ENTSO-E’s assessment is that gas savings made by the power sector are possible, but that a significant volume of gas is still needed for electricity adequacy. ACER welcomes ENTSO-E’s preliminary assessment of gas dependency, which provides an early indication of potential risks to security of supply for the upcoming winter.

ACER decided not to issue an opinion on ENTSO-E’s Summer Outlook, finding it broadly consistent with its mandate.

ACER’s considerations for the upcoming Winter Outlook Report

ACER raised some key considerations on the upcoming Winter Outlook Report 2022-2023:

• Coordination between ENTSOs is key

Gas storage levels at the end of summer will be key for the Winter electricity Adequacy Outlook. ACER recommends that ENTSO-E (electricity) and ENTSOG (gas) coordinate the assumptions and outputs for their respective seasonal outlooks for consistent results.  

• National mitigation measures will have an impact at European level

Member States are implementing preparedness and mitigation measures in view of a potential disruption of Russian gas. The Winter Outlook can assess the relevant cross-border effects of these national mitigation measures. TSOs should closely coordinate with competent national authorities to ensure the latest data is available to ENTSO-E.

• Considering additional sensitivities can help EU decision makers

ACER appreciates ENTSO-E’s efforts to shape the Winter Outlook in a way that EU decision-makers can benefit from additional sensitivity analysis to capture potential scenarios.

ACER proposes further scenarios for consideration related to demand side adjustment, supply side events and factors affecting the network.

• ENTSO-E’s dynamic and responsive approach is welcome

ACER appreciates ENTSO-E is engaging with and sharing early results with Member States and national regulatory authorities.

ACER welcomes ENTSO-E inclusion of the months of October and November (which are not usually part of the Outlooks) and recommends updating the assumptions of the Winter Outlook as close as possible to the publication date.

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The EU Agency for the Cooperation of Energy Regulators (ACER) has reached a decision on alternative electricity bidding zone configurations. Transmission System Operators (TSOs) have 12 months to conduct the bidding zone review and to recommend whether to keep or amend the existing bidding zones.

What are bidding zones and why are their alternative configurations relevant?

A bidding zone is the largest geographical area within which market participants are able to exchange energy without capacity allocation. Currently, bidding zones in Europe are mostly defined by national borders. However, the existing European electricity target model requires defining bidding zones based on network congestions. Hence, alternative bidding zone configurations based on this principle need to be examined.

What are the Decision’s main highlights?

ACER’s Decision is based on stakeholder input (via a stakeholder consultation in 2021), as well as on the extensive information provided by TSOs. This information included alternative configurations previously submitted to ACER, the outcome of locational marginal pricing simulations (in accordance with the bidding zone review methodology approved in November 2020) and additional feedback received by TSOs.

In its Decision, ACER proposes alternative bidding zone configurations for five Member States.

• In Continental Europe, alternative configurations are proposed for Germany (4 alternatives), France (1), Italy (1) and the Netherlands (1).
• In the Nordic area, 4 alternative configurations are proposed for Sweden.

What’s next?

Following ACER’s Decision, TSOs have 12 months to conduct the bidding zone review and provide a recommendation on whether to keep or amend the existing bidding zones. Member States will then decide whether or not to change the bidding zones accordingly.

What are the benefits?

Better defined bidding zone configurations (i.e. whose borders are based on long-term, structural congestions) can bring several benefits including:

• increased opportunities for cross-zonal trade,
• more efficient network investments, and
• cost-efficient integration of new technologies.

Read more on the ACER's Decision 11-2022.