ACER and CEER publish their reaction to the Hydrogen and Decarbonised Gas Package

Image
Hydrogen and windmill
Intro News
ACER and CEER have published their views and recommendations on the European Commission's legislative proposals on Hydrogen and Decarbonised Gas Markets.

ACER and CEER publish their reaction to the Hydrogen and Decarbonised Gas Package

What is it about?

The EU Agency for Cooperation of Energy Regulators (ACER) and the Council of European Energy Regulators (CEER) have published their views and recommendations on the European Commission's legislative proposals on Hydrogen and Decarbonised Gas Markets.

The energy regulators appreciate the ambition of the proposals to establish a comprehensive system design with a clear target model for the hydrogen and decarbonised gas market(s), to reinforce measures on integrated network development and focus on consumer protection issues.

In particular, ACER and CEER welcome:

  • The willingness to establish core principles for the regulation of a dedicated hydrogen sector, entrusted to national energy regulatory authorities.

  • The extensive mirroring of the consumer protection provisions already in place for electricity consumers to the benefit of gas consumers.

  • The proposed role for regulatory authorities in approving and amending national development plans for gas as a way to promote a user-oriented and efficient development of the energy system.

They also see scope to enhance certain elements of the proposals, with a focus on:

  • comprehensive system design;

  • integrated network development; and

  • inclusive consumer protection.

Read the ACER-CEER Reaction.

ACER Public workshop on the draft Framework Guidelines on demand response

ACER Public workshop on the draft Framework Guidelines on demand response

Online
28/06/2022 09:30 - 11:30 (Europe/Brussels)
Event banner

ACER initiates the drafting of new framework guidelines on demand response

Image
Electric Vehicle charging
Intro News
On 1st June 2022, ACER has been asked by the European Commission to submit non-binding framework guidelines setting out clear and objective principles for the development of a network code on demand response.

ACER initiates the drafting of new framework guidelines on demand response

What is it about?

On 1st June 2022, the EU Agency for the Cooperation of Energy Regulators (ACER) has been asked by the European Commission to submit non-binding framework guidelines setting out clear and objective principles for the development of a network code on demand response. The framework guidelines will ensure coherency with the existing regulatory framework by identifying relevant provisions in the existing network codes and guidelines.

The network code will aim at enabling market access for demand response, including load, storage and distributed generation (aggregated or not), as well at facilitating the market based procurement of services by distribution and transmission system operators. It will be applicable to all Member States.

Why is it relevant?

Demand response is key to integrate the growing share of renewable energy and new electricity loads (e.g. resulting from heat pumps and electric vehicles) in a cost-efficient way.

A future European framework must ensure that no undue regulatory barriers hamper their participation in any of the existing wholesale electricity markets.

In developing these framework guidelines, ACER is contributing to a more cost-efficient energy transition by facilitating market access for smaller actors, including consumers.

What are the next steps?

To inform its decision-making process, ACER opens a public consultation from 2 June to 2 August 2022 and invites interested stakeholders to submit their inputs.

To learn more about the draft framework guidelines, join ACER’s public workshop on 28 June, 9:30-11:30.

ACER will submit the framework guidelines to the European Commission by December 2022.

Read more on the Public Consultation and register to the Public Workshop!

Stay updated on the latest news, sign up for our Infoflash.

ACER-CEER Public Workshop on the possible developments of the EU electricity forward market

ACER-CEER Public Workshop on the possible developments of the EU electricity forward market

Online
06/07/2022 09:00 - 12:00 (Europe/Brussels)
Event banner

ACER and CEER consult on the EU electricity forward market

Image
Electricity transmission line
Intro News
ACER and CEER announce a public consultation to collect inputs on their draft policy paper on how to address key challenges in the EU electricity forward market.

ACER and CEER consult on the EU electricity forward market

What is it about?

The EU Agency for the Cooperation of Energy Regulators (ACER) and the Council of European Energy Regulators (CEER) announce a public consultation to collect inputs on their draft policy paper on how to address key challenges in the EU electricity forward market.

In this consultation paper, ACER and CEER have identified the main problems experienced in the EU’s electricity forward market, as well as possible solutions for policy makers. The paper includes a qualitative analysis and proposes some preliminary conclusions on the preferred policy options.

Among several other elements, stakeholders are invited to share their views on the:

  • problems identified (e.g. low liquidity, inadequate maturities, barrier to reconfiguration of bidding zones)

  • set of possible policy options and solutions to the challenges

  • the analysis and preliminary conclusions.

Target audience: Market participants interested to hedge (producers, consumers, traders).

The public consultation runs from Wednesday 1 June until Friday 29 July 2022.

ACER and CEER will also hold a public workshop on Wednesday 6 July 2022, from 9.00 to 12.00 CET, to present the consultation paper and gather first reflections from stakeholders.

What are the next steps?

ACER and CEER will further analyse and evaluate the policy options, taking into consideration the outcome of the consultation. As a next step, ACER and CEER may recommend amendments on the legal framework to accommodate one or several policy options.

Read more on the Public Consultation and share your inputs!

Register to the ACER-CEER event.

Terms and conditions or methodologies: the approval process

Terms and conditions or methodologies: the approval process

What is it about?

Image
Electricity transmission pillars, electricity infrastructures

The European market rules establish obligations for Transmission System Operators (TSOs), the European Network of Transmission System Operators (ENTSO-E), regulatory authorities and ACER on the development and approval of terms and conditions or methodologies. To be approved, terms and conditions or methodologies must:

  • be consulted upon by relevant stakeholders

  • include a  timescale for implementation

  • clearly address their expected impact on the objectives of the Regulations

  • meet the necessary requirements as set out in the legal basis.

Terms and conditions or methodologies: the approval process

The approval process

While terms and conditions or methodologies (TCMs) developed by all TSOs or all NEMOs are directly submitted to ACER for approval, regional terms and conditions or methodologies are submitted to the relevant national regulatory authorities (NRAs) for a regional approval process. Once submitted, the regulatory authorities or ACER should decide within six months after the receipt of the proposal.

In case NRAs are not able to agree, they can request an amendment. This provides TSOs an extra two months for amending the proposal and another two months for the regulatory authorities to approve the amended proposal.

In case NRAs are not able to reach unanimous agreement on a regional proposal (or upon their joint request), ACER is competent to decide on the proposal within six months from the referral.

Once the  terms and conditions or methodologies are adopted, the TSOs responsible for developing the proposals or the regulatory authorities responsible for their adoption, can request amendments. If this happens, the amended proposals should be submitted for new consultation and the approval process starts again.

Image
Approval process

Market rules for different electricity market timeframes

Market rules for different electricity market timeframes

What is it about?

Common market codes (or rules) at EU level make it easier to trade electricity across borders. The market codes correspond to the different timeframes of the wholesale electricity market:

  • forward market

  • day-ahead market

  • intraday market

where market participants exchange energy with different lead times.

A separate balancing market is run by the Transmission System Operators (TSOs) which allows them to settle imbalances and avoid blackouts if demand and supply do not match.

Market rules for different electricity market timeframes

Forward market

The Forward Capacity Allocation (FCA) Regulation ensures the availability of sufficient hedging opportunities in the forward timeframe and includes provisions for the allocation of long-term transmission rights by TSOs.

Main characteristics:

  • Market participants hedge the risk and/or exposure against possible price fluctuation on spot markets (i.e. day-ahead, intraday) with the financial trade taking place up to several years before the physical delivery in a specific bidding zone.

  • Price formation is based on the expected average price of the day-ahead timeframe.

  • If a bidding zone does not offer a sufficiently liquid forward market to hedge risks, this has consequences on:

    • consumers (which often need to pay significant risk premiums)

    • Increase in bankruptcy cases (in case of unexpected prices).

Market rules for different electricity market timeframes

Day-ahead and Intraday markets

The Capacity Allocation and Congestion Management (CACM) Regulation increases welfare effects while ensuring the well-functioning of the day-ahead and intraday markets (including operational security).

Main characteristics:

  • The physical trades take place up to one day-ahead or some minutes (e.g. 15 minutes) ahead of the physical delivery.

  • To ensure the efficient use of the available cross-zonal capacity for the exchange of electricity between different bidding zones in those market timeframes, the cross-zonal capacity is allocated implicitly in the so-called single day-ahead and intraday market coupling.

The process flow chart for the current situation in day-ahead (on the left) provides an overview of the involved parties and tasks.

ACER recently proposed reasoned amendments for a new CACM Regulation (“CACM 2.0”) including changes to this set-up.

Market rules for different electricity market timeframes

Balancing market

The Electricity Balancing (EB) Regulation establishes and regulates the smooth exchange of balancing energy across the European Union.

Main characteristics:

  • If demand and supply of the market participants trading in the electricity markets do not match, the imbalance needs to be corrected by TSOs.

  • TSOs procure balancing services (i.e. balancing capacity and energy) from market participants (with reserve-providing units/groups) which enable the electricity transmission grid’s frequency to be maintained.  

  • The procurement of balancing capacity is done in parallel to other timeframes while the procurement of balancing energy takes place during or after the intraday timeframe (see graph on the left)

Find out more on ENTSO-E’s market report.

Regulators request more time to decide on the minimum activation period of frequency containment reserves (FCR) providers

Image
Electricity transmission line, view from the ground
Intro News
NRAs of the Continental Europe Synchronous Area requested ACER an extension of six months to decide on the TSOs' proposal on the minimum activation period to be ensured by Frequency Containment Reserve (FCR) providers.

Regulators request more time to decide on the minimum activation period of frequency containment reserves (FCR) providers

What is it about?

On 17 May 2022, the National Regulatory Authorities (NRAs) of the Continental Europe Synchronous Area requested the EU Agency for the Cooperation of Energy Regulators (ACER) an extension of six months to decide on the Transmission System Operators’ (TSOs') proposal on the minimum activation period to be ensured by Frequency Containment Reserve (FCR) providers.

What does frequency containment reserve (FCR) mean?

FCRs (also known as primary control reserves) help maintain the power balance across the EU electricity grid. FCRs are one of the balancing services to level out frequency deviations in the power grid. The FCR is the first response to frequency disturbances (e.g. following a planned/unplanned power plant outage). The minimum activation period must be ensured by the FCR providers. If the frequency deviation persists, the Frequency Restoration Reserves (FRR) subsequently replace the primary control reserve.

What are the next steps?

ACER intends to decide promptly on this request.

Access the Public Notice.