Ljubljana, 30 January 2025
In July 2024, ACER received a proposal from Transmission System Operators (TSOs) to amend the methodology for harmonising cross-zonal capacity allocation for the exchange of balancing capacity or sharing of reserves.
After consulting with stakeholders in the autumn of 2024, ACER revised the TSOs’ proposal. Today, with its Decision 01-2025, ACER has adopted the amended methodology.
The methodology (approved by ACER in 2023) harmonises the processes (i.e., market-based and co-optimisation) that compare the market value of cross-zonal capacity between balancing capacity and day-ahead electricity markets. These processes rely on an algorithm that optimises the allocation of available cross-zonal capacity in a way that maximises overall market welfare.
Why did ACER amend the methodology and what’s new?
The updated methodology:
- clarifies the governance of the market-based process to ensure its efficient implementation and operation;
- allows to establish rules for distributing congestion income resulting from cross-zonal capacity allocation among TSOs.
ACER’s Decision also grants TSOs more time to develop the harmonised market-based software and offers flexibility to those already operating regional market-based processes to adapt to the methodology’s new requirements.
What are the next steps?
TSOs are required to develop the harmonised market-based software by June 2026.
Full implementation of the harmonised market-based allocation process is not expected before September 2027, pending approval from the relevant National Regulatory Authorities (NRAs).