Ljubljana, 22 December 2023
ACER has reached a decision that no alternative electricity bidding zone configurations need to be investigated in the Baltic region. The procedure to decide started on 26 September 2023.
What are the Decision’s main highlights?
ACER’s Decision is based on the feedback received from stakeholders in 2021, as well as on the following information provided by Transmission System Operators (TSOs):
- the alternative configurations previously submitted to ACER; and
- the outcome of locational marginal pricing simulations (following the bidding zone review methodology approved in November 2020).
ACER concludes that the current bidding zone configuration in the Baltic region is adequate, and no alternatives should be sought with priority. Nonetheless, this conclusion does not preclude the possibility to investigate potential mergers of the Baltic bidding zones in future reviews.
Source – ACER – Email
ACER amends the harmonised allocation rules for long-term electricity transmission rights
Ljubljana, 22 December 2023
On 22 December 2023, with its Decision 18/2023, ACER approved the proposal of the Transmission System Operators (TSOs) to amend the Harmonised Allocation Rules (HAR) for long-term electricity transmission rights.
Why were the rules amended?
Amending the HAR was needed to introduce the flow-based allocation of long-term transmission rights, a mechanism that efficiently allocates cross-border transmission capacity in the electricity markets to better reflect the physical network reality and provide more accurate price signals for cross-border trade.
The new rules enable the implementation of two projects for long-term flow-based capacity calculation and allocation in the Core and the Nordic capacity calculation regions.
What are the next steps?
The amended HAR will apply from the date specified in the amendment notice published by the Joint Allocation Office.
Source – ACER – Email
ACER amends the congestion income distribution methodology
Ljubljana, 22 December 2023
ACER approved the proposal received by Transmission System Operators (TSOs) to amend the congestion income distribution methodology in the European electricity markets.
Congestion arises when there is limited capacity to transport electricity between different areas. When a congestion occurs, a price difference emerges between the different bidding zones which generates congestion income. The congestion income distribution methodology describes how to distribute such income among TSOs to ensure fairness and efficient operation of the electricity market.
Why the need for an amendment?
There are two main reasons for amending the methodology:
- Several mechanisms (such as flow-based allocation or advanced hybrid coupling) have recently been or will soon be implemented to increase the efficiency of the market coupling. However, these mechanisms can cause unintuitive flows (electricity flows from an expensive zone to a cheaper one). This amendment aims to address the financial consequence of unintuitive flows and to ensure a non-discriminatory treatment of all TSOs.
- In the future, exchange of balancing capacity or sharing of reserve will be implemented. Both mechanisms would generate congestion income that need to be distributed. This amendment will regulate how congestion income will be distributed among TSOs.
What are the next steps?
Following ACER’s approval of the methodology, European TSOs will implement the required changes.
Access the Decision and its annexes.
Source – ACER – Email