Ljubljana, 26 July 2024
ACER publishes today its report on the implementation of the Inter-Transmission System Operator Compensation Mechanism (ITC) for 2022. ACER issues these yearly monitoring reports since 2012, as mandated by the relevant Regulation.
What is the ITC mechanism?
The ITC mechanism aims to ensure a fair compensation among Transmission System Operators (TSOs) for the costs of hosting cross-border electricity flows on their networks (e.g. power losses and investments in network infrastructure). European TSOs contribute and receive money from the ITC Fund depending on how much electricity they import and export across their national borders, as well as on the volume of transits they carry through their networks.
ACER is responsible for overseeing the yearly implementation of the ITC mechanism and reporting its findings to the European Commission.
What are the key findings for 2022?
- In 2022, the cost of losses used for the ITC mechanism to calculate the contribution and compensation for each ITC party increased significantly across Europe due to soaring electricity prices.
- This increase led to higher contributions and compensations among ITC parties, resulting in another record-high ITC fund of approximately €605 million.
- Changes in net positions were notable for several ITC parties, with many shifting from a net contributor to a net recipient position or vice versa.
- The distribution of net compensations and contributions was concentrated in a few countries.
- ACER’s report also highlights shortcomings in data accuracy and timeliness in implementing the ITC mechanism and emphasises the need for increased data auditing efforts, calling for greater transparency in determining loss values and input data, as well as for stricter enforcement of contractual deadlines. ACER reiterates its recommendations to ENTSO-E, TSOs and National Regulatory Authorities (NRAs) for methodological improvements in handling losses within the ITC mechanism.