text: OJ L158, 14.6.2019, p. 22. Page 1 of 10

text: Recommendation No 02/2019

text: https://ec.europa.eu/energy/en/topics/energy-strategy-and-energy-union/clean-energy-all-europeans. https://www.acer.europa.eu/Events/Presentation-of-ACER-Gas-Target-Model- /Documents/European%20Gas%20Target%20Model%20Review%20and%20Update.pdf C18-RGS-03-0. Consultation period: 22 March 2019 – 17 May 2019. https://www.ceer.eu/documents/104400/-/-/274b3146-afb5-8c96-436e-4056f3636b31. PC_2019_G_06. Consultation period: 23 July 2019 – 9 September 2019. https://www.acer.europa.eu/Official_documents/Public_consultations/PC_2019_G_06/The%20Bridge%20beyo nd%202025%20-%20PC_2019_G_06.pdf.

text: Recommendation No 02/2019

text: Table 1: Thematic grouping of the issues in the Bridge consultation document

text: Recommendation No 02/2019

text: https://www.acer.europa.eu/Official_documents/Acts_of_the_Agency/SD_The%20Bridge%20beyond%20202 5/The%20Bridge%20Beyond%202025_Conclusion%20Paper.pdf In line with ACER competences as provided in the ACER Regulation

text: Recommendation No 02/2019

text: Recommendation No 02/2019

text: Recommendation No 02/2019

text: Recommendation No 02/2019

text: Recommendation No 02/2019

text: Recommendation No 02/2019

identifier: ACER Recommendation No 02/2019

title: ACER Recommendation 02-2019 on the Regulatory Response to the Future Challenges Emerging from Developments in the Internal Gas Market

text: PUBLIC

text: RECOMMENDATION No 02/2019 OF THE EUROPEAN UNION AGENCY FOR THE COOPERATION OF ENERGY REGULATORS of 19 November 2019 on the regulatory response to the future challenges emerging from developments in the internal gas market

text: THE EUROPEAN UNION AGENCY FOR THE COOPERATION OF ENERGY REGULATORS, Having regard to

text: Regulation (EU) 2019/942

text: of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators , and, in particular,

text: Article 3(1)

text: thereof, Having regard to the favourable opinion of the Board of Regulators of 18 November 2019, delivered pursuant to

text: Article 22(5) of Regulation (EU) 2019/942

text: , Whereas:

text: 1. INTRODUCTION (1) The completion of the Internal Energy Market (IEM), delivering tangible benefits to European energy consumers, remains a top priority for ACER and for National Regulatory Authorities (NRAs). (2) As the gas sector faces numerous challenges in view of the sustainability and decarbonisation objectives of the European Union, the gas regulatory framework should be adjusted to the new energy policy goals. This should happen against a background of an evolving role of natural gas and other types of gases in the future energy system and of the forecasted increased integration of gas and electricity facilities, inter alia through power-to-gas. At the same time, a level playing field in which competition can flourish must be ensured and a sound investment climate that is based on a predictable regulatory framework must be provided. (3) With this Recommendation, ACER proposes elements of an effective regulatory and policy response to the challenges and trends that the European gas sector faces in the medium-term, i.e. beyond 2025.

text: 2. SCOPE (4) This Recommendation is part of a process in which ACER and NRAs intend to support the European Commission and other relevant European Institutions in the identification of future challenges and appropriate measures for the gas sector after 2025. Starting from the “Clean Energy for All Europeans” Package (CEP) , it proposes measures and practical actions to address the identified challenges. (5) This Recommendation builds around two key strategic areas which may call for regulatory action. (a) Targeted regulation and market functioning. While the European Gas Target Model , where applied, is generally working well, there are some markets where competition is still not effective and consumers’ interests are not well served, or where the current system of gas regulation may need review. This triggers the need for a limited number of amendments to the current gas market design and a sound regulatory framework that addresses the remaining challenges. (b) Enabling new energy products and enhancing infrastructure governance. A sustainable future requires deep decarbonisation of the energy system and the use of new technologies. However, the current regulatory framework was not designed based on such considerations. Consequently, the absence of appropriate regulation may have unintended consequences, and hinder the development of these technologies. Notably, the existing unbundling rules may need to be applied to new services, while the former natural monopolies are now competing with other services. Such major challenges suggest that a successful energy transition requires adequate regulatory polic ies simultaneously paving the way for sustainable, secure and affordable energy. (6) Some of the proposals contained in this Recommendation have been tested with stakeholders through two public consultations carried out in 2019, by the Council of European Energy Regulators (Consultation Paper on Regulatory Challenges for a Sustainable Gas Sector, from 22 March to 17 May 2019 ) and ACER (Public Consultation on the Gas Bridge beyond 2025, from 23 July to 9 September 2019 ). (7) Stakeholders’ views on the ACER’s gas Bridge beyond 2025 consultation document were collected on the following topics: 1) Market Monitoring as a basis for action 2) Liquidity on balancing platforms 3) Administrative and legal requirements 4) Oversight of regional entities and market areas 5) Transmission tariffs and cross-border capacity allocation 6) Institutional and governance arrangements 7) Defining new technologies 8) Dynamic regulation for new activities 9) Governance for infrastructure planning 10) Regulation of new networks 11) Other issues. The abovementioned eleven topics were then categorised into five macro-thematic groups, as shown in Table 1 below. Thematic group Consultation topics A. Access and market monitoring 1 + 2 + 3 B. Governance of infrastructure and oversight of 4 + 6 + 9 existing and new entities C. Dynamic regulation for new activities and 7 + 8 + 10 technologies D. Transmission tariffs and cross-border capacity 5 allocation E. Others 11 (8) It seems clear that a sustainable future needs decarbonised gases and new technologies (such as power-to-gas), but the current regulatory framework was not designed with these activities in mind. The potential lack of regulation for these areas may have unintended consequences, acting as a barrier or hindrance to their development. (9) As the Network Codes are implemented, in some markets particular issues relating to cross-border tariffs or capacity allocation are emerging, for example as long-term bookings decrease, which need to be assessed for targeted action.

text: 3. CONCLUSION (10) The conclusions drawn by ACER and NRAs from the process described in the previous recitals are presented in the Conclusions Paper “The Bridge beyond 2025” published by ACER and the Council of European Energy Regulators on 19 November 2019 . On the basis of these conclusions, ACER is able to formulate recommendations for actions and possible legislative proposals, in particular related to the gas sector. HAS ADOPTED THIS RECOMMENDATION: On access and market monitoring

text: 1. The system of having ACER track Gas Target Model indicators to measure market performance should be incorporated in EU law, while the choice of metrics needs to be capable of change in line with evolving market conditions. Therefore, legislatio n should only specify the process, enabling the Agency to update the metrics after the usual public consultation. Threshold values for these metrics could be specified by the Agency in advance and then used to indicate (as a screening mechanism) cause for concern on market functioning grounds in the gas wholesale market.

text: 2. If the market indicators do not meet the thresholds, this would indicate market functioning concerns. A process set out in legislation should establish a trigger to require the concerned NRA(s) to undertake a more detailed analysis of the situation, taking into account also other market circumstances and aspects, properly defining the market (e.g. national or multi-national), ascertaining the underlying causes and considering whether any of the options available from a “regulatory toolkit” would be likely to provide the necessary improvements.

text: 3. If the problem were confirmed by the analysis, the NRA or the relevant decision maker (depending on who is responsible for the appropriate action), following consultation with all market participants, would then have to decide on the action to take. Any proposed major action should be subject to a cost-benefit analysis (CBA), to ensure that benefits outweigh the costs. Where decisions had cross-border relevance and fell on NRAs, if they could not agree within a prescribed period of time, the decision would be transferred to ACER .

text: 4. Alongside the market metrics, sustainability metrics, albeit not part of the GTM, are needed to give a fuller picture of the extent to which the sector is successfully contributing to the wider decarbonisation effort.

text: 5. A system of mutual recognition for wholesale market authorisations/licences (or an equivalent mechanism) should be introduced across the EU. Once a wholesale supplier/trader is authorised or licensed in one Member State, based on well-defined standardised minimum requirements, including in relation to the reliability and financial solvency of the entity, this should automatically be recognised in any other Member State that requires a licence or authorisation for wholesale trading. The relevant authorities should agree on the potential minimum standards and on an enforcement system in which action can be taken without undue delay.

text: 6. To ensure that arrangements for mutual recognition do not increase risks, a counterbalancing system of mutual warning should be established among the entities responsible for registration, authorisation or licensing. This would imply a combination of sensible ex-ante and ex-post checks by the TSO and/or the NRA/competent authorities. Factual information on the creditworthiness of trading parties should be appropriately shared across the EU. In the extreme, in rare cases when energy trading companies were convicted of fraud or found to be in breach of their licences, it should be possible for all Member States to exclude them from trading in their markets. This could be implemented through an EU-wide “blacklist”, where companies found to be in breach of the relevant licence or authorisation conditions are listed and the relevant authorities are then permitted to exclude them from operating in their markets. The same could apply to board members and subsidiaries of convicted companies. There would also be a process for removal of companies and individuals from the blacklist, where appropriate. On governance of infrastructure and oversight of existing and new entitie s

text: 7. The overall governance arrangements in gas should be brought into line with those recently updated for electricity in the CEP (especially in a context of sector coupling and a holistic system view in the future). This alignment will involve changes to the gas legislation in relation to the Network Codes, the Agency’s powers, enforcement of the compliance of the European Network of Transmission Operators for Gas (ENTSOG) with its obligations, and exemptions and planning obligations for distribution systems. In particular, the revised governance for the relationship between the Agency and the European Network of Transmission System Operators for Electricity (ENTSO-E) set out in the CEP should equally apply to ENTSOG, where ENTSOG has not always taken sufficient account of the Agency’s opinions to date and further issues are increasingly likely in the future as decarbonisation increases the risks of conflicts of interests for Transmission System Operators (TSOs).

text: 8. ENTSO-E and ENTSOG (collectively, ENTSOs) should submit their annual work programme and their sufficiently detailed budget for approval to the Agency. The Agency should have the ability to request an amendment if it deems the annual work programme or the budget to be insufficient to cover the ENTSO's legal obligations, as well as if it considers the budget to be too generous. Such oversight of the Agency needs to be coordinated with the NRAs overseeing their TSOs’ contributions to the respective ENTSO.

text: 9. To avoid weakening the regulatory oversight, a clear legal requirement should be introduced to the effect that TSOs can only delegate or mandate legally required tasks if there is at least the same degree of regulatory oversight over the new entity. How this regulatory oversight is shaped can be left to lower-level legislation or regulation.

text: 10. There is a need for a coherent approach across multiple sectors, including integration of power-to-gas, and with energy management services for households, transport, services and industry. Scenarios need to be driven by the National Energy and Climate Plans established in

text: Regulation (EU) 2018/1999

text: on Governance of the Energy Union, to ensure that they are in line with the wider policy objectives. This may be facilitated by establishing, at European level, consistent definitions, criteria and policy scenarios, such as the speed of decarbonisation in different sub-sectors, the extent of technological innovation and energy efficiency improvements, and trends in demographic and economic factors. In order (later) to test the robustness of proposed solutions, energy-sector scenarios or sensitivities should be defined, to be used to develop alternative, realistic pathways which take into account and promote the availability of efficiently produced “green” gases, properly defined, and to identify the related system needs. The choice of these scenarios and needs can materially influence the choice of investments, so should not be left to promoters of those investments. Therefore, energy-sector scenario development and needs identificatio n at EU level, as a basis for the TYNDP, should be at least subject to approval by ACER.

text: 11. On the basis of the identified needs, and taking into account the supply of decarbonised gases, multiple solution providers (including TSOs and flexibilit y providers) could come forward with ways to meet those needs, which could be network-based or not. Where possible, these alternatives would compete either in the market or for the market via market tests. At EU level, the assessment of the available options and pathways should be supported by the availability of the necessary fundamental data, with ACER having stronger oversight of the operational planning activities undertaken by the ENTSOs.

text: 12. Analysis needs to test how robust each proposed infrastructure investment is under various scenarios and pathways. These should consider both total and peak demand, and the effects of these on the transmission capacity needs. ACER should be conferred the power to approve the ENTSOs’ TYNDPs and require amendments by the relevant ENTSO, with due justification, when the plan is deemed non-compliant with the objectives in the relevant regulation. Alternatively, ACER should be given the power to prescribe binding guidelines for the TYNDP development, and check the draft TYNDP against those guidelines, similar to the Framework Guidelines – Network Codes development process. Whichever approach is adopted, this should not overwrite national approvals of the NDP.

text: 13. Since currently not all NRAs have the power to approve the NDPs, this should be changed. In this way, consistency between the EU and national regulatory approval could be ensured through collaboration between the Agency and NRAs.

text: 14. The CBA methodology needs to be adapted to ensure that sustainability (includin g climate) effects of new investments are properly taken into account. In this respect, ACER should be given the power to prescribe binding guidelines for the CBA methodology and have the power to require ENTSOs to amend the methodology where necessary and to document any models used in the CBA in a way that allows third parties to run the analysis independently. The CBA methodology should include a full assessment of decarbonisation effects and its monetisation. It should also be applicable to cases of decommissioning of assets, including consideration of repurposing of natural gas assets for use in a decarbonised future (which could include transportation of hydrogen or carbon dioxide for use or long-term storage). Through this approach, decommissioning should be subject to due consultation of neighbourin g authorities and stakeholders where their markets may be affected.

text: 15. Investments geared solely towards fossil fuels should be compliant with decarbonisation goals. Investments in gas infrastructure should be future-proof, meaning they should also be useful for “low-carbon” or “green” gases, properly defined.

text: 16. TSOs, storage operators and LNG operators, as well as Distribution System Operators (DSOs) above a size threshold, should be obliged to measure and report their methane emissions according to a standard methodology, with sufficient granularity to allow the identification of the highest emitters. The data should be publicly available through a European Methane Emissions Observatory, as well as in the audited annual reports of the operators, which should also cover other sources of methane emissions. The measurements should be followed by an action plan at system operator level to address emissions. NRAs should recognise the efficiently incurred costs of emission reduction for regulated entities. Once emission data are sufficiently robust, tradeable permits or taxes on actual emissions could be introduced. On dynamic regulation for new activities and technologies

text: 17. In general, a market-based approach to new activities and technologies should be preferred, where conditions allow this. Regulation should be neutral between technologies and support efficient outcomes and investments. In particular, and in a sector-coupling context, there should be a review of market rules across gas and electricity, as they affect power-to-gas assets, to ensure no undue distortions.

text: 18. Where a market-based approach is not suitable, technologies are still developing and their future role is rather uncertain, a dynamic regulatory approach, based on consistent principles at European level, should be preferred to the inclusion of detailed rules in legislation.

text: 19. This will need to be supported by effective definitions and monitoring. Definitions and criteria should unambiguously determine the different types of decarbonised gases and classify them according to the extent to which each can be regarded as “green” or “low carbon”. It is also necessary that such a classification be general enough to include new gases/technologies that may emerge. While the Renewable Energy Directive is helpful in establishing Guarantees of Origin (GOs) for renewable gas injected into natural gas networks, further consideration is needed for decarbonised gases more generally and to ensure that a consistent approach is taken into account. A harmonised framework based on common standards and definitions of different types of gas could also ensure interoperability of different national GOs systems and thereby facilitate their cross-border trading.

text: 20. Principles and methodologies should be developed at European level for the regulatory treatment of the blending of hydrogen in gas networks. As long as national and regional conditions differ, any EU-wide thresholds for hydrogen admixture should not prevent significant development of blending in regions where this can proceed quickly, nor require excessive investment in other regions where flows of hydrogen remain marginal.

text: 21. For the proper regulatory assessment of the impact of decarbonised gas production on the sector, including transmission system development patterns and trading, reliable fundamental data on gas production assets, in place and planned, should be systematically collected from TSOs, DSOs and GO issuing bodies, and should be available at European level.

text: 22. As regards the development of new technologies and activities for gas, barriers for genuine, first-of-a-kind or small-scale pilots, should be avoided. An “EU umbrella” for a sandbox approach should be established, allowing time-limited derogations for very small scale initiatives, with the view to generate information that is useful in the public interest and where there is no significant risk of a material impact on the wider market. The resulting lessons should be shared between NRAs to avoid the need to replicate the pilots in each Member State, to stimulate cross-fertilisation and to accelerate decisions on whether regulation or legislation needs to be adapted.

text: 23. In terms of the role of TSOs and DSOs, a parallel can be drawn with the approach for electricity storage and recharging stations for electric vehicles adopted in the CEP. This could be formulated as a confirmation of how the existing approach to unbundling applies to new activities. In general, TSOs and DSOs should be precluded from investing in potentially competitive activities. Where the market is not bringing forth the needed investment, the next course of action should be to utilise competitive tenders. If this fails, then following careful analysis of the cost and benefits of the proposed investment and of the effect on competition, it should be possible to grant limited exemptions to TSOs and DSOs to allow them to invest in order to get the market started. Additional restrictions could be considered, such as requiring investments to be through a separate, but related, company for greater transparency, and requirements to divest once the market is ready to take over. Unbundling of regulated and non-regulated activities must be ensured. Care would need to be taken not to allow TSO/DSO-operated assets to foreclose the market for the services these assets provide, to use their inside information to secure the best sites or to crosssubsidise the new projects putting the TSO/DSO in an unduly favourable position. This would likely include requirements for regulated third party access for all assets developed by TSOs or DSOs.

text: 24. Existing tools, such as the TEN-E Regulation, should be amended to include investments promoting decarbonisation in the TYNDP and possibly as Projects of Common Interest (PCIs), where this would facilitate increased efficiency in supporting the energy transition in the best interests of energy consumers.

text: 25. Where new infrastructure, such as power-to-gas or biogas plants, are developed by the market, there is a need to coordinate with network availability and development. This starts with the TSOs (and DSOs, where relevant) being required to publish information on relative ease of accommodation of new assets. Economic efficiency is likely to be best served if this is backed up through a price signal, such as connection charges, but in any event appropriate processes will need to be put in place to ensure that there is a level playing field. Where it is clear that network operators cannot invest in such assets themselves, it should be possible to achieve effective coordination so that networks can accommodate solutions provided by the market.

text: 26. To ensure that the DSOs’ views are part of the EU deliberations when developing new measures, it would be useful to bring gas DSOs into a European DSO entity with clearly defined tasks and objectives to support new technologies. This could assist in the development of a new Network Code governing decentralised injection of decarbonised gases. With respect to an EU DSO entity, it will be important to recognise that (as with TSOs and market participants) DSOs generally have vested interests in promoting their own business model and their own assets, so their views should be considered alongside those of other stakeholders.

text: 27. Consideration should be given to a regulatory framework for a pure hydrogen network, since uncertainty over future regulation could hamper (and delay) the initial investments in decarbonised gases. Some principles, such as third party access, could potentially be set at EU level before investments are made. Just as it is important to ensure effective regulation of networks, so it will be important to avoid unnecessary regulation of competitive activities. For example, where hydrogen is piped to a single industrial user, it is unlikely to be appropriate to impose significant regulatory requirements. But should hydrogen networks become widespread, and where blending of decarbonised gas increases in existing networks, there would be real value in leveraging the liquidity of existing markets and the understanding of existing rules and regulations. This could be achieved by extending the existing Gas Directive and Regulation to apply beyond natural gas to include decarbonised gases, with clear carve-outs for direct pipes to individual (or small clusters of) industrial users where additional regulation is unwarranted. On transmission tariffs and cross-border capacity allocation

text: 28. The basis of the current gas market design needs to be anchored more firmly in EU legislation. In particular, the definition of the entry-exit system and of harmonised capacity products (firm, interruptible and conditional) in the context of an entry-exit system is currently lacking and needs to be accurately developed, taking into account the topology of the network, flow patterns and the potential for physical congestion. Such a definition needs to include rules indicating if and when deviations are allowed and to explain whether and how capacity constraints apply when using these products.

text: 29. At present, tariff design does not appear to be causing major issues at a pan-EU level, and therefore the implementation of the Tariffs Network Code as well as monitorin g its effects on the gas market in order to assess whether further measures are needed shall remain a priority. However, there are concerns in some regions and legislative changes can unlock better regulatory tools to address any instance where cross-border tariffs become a barrier to trade and where there is a risk of foreclosure of cross-border capacity. A possible response could be to allow the reserve price in cross-border capacity allocation to be reduced, on the basis of an agreement between the concerned NRAs, supported by ACER in a mediating role where needed. The implementation of such a measure at regional level may also provide relevant experience in case the issues now detected in some regions were to become more pervasive and an EU-wide solution were to be needed.

text: 30. If an Inter TSO Compensation (ITC) mechanism is implemented, for example to accompany the merger of different entry-exit zones, additional transparency requirements are needed, in particular covering the calculation and value of the allowed revenue, respecting confidentiality requirements. In order to foster the implementation of ITC mechanisms at regional level, clear principles are needed, along with an appropriate institutional framework setting out the roles and responsibilities of each entity. In order fully to address the issue in those circumstances where an ITC mechanism is in use, the calculation of a TSO's allowed revenue to be considered in the ITC mechanism should follow a set of common criteria.

text: 31. To address sector coupling issues, regulators should be tasked with reviewing the substitutability of gas and electricity assets and ensuring that network charges provide a level playing field between gas and electricity. In order to ensure such a level playing field and promote economic efficiency, the tariffs applied to these assets should reflect the costs they impose on the network. These, and other similar assets, should not be within the scope of consumption levies and taxes.

text: 32. Where there is a risk of a dominant party, in a given market area, securing most longterm capacity, particularly in markets which are highly concentrated or illiq u id , additional measures of intervention should be elaborated as part of targeted regulation to allow for urgent response to possible risk of market foreclosure On the necessary resourcing of ACER

text: 33. Some of these recommendations may lead to additional tasks for ACER. As evidenced by the draft budgets approved by ACER’s Administrative Board in recent years, ACER is already facing serious resource restrictions. In case new tasks were given to ACER, it would be essential that they are accompanied by sufficient additional human and financial resources to ensure their effective implementation. This Recommendation is addressed to the European Parliament, the Council and the European Commission. Done at Ljubljana, on 19 November 2019. -SIGNED- Fоr the Agency Director ad interim Alberto POTOTSCHNIG


text: Recommendation No 02/2021

text: OJ L158, 14.6.2019, p. 22. 2 OJ L 158, 14.6.2019, p. 54–124 3 OJ L 197, 25.7.2015, p. 24–72; OJ L 62, 23.2.2021, p. 24–40 Page 1 of 7

text: Recommendation No 02/2021

text: OJ L 220, 25.8.2017, p. 1–120; OJ L 62, 23.2.2021, p. 24–40 5 OJ L 312, 28.11.2017, p. 6–53; OJ L 62, 23.2.2021, p. 24–40

text: Recommendation No 02/2021

text: Recommendation No 02/2021

text: Recommendation No 02/2021

text: Recommendation No 02/2021

text: Recommendation No 02/2021

identifier: ACER Recommendation No 02/2021

publisher: Europeiska unionens byrå för samarbete mellan energitillsynsmyndigheter

sprak: en

title: ACER Recommendation 02-2021 on Capacity Allocation and Congestion Management Regulation (CACM 2.0)

serie: rekommendationer

text: PUBLIC

type: stycke

text: RECOMMENDATION No 02/2021 OF THE EUROPEAN UNION AGENCY FOR THE COOPERATION OF ENERGY REGULATORS of 17 December 2021 on reasoned proposals for amendments to the

text: Commission Regulation (EU) 2015/1222 of 24 July 2015

type: rubrik

text: THE EUROPEAN UNION AGENCY FOR THE COOPERATION OF ENERGY REGULATORS, Having regard to

text: Regulation (EU) 2019/942

text: of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators , and, in particular,

text: Article 3(1)

text: thereof, Having regard to

text: Regulation (EU) 2019/943

text: on the internal market for electricity , and, in particular, Article

text: and

text: thereof, Having regard to the outcome of the public consultation, Having regard to the outcome of the consultation with ACER’s Electricity Working Group, Having regard to the favourable opinion of the Board of Regulators of 15 December 2021, delivered pursuant to

text: Article 22(5)

text: (a) of

text: Regulation (EU) 2019/942

text: , Whereas:

text: I. INTRODUCTION

text: (1) Following the Commission’s invitation to ACER, announced at the Florence Forum of 8 December 2020, to prepare reasoned proposals for amendments to the

text: establishing a guideline on capacity allocation and congestion management (hereafter: CACM Regulation) , ACER made

text: an assessment about the scope of the reasoned proposals on amendments to the CACM Regulation.

text: (2) On 23 December 2020, ACER sent a letter informing the Commission of the results of the scoping assessment. The assessment proposed improvements to the CACM Regulation with regard to market coupling operators’ governance, single day-ahead and intraday coupling, costs and congestion income distribution, capacity calculation, remedial actions, bidding zone review, as well as general improvements.

text: (3) In the same letter, ACER noted that, in its recommendation for amendments to the CACM Regulation, ACER would give special attention to interactions with other existing regulations, in particular with the

text: Commission Regulation (EU) 2017/1485

text: establishing a guideline on electricity transmission system operation (hereafter: SO Regulation) and the

text: Commission Regulation (EU) 2017/2195

text: establishing a guideline on electricity balancing (hereafter: Balancing Regulation) , and asked for the Commission’s guidance on whether it would be possible to propose limited changes to those regulations if such an amendment is considered to ensure the most efficient and consistent legal structure.

text: (4) On 20 January 2021, acknowledging the outcome of ACER’s scoping assessment for the possible areas of amendment to the CACM Regulation, the Commission invited ACER to prepare, by the autumn of 2021, reasoned recommendations for amendments to the CACM Regulation in line with Article 60(3) of the Electricity Regulation. The Commission added that recommending limited changes notably to the SO Regulation and the Balancing Regulation could be considered, but only in so far as they are intrinsically linked to the changes under discussion for the CACM Regulation.

text: II. PROCEDURE

text: (5) In accordance with

text: Article 60(3) of Regulation (EU) 2019/943

text: on the internal market for electricity (hereafter: Electricity Regulation) and

text: Article 14 of Regulation (EU) 2019/942

text: , ACER conducted a public consultation with all stakeholders from 15 April to 10 June 2021. The evaluation of responses to the public consultation is detailed in Annex 6 to this Recommendation.

text: (6) In addition to the public consultation, ACER held two workshops with stakeholders on 10 May 2021, with the purpose to introduce the proposed amendments, assist stakeholders in providing feedback to the public consultation and allow stakeholders to pose questions to ACER and the regulatory authorities involved in the drafting of the amendments.

text: (7) After the public consultation, ACER involved all TSOs and all NEMOs in the further review of the amendments in order to ensure that they had sufficient opportunity to

text: express their concerns and views. All TSOs and NEMOs were involved in the area of market coupling operation (hereafter: MCO) governance and development, organisation and operation. All TSOs were also involved in the meetings where the draft amendments on capacity calculation, bidding zone review, data exchange, common grid model, scheduling and redispatching and countertrading. These meetings took place from June to October 2021.

text: (8) ACER’s Electricity Working Group (hereafter: AEWG) was consulted between 10 November 2021 and 19 November 2021, and provided its advice on 22 November 2021).

text: (9) In its advice, the AEWG broadly endorsed the draft ACER Recommendation on reasoned proposals for amendments to the CACM Regulation.

text: (10) In its advice, the AEWG considers that the CACM Regulation is a legal cornerstone of the EU market design as it describes key elements for the functioning of short-term markets, but also elements which have an impact on transmission system operation. Therefore, in its advice, the AEWG considers that ACER and regulatory authorities need to strive for an ambitious and well-reasoned recommendation on enhancements of the CACM Regulation. The AEWG also acknowledged that, although the process aimed for a continuous and wide participation amongst regulatory authorities and with stakeholders, given the different interests and views, not for all substance items common positions or compromises could be achieved.

text: (11) The AEWG further considers that having in mind that the recommendation to the European Commission will provide input to a legislative process, it is considered useful to in any case provide clear input from regulators even if no compromise text could reached. Hence, the AEWG considers that it is welcomed that, although limited in number, for these areas different options are included.

text: (12) Finally, in its advice, the AEWG invites ACER to take note of the comments raised and in particular pay attention to the following topics:

text: (a) The MCO governance defined in the current CACM Guideline proved to be a source of problems in terms of decision making and implementation of relevant features and projects. This experience suggests an appropriate restructuring of the MCO governance and ACER suggests a timeline for that. However, it could be explored how remarks from some regulatory authorities in relation to more balanced representation of the different options and cost/benefit considerations could still become accommodated into the recommendation.

text: (b) Monopoly NEMOs are an established practice in a number of Member States. The first CACM Regulation established competitive NEMOs as a standard model and monopoly as an exemption and although it is still appropriate to compare and evaluate the two models applied in practice, the assessment process should be adequate.

text: (c) The approach to capacity calculation differs regionally where the two applied models are flow-based and coordinated NTC. The requirements defined in

text: CACM need to provide for a level-playing field between the TSOs applying the two capacity calculation models when comparing their performance in relation to the 70% target. However, this should not lead to unnecessary additional cost (also for consumers).

text: III. LEGAL GROUNDS FOR THE PRESENT RECOMMENDATION

text: (14) According to its invitation of 20 January 2021, the Commission asked ACER to “prepare reasoned recommendations for amendments to the CACM Regulation, in line with Article 60(3) of the

text: Regulation (EU) 2019/943

text: on the internal market for electricity”.

text: (15) In that regard, it is first to note that the CACM Regulation is not a network code, as referred to by Article 60 of the Electricity Regulation, but a guideline pursuant to Article 61 of the Electricity Regulation.

text: (16) While Article 60 of the Electricity Regulation defines a process for the amendment of network codes within the areas listed in

text: Article 59(1)

text: and (2) thereof, with ACER having a formal role for the proposal of such amendments, no detailed amendment process is provided for guidelines under Article 61 of the Electricity Regulation;

text: Article 61(6)

text: only requires the Commission to consult ACER, ENTSO for Electricity, the EU DSO entity and, where relevant, other stakeholders when adopting or amending guidelines.

text: (17) Given the similarities of network codes and of guidelines adopted in areas where network codes could have been developed, ACER considers it as appropriate to apply the process defined in Article 60 of the Electricity Regulation for its proposals of amendments to network codes mutatis mutandis for the purpose of its proposals of amendments to guidelines in the network code areas.

text: (18) Thus, according to the first sentence of Article 60(3) of the Electricity Regulation, ACER may make reasoned proposals to the Commission for amendments, explaining how such proposals are consistent with the objectives of the network codes set out in Article 59(3) of the same Regulation. Article 59(3) of the Electricity Regulation does not refer explicitly to objectives and states that the Commission should establish a priority list every three years, identifying the areas to be included in the development of network codes. Instead, subsequently,

text: Article 59(4)

text: and (11) of the Electricity Regulation do define objectives for the development of network codes, namely contribution to market integration, non-discrimination, effective competition, and the efficient functioning of the market. Accordingly, the reference in Article 60(3) of the Electricity Regulation to the objectives of Article 59(3) of that Regulation should be read together with

text: Article 59(4)

text: and (11) of the same Regulation and in light of the objectives listed therein. Therefore, these objectives are also relevant for the amendments proposed in this Recommendation (as detailed in the reasoning provided in Annexes 3, 4 and 5).

text: (19) According to the second sentence of Article 60(3) of the Electricity Regulation, where ACER considers an amendment proposal to be admissible and where it proposes amendments on its own initiative, ACER should consult all stakeholders in accordance with

text: Article 14 of Regulation (EU) 2019/942

text: (20) Pursuant to

text: Article 14(1) of Regulation (EU) 2019/942

text: , ACER, in the process of proposing amendments of network codes under Article 60 of the Electricity Regulation, has to ‘extensively consult at an early stage market participants, transmission system operators, consumers, end-users and, where relevant, competition authorities, without prejudice to their respective competence, in an open and transparent manner, in particular when its tasks concern transmission system operators’.

text: (21) With regard to the amendment of the CACM Regulation, it is also to note that the CACM Regulation relates to the area of ‘capacity allocation and congestionmanagement rules’ under

text: Article 59(1)

text: (b) of the Electricity Regulation, which is specified as including rules on day-ahead, intraday and forward capacity calculation methodologies and processes, grid models, bidding zone configuration, redispatching and countertrading, trading algorithms, single day-ahead and intraday coupling, the firmness of allocated cross-zonal capacity, congestion income distribution, cross-zonal transmission risk hedging, nomination procedures, and capacity allocation and congestion management cost recovery.

text: (22) While those specifications are subareas of the generic term ‘capacity allocation and congestion management rules’, this does not mean that they can or must be covered only in a single set of rules. In fact, they can be addressed through separate legal acts, as is the case e.g. for forward capacity calculation, which is currently governed within

text: Commission Regulation (EU) 2016/1719 of 26 September 2016

text: establishing a guideline on forward capacity allocation. Consequently, capacity allocation and congestionmanagement rules may be included also in other legal acts than the CACM Regulation, and the latter may be also amended to the effect that rules currently included in the CACM Regulation are transferred to and incorporated in other legal acts.

text: (23) Finally, according to

text: Article 3(1) of Regulation (EU) 2019/942

text: , ACER may, upon a request of the European Parliament, the Council or the Commission, or on its own initiative, provide an opinion or a recommendation to the European Parliament, the Council and the Commission on any of the issues relating to the purpose for which it has been established.

text: (24) As indicated by Articles 60 and 61 of the Electricity Regulation, ACER’s contribution to the amendment of network codes and guidelines concerns issues relating to a purpose for which ACER has been established.

text: IV. MAIN FINDINGS

text: (25) ACER found that amendments to the CACM Regulation would be required in the areas set out in recitals (26) to (31).

text: (26) On the general provisions, ACER proposes amendments to the adoption of terms and conditions or methodologies, definitions, publication of information and delegation of tasks.

text: (27) On the organisation of market coupling and capacity calculation, ACER proposes amendments to the designation of NEMOs, MCO governance and organisation, MCO tasks and responsibilities and costs provisions.

text: (28) On the capacity calculation, ACER proposes amendments to capacity calculation regions, general requirements for capacity calculation, capacity calculation methodologies and the capacity calculation process.

text: (29) On market coupling, ACER proposes amendments to market coupling development, timings and procedures, scheduled exchanges, congestion income collection and distribution, clearing and settlement and market coupling operation.

text: (30) On the bidding zone review process, ACER proposes amendments to the bidding zone review procedure and the criteria for bidding zone review.

text: (31) On the implementation monitoring and reporting, ACER proposes amendments to the reporting on market coupling, capacity calculation and bidding zone configuration and implementation monitoring.

text: (32) ACER has proposed the amendments in these areas in Annex 1 to this Recommendation for the reasons detailed in Annexes 3 and 4 to this Recommendation explaining how such proposals are consistent with the objectives in Article 59(4) of the Electricity Regulation. The amendments proposed by ACER take into consideration the advice received from the AEWG, summarised above in paragraphs (8)-(12); ACER’s consideration of the views from regulatory authorities on the different contested topics is indicated, where pertinent, in Annexes 3 and 4 to this Recommendation.

text: (33) In line with the Commission’s request, and taking into account the outcome of its extensive consultation with the relevant stakeholders, ACER has prepared reasoned proposals for amendments to the CACM Regulation as well as to the SO Regulation; with regard to the latter, ACER proposed limited changes that are intrinsically linked to the changes proposed to the CACM Regulation, as explained in detail in Annex 4 to this Recommendation.

text: (34) ACER found that amendments to the SO Regulation linked to the removal of these provisions from the CACM Regulation would be required in the areas: generation and load data provision, common grid model and scenarios, redispatching and countertrading coordination and cost sharing and scheduling.

text: (35) ACER has proposed the amendments in these areas in Annex 2 to this Recommendation for the reasons detailed in Annexes 5 to this Recommendation explaining how such proposals are consistent with the objectives in Article 59(4) of the Electricity Regulation.

text: (36) Finally, while no amendments are proposed in the areas of application of the CACM Regulation to third countries and the minimum capacity targets pursuant to Article 16(8) of the Electricity Regulation, ACER encourages the Commission to examine these areas and consider potential amendments.

text: HAS ADOPTED THIS RECOMMENDATION:

text: 1. ACER recommends to amend

text: establishing a guideline on capacity allocation and congestion management, as amended by Commission Implementing

text: Regulation (EU) 2021/280 of 22 February 2021

text: , in accordance with Annex 1, for the reasons explained in Annex 3 and 4.

text: 2. ACER recommends to amend

text: Commission Regulation (EU) 2017/1485 of 2 August 2017

text: establishing a guideline on electricity transmission system operation, as amended by Commission Implementing

text: , in accordance with Annex 2, for the reasons explained in Annex 5.

text: This Recommendation is addressed to the European Commission.

text: Done at Ljubljana, on 17 December 2021.

text: - SIGNED –

text: Fоr the Agency The Director

text: C. ZINGLERSEN

text: Annexes:

text: Annex 1 – Amended CACM Regulation Annex 1a – Amended CACM Regulation TC compared to the current Regulation Annex 2 – Amended SO Regulation Annex 2a – Amended SO Regulation TC compared to the current Regulation Annex 3 – Initial impact assessment on market coupling organisation Annex 4 – Reasoning to proposed amendments to the CACM Regulation Annex 5 – Reasoning to proposed amendments to the SO Regulation Annex 6 – Evaluation of responses to the public consultation (based on Power BI report)

type: vagledning

utgivare: acer