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Capacity allocation and congestion management

On 29 July 2011 ACER adopted its Framework Guidelines on Capacity Allocation and Congestion Management (CACM) for Electricity.

These Framework Guidelines and the network codes to be developed pursuant to them shall provide the legal framework and requirements to Transmission System Operators and power exchanges for the operation of an integrated electricity market in the long-term, day-ahead and intraday timeframes.
The core elements of the Framework Guidelines are:
·        Optimal definition of bidding zones with respect to overall market efficiency. The Framework Guidelines define a process to regularly investigate and report on whether existing bidding zones are efficient. In case inefficiencies are identified, the review of bidding zones should be triggered to compare the overall market efficiency of alternative bidding zones configurations against the existing one;
·     Calculation of capacities between bidding zones should maximise the possibilities to trade between bidding zones taking into account the limitations of existing network infrastructure. Capacity calculation should be efficient, transparent, and strongly coordinated among TSOs. Flow-based capacity calculation should be applied in highly meshed networks, whereas NTC capacity calculation may be used in less meshed networks;
·     Efficient allocation of cross-zonal capacity. In the forward timeframe cross-zonal capacity shall be allocated through explicit auctions in a form of Physical or Financial Transmission Rights. In the day-ahead timeframe cross-zonal capacity should be allocated via implicit auction (price market coupling). For the intraday timeframe cross-zonal capacity should be allocated through implicit continuous allocation (continuous market coupling), which can be complemented with implicit auctions in specific cases.
·     The cross-zonal capacity allocated in the forward timeframe should be financially firm, whereas cross-zonal capacity allocated in the day-ahead and intraday timeframe should be physical firm.

Network Codes

According to the regularly updated electricity EC/ACER/ENTSO-E 3-year work plan, two network codes shall be developed pursuant to the Framework Guidelines on Capacity Allocation and Congestion Management for Electricity, namely:

  • Capacity Allocation and Congestion Management for the day-ahead and intraday timeframe;

  • Forward Capacity Allocation for the long-term timeframe

For information related to the adoption of Network Codes, please consult the European Com​mission’s webpage dedicated to the Electricity Cross-Border Committee.

ACER’s Milestones