Market news
As part of the Clean Energy Package (CEP) legislative package, the EU Commission has defined requirements for both the introduction and the design of capacity mechanisms. Several EU member states have already introduced different types of capacity mechanisms in order to address national concerns regarding security of supply. A key feature of capacity mechanisms is the remuneration of the capacity (MW) provided. This distinguishes capacity mechanisms from the so-called energy-only market, in which the energy actually supplied (MWh) is remunerated.
According to the provisions of the Electricity Market Regulation (Art. 26 Regulation (EU) 2019/943), capacity mechanisms must be opened up to the cross-border participation of foreign capacities.
The possibility of cross-border participation is now becoming a reality in Belgium. The Belgian authorities introduced the Belgian Capacity Remuneration Mechanism (CRM) with a view to maintaining the required level of security of supply for Belgium. The Belgian transmission system operator Elia is responsible for implementing the capacity mechanism. The Dutch transmission system operator is supporting Elia with the implementation and is available in case of questions for Dutch capacities providers.
The first "delivery period" allowing for cross-border participation will be 2025 to 2026. Dutch capacities can participate in the corresponding auction in September 2024, provided they are directly connected to the electricity supply grid of a Dutch transmission system operator. The auction will be preceded by a prequalification process, which will begin in April 2024 with a so-called "light prequalification". The timeline for 2024 is as follows:
An overview of the framework conditions for participation and the individual processes can be found here. Here you can find a guideline for the official legal and operational framework of the CRM.
Further information on the capacity mechanism can be found on the website of the Belgian transmission system operator ELIA .
Different information sessions
ELIA will offer digital information events for all interested market participants. Therefore, Elia is organizing general and detailed info sessions on the CRM to provide you with a comprehensive understanding of the mechanism, as well as detailed information on its most complex modalities.
The goal of the general session is to provide a comprehensive introduction to the CRM for those who may not be familiar with it. Elia will cover the fundamental principles, key features, and regulatory requirements of the mechanism, as well as plenty of examples on what participation to this market mechanism means.
The goal of the detailed session is to exemplify the most complex modalities of the mechanism. Elia will delve into the intricacies of the mechanism, providing a detailed understanding of its operations and the implications for the energy market.
Further, Elia will offer a session dedicated to cross-border participation. The goal of the XB CRM session is to provide a comprehensive introduction to the CRM and special characteristics of cross-border participation.
General session
Two identical sessions* are organized on:
- 23/02/2024 from 13:00 to 16:00, and
- 15/03/2024 from 13:00 to 16:00.
Detailed session
Two identical sessions* are organized on:
- 01/03/2024 from 9:30 to 12:30, and
- 22/03/2024 from 13:00 to 16:00.
* The sessions are interchangeable; the same information will be presented.
XB CRM info session
- 07/03/2024 from 13:00 to 16:00.
To ensure efficient sessions, could you please confirm your participation at least two working days before the session via email to taskforce.crm@elia.be indicating which sessions you would like to attend, along with the names and contact details of all attendees.
Questions?
If you have specific questions regarding capacities in the TenneT control area, please contact us at the following e-mail address Systemservices@tennet.eu.
The Belgian authorities have introduced the Belgian Capacity Remuneration Mechanism (CRM) with a view to maintaining the required level of security of supply for Belgium. The first delivery period will be 2025 to 2026. The Belgian transmission system operator Elia is responsible for implementing the capacity mechanism.
This may also be of interest to German capacity operators, as the EU Commission has defined conditions for the cross-border participation of foreign capacities as part of the "Clean Energy Package" (CEP) legislative package.
The German transmission system operators would like to inform you about the possibilities of participating in the Belgian CRM and therefore refer to the following website for all further information:
Participation of German capacities in the Belgian capacity mechanism (netztransparenz.de)
If you have specific questions regarding capacities in the TenneT control area, please contact us at the following e-mail address:
xb-capacitymechanism-de@tennet.eu
As of 01.03.2023 TenneT TSO GmbH will harmonize the publication processes concerning day-ahead Urgent Market Messages to the NordPool REMIT UMM Platform on the connection DE-LU <> SE4. The respective information – currently published as day-ahead Urgent Market Message – is an input to the NTC harmonization process with Baltic Cable and Svenska Kraftnät, which determines the final NTC value to be provided for the SDAC process.
In accordance with common practice on other connections and to avoid misinterpretation in terms of market information and transparency, only the final offered capacities for the concerned connection DE-LU <> SE4 are published in accordance with Art. 11.1 Regulation (EU) 543/2013 on the ENTSO-E transparency platform.
In line with TenneT’s Commitment towards the European Commission by Dec. 2018, TenneT TSO GmbH guarantees the provision of a minimum cross border capacity at DE/LU-DK1 according to a predefined trajectory and independent of any internal grid congestions.
The following table shows the historic as well as the current ‘TenneT Guaranteed Hourly NTC’ for DE/LU-DK1 in MW dependent on the commissioning state of the planned interconnectors at this border. As defined in the Commitment the Guaranteed Hourly NTC will be increased by 96 MW each year until 2026 starting from 2020, representing the subsequent year after the commissioning of the East Coast Line took place. Additional capacity will be provided in an analogue procedure after the outstanding commissioning of the West Coast Line.
The table below will be updated accordingly on an annual basis.
|
valid from |
East Coast Line (MW) |
West Coast Line (MW) |
Annual sum of increase (MW) |
TTG Guaranteed Hourly NTC (MW) |
|
01. Jan 2020 |
0 |
0 |
0 |
1300 |
|
01. Jan 2021 |
96 |
0 |
96 |
1396 |
|
01. Jan 2022 |
192 |
0 |
192 |
1492 |
|
01. Jan 2023 |
288 |
0 |
288 |
1588 |
| 01. Jan 2024 | 384 | 0 | 384 | 1684 |
The Central Western Europe (CWE) region was the first to implement the flow-based capacity calculation methodology that has now been adopted as the preferred way forward across the rest of Europe.
Today, eight Transmission System Operators (TSOs) from six European countries are celebrating the closure of a project that has changed the way we calculate and allocate day-ahead capacity to the power grids of each involved country. The flow-based market coupling approach means it is possible to carry out coordinated regional optimisation based on maximum economic value. This is contributing to the decarbonisation of the European energy system and is increasing security of supply. This voluntary approach, which began to be developed in 2006, has been improved with the extension of the flow-based capacity calculation method across the much larger Core region on 8 June 2022.
To build an internal European electricity market, the different national systems need to be connected both physically - via interconnectors - and commercially. In the early 2000s, some CWE countries started to move towards market coupling in accordance with several regional initiatives. An important additional step was the establishment of the Pentalateral Energy Forum in 2006 by the ministers of Belgium, France, Germany, Luxembourg and the Netherlands. This forum was meant to foster security of supply through further market integration. In 2007, an important milestone was reached when the ministries, regulatory authorities, TSOs, Power Exchanges (PX) and market parties signed the Memorandum of Understanding of the Pentalateral Energy Forum on Market Coupling and Security of Supply in Central Western Europe. In 2010, the CWE markets were first coupled based on the coordinated Net Transfer Capacity (NTC) calculation methodology. In 2011, Austria joined the Pentalateral Energy Forum. The next major step, in May 2015, took place with the launch of the new flow-based capacity calculation method, thereby introducing the flow-based market coupling (FBMC) methodology to Europe. To realise this innovative approach, CWE TSOs and their partners have invested significant efforts in the project over several years.
One of the main targets of market coupling is the convergence of market prices across participating countries. Sufficient cross-border transmission capacities are crucial for the achievement of the so-called ‘full’ price convergence between countries. The first approach adopted for the allocation of cross-border capacities was based on coordinated NTC. In contrast, the flow-based market coupling method allocates capacities in a more efficient way, as the economic value of a single exchange takes into account all other exchanges and their respective use of the available grid capacity across the whole region. This requires regional coordination, leading to regional optimisation. As a result, since 2015, capacities allocated to cross-border trading and consequently the economic value of the exchanges and the level of price convergence between the CWE countries have increased over time. Accordingly, CWE TSOs have made a significant contribution to dispatching available resources in a cost-efficient manner to meet demand across the CWE region. Further CWE market coupling milestones have been the introduction of additional borders as part of the German-Austrian Bidding Zone split in 2018, the ALEGrO project in 2020 and the minimum remaining available margin of 20%. CWE TSOs would like to express their special gratitude towards CWE power exchanges and the Joint Allocation Office (JAO) for the great teamwork and the national regulatory authorities and ministries for their strong support as the main sponsors over the past few years.
The ending of the flow-based market coupling approach across the CWE is a natural consequence of the launch of the new flow-based market coupling approach across Core. This launch has extended the use of flow-based allocation across a wider European area - the Core Capacity Calculation Region (CCR) – which comprises 13 countries: Austria, Belgium, Croatia, the Czech Republic, France, Germany, Hungary, Luxembourg, the Netherlands, Poland, Romania, Slovakia and Slovenia. This region is home to 278 million citizens with an estimated annual electricity use of 1500 TWh. The Core CCR makes use of the flow-based methodology, adding value to the version previously operated in CWE.
As of 9th September, 2022, Energinet is going to limit countertrades on the border DE/LU-DK1 to the day-ahead exchange resulting from the Single Day-Ahead Coupling.
This means that countertrades can reduce the scheduled day-ahead exchange on the border to zero, but countertrade will not reverse the direction of the day-ahead schedule. As a result of intraday capacity allocations (XBID), however, the direction of the net scheduled exchange could still change.
The countertrade limitation only applies when the transmission system is in “normal state” as defined in Art. 18(1) System Operation Guideline (regulation (EU) 2017/1485). TenneT is going to adhere to the limit resulting in additional national redispatch, including renewable energy sources.
Details on SDAC Communication note
TenneT together with other European Transmission System Operators (TSOs) of the Core Capacity Calculation Region (Core CCR) have taken another important step on the backbone of the European Energy Market of the future: The Improved Coordination Solution (ICS) of remedial actions.
TenneT is part of the biggest capacity calculation region, the so-called Core, existing of 16 TSOs of Austria, Belgium, Croatia, the Czech Republic, France, Germany, Hungary, Luxemburg, the Netherlands, Poland, Romania, Slovakia and Slovenia.
They are developing and implementing market integration solutions defined in European legislation. Further integration of the wholesale electricity markets is essential for the energy transition towards a carbon free energy system.
The current regulatory focus is thus on increasing cross-zonal capacities including increased cooperation and harmonisation between member states. Since it becomes increasingly challenging and expensive to maintain operational grid security, a common cross-border determination and coordination of remedial actions is needed. That is why the ROSC (Regional Operational Security Coordination) Methodology were developed and adopted for each European CCR. For each CCR, the methodology establishes common processes for Regional Security Analysis, Remedial Action Optimization, Coordination and Cost Sharing within the respective CCR. The processes cover the operational planning timeframe Day Ahead and Intraday and will complement and replace already existing national and international operational planning processes. The ROSC methodology will be stepwise implemented in the coming years and they bring an international obligation of TSOs to share and coordinate remedial actions for solving congestions in TSO´s grids. It should lead to a more efficient use of remedial actions and to enhancing the security of electricity supply.
First step of Regional Operation Security Coordination between 13 countries
As part of this process on 1 November, the ICS process was launched by CCR Core TSOs and Regional Security Coordinators (RSCs). RSCs are centres of cooperation of the involved TSOs and play an important operational role in all the coordinated processes in CCR Core. The ICS provides a daily exchange of Remedial Actions potential, such as Redispatch and Countertrade potential, topological measures, available Phase Shifter Tap ranges and also introduces a common Coordination process for the planning and activation of these Remedial Actions.
Target solution will be implemented as next step in 2024
The implementation of the ICS marks an important milestone, but only the first step in a sequence of implementations which TSOs will perform in order to fulfil the guidelines on electricity transmission system operation established by the EU Commission (SO GL). With this early implementation the existing operative planning processes are prepared for the target solution of the future, the Coordinated Security Analysis (CSA). For the target solution a common centralized platform will enable Core TSOs to optimize remedial actions, in order to relieve existing congestions in the grid and utilize the grid in the most efficient way.
In compliance with TenneT’s Commitment to the European Commission (“Commitment”) (Commission Decision of 7.12.2018 […] Case AT.40461 – DE/DK Interconnector), TenneT guarantees a certain minimum transmission capacity at the bidding zone border of Germany/Luxembourg (“DE”) and Denmark West (“DK1”), referred to as Guaranteed Hourly NTC. According to recital 46 (i) of the Commitment, TenneT may reduce the Guaranteed Hourly NTC to what is necessary and proportional to comply with safety standards of secure network operation if critical transmission lines (listed in Annex 2 of the Commitment) are not available due to unplanned outages, construction or maintenance work; but not below a threshold of 500 MW (hereafter referred to as Minimum Threshold).
Following the commissioning of the East Coast Line the list of critical transmission lines of annex 2 of the Commitment and the Minimum Threshold have to be adapted and aligned with the Monitoring Trustee. Subsequently, the adaptation has to be published on the website of TenneT no later than 1 January following the commissioning of the East Coast Line. The Monitoring Trustee shall in this respect provide a report to the European Commission with his opinion on the appropriateness of the amendments.
Although TenneT has no process planned or implemented to apply reductions of the Guaranteed Hourly NTC in case of unplanned outages, construction or maintenance work in accordance with Annex 2 of the Commitment, the determination of the Minimum Threshold and the list of critical transmission lines shall be adapted as required by the Commitment.
Therefore, the Minimum Threshold and the list of critical transmission lines have been adapted to account for the commissioning of the East Coast Line. As of 1 January 2021 the Minimum Threshold will be increased to 1300 MW and the list of critical transmission lines defined in Annex 2 of the Commitment will be changed as .follows. The updated list is shown in Table 1.
- Both 380 kV lines Audorf – Jardelund are rerouted via Handewitt to Audorf Süd
- Both 220 kV lines, Flensburg – Kassoe and Flensburg – Ensted have been decommissioned
- Two 380 kV lines originating from Audorf Süd to Kassoe via Handewitt and Schuby West have been commissioned.
Table 1: Updated list of relevant critical transmission lines of annex 2 of the Commitment
|
EIC |
Name |
| 10T-DE-DK-00001I | 380-kV-Stromkreis Jardelund - Kassoe/ENDK 1 |
| 10T-DE-DK-00002G | 380-kV-Stromkreis Jardelund - Kassoe/ENDK 2 |
| 11T0-0000-0926-V | 380-kV-Stromkreis Handewitt - Jardelund blau |
| 11T0-0000-0925-Y | 380-kV-Stromkreis Handewitt - Jardelund grün |
| 11T0-0000-0924-0 | 380-kV-Stromkreis Audorf Süd - Flensburg - Handewitt blau |
| 11T0-0000-0923-3 | 380-kV-Stromkreis Audorf Süd - Flensburg - Handewitt grün |
| 10T1001C--00063U | 380-kV-Stromkreis Handewitt - Kassoe/ENDK 1 |
| 10T1001C--00064S | 380-kV-Stromkreis Handewitt - Kassoe/ENDK 2 |
| 11T0-0000-1471-8 | 380-kV-Stromkreis Schuby West - Handewitt rot |
| 11T0-0000-1472-5 | 380-kV-Stromkreis Schuby West - Handewitt gelb |
| 11T0-0000-1473-2 | 380-kV-Stromkreis Audorf Süd - Schuby West weiss |
| 11T0-0000-1475-X | 380-kV-Stromkreis Audorf Süd - Schuby West schwarz |
Figure 1 shows the changes by comparison of the grid topology at the border DE-DK1 valid until 8 June 2020 before (left), and after the commissioning of the East Coast Line valid from 14 July 2020 (right). Each change is marked by a designated number, indicating whether a segment has been commissioned (green) or decommissioned (red).
Figure 1: Comparison between the grid topology before (left side) and after (right side) the commissioning of the East Coast Line
Starting on 8 June 2020 the 220 kV interconnector line leading from Flensburg to Kassoe was decommissioned (1). On 22 June 2020 the first out of two lines connecting Handewitt and Schuby West was commissioned, followed by the second line on 23 June 2020 (2). On 1 and 2 July 2020 respectively two interconnector lines connecting the substations Handewitt and Kassoe have been commissioned (3). By 14 July 2020 two lines between Audorf Süd and Schuby West (4) were commissioned, representing the completion of the East Coast Line. Finally the remaining 220 kV interconnector line between the substations Flensburg and Ensted was decommissioned on 3 August 2020.