The CEP70 minimum requirement for cross-zonal trade: What does it mean and how is it monitored?

To make sure that an adequate level of transmission capacity is made available to the market, Article 16(8) introduced the 70 % minimum capacity criterion (hereafter “CEP70 requirement”). This requirement is considered met if a minimum of 70 % of transmission capacity are made available for cross-zonal trade. Transmission System Operators (TSOs) may deviate from of the minimum capacity if operational security is at risk. 

For Member States that have identified structural grid congestion, the Electricity Regulation provides the possibility of releasing an action plan to reduce congestion (cf. Art. 15(1)). In this case, the minimum value for cross-zonal trade capacity is to be raised annually during the period from 1 January 2020 through 31 December 2025 until reaching 70 % (so-called linear trajectory or interim requirement). Furthermore, TSOs can request a derogation from the CEP70 requirement where necessary for maintaining operational security. Derogations are granted by the relevant National Regulatory Authorities (NRAs) and are valid for one year. 

Evaluation of compliance with the CEP70 requirement is a national task

The NRAs are responsible for assessing the compliance with the CEP70 requirement. To do so, TSOs must provide the relevant data annually and, in case of an action plan, submit a report to their relevant NRA for approval. 

Against this background and after consultation with stakeholders and Member States, the Federal Republic of Germany submitted its Bidding Zone Action Plan on 28 December 2019 to the European Commission (hereafter “EC”) and the Agency for the Cooperation of Energy Regulators (hereafter “ACER” or “the Agency”). The German Action Plan contains concrete measures by which Germany will counteract the structural congestion described above and raise the minimum capacity for cross-zonal electricity trading step by step to 70 % by 31 December 2025. Depending on individual starting values, separate linear trajectories were defined for the capacity calculation region (CCR) “Core” and the other German interconnectors.

An evaluation of the compliance with the linear trajectories towards the 70 % target and the associated transitory minimum value is carried out by the German TSOs and the German regulatory authority Bundesnetzagentur (hereafter “BNetzA”) for each year [1]. By submitting all relevant data as well as a comprehensive report to the BNetzA, German TSOs report on the fulfilment of the linear trajectories towards making available at least 70 % of cross-border capacity by end of 2025. Each year, the BNetzA issues a formal decision approving or rejecting the German TSO´s assessment, thereby declaring their compliance with the legal requirements.

So far, the BNetzA has approved the reports from the German TSOs, finding that the transitory minimum values for each border were complied with during the respective year. 

The minimum value must be respected by the offered capacity on each critical network element with contingency or per border (“CNEC”) within every market time unit (MTU). The offered capacity Figure 1 (also referred to below as the “trade margin” or MACZT) consists of two components (cf.): The first is the coordinated trade margin (MCCC) which represents the offered capacity at the border or borders in question that participate in the same capacity calculation process. The second component is the margin from non-coordinated capacities (hereafter “MNCC” or “uncoordinated margin”), which represents the consequences of the trade capacities offered at other borders not participating in the capacity calculation process for that border, while no distinction is made between third countries and Member States.