Differences between the BNetzA and ACER methodologies to calculate the CEP70 requirement
Early on, the BNetzA and ACER had different understandings of the application of the methodology. While BNetzA implements the legal wording exactly and includes all offered trading capacities in the monitoring, ACER interprets the Electricity Regulation in a more simplified way. However, the assessment of a TSO’s compliance with the CEP70 requirement remains the responsibility of the NRA [2] – in Germany’s case the BNetzA. Table 1 gives an example comparison of the applied approaches for the CCR Core.
| BNetzA | ACER | Comment | |
Coordinated | Consideration of day- ahead flow-based (DA FB) domain and the long-term domain | Consideration of only the DA FB domain | Some of the capacity offered is not taken into account by ACER |
| Uncoordinated margin | Summing up all possible burdening flows | Using only forecasted flows and offsetting of burdening and relieving flows | ACER does not consider all |
| Data shown in respective reports | Per MTU, the lowest trade margin of EACH network element (mul- tiple values per MTU) | Per MTU, the lowest MACZT of ALL network elements (single value per MTU) | Since the lowest value per se does not limit trading, only the monitoring of each element per MTU gives a complete picture |
From the very beginning BNetzAs views differed from ACER’s approach on computing the MNCC which describes “the portion of capacity of a CNEC available for cross-zonal trade on bidding zone borders outside the considered coordination area. MNCC may consist of different flows induced by several other coordination areas” [3]. Most notably, for flow-based borders ACER calculates the uncoordinated margin based on forecasted allocated capacities, whereas German TSOs calculate the uncoordinated margin based on offered capacities, which is more in line with the legal provision of “capacity to be made available to the market”. As a result, in the ACER approach the absolute value of the coordinated margin must be higher (in some cases even higher than 70% or the transitional target) in order to still meet the minimum target in the opposite direction. The BNetzA approach on the other hand takes the impact of uncoordinated flows in both directions into account.
Another fundamental difference between the two approaches is the consideration of long-term markets. By means of the so-called “Extended Long-Term Allocation Inclusion” (LTA Inclusion), German TSOs ensure that sufficient capacities are offered in the day-ahead (DA) timeframe to allow for the payout of long-term financial transmission rights. This may lead to an increase of offered capacities. In contrast, the Agency’s monitoring focuses exclusively on the DA FB domain and thus dismisses that additional capacity may be offered because of the LTA inclusion. The Agency’s approach may therefore neglect a significant share of the capacity made available to the market.
By neglecting those capacities the Agency’s approach sets the methodological benchmark for achieving the minimum trade requirement higher than some NRAs may consider appropriate and therefore out of line with legal requirements, pressuring TSOs to operate their system under even greater risks and costs. The Electricity Regulation explicitly names NRAs as the responsible entities for approving the compliance assessment. In Germany, the validity of the applied monitoring approach is discussed transparently in the BNetzA decisions and the corresponding compliance reports.