Achievement of the CEP70 minimum requirement in CCR Core
Figure 2 Frequency distribution curves showing the relative trade margin on each CNEC for each year. Note: Since the flow-based capacity calculation in Core went live in June 2022, the frequency distribution curve for 2022 is based on 4,933 MTUs. The 2023 curve is covering the full year, i.e., 8,760 MTUs. The 2024 curve covers January to June, i.e.,4,367 MTUs Source: The Authors
Figure 3 Percentage of hours where the interim capacity requirements were met in all CNECs in the Core capacity calculation region per Member State with action plan and/or derogation in 2023 (% of hours) Source: ACER (2024): Transmission capacities for cross-zonal trade of electricity and congestion management in the EU, see Figure 19 on p. 29
As of June 2022, there is a coordinated capacity calculation process in place within CCR Core. As Germany applies an action plan, the CEP70 requirement for German grid elements increased from 31.0 % in 2022 to 40.8 % in 2023, and to 50.5 % in 2024. The yearly monitoring reports of the German TSOs for the years 2022 and 2023 were already approved by BNetzA, confirming the compliance with the CEP70 requirement for these years. Figure 2 presents a density curve for all German network elements, showing the capacities made available for cross-zonal trade (for 2024, data from 1 January to 30 June are considered). The lower bandwidth of the curve clearly illustrates how the German TSOs incrementally increased the capacity offered to the market each year in order to meet the CEP70 minimum requirement.
In contrast, ACER communicated in its annual reports as well as in its Opinion 02/2024 of 10 April 2024 that reaching the CEP70 requirement is still in the far future. The Agency comes to such conclusion because it primarily focuses on the achievement of the final target value of 70 %. This overlooks the fact that most Member States currently have an action plan or derogation, which means that the applicable requirements are still below 70 %. Benchmarking on the basis of the 70 % - as ACER does in its annual report – does not provide meaningful results, as this value is not applicable yet in many countries. On the contrary, it may even be misleading to do so. In the case of Germany, it can be observed that cross-border capacities have been successfully increased every year according to the linear trajectory. It is noteworthy that ACER also benchmarks today’s CEP70 interim requirements based on Member States’ action plans and/or derogations approved by NRAs. However, this assessment is not really discussed in detail by ACER, although it shows that applicable requirements are currently largely met. The ACER assessment of the interim target for CCR Core in 2023 is shown in Figure 3 below.
The objective of ACER’s market monitoring is to identify barriers to cross-zonal trade. For the time being, the action plans in force in some countries must be recognized as measures to overcome said barriers.
German TSOs call for an objective and diligent assessment of the German Action Plan
The most important pillar of the German action plan is to increase internal transmission capacity in order to reduce congestions. New high-voltage direct current assets will contribute to more efficient system operation. The fact that many transmission projects have benefited from faster regulatory approval in the recent past gives cause for optimism regarding the success of the German action plan. However, it is important to point out that costly remedial actions are a legitimate means of bridging the time until these assets are available to the European electricity market. The successful implementation of the German action plan will bring many benefits to the European electricity market and the large and liquid German single bidding zone in the geographical center of the European Union.
We recognize the efforts and the contributions of the Agency monitoring of the European action plans. Still a truly fair and objective assessment of the German action plan is of utmost importance. It is worth discussing whether the approach recommended by the Agency paints a realistic picture of the capacity made available to the market and whether it potentially disregards the significant progress made to date. On 3 July 2024, ACER published its monitoring report entitled “Transmission capacities for cross-zonal trade of electricity and congestion management in the EU”. This report was preceded by a formal opinion to the European Commission and the European Parliament, which was published on 10 April 2024. The ACER report and the national compliance monitoring demonstrate that Germany is fulfilling the interim targets from the linear trajectory and is hence on track to fulfil its action plan. Nevertheless, ACER’s reports and its opinion critizise that the CEP70 requirement will not be met from 2026 by all Member States. The German TSOs look forward to intensifying discussions on how to improve cross-border trading opportunities given the great responsibility we bear for the functioning of the European electricity transmission network.
Sources
[1] cf. ACER (2024): Transmission capacities for cross-zonal trade of electricity and congestion management in the EU.
[2] cf. ACER (2024): Opinion No. 02/2024 of 10 April 2024, Point 14.
[3] cf. ACER (2019): Recommendation 01/2019 of 8 August 2019 on the implementation of the minimum margin available for cross-zonal trade pursuant to Article 16(8) of Regulation (EU) 2019/943.
M. Drerup and M. Hermann, TenneT TSO GmbH, Bayreuth; B. Höflich, 50Hertz Transmission GmbH, Berlin; J. Huxoll, Amprion GmbH, Dortmund; K. Seiter and A. Weigel, TransnetBW GmbH, Stuttgart
Contact:justus.huxoll@amprion.net