Eurelectric response to ACER public consultation on aFRR Implementation Framework and Pricing Methodology
Introduction
All TSOs submitted to ACER on 07 February 2024 their proposal to:
- the Second amendment of Methodology for pricing balancing energy and cross-zonal capacity used for the exchange of balancing energy or operating the imbalance netting process in accordance with Article 30(1) of Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing (the ‘Pricing Methodology Amendment Proposal’); and
- the Second amendment of Implementation framework for the European platform for the exchange of balancing energy from frequency restoration reserves with automatic activation in accordance with Article 21 of Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing (the ‘aFRR IF Amendment Proposal’)
ACER will review these proposals and revise them where necessary, in order to ensure that they are in line with the purpose of the Regulation (EU) 2017/2195 and Regulation (EU) 2019/943. ACER may also introduce editorial amendments to improve clarity, conciseness, consistency and readability of the Proposals.
The objective of this consultation is to gather views and information from stakeholders to inform ACER’s decision-making. This consultation is addressed to all interested stakeholders, including regulatory authorities, market participants and transmission system operators.
The European Union Agency for the Cooperation of energy regulators (‘ACER’) will use the input from the consultation to inform its decisions on the Amendment Proposal, in accordance with Article 6(10) of Regulation (EU) 2019/942.
Related Documents
- Regulation(EU) 2019/942 of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators (‘ACER Regulation’).
- Regulation(EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (recast) (“Electricity Regulation).
- Regulation(EU) 543/2013 of 14 June 2013 on submission and publication of data in electricity markets and amending Annex I to Regulation (EC) No 714/2009 of the European Parliament and of the Council Text with EEA relevance.
- Commission Regulation (EU) 2017/2195of 23 November 2017 establishing a guideline on electricity balancing (‘EB Regulation’)
- Commission Regulation (EU) 2017/1485of 2 August 2017 establishing a guideline on electricity transmission system operation (’SO Regulation’)
- Commission Regulation (EU) 2015/1222of 24 July 2015 establishing a Guideline on Capacity Allocation and Congestion Management ('CACM Regulation')
- Annex I of ACER Decisionon Harmonised maximum and minimum clearing prices for single intraday coupling in accordance with Article 54(1) of Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (CACM Regulation)
- Annex I of ACER Decisionon Harmonised maximum and minimum clearing prices for single day-ahead coupling in accordance with Article 41(1) of Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (CACM Regulation)
- Submitted documents:
Legal background
Pursuant to Article 30(1) of the EB Regulation, “all TSOs shall develop a proposal for a methodology to determine prices for the balancing energy that results from the activation of balancing energy bids for the frequency restoration process pursuant to Articles 143 and 147 of Regulation (EU) 2017/1485, and the reserve replacement process pursuant to Articles 144 and 148 of Regulation (EU) 2017/1485”.
The Methodology for pricing balancing energy and cross-zonal capacity used for the exchange of balancing energy or operating the imbalance netting process (the ‘Pricing Methodology’) came into effect on 24 January 2020 with the ACER Decision 01/2020.
The Pricing Methodology sets the limits to the maximum and minimum prices for all balancing energy product bids and the maximum and minimum values of the cross border marginal prices (CBMP). These limits are set to 15,000 €/MWh and -15,000 €/MWh until July 2026 (maximum and minimum transitional price limits) and will be set to 99,999 €/MWh and -99,999 €/MWh after July 2026 (maximum and minimum technical price limits).
According to Article 10(1) of the Electricity Regulation, “there shall be neither a maximum nor a minimum limit to the wholesale electricity price. This provision shall apply, inter alia, to bidding and clearing in all timeframes and shall include balancing energy and imbalance prices, without prejudice to the technical price limits which may be applied in the balancing timeframe and in the day-ahead and intraday timeframes in accordance with paragraph 2”.
Article 10(2) sets out the principles for day-ahead and intraday harmonized maximum/minimum clearing prices: “NEMOs may apply harmonised limits on maximum and minimum clearing prices for day-ahead and intraday timeframes. Those limits shall be sufficiently high so as not to unnecessarily restrict trade, shall be harmonised for the internal market and shall take into account the maximum value of lost load. NEMOs shall implement a transparent mechanism to adjust automatically the technical bidding limits in due time in the event that the set limits are expected to be reached. The adjusted higher limits shall remain applicable until further increases under that mechanism are required” .
Pursuant to Article 30(2) of the EB Regulation, “in case TSOs identify that technical price limits are needed for efficient functioning of the market, they may jointly develop as part of the proposal pursuant to paragraph 1 a proposal for harmonised maximum and minimum balancing energy prices, including bidding and clearing prices, to be applied in all scheduling areas. In such a case, harmonised maximum and minimum balancing energy prices shall take into account the maximum and minimum clearing price for day-ahead and intraday timeframes pursuant to Regulation (EU) 2015/1222”.
Pursuant to Article 41(1) of the CACM Regulation, “all NEMOs shall, in cooperation with the relevant TSOs, develop a proposal on harmonised maximum and minimum clearing prices to be applied in all bidding zones which participate in single day-ahead coupling.”
The Methodology for harmonised maximum and minimum clearing prices (the ‘’HMMCP Methodology”) for single day-ahead coupling (SDAC) came into effect on 14 November 2017 with ACER Decision 04/2017.
The HMMCP Methodology for SDAC sets the maximum/minimum clearing price value which is applied in all bidding zones which participate in SDAC ("Harmonised maximum/minimum clearing price for SDAC”).
Pursuant to Article 54(1) of the CACM Regulation, “all NEMOs shall, in cooperation with the relevant TSOs, develop a proposal on harmonised maximum and minimum clearing prices to be applied in all bidding zones which participate in single intraday coupling.”
The Methodology for harmonised maximum and minimum clearing prices (the ‘’HMMCP Methodology”) for single intraday coupling (SIDC) came into effect on 14 November 2017 with ACER Decision 05/2017.
The HMMCP Methodology for SIDC sets the maximum/minimum clearing price value which is applied in all bidding zones which participate in SIDC ("Harmonised maximum/minimum clearing price for SIDC”).
Pursuant to Article 21(1) of the EB Regulation, “all TSOs shall develop a proposal for the implementation framework for a European platform for the exchange of balancing energy from frequency restoration reserves with automatic activation.”
The Implementation framework for the European platform for the ex-change of balancing energy from frequency restoration reserves with automatic activation (‘aFRR IF’) came into effect on 24 January 2020 with the ACER Decision 02/2020.
The aFRR IF describes the high-level design of the PICASSO platform.