Capacity calculation and allocation

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<header class="p-4 bg-light border-bottom header-sections-mobile"> <button class="btn btn-outline-danger btn-left fl"><i class="fas fa-chevron-left"></i></button> <p class="show-mobile-item"></p> <button class="btn btn-outline-danger btn-close fr"><img src="/themes/custom/acer/img/ic_close.png" /></button> </header> <nav class="list-group list-group-flush">     <section class="row region region-electricity-menu">     <nav role="navigation" aria-labelledby="block-electricity-menu" id="block-electricity" class="block block-menu navigation menu--electricity"> <h2 class="visually-hidden" id="block-electricity-menu">ELECTRICITY</h2>     <ul id="block-electricity" class="clearfix nav navbar-nav principal"> <li class="nav-item menu-item--expanded dropdown"> <a href="/electricity/about-electricity" class="nav-link dropdown-toggle nav-link--electricity-about-electricity" data-toggle="dropdown" aria-expanded="false" aria-haspopup="true" data-drupal-link-system-path="node/126">About 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</li> </ul> <a href="#" class="nav-link dropdown-toggle nav-link-- is-active arrow-right-menu" data-toggle="dropdown" aria-expanded="false" aria-haspopup="true" data-content="ELECTRICITY" data-drupal-link-system-path="<front>"><i class="fas fa-chevron-right" ></i></a> </li> <li class="nav-item"> <a href="https://www.acer.europa.eu/electricity/cybersecurity-network-code" class="nav-link nav-link-https--wwwacereuropaeu-electricity-cybersecurity-network-code">Cybersecurity</a> </li> <li class="nav-item menu-item--expanded dropdown"> <a href="https://www.acer.europa.eu/" class="nav-link dropdown-toggle nav-link-https--wwwacereuropaeu-" data-toggle="dropdown" aria-expanded="false" aria-haspopup="true">TCMs Implementation Monitoring</a> <ul class="dropdown-menu "> <li class="dropdown-item menu-item--expanded dropdown"> <a href="https://www.acer.europa.eu/electricity/implementation-monitoring-tmcs" class="dropdown-toggle 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id="two-columns-section"> <div class="row area-padding cover-main-news row-migrated-contents"> <div class="col-lg-6 col-md-6 col-xs-12 col-1-migrated"> <h2 class="subtitle">Development of methodologies related to capacity calculation and allocation in balancing timeframe</h2>     <div class="field field--name-gplmigrated-sec-1-left-img field--type-image field--label-hidden field__item">       <picture> <source srcset="/sites/default/files/styles/main_images_news_and_pages/public/images/generic_page/Electric%20Pillar_8.jpg?itok=iz8Nfqay 1x, /sites/default/files/styles/main_images_news_and_pages/public/images/generic_page/Electric%20Pillar_8.jpg?itok=iz8Nfqay 2x" media="all and (min-width: 851px)" type="image/jpeg" width="850" height="600"/> <source srcset="/sites/default/files/styles/main_images_news_and_pages_medium_/public/images/generic_page/Electric%20Pillar_8.jpg?itok=SvEeHc-- 1x, /sites/default/files/styles/main_images_news_and_pages_medium_/public/images/generic_page/Electric%20Pillar_8.jpg?itok=SvEeHc-- 2x" media="all and(min-width: 560px) and (max-width: 850px)" type="image/jpeg" width="800" height="650"/> <source srcset="/sites/default/files/styles/main_images_news_and_pages_little_/public/images/generic_page/Electric%20Pillar_8.jpg?itok=I2VStnVs 1x, /sites/default/files/styles/main_images_news_and_pages_little_/public/images/generic_page/Electric%20Pillar_8.jpg?itok=I2VStnVs 2x" media="(min-width: 0px)" type="image/jpeg" width="800" height="650"/>    <img loading="eager" src="/sites/default/files/styles/main_images_news_and_pages_little_/public/images/generic_page/Electric%20Pillar_8.jpg?itok=I2VStnVs" width="800" height="650" alt="Electric Pillar" title="Electric Pillar" />  </picture>   </div>  </div> <div class="col-lg-6 col-md-6 col-xs-12 col-2-migrated"> <h4><strong>Application of an allocation process of cross-zonal capacity </strong></h4> <p><strong>What is it about?</strong></p> <p>Two or more TSOs exchanging balancing capacity need to ensure the overall availability of the cross-zonal capacity for the exchange of balancing capacity. This can be done through the allocation of cross-zonal capacity for the exchange of balancing capacity or for sharing of reserves. </p> <p>There are three different processes for allocating cross-zonal capacity: </p> <ul> <li> <p>co-optimised allocation process (Article 40)</p> </li> <li> <p>market-based allocation process (Article 41)</p> </li> <li> <p>allocation process based on economic efficiency analysis (Article 42). </p> </li> </ul> <p>If TSOs opt for applying one of these processes, they need to further specify the relevant bidding zone borders, the timeframe and the duration of the application of the respective methodology.</p> <p><strong>Legal basis: </strong>Article 38(1) of the EB Regulation</p> <p><strong>Responsibility: </strong>two or more TSOs are allowed to apply the methodology for cross-zonal capacity allocation process for the exchange of balancing capacity or sharing of reserves.</p> <p><strong>Current status:</strong> The proposal for the application of the methodology  from frequency restoration reserves with automatic activation submitted by the TSOs of Denmark, Finland and Sweden was approved by ACER in August 2020.The proposal for the application of the methodology for frequency containment reserves and frequency restoration reserves for the Baltic capacity calculation region (Baltic balancing capacity market), submitted by the TSOs of Estonia, Latvia and Lithuania, was approved by the Baltic regulatory authorities in February 2024.</p> <p><strong>Implementation:</strong> The methodology for the Nordic capacity calculation region has been implemented with the go-live of the capacity calculation methodology, according to the CACM Regulation. The methodology for the Baltic capacity calculation region will be implemented once the capacity calculation methodology for the Baltic capacity calculation region is applied according to the CACM Regulation.</p> <p><a href="https://www.acer.europa.eu/sites/default/files/documents/en/Electricity/MARKET-CODES/ELECTRICITY-BALANCING/Documents/Proposal_Baltic_balancing_capacity_market_rules.pdf">Read more on the latest approved proposals for the application of a methodology for a cross-zonal capacity allocation process for the exchange of balancing capacity or sharing of reserves.</a></p> <p><a href="https://www.acer.europa.eu/electricity/market-rules/electricity-balancing/capacity-calculation-and-allocation/11-CZCA-appl">Documentation on the approval process of these proposals.</a></p> <p> </p> <h4><strong>Harmonisation of the methodology for allocating cross-zonal capacity for the exchange of balancing capacity or sharing of reserves </strong></h4> <p><strong>What is it about?</strong></p> <p>This methodology provides a harmonised approach for the processes of allocating cross-zonal capacity for the exchange of balancing capacity or sharing of reserves, which can be applied by any group of TSOs.</p> <p>The methodology fosters the optimisation of the allocation process and concerns the co-optimised and the market-based allocation process (Article 40 and 41 of the EB Regulation).</p> <p>The methodology will replace the regional methodologies for allocating cross-zonal capacity to the balancing timeframe.</p> <p><strong>Legal basis</strong>: Article 38(3) of the EB Regulation</p> <p><strong>Responsibility: </strong>all TSOs</p> <p><strong>Current status</strong>: The harmonised cross-zonal capacity allocation methodology was approved by ACER in July 2023. A proposal for amendment was submitted by TSOs on 31 July 2024. After <a href="https://www.acer.europa.eu/documents/public-consultations/pc2024e08-public-consultation-amending-harmonised-electricity-cross-zonal-capacity-allocation-methodology">consulting with stakeholders</a>, ACER reviewed the TSOs’ proposal and adopted the <a href="https://www.acer.europa.eu/sites/default/files/documents/Individual%20Decisions_annex/ACER_Decision_01-2025_Annex_II.pdf">amended methodology</a> on 29 January 2025 (<a href="https://www.acer.europa.eu/sites/default/files/documents/Individual%20Decisions/ACER_Decision_01-2025_HCZCAM.pdf">Decision 01-2025</a>).</p> <p><strong>Implementation</strong>: The harmonised market-based process is expected to be fully implemented by September 2027 at the earliest. The implementation deadline of the co-optimised allocation process is defined in the <a href="https://www.acer.europa.eu/electricity/market-rules/capacity-allocation-and-congestion-management/market-coupling-development">single day-ahead coupling algorithm methodology</a> (Article 37 of the Capacity Allocation and Congestion Management Regulation).</p> <p>Access the <a href="https://www.acer.europa.eu/sites/default/files/documents/Individual%20Decisions_annex/ACER_Decision_01-2025_Annex_II.pdf">latest approved methodology</a> for harmonising processes for allocating cross-zonal capacity for the exchange of balancing capacity or sharing of reserves.</p> <p>Documentation on the approval process of this methodology:</p> <ul> <li><a href="https://www.acer.europa.eu/sites/default/files/documents/Official_documents/Public_consultations/PC_2023_E_02/TSOs_HCZAM_Proposal.pdf">TSO proposal for the harmonised methodology for cross-zonal capacity allocation for the exchange of balancing capacity or sharing of reserves</a> (16 December 2022);</li> <li><a href="https://www.acer.europa.eu/sites/default/files/documents/Official_documents/Public_consultations/PC_2023_E_02/ENTSOE_RCC_Sizing_Proposal.pdf">TSO proposal for the Regional Coordination Centres' (RCCs') tasks of regional sizing of reserve capacity</a> (17 March 2023); </li> <li><a href="https://www.acer.europa.eu/sites/default/files/documents/Official_documents/Public_consultations/PC_2023_E_02/ENTSOE_RCC_Procurement_Proposal.pdf">TSO proposal for the RCCs' tasks of facilitating the procurement of electricity balancing capacity</a> (17 March 2023)</li> <li><a href="https://www.acer.europa.eu/sites/default/files/documents/Individual%20Decisions/ACER_Decision_11-2023_on_Harmonised_Cross-Zonal_Capacity_Allocation_Methodology.pdf">ACER Decision No 11-2023 on the TSOs’ proposal for the harmonised cross-zonal capacity allocation methodology</a> (19 July 2023);</li> <li><a href="https://www.acer.europa.eu/sites/default/files/documents/Individual%20Decisions/ACER_Decision_12-2023_on_RCC_Regional_Sizing_of_Reserve_Capacity_Methodology.pdf">ACER Decision No 12-2023 on the Regional Coordination Centre Regional Sizing of Reserve Capacity Methodology</a> (19 July 2023); and</li> <li><a href="https://www.acer.europa.eu/sites/default/files/documents/Individual%20Decisions/ACER_Decision_13-2023_on_RCC_Regional_Procurement_of_Balancing_Capacity_Methodology.pdf">ACER Decision No 13-2023 on the Regional Coordination Centre Regional Procurement of Balancing Capacity Methodology</a> (19 July 2023).</li> <li><a href="https://www.acer.europa.eu/sites/default/files/documents/Official_documents/Public_consultations/PC_2024_E_08/TSOs_proposal_methodology.pdf">TSO proposal for the amendment of the harmonised methodology for cross-zonal capacity allocation for the exchange of balancing capacity or sharing of reserves</a> (31 July 2024).</li> <li><a href="https://www.acer.europa.eu/sites/default/files/documents/Individual%20Decisions/ACER_Decision_01-2025_HCZCAM.pdf">ACER Decision 01-2025 on the amendment to the harmonised cross-zonal capacity allocation methodology</a> (29 January 2025).</li> </ul> <h4><strong>Methodology for a co-optimised allocation process of cross-zonal capacity </strong></h4> <p><strong>What is it about?</strong></p> <p>The co-optimised allocation process is based on a comparison of actual market values of cross-zonal capacity for the exchange of energy and of balancing capacity or sharing of reserves. Its methodology describes the associated rules for allocating cross-zonal capacity across timeframes. </p> <p>The market values is based on the bids of market participants, submitted for day-ahead energy and balancing capacity markets. </p> <p>The cross-zonal capacity will be allocated across the balancing and day-ahead timeframe to maximise the combined overall welfare gains. </p> <p><strong>Legal basis:</strong> Article 40(1) of the EB Regulation</p> <p><strong>Responsibility:</strong> all TSOs</p> <p><strong>Current status</strong>: The methodology for a co-optimised allocation process was approved by ACER in June 2020.</p> <p><strong>Implementation</strong>: The implementation is on-going. </p> <p>All TSOs are currently conducting an impact assessment for the implementation of the co-optimised allocation process and will provide the relevant requirements for the singe day-ahead coupling algorithm to Nominated Electricity Market Operators (NEMOs). </p> <p>NEMOs need to consider this implementation when submitting amendments of the <a href="https://www.acer.europa.eu/electricity/market-rules/capacity-allocation-and-congestion-management/market-coupling-development">single day-ahead coupling algorithm methodology</a> (Article 37 of the Capacity Allocation and Congestion Management Regulation).</p> <p><a href="https://www.acer.europa.eu/sites/default/files/documents/en/Electricity/MARKET-CODES/ELECTRICITY-BALANCING/18%20CO%20CZCA/Approved/Action%202%20-%20ACER%20Decision%20on%20CO%20CZCA%20-Annex%20I.pdf">Read more on the latest approved methodology for a co-optimised allocation process. </a></p> <p><a href="https://www.acer.europa.eu/electricity/market-rules/electricity-balancing/capacity-calculation-and-allocation/18-CO-CZCA">Documentation on the approval process of this methodology.</a></p> <p> </p> <h4><strong>Methodology for a market-based allocation process of cross-zonal capacity </strong></h4> <p><strong>What is it about?</strong></p> <p>The market-based allocation process is based on a comparison of market values of cross-zonal capacity for the day-ahead and  balancing timeframe. Its methodology establishes the rules for allocating cross-zonal capacity for the exchange of balancing capacity or sharing of reserves. </p> <p>While one of the two market values is based on the bids of market participants, the second one is based on a forecast. The cross-zonal capacity is then allocated across the balancing and energy timeframe with the aim of maximising the expected combined overall welfare gains.</p> <p><strong>Legal basis:</strong> Article 41(1) of the EB Regulation</p> <p><strong>Responsibility:</strong> all TSOs in each capacity calculation region</p> <p><strong>Current status</strong>: Methodologies for a market-based allocation process were approved for the Baltic, Core, GRIT, Italy North and Nordic capacity calculation regions.</p> <p><strong>Implementation</strong>: Different regions have different implementation timelines. Some regions have already implemented the methodology, whereas some other are expected to do so by 2025.</p> <p><a href="https://www.acer.europa.eu/electricity-balancing/capacity-calculation-and-allocation/12-MB-CZCA-Approved">Read more on the latest approved methodologies for a market-based allocation process of the respective capacity calculation region.</a></p> <p><a href="https://www.acer.europa.eu/electricity-balancing/capacity-calculation-and-allocation/12-MB-CZCA">Documentation on the approval processes of the methodologies for a market-based allocation process of each capacity calculation region.</a></p> <p> </p> <h4><strong>Methodology for an allocation process of cross-zonal capacity based on economic efficiency analysis </strong></h4> <p><strong>What is it about?</strong></p> <p>The allocation process is based on a comparison of forecasted market values of cross-zonal capacity for the exchange of energy,  balancing capacity or sharing of reserves. Its methodology describes the rules for allocating cross-zonal capacity across timeframes. </p> <p>The cross-zonal capacity will be allocated across the balancing and energy timeframe to maximise the expected combined overall welfare gains.</p> <p><strong>Legal basis:</strong> Article 42(1) of the EB Regulation</p> <p><strong>Responsibility:</strong> all TSOs in each capacity calculation region</p> <p><strong>Current status</strong>: Methodologies were submitted for the Core, Greece-Italy (GRIT) and Italy North capacity calculation regions.  Core and Italy North were withdrawn during the approval process, while GRIT was approved.</p> <p><strong>Implementation</strong>: No implementation is foreseen.</p> <p><a href="https://www.acer.europa.eu/electricity/market-rules/electricity-balancing/capacity-calculation-and-allocation/19-EF-CZCA_Approved">Read more on the latest approved methodologies for a market-based allocation process of the respective capacity calculation region.</a></p> <p><a href="https://www.acer.europa.eu/electricity/market-rules/electricity-balancing/capacity-calculation-and-allocation/19-EF-CZCA">Documentation on the approval processes of the methodologies for a market-based allocation process of each capacity calculation region.</a></p> </div> </div> </section> <section id="full-width-column-section"> <div class="clearfix paragraph paragraph--type--full-width-column-block paragraph--view-mode--default"> <div class="field field--name-fwcb-contents field--type-entity-reference-revisions field--label-hidden field__items"> <div class="field__item"> <section id="see-also-section"> <div class="clearfix paragraph row area-padding see-also-class paragraph--type--see-also-block paragraph--view-mode--default"> <div class="container-fluid"> <h2 class="subtitle">↓ See Also:</h2> <div class="field field--type-link field--label-hidden field__items">     <div class="field field--name-field-see-also-2-migrated field--type-link field--label-hidden field__items row" > <div class="field__item col-lg-3 col-md-3 col-xs-12" > <div class="see-also-wrapper d-flex"> <span class="see-also-link p-2 "><span class="align-middle"><a href="https://www.acer.europa.eu/electricity/market-rules/electricity-balancing">Electricity Balancing</a></span></span> </div> </div> <div class="field__item col-lg-3 col-md-3 col-xs-12" > <div class="see-also-wrapper d-flex"> <span class="see-also-link p-2 "><span class="align-middle"><a href="https://www.acer.europa.eu/electricity/market-rules">Market Rules</a></span></span> </div> </div> </div>  </div> </div> </div> </section> </div> </div> </div> </section> </div> </article>  </div> </div>      <div class="views-element-container block row area-padding block-views block-views-blockrelated-news-related-news-block" id="block-views-block-related-news-related-news-block"> <div class="content container-fluid"> <h2>↓ Related News</h2>    <div>    <div class="view view-related-news view-id-related_news view-display-id-related_news_block js-view-dom-id-af72013b1e64738addbb0c7e28f282ae24e3a8475c253aace23baf7677601913"> <div class="view-content row">     <div class="row"> <div class="content container-fluid"> </div> <div class="views-row col-lg-6 col-md-6 col-xs-12">     <div class="related-news-wrapper"> <div class="related-new-date">    17th February 2025  </div> <div class="title-wrapper">    <a href="/news/acer-suggests-better-reflecting-benefits-europes-internal-electricity-market-polands-national" hreflang="en">ACER suggests better reflecting the benefits of Europe’s internal electricity market in Poland’s National Resource Adequacy Assessment</a>  </div> <div class="intro-wrapper">    ACER releases its Opinion on the National Resource Adequacy Assessment of Poland. 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