Joint Statement Strengthening the regional approach to system operation to boost renewables’ integration

Thursday, October 26th, 2017

Europe needs to integrate ever-growing shares of renewable energy sources into the wholesale power market. This path is a no brainer for Europe and for the signatories of this statement. Today however, a number of hurdles are in the way of reaching this goal and we believe there is some room for improvement:

  1. Firstly, we call for ambitious regional methodologies for fully transparent and coordinated capacity calculation in line with the principles highlighted in the ACER Recommendation 02-2016 in order to reach the optimum level of cross-border transmission capacity allocated to the market in all timeframes and maximise regional welfare. Correspondingly, access to interconnections through the allocation of transmission rights by the TSOs should be granted to market participants in forward timeframes, in addition to the allocation made implicitly in day-ahead and intraday.
  2. Secondly, we call for a fully transparent and systematic justification each time that a TSO decides to derogate from RCCs’ instructions. Such derogation shall only happen in cases where the safety of the system is threatened. Transparency should be ensured not only towards the RCCs and TSOs of the system operation region concerned but also towards the NRAs and all market participants.
  3. Thirdly, we call for RCCs to actively facilitate the coordination of balancing capacity sizing and procurement. We believe that this enhanced regional cooperation and the role of RCCs as facilitators is of utmost importance to the energy transition. Adequate balancing capacity sizing is a pre-requisite to enhance cross-border exchanges and optimise balancing capacities at regional level. Importantly, regional procurement of balancing reserves should be realised when cost-efficient, in a manner which ensures that the allocation of cross-border transmission capacity is the outcome of the markets and which prevents TSOs from practising undue reservations.
  4. Finally, consistent regional governance is necessary to allow further regional system operation. In this regard, NRAs’ regional cooperation is also a prerequisite for an effective regional approach. This should be tackled as part of the ACER Regulation, where NRAs should act in regional groups to adopt coordinated regulatory opinions, recommendations and decisions on issues of cross-border relevance.

Accordingly, we call on European policymakers to support a consistent framework for a step-wise regional approach to system operation through:

  • Ambitious and transparent coordinated capacity calculation resulting in the allocation of the optimal volume of cross-border transmission capacity to the market (article 14 draft recast Electricity Regulation)
  • A fully transparent and systematic justification when TSOs derogate from RCCs’ instructions (article 38 paragraph 2 draft recast Electricity Regulation);
  • A greater facilitating role given to RCCs on balancing capacity sizing and procurement (article 34 paragraph 1 draft recast Electricity Regulation);
  • An enhanced regional governance framework for Member States and NRAs (article 7 draft recast ACER Regulation).