Europe’s Clean Energy Package (CEP) has set a binding minimum 70% target for electricity interconnector capacity for cross-zonal trading (the “minimum 70% target”). The lack of sufficient cross-zonal capacity is one of the main barriers to the integration of electricity markets, and market integration is key to deliver on Europe’s energy goals. The CEP established a clear rule – namely a minimum capacity margin available for cross-zonal trade (MACZT), the ‘minimum 70% target’, to be met by all Transmission System Operators (TSOs). The more interconnector capacity that is made available for cross-zonal trade, the more trading that can occur.
ACER’s first “70% Target Report” provides an overview of the current levels of margins for cross-zonal capacity compared to the minimum legally binding 70 % target for the first half of 2020, and on action plans and derogations.
ACER’s 70% Target Report finds that:
- Member States have much more to do to get closer to the legally binding minimum 70% target
- The levels of margins for cross-zonal capacity is mixed across the EU.
- Member States should work to meet the 70% minimum target at all times, and to reach their target national transitional targets to gradually reach the 70% minimum.
- How? Members States can count on several measures at their disposal to improve the level of margin offered such as cost-efficient investments; use of remedial actions; and bidding zone reconfiguration, to help them to reach the target.
Figure 1. Percentage of the time when the relative MACZT is above the minimum 70% target on all limiting critical network elementс with contingencies in both directions, per country and coordination area, for countries of Continental Europe where a coordinated capacity calculation is not yet implemented, not considering exchanges with third countries – first semester of 2020 (% of hours)
- The levels of cross-zonal capacity are very diverse depending on the type of border and geographical location.
- On high-voltage Direct Current (DC) borders, the 70% target was met most of the time but with a few notable exceptions.
- On Alternating Current (AC) borders, there is a very diverse picture with significant room for improvement to meet the 70% target for most regions and borders.
- ACER’s monitoring depends critically on TSOs providing robust and extensive data. ACER acknowledges the efforts made by a majority of TSOs to improve the provision of data. However, the completeness and quality of this data needs to be further improved.
- Regarding action plans and derogations, ACER finds significant room for further harmonising their setup across the EU. Regulatory authorities should grant derogations as a last resort measure, and only where necessary for maintaining operational security.
- For consistency, national regulatory authorities (NRAs) should consider the results of ACER’s analysis to assess the compliance of TSOs with the minimum 70% target.