Capacity Calculation and Allocation

One of the main duties of Electricity System Operators is the optimal management of international interconnections.

IPTO aims to maximize the capacity of the interconnections available on the market for energy exchanges, thus ensuring optimal use of infrastructures, reinforcement of competition and an increase of the financial performance of the wholesale electricity market. The optimum management of electrical interconnections in line with the common European framework, in cooperation with neighbouring Operators and energy exchanges, results in a convergence of wholesale market prices at European level, and the ultimate reduction of the cost of electricity for consumers.

To optimise interconnection management, Operators initially develop at regional level methodologies for calculating the capacity of the interconnections they manage, which then allows them - in cooperation with the Regional Security Coordinators (RSCs) - to determine the available capacity for energy transmission between the market’s bidding zones. 

In the case of Greece, the SEleNe – CC (Southeast Electricity Network – Coordination Center), which is seated in Thessaloniki, will provide services to the regions involving calculation of SEE capacity, including the interconnection between Greece and Bulgaria and GRIT, i.e. the Greece-Italy submarine cable.

According to Regulation (EU) 2015/1222  establishing a guideline on capacity allocation and congestion management (CACM), Operators shall adopt two main approaches for calculating available capacity: based on Coordinated Net Transfer Capacity (Coordinated NTC) and Flow-Based (FB).

In the NTC approach, all bidding offers are considered equivalent couplings and only their connection to the neighbouring bidding zones are taken into consideration. The interzonal transmission capacity between two couplings is not deemed to depend on energy flows between the other couplings, and the capacity calculations are made in a 2-day period before the delivery of the energy, taking into consideration assumptions on production and demand levels and physical energy flows based on the common network model.




To the contrary, in the FB approach, within each bidding zone, the Critical Network Elements (CNE) are identified, which may be lines or transformers potentially affecting to a significant degree interzonal energy exchanges. Two days before the energy delivery time, and after taking into consideration the critical network elements, apart for the assumptions on production levels, the RSCs determine a basic scenario for the available transmission capacity. After that, calculations are made even one day before the energy delivery time. The results of the calculations depend on the total energy flows between the bidding zones, and as a rule are higher than those of the NTC method and better express the systems’ physics.

The available cross-border capacity in the various stages of the electricity markets is allocated by Operators to participants in the market through the Auction Offices. These bodies, in which IPTO is a shareholder, along with the other Operators, are responsible for the auctioning of electricity transmission rights on the part of the competent Operators on a long-term annual or monthly horizon, as well as a short-term daily horizon, or of specific hours, for the needs of the intra-day market. The purpose of the Operators is to offer the total available capacity of interconnections to participants in the market so they can commercially exploit it. 

IPTO cooperates with and is a shareholder in two electricity transmission rights Auction Offices, JAO and SEE CAO.

Specifically, the Joint Allocation Office (JAO) has been designated a Single Allocation Platform and allocates the short-term and long-term cross border capacity for all Transmission System Operators within the EU through explicit auctions. The JAO conducts auctions for long-term and day transmission rights for the borders of Greece with Italy and Bulgaria, and it will soon initially start allocating capacity through implicit auctions at these borders in the framework of the day ahead market coupling and then in the framework of the continuous intraday market coupling. Also, the Coordinated Auction Office in South East Europe (SEE CAO) was founded by the Transmission System Operators of Southeast Europe,  with the purpose of allocating the long-term cross-border capacity between Greece and countries outside the EU, through explicit auctions. 

Optimising the use of interconnections plays a critical role in creating a single European Electricity Market, produces increased benefits from cross-border competition, leads to fair and competitive wholesale market prices, enhances the security of Europe’s energy supply and contributes towards the international goal of reducing greenhouse gas emissions and decarbonising the European economy, benefits reaped not only by participants in the market but by all European citizens.