European Framework

The energy policy of the European Union has set as a priority the achievement of an integrated European Energy Market, which will offer a more cost-effective and competitive electricity system, enhanced security and cross-border solidarity by integrating a greater share of Renewable Energy Sources.

The roadmap to this European energy integration requires both the development of the necessary interconnections aiming at the unrestricted electricity flow from low-price areas to higher-price areas, which will contribute to the reduction of energy costs through price convergence, and the harmonisation of rules and policies of the individual energy markets of all EU member states.

The Third Energy EU package, known as Clean Energy Package, approved in 2019, proposes an adaptation of a new European enegy policy framework, to facilitate the transition away from fossils fuels towards cleaner energy. The Electricity Regulation (EC) 714/2009 was revised in order to become more flexible and adjust to the new commercial reality. The Clean Energy Package sets, among others, a new EU target for 2030 by reaching the percentage of 32% for Renewable Enrgy Sources in the EU’s energy mix. The Clean Energy Package consists of the following Regulatory Framework:

The new electricity market design is intended to better fit the future electricity markets, which will be characterised by more variable and decentralised production, an increased interdependence between cross-border systems and opportunities for consumers to participate in the market through demand response, aggregation, self-generation, smart metering and storage.

Europe’s cross-border electricity networks are operated according to rules that help govern the work of operators and determine how access to electricity is given to users across the EU. In the past, these grid operation and trading rules were drawn up nationally. As electricity is increasingly interconnected between countries, the EU-wide rules effectively manage these electricity flows in the internal energy market. These rules, known as network codes or guidelines, are legally binding European Commission implementing Regulations. They govern all cross-border electricity market transactions and system operations alongside the Regulation on conditions for accessing the network for cross-border electricity exchanges, according to the Regulation (EU) 2009/714.

 

 

The Network Codes are distinguished as follows:

The Connection Codes consist of:

  1. Regulation (EU) 2016/631 (‘RfG’) sets out detailed rules related to the connection of, principally, new power generating installations to national electricity networks.
  2. Regulation (EU) 2016/1388  (‘DCC’)sets out detailed rules related to the connection of, principally, new demand facilities to national electricity networks.
  3. Regulation (EU) 2016/1447 (‘HVDC’) sets out detailed rules related to the connection of, principally, new high-voltage direct current systems to national electricity networks.

For more information on the Connection Codes please visit the website of ENTSO-E.

The System Operation Codes consist of:

  1. Regulation (EU) 2017/1485  (‘SoGL’) which establishes a framework for the maintenance of the secure operation of the interconnected transmission system in real time,
  2. Regulation (EU) 2017/2196  (‘ER’) which sets down rules related to the management of the electricity transmission system in emergency, blackout and restoration states. The main objective of the relevant rules is to bring the system back to its normal state.

For more information on the System Operation Codes please visit the website of ENTSO-E.

Below you can find the methodologies that derive from these Codes. 

 System Operation Guideline (SO GL):

Topic

Decision Date
Methodology for Coordinated Operational Security Analysis 14 June 2021
FCR additional properties 21 January 2021
Methodology for Assessing the relevance of assets for Outage Coordination 19 June 2019
Key Organisational Requirements, Roles and Responsibilities (KORRR) relating to Data Exchange 19 December 2018
Common Grid Model Methodology 17 September 2018

The Market Codes consist of:

  1. Regulation (ΕU) 2015/1222 (‘CACM’) governs the establishment of cross-border EU electricity markets in the day-ahead and intraday timeframes, as well as methods for the calculation of interconnection capacity.
  2. Regulation (EU) 2016/1719 (‘FCA’) establishes a framework for the calculation and allocation of interconnection capacity, and for cross-border trading, in forward markets (i.e. timeframes longer than day-ahead).
  3. Regulation (EU) 2017/2195 (‘EBGL’) sets down rules on the operation of balancing markets, i.e. those markets that transmission system operators (TSOs) use to procure energy and capacity to keep the system in balance in real time. The objectives of the guideline include increasing the opportunities for cross-border trading and the efficiency of balancing markets.

For more information on the System Operation Codes please visit the website of  ENTSO-E. Below you can find the methodologies that derive from these Codes.

 Capacity Allocation & Congestion Management (CACM):

Topic

Decision Date
Capacity Calculation  
CCR Amendment 07 May 2021
CCR Amendment 01 April 2019
GRIT - Common Capacity Calculation Methodology for The Day-Ahead and Intraday Timeframe
 		 12 July 2018
Common Grid Model Methodology 8 May 2017
Generation and Load Data Provision Methodology 23 October 2017
Determination of Capacity Calculation Regions (CCRs) 17 November 2016
Market Coupling Development  
Congestion Income Distribution Methodology (CIDM) 17 December 2021
GRIT Fallback 03 December 2020
Complementary Regional Intraday Auctions for Greece Italy Capacity Calculation Region  18 February 2019
Scheduled Exchanges - Intra-day 08 February 2019
Scheduled Exchanges - Day-ahead 08 February 2019
Intraday cross-zonal capacity pricing methodology 24 January 2019
Intraday Cross-Zonal Gate Opening and Gate Closure Times 24 April 2018
Day Ahead Firmness Deadline 15 May 2017
GRIT Fallback 10 April 2017
Congestion Income Distribution Methodology 14 December 2017
Redispatching and countertrading  
GRIT - Coordinated Redispatching and Countertrading Methodology (art 35 CACM) 11 January 2019
GRIT - Coordinated Redispatching and Countertrading Cost sharing Methodology (art 74 CACM) 17 March 2018
Maximum & Minimum prices – Day-ahead 14 November 2017
Maximum & Minimum prices – Intraday     14 November 2017

 

Forward Capacity Allocation (FCA):

Topic

Decision Date
Forward calculation of capacities between bidding zones  
GRIT - Proposal for Splitting Long-Term Cross-Zonal Capacity 27 January 2020
GRIT – Common Capacity Calculation Methodology 27 January 2020
Common Grid Model Methodology 11 June 2018
Generation and Load Data Provision Methodology 23 October 2018
Forward allocation of cross-zonal capacities  
Congestion Income Distribution (CID) 18 July 2022
Harmonised Allocation Rules – Amendment 29 November 2021
Methodology for Sharing Costs Incurred to Ensure Firmness and Remuneration of Long-Term Transmission Rights 23 October 2020
Harmonised Allocation Rules – Amendment 29 October 2019
GRIT - Specific Annex for Harmonised Allocation Rules 29 November of 2018
GRIT - Design of Long Term Transmission Rights 11 October 2017
Harmonised Allocation Rules for Long-Term Transmission Right 2 October 2017
Single Allocation Platform  
Single Allocation Platform and the Methodology for Sharing Costs of Establishing, Developing and Operating the Single Allocation Platform 18 July 2022
Single Allocation Platform Proposal 18 September 2017

 

Electricity Balancing (EB):

Topic

Decision Date
Balancing capacity exchanges  
Methodology for a list of standard products for balancing capacity 17 June 2020
Common and Harmonised Rules and Processes for the Exchange and Procurement of Balancing Capacity for Frequency Containment Reserves (FCR) 26 April 2018
Exemption from the Obligation to Allow Balancing Service Providers to Transfer their Obligations to Provide FCR 28 December 2018
Exemption from the Requirement to Carry out the Procurement of Upward and Downward Balancing Capacity of aFRR Separately 18 December 2018
Capacity calculation and allocation  
Methodology for a Co-Optimised Allocation Process of Cross-Zonal Capacity 17 June 2020
GRIT - Methodology for a Market‐Based Allocation 
Process of Cross Zonal Capacity for the Exchange of Balancing Capacity or Sharing of Reserves		 18 December 2019
GRIT - Methodology for an Allocation Process of Cross 
Zonal Capacity for the Exchange of Balancing Capacity or Sharing of Reserves Based on Economic Efficiency Analysis		 18 December 2019
Balancing Energy Platforms  
Implementation Framework for a European Platform for the Exchange of Balancing Energy from Frequency Restoration Reserves with Manual Activation (mFRR) 24 January 2020
Implementation Framework for a EuropeanPplatform for the Exchange of Balancing Energy from Frequency Restoration Reserves with Automatic Activation (aFRR) 24 January 2020
Implementation Framework for a European Platform for the Imbalance Netting Process (INP) 24 June 2020
Methodology for Classifying the Activation Purposes of Balancing Energy Bids 15 July 2020
Methodology to Determine Prices for the Balancing Energy that Results from the Activation of Balancing Energy Bids for the Frequency Restoration Process 25 February 2022
Harmonisation of Imbalance Settlement  
Harmonisation of the Main Features of Imbalance Settlement 15 July 2020
Settlement Rules Between TSOs  
Common Settlement Rules Applicable to All Intended Exchanges of Energy as a Result of the Reserve Replacement Process, the Frequency Restoration Process With Manual and Automatic Activation and the Imbalance Netting Process 15 July 2020
All Asynchronously Connected TSOs’ Proposal for Common Settlement Rules for all Intended Exchanges of Energy Between Synchronous Areas as a Result of the Frequency Containment Process and of Ramping Restrictions 22 May 2020
All Asynchronously Connected TSOs’Proposal for Common Settlement Rules for All Unintended Exchanges of Energy Between Synchronous Areas 4 December 2019