Implementation of the guideline on forward capacity allocation
The FCA Regulation together with Regulation (EU) 2019/942 sets out the obligations for TSOs, ENTSO-E, regulatory authorities and ACER regarding the development and approval of terms and conditions or methodologies. The terms and conditions or methodologies should be consulted on, contain a timescale for implementation and the expected impact on the objectives of the FCA Regulation.
While terms and conditions or methodologies developed by all TSOs are directly submitted to ACER for approval, regional terms and conditions or methodologies are submitted to the relevant national regulatory authorities for a regional approval process. Once submitted, the relevant regulatory authorities or ACER should take decisions concerning the proposed terms and conditions or methodologies within six months after the receipt of the proposal.
Where the regulatory authorities are not able to agree on the approval of the proposal, they can request an amendment, which gives TSOs an extra two months for amending the proposal and another two months for the regulatory authorities to approve the amended proposal. If, in case of a regional approval process, the regulatory authorities are not able to reach unanimous agreement or upon their joint request, ACER shall adopt a decision within six months from the referral.
After the adoption of the terms and conditions or methodologies, the TSOs responsible for developing the respective proposals or the regulatory authorities responsible for their adoption, may request amendments of these terms and conditions or methodologies. In that case the proposals for amendment to the terms and conditions or methodologies shall be submitted to consultation and follow the approval procedure as described above.
The core elements
The core elements of the FCA Regulation are:
Forward calculation of capacities between bidding zones for the year- and month-ahead market time frames. This coordinated calculation ensures reliable and transparent information to market participants. As a result of this calculation, TSOs provide the optimal amount of long-term cross-zonal capacities for allocation of long-term transmission rights (LTTRs). LTTRs allow market participants to hedge their positions on the long-term electricity markets.
Forward allocation of cross-zonal capacities. Market participants need to be provided sufficient hedging opportunities and equal access to long-term markets. This is ensured by allocating LTTRs and harmonised allocation rules (HAR) across Europe.
Establishment of a Single Allocation Platform. This platform has been developed by all European TSOs to facilitate the allocation of LTTRs to market participants. The platform applies the harmonised allocation rules and reduces barriers for all European market participants by providing them with equal access to this centralised platform, which issues all LTTRs in the European Union.