Who's in charge in the electricity market?
Tuesday, 09 May 2017 23:39

 

If the Winter Energy Package was adopted as proposed by the European Commission, the EU Member States, national Transmission System Operators, as well as the domestic regulatory authorities would be deprived of the decisive influence over the bidding zone's borders.

 

 


 

 

The decision on the bidding zone's delineation in such a case would be taken over by the European Commission.

 

Article 13(4)-(6) of the Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), 30.11.2016, COM(2016) 861 final 2016/0379 (COD) is unambiguous in that regard.

 

The Winter Energy Package requires, admittedly, that the respective European Commission's decision must be justified "in particular as regards possible deviations from the result of the bidding zone review", but this can't be assessed as a satisfactory assurance, conversely, it raises an anxiety that the European Commission's decision on bidding zone's delineation may arbitrarily deviate from the results of previous, comprehensive TSOs' assessments.

 

The procedure for the bidding zones' delineation is at present laid down in Articles 32-34 of the CACM.

 

Specifically, Article 32(4)(c) foresees that on receiving the joint proposal of the TSOs' to maintain or to amend the bidding zone configuration "the participating Member States or, where provided by Member States, the regulatory authorities shall within six months reach an agreement on the proposal to maintain or amend the bidding zone configuration".

 

It follows, if the Winter Energy Package was adopted as is, such an agreement of the participating Member State wouldn't be necessary.

 

Does it matter who is in charge of taking ultimate responsibility for the bidding zones' merging or splitting?

 

Obviously yes. Bidding zones' reconfiguration deeply influences on market structure fundamentals, ancillary services, capacity markets mechanisms, capacity adequacy assessments, not to mention the curves of the very generation and demand in the market.

 

Hence, the opposition from at least some EU Member States is probable with respect to such drastic U-turn in the electricity market organisation.

 

In broader terms, the present dilemma may be seen as consciously provoked by the European Commission to ultimately decide whether the European electricity market becomes structurally uniform or still remains the sum of the electricity markets of the EU Member States.

 

 

 

 

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