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Forward Capacity Harmonised Allocation Rules (HAR)
European Union Electricity Market Glossary

 

 

Forward Capacity Harmonised Allocation Rules (HAR) contain the terms and conditions for the allocation of Long Term Transmission Rights.

 

According to Article 52(1) of the Commission Regulation (EU) 2016/1719 of 26 September 2016 establishing a guideline on forward capacity allocation (FCA Regulation), the requirements for HAR for long-term transmission rights cover physical transmission rights (PTRs) and financial transmission rights (FTRs) in the form of FTRs-options and FTRs-obligations.

 

The provisions of the HAR are applicable to the bidding zone borders in the EU, unless otherwise decided by the relevant National Regulatory Authorities (NRAs) in accordance with Article 30 of the FCA Regulation.

 

HAR documentation is currently incorporated into Annex I of the Decision of the Agency for the Cooperation of Energy Operators (ACER) No 14/2019 of 29 October 2019 on the TSOs proposal for HAR amendment (modifying the earlier ACER's Decision No 03/2017 of 2 October 2017 on the electricity transmission system operators’ proposal for harmonised allocation rules for long-term transmission rights.

 

HAR are to be read in the context of the objectives of Article 3 of the FCA Regulation.

 

The Recitals of the HAR refer to the objective of promoting effective long‐term cross‐ zonal trade with long‐term cross‐zonal hedging opportunities for market participants as the harmonisation of all the relevant rules will ease the creation of a level‐playing field across Europe.

 

In particular, the HAR set out the rights and obligations of registered participants (who will accede to these rules by the signature of the participation agreement) as well as the requirements for participation in auctions.

 

info

See Harmonised allocation rules for long‐term transmission rights (Annex I to the ACER Decision 14/2019 of 29 October 2019)

 

Moreover, they describe the process of auction, including the determination of marginal price as a result of auction, the conditions for transfer and return of Long Term Transmission Rights, for remuneration of holders of such returned Long Term Transmission Rights, and the processes for curtailment of Long Term Transmission Rights and invoicing/payment.

 

Before the ACER’s Decision 03/2017 there were multiple allocation rules across the EU which were required to be aligned and implemented by the single Forward Capacity Allocation Platform based on HAR.

 

This was the effect of actions in the course of the early implementation of the FCA Regulation (before its entry into force).

 

In 2015 ENTSO-E submitted the final version of the harmonised allocation rules to national authorities who approved it in the first quarter of 2015.

 

The first yearly allocation based on the harmonised allocation rules was organised by the Joint Allocation Office – joint service company of 20 TSOs at the end of 2015 (ENTSO-E Annual Report 2015, p. 21) and applied for the long-term auctions of 2016.

 

The development of Forward Capacity Harmonised Allocation Rules is envisioned in Articles 4(1), 6(d) and 51(1) of the FCA Regulation - see box.


Pursuant to Article 4(7)(e) of the FCA Regulation the regional rules for Forward Capacity Harmonised Allocation Rules require the approval by all regulatory authorities of the concerned region.

 

In the pursuance of Articles 4(6)(d) and 51(1) of the FCA Regulation all concerned Transmission System Operators (TSOs) submitted a common proposal regarding the harmonised allocation rules on Long Term Transmission Rights to their respective NRAs for approval.

 

The deadline for all TSOs to develop and submit a proposal for the harmonised allocation rules for LTTRs was six months after the entry into force of the FCA Regulation.

 

The proposal for the HAR was submitted for public consultation in the period 16 January 2017 - 17 February 2017.

 

The alignment process ended in summer 2016 when TSOs submitted the updated version of the HAR.

 

However, the NRAs were unable to reach a unanimous decision on the above proposal as stated in their letter of 17 August 2017 because they were not able to agree on the provisions concerning the required credit rating for banks issuing collaterals for market participants, therefore, in accordance with Articles 4(10) of the FCA Regulation and Article 8(1) of Regulation (EC) No 713/2009, the ACER became responsible for the process and adopted the aforementioned Decision 03/2017.

 

The approved rules applied for the first time to the long-term allocations for 2018.


Article 4(6)(d) and (12) of the FCA Regulation provides that amendments to the approved HAR in accordance with Article 51 of the same Regulation require the ACER’s approval.


 
On 29 October 2019 the ACER adopted the Decision 14/2019 on the TSOs proposal for HAR amendment.

 

The TSOs’ proposal for amendment consisted of the complete HAR as contained in Annex I to the Agency’s Decision No 03/2017, subject to the following amendments:
a) addition of one sentence in Recital (5);
b) deletion of redundant definitions in Article 2(2);
c) replacing the term ‘Allocation Platform’ with ‘Single Allocation Platform’ throughout the document;
d) amendments to the foreseen communication method in Articles 9, 50 and 74;
e) amendments in Article 7, 9, and 15 to apply the requirements of Directive (EU) 2015/849;
f) amendments in Articles under Title 3 for an earlier provision of bank guarantees;
g) deletion of the second part of the sentence in Article 31(1)(f), to support the amendment of bids in the auction tool;
h) amendments to Article 58 for a direct reference to the proposal pursuant to Article 69 of the CACM Regulation; and
i) addition of formulas for the calculation of compensation caps in curtailment situations in Article 59.

 

In effect, the consolidated version of Harmonised allocation rules for long‐term transmission rights are currently incorporated in the Annex I to the ACER Decision 14/2019 of 29 October 2019 - see link below).

 

 

FCA Regulation

 

Chapter 5
Harmonised Allocation Rules

 

Article 51
Introduction of harmonised allocation rules

 

1. Within six months after the entry into force of this Regulation, all TSOs shall jointly develop a proposal for harmonised allocation rules for long-term transmission rights pursuant to Article 52(2). The proposal shall be subject to consultation in accordance with Article 6. This proposal shall include regional and bidding zone border specific requirements if developed by the TSOs of each capacity calculation region pursuant to Article 52(3).

 

2. Once the regional requirements have entered into force, they shall prevail over the general requirements defined in the harmonised allocation rules. In case the general requirements of the harmonised allocation rules are amended and submitted to all regulatory authorities' approval, the regional requirements shall also be submitted to regulatory authorities' approval of the concerned capacity calculation region.

 

Article 52
Requirements for the harmonised allocation rules

 

1. The requirements for the harmonised allocation rules for long-term transmission rights shall cover physical transmission rights, FTRs – options and FTRs – obligations. TSOs shall consider and duly take into account specificities related to the different types of products.

 

2. The harmonised allocation rules for long-term transmission rights shall follow the principles of non-discrimination and transparency and at least contain the following general requirements:

(a) harmonised definitions and scope of applications;

(b) a contractual framework between the single allocation platform and the market participants including provisions on the applicable law, the applicable language, confidentiality, dispute resolution, liability and force majeure;

(c) harmonised UIOSI provisions in case of physical transmission rights pursuant to Article 32;

(d) a description of the types of long-term transmission rights which are offered, including the remuneration principles pursuant to Article 35;
(e) principle description of the applicable nomination rules pursuant to Article 36;

(f) harmonised provisions on eligibility and entitlement, suspension and renewal and costs of participation pursuant to Article 37;

(g) a description of the forward capacity allocation process including at least provisions on auction specification, submission of bids, publication of auction results, contestation period and fallback procedures pursuant to Articles 37, 38, 39, 42, 43 and 44;

(h) harmonised provisions on financial requirements and settlement pursuant to Article 41; 

(i) harmonised provisions for the return of long-term transmission rights pursuant to Article 43;
(j) harmonised provisions for notification of transfer of long-term transmission rights pursuant to Article 44;
(k) provisions on firmness and compensation rules pursuant to Article 53 and Article 55;

(l) harmonised provisions concerning netting policies and financial collaterals for FTRs - obligations, where applicable.

 

3. The harmonised allocation rules may also contain regional or bidding zone border specific requirements in particular for, but without limitation to:
(a) the description of the type of long-term transmission rights which are offered on each bidding zone border within the capacity calculation region pursuant to Article 31;
(b) the type of long-term transmission rights remuneration regime to be applied on each bidding zone border within the capacity calculation region according to the allocation in the day-ahead timeframe pursuant to Article 35;
(c) the implementation of alternative coordinated regional fallback solutions pursuant to Article 42;
(d) the regional compensation rules defining regional firmness regimes pursuant to Article 55.

 

 

 

 

Recitals 9 and 10 to the FCA Regulation

 

(9) Currently there are multiple allocation rules across the Union governing the contractual arrangements for long-term transmission rights. TSOs should develop harmonised allocation rules for physical transmission rights, financial transmission rights - options (hereinafter "FTRs – options") and financial transmission rights - obligations (hereinafter "FTRs – obligations") at Union level.

 

(10) Those harmonised allocation rules should at least contain the description of the allocation process/procedure for long-term transmission rights, including the minimum requirements for participation, financial matters, type of products offered in explicit auctions, nomination rules, curtailment and compensation rules, rules for market participants in case they are transferring their long-term transmission rights, the use-it-or-sell-it (hereinafter "UIOSI") principle, rules as regards force majeure and liability. Those harmonised allocation rules should also outline the contractual obligations to be respected by market participants.

 

 

  

 

 

chronicle

Forward Capacity Harmonised Allocation Rules (HAR) - regulatory chronicle 

 

 


29 October 2019

 

ACER Decision 14/2019 on the TSOs proposal for HAR amendment 

  

Annex I_HAR amendment decision


Annex Ia_HAR amendment decision


Annex II_HAR amendment decision

 

 

IMG 0744

    Documentation    

 

 

 

 

Commission Regulation (EU) 2016/1719 of 26 September 2016 establishing a guideline on forward capacity allocation (FCA Regulation), Articles 51, 52, Recitals 9, 10

 

ACER Decision No 14/2019 of 29 October 2019 on the TSOs proposal for HAR amendment 

 

Annex I_HAR amendment decision


Annex Ia_HAR amendment decision


Annex II_HAR amendment decision

 

Decision of the Agency for the Cooperation of Energy Operators (ACER) No 03/2017 of 2 October 2017 on the electricity transmission system operators’ proposal for harmonised allocation rules for long-term transmission rights

 

Harmonised allocation rules for long‐term transmission rights in accordance with Article 51 of Commission Regulation (EU) 2016/1719 of 26 September 2016 establishing a Guideline on Forward Capacity Allocation (Annex I to the ACER Decision 03/2017)

 

Evaluation of responses to the NRAs and TSOs consultation on the HAR Proposal (Annex II to the ACER Decision 03/2017)

 

Harmonised allocation rules for long‐term transmission rights in accordance with Article 51 of Commission Regulation (EU) 2016/1719 of 26 September 2016 establishing a Guideline on Forward Capacity Allocation (Annex Ia to the ACER Decision 03/2017, mark-up version)

 

All TSOs' proposal for harmonised allocation rules for long-term transmission rights, 23 December 2016, and Annexes

 

ENTSO-E Draft for Harmonised Allocation Rules for Forward Capacity Allocation of 18 April 2016

 

ENTSO-E Annual Report 2015, p. 21 

 

 

 

 

 

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    Links    

 

 

 

 

 

Forward Capacity Allocation

 

Joint Allocation Office (JAO)

 

Bidding Zone 

 

Capacity allocation

 

 

 

 

 

 

  

Last Updated on Saturday, 09 November 2019 14:40
 

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