Coordinated net transmission capacity (CNTC) approach is the capacity calculation method based on the principle of assessing and defining ex ante a maximum energy exchange between adjacent bidding zones (Article 2(8) of the Regulation establishing a Guideline on Capacity Allocation and Congestion Management - CACM (Regulation on market coupling)).
The same definition of the CNTC is used in Article 2(68) of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (recast).
Both these methods are intended to maximise tradable cross-zonal capacity while safeguarding the operational security standards of the transmission system, also both result in the determination of possible commercial capacity that can be allocated for each direction on each bidding zone border.
However, the distinctive features of the CNTC method are:
- the actual exchange between two given bidding zones is not dependent on the exchanges across adjacent borders,
- the maximum bilateral exchanges are fixed ex ante,
- the combination of possible exchanges (on a set of adjacent borders) cannot be optimised via the capacity allocation algorithm,
- there is lower visibility of the location of physical congestions.
It is an acceptable capacity calculation method for non-meshed networks, provided that a sufficient level of coordination is applied (ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Gas Markets in 2016 (Electricity Wholesale Markets Volume, October 2017, p. 22).
CNTC refers to one of the two possible capacity calculation methodologies envisaged in the CACM (in addition to the flow-based approach), while NTC is used to refer to existing capacity calculation methodologies, which are not necessarily as coordinated as required by the CACM.
Regulation establishing a Guideline on Capacity Allocation and Congestion Management - CACM (Regulation on market coupling)
Capacity calculation methodology
1. No later than six months after the approval of the common coordinated capacity calculation methodology referred to in Article 9(7) of Commission Regulation (EU) 2015/1222, all TSOs in each capacity calculation region shall submit a proposal for a common capacity calculation methodology for long-term timeframes within the respective region. The proposal shall be subject to consultation in accordance with Article 6.
2. The approach used in the common capacity calculation methodology shall be either a coordinated net transmission capacity approach or a flow-based approach.
3. The capacity calculation methodology shall be compatible with the capacity calculation methodology established for the day-ahead and intraday timeframes pursuant to Article 21(1) of Commission Regulation (EU) 2015/1222.
4. The uncertainty associated with long-term capacity calculation timeframes shall be taken into account when applying:
(a) a security analysis based on multiple scenarios and using the capacity calculation inputs, the capacity calculation approach referred to in Article 21(1)(b) and the validation of cross-zonal capacity referred to in Article 21(1)(c) of Commission Regulation (EU) 2015/1222; or
(b) a statistical approach based on historical cross-zonal capacity for day-ahead or intraday timeframes if it can be demonstrated that this approach may:
(i) increase the efficiency of the capacity calculation methodology;
(ii) better take into account the uncertainties in long-term cross-zonal capacity calculation than the security analysis in accordance with paragraph 4(a);
(iii) increase economic efficiency with the same level of system security.
5. All TSOs in each capacity calculation region may jointly apply the flow-based approach for long-term capacity calculation timeframes on the following conditions:
(a) the flow-based approach leads to an increase of economic efficiency in the capacity calculation region with the same level of system security;
(b) the transparency and accuracy of the flow-based results have been confirmed in the capacity calculation region;
(c) the TSOs provide market participants with six months to adapt their processes.
6. Where a security analysis based on multiple scenarios is applied for developing the capacity calculation methodology in a capacity calculation region, the requirements for the capacity calculation inputs, the capacity calculation approach and the validation of cross-zonal capacity as provided for in Article 21(1) of Commission Regulation (EU) 2015/1222, except Article 21(1)(a)(iv) where relevant, shall apply.
7. When developing the capacity calculation methodology, the requirements for the fallback procedures and the requirement provided for in Article 21(3) of Commission Regulation (EU) 2015/1222 shall be taken into account.
Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (recast), Article 2(68)
Network Code on Forward Capacity Allocation, Article 10