Capacity Calculations Regions (CCRs) - the key architecture of the EU Internal Electricity Market
European Union Electricity Market Glossary

 


 

 

What is the 'capacity calculation region' (CCR) and what is its significance for the European Union Internal Electricity Market? Is the CCR something that needs to be bothered with?

 

An expressive answer to the above questions can be found in the Commission Staff Working Document of 30.11.2016 Accompanying the document Report from the Commission Final Report of the Sector Inquiry on Capacity Mechanisms {COM(2016) 752 final} SWD(2016) 385 final, p. 10), which unequivocally underlines that organisation of electricity trading with capacity calculation regions of several EU Member States and harmonised rules for trading in these regions fundamentally change the business models of generators and suppliers alike.

ccr core

 

Generators and suppliers increasingly need to take into account cross-border flows and hedge their positions long term, for instance by closing long term contracts and/or buying transmission rights, as well as optimize their positions in the day-ahead and increasingly in even shorter term intraday markets.

 

To explain the CCRs in greater detail it is useful to start with the recollection that capacity calculation for the day-ahead and intraday market timeframes needs to be coordinated at least at the regional level to ensure that capacity calculation is reliable and that optimal capacity is made available to the market.

 

For this purpose, regions where such coordination is required are defined by all the EU Transmission System Operators (TSOs).

 

In accordance with Article 2 of CACM Regulation, these delineations are termed 'capacity calculation regions' (CCRs), meaning 'the geographic area in which coordinated capacity calculation is applied' (identical CCR's definition is used by the recently communicated draft legislation of the so-called 'Winter Energy Package' (Article 2(2)(t) 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)).

 

The CCR needs to consist of a set of bidding zone borders for which the capacity calculation is coordinated by TSOs in accordance with the CACM Regulation. 

 

Article 15 of the CACM Regulation sets the requirements for the determination of CCRs (see box).

 

CCR must take into account the general principles and goals set in the CACM Regulation as well as Regulation (EC) No 714/2009.

 

The goal of CACM Regulation is the coordination and harmonisation of capacity calculation and allocation in the day-ahead and intraday cross-border markets, and it sets requirements for the TSOs to co-operate on the level of CCRs, on a pan-European level and across bidding zone borders.

 

In particular, based on the CACM Regulation, the following terms and conditions or methodologies need to be developed and approved on a CCR level:

 

 

info

Capacity Calculation Regions (CCRs) definition and structure applying in the European Union Internal Electricity Market as approved by the EU Agency for the Cooperation of Energy Regulators (ACER) are stipulated in the Annex I to the ACER Decision No 06/2016 of 17 November 2016.

 

(a) the common capacity calculation methodology (Article 20);

 

(b) the methodology for coordinated redispatching and countertrading (Article 35(1));

 

(c) the fallback procedures (Article 44); and

 

(d) the redispatching or countertrading cost sharing methodology (Article 74(1)).

 

The obligations and rights related to CCRs as determined in the CACM Regulation remain with the TSOs assigned to the respective CCR.

 

To take into account interdependencies between capacity calculation, security analysis coordination and outage scheduling, TSOs should coordinate with TSOs beyond their respective CCR.

 

For each CCR, a Coordinated Capacity Calculator needs to be established to define cross-zonal capacities for day-ahead, intraday timeframes and long-term timeframes using the European Common Grid Model (CGM) by extracting relevant parts of data from the CGM.

 

 

 

Article 15 of the CACM Regulation 

 

Capacity calculation regions

 

1. By three months after the entry into force of this Regulation all TSOs shall jointly develop a common proposal regarding the determination of capacity calculation regions. The proposal shall be subject to consultation in accordance with Article 12.

 

2. The proposal referred to in paragraph 1 shall define the bidding zone borders attributed to TSOs who are members of each capacity calculation region. The following requirements shall be met:

 

(a) it shall take into consideration the regions specified in point 3(2) of Annex I to Regulation (EC) No 714/2009;

 

(b) each bidding zone border, or two separate bidding zone borders if applicable, through which interconnection between two bidding zones exists, shall be assigned to one capacity calculation region;

 

(c) at least those TSOs shall be assigned to all capacity calculation regions in which they have bidding zone borders.

 

3. Capacity calculation regions applying a flow-based approach shall be merged into one capacity calculation region if the following cumulative conditions are fulfilled:

 

(a) their transmission systems are directly linked to each other;

 

(b) they participate in the same single day-ahead or intraday coupling area;

 

(c) merging them is more efficient than keeping them separate. The competent regulatory authorities may request a joint cost-benefit analysis from the TSOs concerned to assess the efficiency of the merger.

 

 

 

To further ensure coordination of capacity calculation between the CCRs, each Coordinated Capacity Calculator must cooperate with the neighbouring Coordinated Capacity Calculators. 

 

Article 20(1) of CACM Regulation stipulates that there must be one common Capacity Calculation Methodology per CCR. 

 

The Regulation requires that CCRs must be proposed by all TSOs and approved by all EU national regulatory authorities.

 

The ENTSO-E's propositions with respect to CCR design were initially set out in the All TSOs' draft proposal for Capacity Calculation Regions (CCRs) - Draft Version 1.0 (the map attached below).

 

 

Network Code on Forward Capacity Allocation

 

Article 8 Capacity calculation regions

 

For the purposes of this Regulation the capacity calculation regions shall be those established pursuant to Article 15 of Commission Regulation (EU) 2015/1222.

 

Article 9 Capacity calculation timeframes

 

All TSOs in each capacity calculation region shall ensure that long-term cross-zonal capacity is calculated for each forward capacity allocation and at least on annual and monthly timeframes.

 

 

 

 

Capacity-calculations-regions

 

Diagram's source: https://consultations.entsoe.eu/system-operations/capacity-calculation-regions/consult_view

  

 

As a second step TSOs submitted a more comprehensive and detailed CCRs proposal on 29 October 2015, the relevant documentation involved:

 

All TSOs' proposal for Capacity Calculation Regions (CCRs) in accordance with Article 15(1) of the Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a Guideline on Capacity Allocation and Congestion Management of 29 October 2015,

 

Explanatory document to all TSOs' proposal for Capacity Calculation Regions (CCRs) in accordance with Article 15(1) of the Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a Guideline on Capacity Allocation and Congestion Management of 29 October 2015.

  

As the above documents expressly underlined, they represented an important step on the roadmap towards a long-term target of the CACM Regulation i.e. the harmonisation of the capacity calculation methodology within the CCRs and merging of CCRs when efficiency reasons justify doing so.

 

Pursuant to ENTSO-E, the above CCRs proposal contributed, moreover, to the objective of promoting effective competition in generation, trading and supply of electricity (Article 3(a)) of the CACM Regulation) because it tObok into account market specificities on bidding zone borders by allowing optimally configured CCRs to be established.

 

The underlying assumption of the above design is each existing bidding zone border where CACM obligations are in force has been assigned only to one CCR in accordance with Article 15 of CACM Regulation.

 

In addition, some bidding zone borders to be created by construction of new interconnections foreseen to be commissioned by the end of 2018 and to be operated by TSOs certified at the moment of submission of the said proposal were also proposed to be included in the respective CCRs so as to receive the EU Member State's energy regulatory authority approval.

 

Decision of the Agency for the Cooperation of Energy Regulators No 06/2016 of 17 November 2016 on the electricity transmission system operators' proposal for the determination of the capacity calculation regions assessed the above TSOs' CCRs proposal of 29 October 2015 as not compliant with the Regulation No 714/2009 and the CACM Regulation to the extent where it did not merge the CWE (Central-West Europe) CCR and the CEE (Central Eastern Europe) CCR into one CCR.

 

Pursuant to the ACER, the CWE CCR and the CEE CCR, as described in Articles 5 and 8 of the CCRs Proposal, need to be merged.

 

Therefore ACER approved the aforementioned CCRs proposal subject to the amendments related to the merger of the CWE CCR and the CEE CCR into one CCR - the CORE CCR.

 

Annex I to the said ACER Decision No 06/2016 of 17 November 2016 determined the CCR definition applying in the European Union Internal Electricity Market as approved by the EU Agency including the above amendments.

  

The CCRs according to the said ACER Decision No 06/2016 of 17 November 2016 cover the following:

 

a) all existing bidding zones within and between Member States, to which CACM Regulation applies,

 

b) future bidding zone borders due to interconnections operated by legal entities certified as TSOs which are under construction at the time of the ACER's Decision and planned to be commissioned before 2018, and

 

c) the Germany/Luxembourg - Austria bidding zone border (DE/LU - AT).

 

 



Last Updated on Friday, 10 November 2017 21:50
 

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