Forward Capacity Allocation

Capacity calculation

Capacity calculation time frames

All TSOs shall ensure that long-term cross-zonal capacity is calculated for each forward capacity allocation, and on at least on annual and monthly time frames.

Capacity calculation regions

For the purposes of this Regulation the capacity calculation regions shall be those established under the CACM.

Capacity calculation methodology

All TSOs in each capacity calculation region shall submit a proposal for a common capacity calculation methodology for long-term time frames within the respective region, no later than 6 months after the approval of the common coordinated capacity methodology under the CACM Regulation.

The capacity calculation methodology shall be compatible with the capacity calculation methodology established for the day-ahead and intraday time frames under the CACM.

The approach used in the common capacity calculation methodology shall be either a coordinated net transmission capacity approach or a flow-based approach.

The proposal shall also include:

• Reliability margin methodology

• Methodology for operational security limits and contingencies

• Generation shift key methodologies

• Methodology for remedial actions

• Cross-zonal capacity validation methodology

Methodology for splitting long-term cross zonal capacity

A joint methodology for splitting the long-term cross-zonal capacity in a coordinated manner between different long-term time frames for each capacity calculation region shall be developed by the respective TSOs no later than the submission of the capacity calculation methodology.

Capacity calculation process

By 30 June 2024, all TSOs in each capacity calculation region shall jointly develop operational rules for long-term capacity calculation time frames. These rules shall supplement the rules defined for operations related to the:

• Merging of the individual grid models;

• Coordinated capacity calculators.

Forward allocation of cross-zonal capacities

Bidding zones

The bidding zones applicable to the day-ahead and intraday trading shall apply to forward capacity calculation and allocation.

General principles for forward capacity allocation

The allocation shall use the marginal pricing principle to generate results for each bidding zone border, direction of utilisation, and market time unit, allocate no more than the offered long-term cross-zonal capacity and be repeatable.

Decision on cross-zonal risk hedging opportunities

TSOs on a bidding zone border shall issue long-term transmission rights unless the relevant regulatory authorities of the bidding zone border have adopted coordinated decisions not to issue long-term transmission rights on the bidding zone border.

Where long-term transmission rights do not exist on a bidding zone border at the entry into force of this Regulation, the competent regulatory authorities of the bidding zone border shall adopt coordinated decisions on the introduction of long-term transmission rights no later than 30 June 2024.

The above-mentioned decisions shall be based on an assessment that identifies whether the electricity forward market provides sufficient hedging opportunities in the relevant bidding zones.

Regional design of long-term transmission rights:

Long-term cross-zonal capacity shall be allocated to market participants by the allocation platform in the form of physical transmission rights pursuant to the UIOSI (use-it-or-sell-it) principle, or in the form of FTRs-options or FTRs-obligations.

All TSOs issuing long-term transmission rights shall offer long-term cross-zonal capacity through the single allocation platform to market participants for at least annual and monthly time frames.

By 30 June 2024, TSOs in each capacity calculation region shall jointly develop a proposal for the regional design of long-term transmission rights to be issued for each bidding zone border within the capacity calculation region.

The allocation in parallel of physical transmission rights and FTRs-options at the same bidding zone border is not allowed. The allocation in parallel of physical transmission rights and FTRs-obligations at the same bidding zone border is not allowed.

Nomination procedure for physical transmission rights

Where TSOs issue and apply physical transmission rights on bidding zone borders, they shall enable physical transmission rights holders and/or their counterparties to nominate their electricity exchange schedules.

By 31 December 2024, all TSOs issuing physical transmission rights on a bidding zone border shall submit for approval to the relevant regulatory authorities a proposal for nomination rules for electricity exchange schedules between bidding zones.

All TSOs shall progressively harmonise the nomination rules for all bidding zone borders on which physical transmission rights are applied.

Introduction of harmonised allocation rules for long-term transmission rights

By 30 June 2023, all TSOs shall apply the harmonised allocation rules for long-term transmission rights.

Once the regional requirements enter into force, they shall prevail over the general requirements defined in the harmonised allocation rules.

Firmness of allocated cross-zonal capacity

All TSOs shall be entitled to curtail long-term transmission rights to ensure operation remains within security limits prior to the day-ahead firmness deadline.

Where TSOs curtail long-term transmission rights, they shall report this to the respective regulatory authorities and publish the factual reasons that lead to the curtailment (e.g., force majeure, etc.).

The holders of curtailed long-term transmission rights shall be compensated with the market spread.

TSOs may propose a cap on the total compensation to be paid to all holders of curtailed long-term transmission rights in the relevant calendar year or the relevant calendar month. Where TSOs propose to apply a cap, they shall jointly propose a set of compensation rules to the applied cap.

Regional allocation platform

Establishment of regional allocation platform

By 30 June 2023, all TSOs shall submit to all regulatory authorities a common proposal for a set of requirements for the regional allocation platform serving the TSOs of Contracting Parties.

All TSOs shall ensure that the regional allocation platform is operational and complies with the functional requirements specified in this Regulation, as well as the cost sharing methodology for the platform, within 12 months after the approval of the proposal for a common set of requirements, and for establishment of the regional allocation platform.

Forward capacity allocations on Direct Current interconnectors shall take place on the regional allocation platform no later than 24 months after the above-mentioned approval.

For interconnections between Contracting Parties and Member States, the respective TSOs shall conclude a bilateral agreement to determine whether forward capacity allocations for the relevant interconnection shall be performed by the regional allocation platform, or the single allocation platform established in accordance with Article 48 of Regulation 2016/1719. In case of no agreement, the single allocation platform (JAO) shall be used.

The regional allocation platform shall harmonize its operational and allocation rules with those applied by the single allocation platform. Both platforms may also enter into administrative cooperation agreements.