Introduction
For nearly 15 years Austria and Germany have shared a
single electricity market, under which traded power market flows and
cross-border capacity are not formally matched, and thus there is no
congestion management on the Austrian-German interconnector. The German
and Austrian electricity wholesale markets have since constituted a
single bidding zone for electricity; thus, the same wholesale
electricity price applies in both countries.
On September 23 2015, following a request from the
Polish National Regulatory Authority, the Agency for the Cooperation of
Energy Regulators (ACER) issued an opinion stating that the
Austrian-German interconnector must be considered "usually and
structurally" congested pursuant to the Electricity Regulation.(1)
The opinion further included a request to introduce a coordinated
capacity allocation procedure at the Austrian-German border. The
implementation of such request would mean splitting the
existing single
Austrian-German electricity market into two.
In reaction to ACER's opinion, the Austrian National
Regulatory Authority, E-Control, and transmission system operators
(TSOs) have since proven that there is no physical congestion at the
interconnector, but rather internal congestion within Germany. However,
according to ACER, an interconnector is considered to be congested not
only in the event of physical congestion, but also when international
trade on the interconnector causes physical flows over physically
congested network elements else in the network of another member state
(eg, in Poland or the Czech Republic). E-Control and other stakeholders
considered ACER's interpretation of 'congestion' to go far beyond the
legal definition set out in the Electricity Regulation and therefore
appealed ACER's opinion. However, the appeals were rejected, since
ACER's opinion was not regarded as legally binding.
Nevertheless, on October 28 2016 the German National
Regulatory Authority announced that it intended to unilaterally
introduce a congestion management procedure at the German-Austrian
border from July 3 2018 onwards. This announcement was followed by
ACER's legally binding decision on November 17 2016, which also foresees
a split of the Austrian-German electricity market.(2)
While the vast majority of the European national regulatory authorities
support the decision, it has been heavily criticised by E-Control and
the Austrian TSOs, which announced that they plan to exhaust all legal
possibilities in order to appeal ACER's decision.
In January 2017 E-Control and the Austrian TSOs appealed against the
decision before ACER's Board of Appeal, claiming that, on the one hand,
there was no physical congestion at the interconnector and, on the other
hand, that the European Network of Transmission System Operators for
Electricity and not ACER had competence to decide this issue. The appeal
proceedings before the board of appeal attracted significant attention
from national regulatory authorities, electricity-intensive industries
and other stakeholders. The board of appeal received 45 requests for
intervention and approximately 100 statements of support, of which only
six interveners were admitted (only national regulatory authorities or
TSOs). In March 2017 the board of appeal dismissed the appeal from
E-Control and the Austrian TSOs as unfounded.
According to Article 20 of EU Regulation 713/2009
establishing an Agency for the Cooperation of Energy Regulators, the
board of appeal's decision can be appealed before the EU General Court.
The deadline for an appeal before the General Court was the end of May
2017. E-Control and the TSOs stated that they have already submitted an
appeal, claiming that the board of appeal failed to properly state the
reasons for its decision.
In the meantime, on May 15 2017 E-Control announced that
it reached an agreement with the German National Regulatory Authority
to safeguard the German-Austrian electricity trade even after a split of
the single electricity market. E-Control stated that from October 1
2018 onwards, restrictions will curb the German-Austrian trade
activities which are currently unlimited. Peaks in the exchange of
electricity will then be capped. However, E-Control promised that
electricity trading between the traditionally well-integrated markets
will – for the most part – remain possible. Up to 4.9 gigawatts (almost
half the Austrian demand during peaks) will still be allocated as
long-term capacity.
According to E-Control's statement, the capacity
allocation procedure in day-to-day trading will be integrated into the
Central-West region (France, Belgium, the Netherlands, Luxembourg and
Germany). As a result, the agreed capacity of 4.9 gigawatts could be
increased by short-term trade capacity. In order to safeguard the
transmission capacity in the system further, E-Control affirmed that
transmission system operators in Germany and Austria will continue their
already close collaboration; therefore, Austrian power plants will
continue to be available for German transmission system operators in the
event that a so-called 're-dispatch' (ie, an adjustment of power output
of power plants with a view to system stability) becomes necessary. As a
next step, the agreement will now be discussed with neighbouring member
states and the European Commission.
Although E-Control stated that the agreement with the
German National Regulatory Authority will help to lower the expected
increase in electricity costs, the split of the German-Austrian single
electricity market will still increase prices for consumers in Austria.
Moreover, it does not address the key problem of internal congestion in
Germany and insufficient electricity transmission capacity within the
German transmission system. It remains to be seen how the General Court
and possibly, at second instance, the European Court of Justice will
assess the situation and decide on the future of the European
electricity market.
Comments
Post a Comment