Eurelectric’s Key Messages on Balancing High Price Mitigation Measures Proposed by All TSOs:
- Eurelectric has in the past expressed concerns on the ability of TSOs to use elastic aFRR energy needs. Those concerns were driven by the impact they may have on the use of specific products and their ability to enforce a de-facto price cap. At the same time, Eurelectric takes note of the ability of elastic demand to allay some of the perceived issues that TSOs are currently observing on the aFRR platform. Eurelectric therefore proposes that if TSOs are to use elastic aFRR energy needs in the PICASSO platform, this would be accompanied by strict limitations and conditions, and be subject to a regular reassessment of the continued need of its use.
- More comprehensive discussion on final price cap is necessary and should be at least up to the highest VoLL in a Member State. We believe that the assessment and potential implementation of a new transitional price cap are premature as the market is not yet fully developed, and a limited number of TSOs have accessed the platform.
- Eurelectric advocates for using REMIT guidelines as the most efficient solution to address the root causes of market abuse by (strategic) bidding, rather than placing the responsability on TSOs to anticipate or qualify market manipulation. We therefore repeat our firm position that any breach of the REMIT framework should be investigated by the competent authorities.
- Eurelectric would also like to refer to the ACER 2023 Market Monitoring Report, where the occurrence of price spikes on the PICASSO platform is analysed in a case study [ACER Market Monitoring Report on 70% MACZT; page 35]. The conclusion in paragraph 107 reads “[…] the Austrian bidding zone would have benefited from accessing the neighbouring bidding zones. This could have been achieved by optimising the availability and use of physical transmission capacity at the time of the incident to increase the amount of cross-border capacity for balancing purposes.” Moreover, in ACER’s analysis it is also showed that high prices incidents generally repeat themselves for lasting periods of time, we thus also endorse the main recommendation made in the report of “Studying the use of slower reserves such as mFRR following aFRR activations to manage price incidents effectively”. We therefore encourage TSOs to further explore the possible applications of ACER’s recommendations.
- In any case, Eurelectric considers that these measures cannot be a precondition for TSOs to comply with the legal deadline to join the PICASSO platform. This would set a harmful precedent, detrimental to the stability of the regulatory framework and therefore to the market participant’s ability to anticipate future incomes as BSPs or costs as BRPs.