Cross-border transmission capacity calculation: analysis of the key parameters

An efficient internal electricity market is of paramount importance in Europe to ensure that all consumers can purchase electricity at an affordable price while maintaining security of energy supply. The way the transmission capacity is allocated, and the way congestions are managed, play key roles in the functioning of the internal electricity market. The flow-based approach will become a cornerstone of the internal electricity market in a short-term future. It will be thus of paramount importance to guarantee that the flow-based approach supports effectively an efficient electricity market.
This study analyzes the key parameters currently used in the capacity calculation methodologies for some of the current European capacity calculation regions and provides an analysis about the trends driving their evolution. Although the information communicated by TSOs to market participants and regulators appears to be incomplete to fully understand key constraints impacting the electricity market, this study establishes two main key facts. First, in the Nordic countries the level of loop flows, internal flows and residual flows due to exchanges with countries outside that region is not negligible but appears to be much lower than the one in the CWE region. Second, although reliability margins taken in the CWE region appear to be in the upper range of European practices and are significantly above the Nordic region, they did not drastically increase with the introduction of the FB market coupling, but the level of risk used to compute these values is not always fully transparent and can also be questioned.
This study concludes on the expected future evolution of the capacity calculation methodologies and parameters. The capacity calculation methodology for the Core region, resulting from the merging of the CWE region with the Central East European (CEE) region exhibits major improvements compared to the current flow-based approach in the CWE region, in terms of transparency and for the design of the LTA patch. However, the calculation of the intraday capacity based on an updated model, which is a key to obtain an efficient market, will be implemented only in 2021.

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“The study is carried out for the European Commission and expresses the opinion of the organisation having undertaken them. To this end, it does not reflect the views of the European Commission, TSOs, project promoters and other stakeholders involved. The European Commission does not guarantee the accuracy of the information given in the study, nor does it accept responsibility for any use made thereof.”