Several Member States have introduced nationally oriented Capacity Remuneration Mechanisms
(CRMs) and market exit barriers in an uncoordinated manner, often giving insufficient consideration
to the actual system adequacy problem or market distortions they induce. There is a strong case for
further EU action in order to align the way system adequacy is assessed, and make sure cross-borders
solutions, if needed are 1) prioritised over national ones when proven more efficient, 2) result from a
common understanding of the system adequacy challenge.
The new Directive on Security of Electricity Supply should propose a common methodology for
system adequacy assessment, to be developed and updated by ENTSO-e in consultation with
relevant stakeholders (ENTSO-e tasks to be reviewed accordingly in the Electricity regulation).
This common methodology should be used by TSOs when performing joint regional adequacy
o Assumptions of the upcoming 2030 national climate and energy plans;
o The contributions of renewables, interconnections, demand response and storage; and
o Monte Carlo simulation, using granular time resolution and large climate data set.
TSOs should ensure transparency on and properly take them into account the economic viability
of power plants and the level of must run obligations.
ACER should be mandated to monitor these regional assessments.
The outcome of these adequacy assessments should be compared against reliability standards,
set at national level in order to inform the need, and scope of possible remedial actions.
Such remedial actions should consider addressing market and regulatory failures first (e.g.
development of liquid intraday and balancing, removal of exit barriers). As a measure of last
resort, CRMs can be introduced only after having been scrutinised by the European Commission
according to the relevant legislation.
1) Most adequacy assessments fail to consider the benefits of regional solutions
In a pan-European electricity market, problems (e.g. bottlenecks, blackouts etc) do not stop at national
borders. Moreover, interconnectors play an essential role in ensuring security of supply as they can
enable an efficient utilisation of electricity resources across Europe, in particular for renewables
producers whose output is variable. There is a strong case to take the benefits of grid exchanges, as
well as the benefits of shared operational reserves when relevant, into account. 2) The contribution of non-conventional sources to adequacy is often overlooked
According to ENTSO-e, 94% of the Net Generating Capacity increase between 2016 and 2025 is
considered as Unavailable Capacity, which is closely linked to variable renewables penetration. This
suggests that the contribution of future installed renewables capacity to system adequacy is factored
in as close to zero, despite the real physical capacity value of wind power. This is also true for demand
response and storage. 3) Need of consistency between the introduction of a CRM and the adequacy analysis
Any remedial actions should be introduced as a consequence of an identified gap stemming from the
comparison of the outcome of the regional adequacy assessment and a biding reliability standard.
Such a standard should use a combination of indicators such as the probability of loss load (LOLP), the
electricity not served (ENS) and the value of lost load (VOLL). The levels of existing CRMs should also
be adjusted accordingly. Failure to do so would result in continuing overcapacities.
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new Article proposed by WindEurope
new legal text proposed by WindEurope
existing legal text under Directive 2009/72/EC
comments by WindEurope
Article 4: Monitoring of security of supply
Member States shall ensure the monitoring of security of supply issues. Where Member States
consider it appropriate, they may delegate that task to the regulatory authorities referred to in Article
35. Such monitoring shall, in particular, cover the balance of supply and demand on the national
market, contribution of electricity imports and exports, the level of expected future demand and
envisaged additional capacity being planned or under construction, including from renewable energy
sources, and the quality and level of maintenance of the networks, as well as measures to cover peak
demand and to deal with shortfalls of one or more suppliers. […]The analysis of the economic viability
of existing and new capacities under the existing arrangements must be part of the monitoring.
System adequacy assessment, Ju