Non-paper from Nordic regulators on aFRR capacity market proposals

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Nordic regulators ask ACER to decide upon aFRR capacity market proposal

Friday 28 February the Nordic regulators sent the proposals for a Nordic aFRR capacity market to ACER, including a non-paper describing their disagreement about approval. ACER have six months to come to a decision. When and how the Nordic TSOs will be able to start the common aFRR capacity market, is dependent on the outcome of this process.

The disagreement among the NRAs is related to different issues ranging from details of the market design to the general justification of choices of the methodology. It is now up to ACER to make the changes necessary for approving the proposals. – The Nordic TSOs are prepared to contribute constructively in a dialogue with them and hope that the process will lead to good solutions allowing an efficient procurement of the reserves necessary for safe operation of the Nordic power system during the green transition ahead of us, NBM program director Jakob Aldrin says.

A critical issue has been whether the Flow-based capacity calculation methodology, which is the approved Nordic methodology for capacity calculation, must be implemented before transmission capacity can be allocated to exchanging aFRR capacity. Article 38(5) of Electricity balancing guideline can be interpreted to have this implication, and that will delay the Nordic market until Flow-based capacity calculation methodology is implemented. However, in the non-paper  three of the regulators are questioning whether there are any reasonable motivations for such a strict reading of this article as this can be contradictory to the overall goals of the guideline and ask ACER to assess whether an interim period with allocation of transmission capacity in accordance with the capacity calculation methodologies applied today, is legally possible. The Finnish NRA has on the other hand the position that there is no room for interpretations and Flow-based is an absolute prerequisite for the market. –The Nordic TSOs are very happy to see that the majority of the regulators explicitly raise questions to ACER about this article and stresses the negative impacts a delay will have for the socio-economic benefits in the Nordics, Aldrin says.