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| CACM Regulation | |
|---|---|
| Name | CACM Regulation |
| En long name | Regulation on Capacity Allocation and Congestion Management |
| Type | European Union regulation |
| Jurisdiction | European Union |
| Adopted | 2015 |
| Policy area | Electricity market integration |
| Legal basis | Treaty on the Functioning of the European Union |
| Related legislation | Electricity Directive 2009/72/EC, Regulation (EC) No 714/2009, Clean Energy for All Europeans |
CACM Regulation
The CACM Regulation is a European Union regulation establishing common rules for capacity allocation and congestion management for cross-border electricity exchanges across the European Union internal electricity market. It aims to harmonize mechanisms among Transmission System Operators, Nominated Electricity Market Operators, and regulatory authorities to enhance market integration between regions such as the Nordic electricity market, Central Western Europe, and the Baltic states. The regulation interacts with other instruments such as the Network Code on Electricity Balancing and objectives from the European Green Deal.
The regulation covers cross-border capacity allocation procedures, long-term transmission rights, day-ahead and intraday market coupling, and congestion management methods affecting regions including France, Germany, Poland, Spain, and Italy. It applies to entities like transmission system operators (TSOs) represented by bodies such as ENTSO-E and regulatory authorities like Agency for the Cooperation of Energy Regulators (ACER) and national regulators including Ofgem, Commission de régulation de l'énergie, Bundesnetzagentur, and Comisión Nacional de los Mercados y la Competencia. The scope explicitly addresses market participants in bidding zones delineated by authorities like EirGrid and Red Eléctrica de España and refers to cross-border projects such as interconnectors between United Kingdom (pre/post-Brexit arrangements) and continental partners.
The CACM Regulation was adopted to implement provisions stemming from the Third Energy Package and the Treaty on the Functioning of the European Union competence for internal market measures. Its genesis followed initiatives by the European Commission and technical work by ENTSO-E and ACER, building on precedents like the Market Coupling Project in Central Western Europe and the Nord Pool integration. Legislative negotiation involved the European Parliament and the Council of the European Union, with influence from national ministries such as the Ministry of Economic Affairs and Climate Policy (Netherlands) and agencies like Agence de l'environnement et de la maîtrise de l'énergie in stakeholder consultations.
The regulation mandates coordinated capacity calculation, transparent allocation, and congestion management procedures including explicit and implicit allocation for long-term products, day-ahead market coupling based on principles used in EPEX SPOT operations, and continuous intraday coupling similar to systems developed by Nord Pool and European Energy Exchange. It requires harmonized network capacity calculation methodologies, flow-based capacity allocation in regions modeled after ENTSO-E proposals, and common rules for firm transmission rights inspired by frameworks like Market Coupling Implementation. Governance duties are allocated to TSOs, power exchanges such as Nord Pool AS and EPEX SPOT SE, and regulatory authorities including ACER and national regulators.
Operational impacts include cross-border price convergence observed in regions connected by projects like the Franco-German interconnector and the NorNed cable, altered bidding strategies of generators such as those in RWE and Iberdrola, and shifting roles for traders like Vattenfall and Enel. The regulation has driven investment signals for interconnectors including initiatives by TransnetBW and Elia System Operator as well as innovation in intraday trading platforms developed by firms like Siemens and ABB. It also shaped interactions with balancing markets governed by network codes and influenced market participants ranging from incumbents like EDF to new entrants such as Tesla Energy (on storage interfaces).
Enforcement mechanisms rely on national regulatory authorities and ACER, invoking procedures under the Treaty on the Functioning of the European Union and coordination with the European Commission for infringement proceedings. Compliance involves monitoring by entities like ENTSO-E and reporting obligations to agencies such as Eurostat for energy statistics. Dispute resolution pathways reference remedies used in cases before institutions like the Court of Justice of the European Union, and governance arrangements enable stakeholder input via committees including the Agency for the Cooperation of Energy Regulators advisory groups and regional coordination centers.
Stakeholders include TSOs (for example TenneT, National Grid), power exchanges (EPEX SPOT SE, Nord Pool AS), generation companies (Iberdrola, RWE, Fortum), consumers represented through associations like BEUC, traders and incumbents such as Engie and Statkraft, and investors behind interconnector projects like Moyle Interconnector investors. Responses ranged from lobbying by utilities and industry federations like Eurelectric to support from integration advocates including think tanks such as Bruegel and Centre for European Policy Studies.
Case studies illustrate varied implementation: the integration of the Central Western Europe market coupling program, the intraday market integration across the Nordic and Baltic regions, and congestion management experiences on the Poland–Germany border. Challenges include coordinating flow-based capacity calculation in complex areas like Benelux and addressing legal questions raised by cross-border capacity allocation involving third countries such as Norway and the United Kingdom (post-Brexit). Technical challenges have surfaced in algorithmic coupling software used by exchanges and in synchronizing TSOs’ data platforms, prompting solutions from consortiums including TenneT and 50Hertz Transmission.
Category:European Union energy law