Commission Regulation (EU) 2015/1222 CHAPTER 2 — Bidding zone configuration

Article 32–Article 34 · 3 articles

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Reviewing existing bidding zone configurations

Article 32

1. A review of an existing bidding zone configuration may be launched by: (a) the Agency, in accordance with Article 34(7); (b) several regulatory authorities, pursuant to a recommendation from the Agency in accordance with Article 34; (c) TSOs of a capacity calculation region, together with all concerned TSOs whose control areas, including interconnectors, are within the geographic area in which the bidding zone configuration shall be assessed in accordance with paragraph 2(a); (d) one single regulatory authority or TSO with the approval of its competent regulatory authority, for the bidding zones inside the TSO's control area, if the bidding zone configuration has negligible impact on neighbouring TSOs' control areas, including interconnectors, and the review of bidding zone configuration is necessary to improve efficiency, or to maintain operational security; (e) Member States in a capacity calculation region. 2. If a review is launched in accordance with paragraph 1(a),(b), (c) or (e), the entity launching the review shall specify: (a) the geographic area in which bidding zone configuration shall be assessed and the neighbouring geographic areas for which impacts shall be taken into account; (b) the participating TSOs; (c) the participating regulatory authorities. 3. If a review is launched in accordance with paragraph 1(d), the following conditions shall apply: (a) the geographic area in which bidding zone configuration is assessed shall be limited to the control area of the relevant TSO, including interconnectors; (b) the TSO of the relevant control area shall be the only TSO participating in the review; (c) the competent regulatory authority shall be the only regulatory authority participating in the review; (d) the relevant TSO and regulatory authority, respectively, shall give the neighbouring TSOs and regulatory authorities mutually agreed prior notice of the launch of the review, giving reasons; and (e) the conditions for the review shall be specified, and the results of the review and proposal for the relevant regulatory authorities shall be published. 4. The review process shall consist of two steps. (a) In the first step, the TSOs participating in a review of bidding zone configuration shall develop the methodology and assumptions that will be used in the review process and propose alternative bidding zone configurations for the assessment. The proposal on methodology and assumptions and alternative bidding zone configuration shall be submitted to the participating regulatory authorities, which shall be able to require coordinated amendments within three months. (b) In the second step, the TSOs participating in a review of bidding zone configuration shall: (i) assess and compare the current bidding zone configuration and each alternative bidding zone configuration using the criteria specified in Article 33; (ii) hold a consultation in accordance with Article 12 and a workshop regarding the alternative bidding zone configuration proposals compared to the existing bidding zone configuration, including timescales for implementation, unless the bidding zone configuration has negligible impact on neighbouring TSOs' control areas; (iii) submit a joint proposal to maintain or amend the bidding zone configuration to the participating Member States and the participating regulatory authorities within 15 months of the decision to launch a review. (c) On receiving the joint proposal to maintain or to amend the bidding zone configuration in accordance with point (iii) above, the participating Member States or, where provided by Member States, the regulatory authorities shall within six months reach an agreement on the proposal to maintain or amend the bidding zone configuration. 5. NEMOs or market participants shall, if requested by TSOs, provide the TSOs participating in a review of a bidding zone with information to enable them to assess bidding zone configurations. This information shall be shared only between the participating TSOs for the sole purpose of assessing bidding zone configurations. 6. The initiative for the review of the bidding zones configuration and its results shall be published by ENTSO for Electricity, or if the review was launched in accordance with paragraph 1(d), by the participating TSO.

Criteria for reviewing bidding zone configurations

Article 33

1. If a review of bidding zone configuration is carried out in accordance with Article 32, at least the following criteria shall be considered: (a) in respect of network security: (i) the ability of bidding zone configurations to ensure operational security and security of supply; (ii) the degree of uncertainty in cross–zonal capacity calculation. (b) in respect of overall market efficiency: (i) any increase or decrease in economic efficiency arising from the change; (ii) market efficiency, including, at least the cost of guaranteeing firmness of capacity, market liquidity, market concentration and market power, the facilitation of effective competition, price signals for building infrastructure, the accuracy and robustness of price signals; (iii) transaction and transition costs, including the cost of amending existing contractual obligations incurred by market participants, NEMOs and TSOs; (iv) the cost of building new infrastructure which may relieve existing congestion; (v) the need to ensure that the market outcome is feasible without the need for extensive application of economically inefficient remedial actions; (vi) any adverse effects of internal transactions on other bidding zones to ensure compliance with point 1.7 of Annex I to Regulation (EC) No 714/2009; (vii) the impact on the operation and efficiency of the balancing mechanisms and imbalance settlement processes. (c) in respect of the stability and robustness of bidding zones: (i) the need for bidding zones to be sufficiently stable and robust over time; (ii) the need for bidding zones to be consistent for all capacity calculation time-frames; (iii) the need for each generation and load unit to belong to only one bidding zone for each market time unit; (iv) the location and frequency of congestion, if structural congestion influences the delimitation of bidding zones, taking into account any future investment which may relieve existing congestion. 2. A bidding zone review in accordance with Article 32 shall include scenarios which take into account a range of likely infrastructure developments throughout the period of 10 years starting from the year following the year in which the decision to launch the review was taken.

Regular reporting on current bidding zone configuration by ENTSO for Electricity and the Agency

Article 34

1. The Agency shall assess the efficiency of current bidding zone configuration every three years. It shall: (a) request ENTSO for Electricity to draft a technical report on current bidding zone configuration; and (b) draft a market report evaluating the impact of current bidding zone configuration on market efficiency. 2. The technical report referred to in paragraph 1 second subparagraph point (a) shall include at least: (a) a list of structural congestion and other major physical congestion, including locations and frequency; (b) an analysis of the expected evolution or removal of physical congestion resulting from investment in networks or from significant changes in generation or in consumption patterns; (c) an analysis of the share of power flows that do not result from the capacity allocation mechanism, for each capacity calculation region, where appropriate; (d) congestion incomes and firmness costs; (e) a scenario encompassing a ten year time-frame. 3. Each TSO shall provide data and analysis to allow the technical report on current bidding zone configuration to be produced in a timely manner. 4. ENTSO for Electricity shall deliver to the Agency the technical report on current bidding zone configuration no later than nine months after the request by the Agency. 5. The technical report on current bidding zone configuration shall cover the last three full calendar years preceding the request by the Agency. 6. Without prejudice to the confidentiality obligations provided for in Article 13, ENTSO for Electricity shall make the technical report available to the public. 7. If the technical or market report reveals inefficiencies in the current bidding zone configuration, the Agency may request TSOs to launch a review of an existing bidding zone configuration in accordance with Article 32(1).

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