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b) Procedural Aspects aa) The “starting point”

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To begin with, one has to recognise that a bidding zone is not created by the market but by the State, i.e. by legal regulations. In this context for example, the German Electricity Grid Access Regulation stipulates that transmission system operators must enable trading transactions throughout the Federal Republic of Germany without capacity allocation in such a way that German territory is a single electricity-bidding zone. In particular, transmission system operators may not unilaterally introduce any capacity allocations that would lead to a division of the German electricity-bidding zone63. Of course, this provision raises significant concerns because EU law comprehensively regulates an expansive range of matters concerning the governance of bidding zones64.

Leaving aside concerns about the legislative competence of the German government in this matter, EU law stipulates that in case a bidding zone is not configured optimally, Member States shall, in principle, decide between a reconfiguration of their bidding zone or implementing other measures such as grid improvement and grid optimisation.

To make this decision, a review of the existing bidding zones is necessary. The review should endeavour to identify all the structural congestion points and needs to include an analysis of different configurations of the bidding zone in question in a coordinated manner. Existing bidding zones must be assessed on the basis of their ability to create a reliable market environment to avoiding grid bottlenecks while balancing electricity demand and supply as well as securing the long-term security of investments in the network’s infrastructure65.

Decisions regarding zones being reconfigured or enhanced use either the identification of long-term structural congestions by the transmission system operator or a report by ENTSO involving either congestion points or a more expansive review of the bidding zone as a starting point66. The Internal Market for Electricity Regulation [regulation (EU) 943/2019] obliges ENTSO to report every three years on structural congestion and other major physical shortcomings between and within bidding zones67.

Los Desafíos Jurídicos de la Transición Energética

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