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Capacity mechanism - RTE is submitting the following set of rules for valuation of cross-border capacity guarantees for 2019

Source : RTE - DIESE 22/11/2018

Within the context of the new Terms and Conditions for the capacity mechanism, the contribution of interconnections to the French security of supply may be taken into account explicitly.

Two procedures for the participation of cross-border capacities will be gradually implemented: the detailed procedure, which will require implementing a contractual agreement with the TSO of the participating interconnected State, and the streamlined procedure.

With respect to the regulatory schedule, RTE will implement the streamlined procedure participation by 2019. Capacity guarantees from the certification of interconnections will be offered for sale by RTE at auction, in accordance with the set of rules approved by the French Energy Regulatory Commission and made public.

In preparation, and in the interest of transparency and proper functioning of the market, RTE is today publicly releasing the set of rules that are to be proposed for valuing cross-border capacity guarantees based on the streamlined procedure.

 

RTE has evaluated the overall contribution of interconnections (excluding Switzerland) to the French security of supply as 6 319 MW for the year 2019. As announced in the 2018 consultation, the streamlined participation procedure will be implemented on all of the borders concerned for this delivery year. This model aims to directly certify interconnection capacities and their valuation on the French capacity market.

For the 2019 delivery year, RTE is submitting a proposal to the French Energy Regulatory Commission to sell these capacity guarantees on the market under the following conditions:  

  • In accordance with the decision taken at the consultation organised by the DGEC (French General Directorate for Energy and Climate), all of the guarantees will be offered for sale at the auction held by EPEX SPOT in May 2019;
  • The sell order will cover the entire volume of guarantees obtained under the certification of interconnections and this independently of RTE's level of obligation for the compensation of losses;
  • This sell order will be executed with a reserve price of 0 (sale "at any cost").

These terms for valuing cross-border capacity guarantees are specific to the year of delivery 2019, and take into account the regulatory schedule constraints. For the following delivery years, RTE will propose adapted terms and conditions for the regulator, maintaining maximum transparency for market participants.

This capacity mechanism was designed from the outset to take into account the contribution of interconnections to the security of electricity supply. Since 1 January 2017, this has been taken into account implicitly, by deducting it from France's capacity needs.

To find out more: Report on the evolution of the set of rules for incorporating cross-border interconnections of the electricity transmission system into the French capacity mechanism