ACER approves the new automatic maximum price limit adjustment mechanism for the European electricity spot markets

ACER approved the European electricity spot markets‘ new automated maximum price limit adjustment mechanism, that intervenes in case of price spikes. Energy supply security is ensured through optimal „short-term dispatch of generation, efficient use of interconnections and to encourage demand response.“
The updated methods will flatten the increase in day-ahead and intraday market price limits. Due to expected high energy prices, ACER urged the Nominated Electricity Market Operators (NEMOs) to submit proposals to amend the Capacity Allocation and Congestion Management methodologies related to:
– The Harmonised Maximum and Minimum Clearing Price (HMMCP) methodology for Single Day-Ahead Coupling (SDAC); and
– The Harmonised Maximum and Minimum Clearing Price (HMMCP) methodology for Single Intraday Coupling (SIDC).
The resulting effects of these amendments will be to more gradually adjust the short-term electricity market price limits, limiting a cascading effect of increases in case of repeated extreme prices resulting from the current methodology, while conserving the benefits of timely adjustments of the price limits on the efficiency of the European spot markets, as the following examples demonstrate.
Apart from these amendments, transmission system operators (TSOs) are required by ACER to ensure that sufficient cross-zonal interconnection capacity is available to maintain the stability of the energy system, and market participants should significantly influence demand-side management.