Market Committee

The progressive harmonization of electricity market rules is at the heart of promoting an effectively competitive internal market, delivering benefits to society. ENTSO-E’s market team supports TSO members in all areas relating to the development of market mechanisms from design elements to network code implementation but also transparency publications.

The objective of the Market Committee and associated Working Groups and Regional Groups is to ensure that the objectives of the 3rd Internal Energy Market package and the Clean Energy Package are realised and to facilitate the development of a well-functioning European electricity market.

Given the considerable range of actions needed to create a harmonised market, the Secretariat’s Market team has a broad remit. Key areas of work include:


Market Team

Market team

If you would like to contact the Market Team, please get in touch at market@entsoe.eu


Market Integration and Congestion Management

Market Integration

Market integration is the process of progressively harmonising the rules of two or more markets. The creation of the Internal Electricity Market will eventually require the harmonisation of all cross-border market rules so that electricity can flow freely in response to price signals. This will reduce prices by increasing competition, creating more market liquidity (which lowers risk) and reducing the need for back-up generation. Market integration will also increase system security by allowing balancing energy to be drawn from more sources and will assist the integration of renewable energy sources.

Market integration is already well advanced in several areas of Europe, especially in day-ahead markets. However, the adopted approaches are not yet fully consistent and further convergence is necessary. Therefore, a key challenge for market integration is to find ways of harmonising regional rules and market platforms to eventually achieve a common EU approach. The network codes, pave the way for an integrated energy market.

Markets across Europe operate in various time-scales that allow capacity and energy (either individually or combined) to be bought or reserved by companies that wish to use it, thus allowing generators and companies to manage their portfolios. Hence, market integration requires the development of solutions to harmonise forward markets, day-ahead markets, and intra-day and balancing markets. Implementation is on the way with the Single Allocation platform for the forward market, the Single Day Ahead market and the Single Intraday Market.

Congestion Management

Market integration also requires solutions to identify and effectively manage network congestion. Network congestion occurs when electricity is unable to flow where it is needed due to physical (e.g. not enough capacity) or contractual (all available capacity has been reserved) issues. Part of the solution to congestion is often investment, yet appropriate rules for determining the amount of available capacity at a border, and making that capacity available on a non-discriminatory basis is also vital.

ENTSO-E’s Market Integration Working Group

ENTSO-E’s Market Integration Working Group is the focal point for all network code work related to capacity allocation and congestion management (including the network codes on Capacity Allocation & Congestion Management and on Forward Capacity Allocation) and the timely implementation of the Target Model agreed by the European Commission, ACER, ENTSO-E and stakeholders of the Florence Forum.

For more information on market integration and congestion management, please contact Marta Mendoza-Villamayor


Enhancing Regional Cooperation

​​​​​Regional market development through TSO cooperation is, in combination with the network codes, essential to the timely realisation of the benefits that the Internal Energy Market (IEM) will bring to Europe. These regional projects build on solutions defined in the network codes and facilitate learning from the implementation of these solutions.

ENTSO-E enhances regional coordination by working in close cooperation with all TSOs, to facilitate the exchange of information and expertise among TSOs across regions, as well as ensuring consistency between them.

Read TSO Regional Coordination report


Balancing and Ancillary Services Markets

Electricity balancing means all actions and processes, on all timelines, through which TSOs ensure, in a continuous way, the maintenance of system frequency within a predefined stability range.

There are two types of balancing services: balancing capacity and balancing energy:

  • Balancing capacity means a volume of reserve capacity that a balancing service provider (BSP) has agreed to hold and in respect to which the BSP has agreed to submit bids for a corresponding volume of balancing energy to the TSO for the duration of the contract;

  • Balancing energy means energy used by TSOs to perform balancing and provided by a BSP.

Historically, electricity balancing market designs in Europe have followed different principles. ENTSO-E runs annual surveys that illustrate the different approaches towards balancing existing in Europe, e.g. central and self-dispatch models, pay-as-bid and marginal pricing, mandatory or market-based procurement schemes, existence of free offers (without pre-contracting balancing capacity), use of different balancing processes and products, etc.

The guideline on electricity balancing (EB GL), Commission Regulation (EU) 2017/2195 of 23 November 2017, was a first achievement towards the harmonisation of European balancing markets. The EB GL establishes an EU-wide set of technical, operational and market rules to govern the functioning of electricity balancing markets. It sets out rules for the procurement of balancing capacity, the activation and pricing of balancing energy and the financial settlement of balance responsible parties.

Further on the harmonisation of balancing markets, the EB GL requires the development of harmonised methodologies, i.e. detailed binding rules that TSOs shall apply. ENTSO-E’s Working Group Ancillary Services is working towards creating a harmonised approach to ancillary services, and electricity balancing in particular. ‘Ancillary services’ refers to a range of functions which TSOs contract so that they can guarantee system security. These include black start capability (the ability to restart a grid following a blackout); frequency response (to maintain system frequency with automatic and very fast responses); fast reserve (which can provide additional energy when needed); the provision of reactive power and various other services.

The Working Group Ancillary Services has drafted proposals for methodologies on the implementation frameworks for European balancing platforms, the pricing and activation purposes of balancing energy bids, TSO-TSO settlement of energy exchanges related to balancing, imbalance settlement harmonisation, cross-zonal capacity allocation and calculation and standard products for balancing capacity. Most of these proposals have already been drafted and consulted with stakeholders and are under approval process by regulatory authorities.

The integration of balancing energy markets should be facilitated with the establishment of common European platforms for operating the imbalance netting process and enabling the exchange of balancing energy from frequency restoration reserves and replacement reserves. Further information on the four balancing platforms (IN, aFRR, mFRR, RR) can be found in the ENTSO-E website on the EB GL: here.

Other information can be found in the links below:

For more information, please contact Alexander Dusolt and Ricardo Renedo Williams.

CBA ISP

ENTSO-E conducted a Cost-Benefit-Analysis, in order to create a basis for a decision on the Imbalance Settlement Period(s) for Europe. Find more information and the CBA ISP in the final report.

Standard products for aFRR, mFRR and RR

ENTSO-E conducted a study on aFRR to – among others - find out possible implications of a shift from pro-rata to merit order activation. Find the study and its appendix here.

Imbalance Settlement

Work to develop a proposal for harmonisation of the main features of imbalance settlement has been started.

Cross Border Electricity Balancing Pilot Projects

Pilot Projects have been defined to gain early experience in cross border electricity balancing cooperation. Regular updates are given here.

Projects for the early implementation of the European target for IN, aFRR, mFRR and RR

ENTSO-E has started work to set up the way forward to implement the European Platforms in line with the EB GL. Here you can find further information ​on

Furthermore TSOs from Austria, Belgium, Germany and the Netherlands have prepared a study on integrating FRR markets. The Explore study can be found here.

Activation purposes

A list of activation purposes of balancing energy bids is currently being developed.

In order to monitor the transition of balancing markets ENTSO-E is conducting a yearly Ancillary Services Survey. The reports can be found here.

Furthermore ENTSO-E together with ACER is organising regular Stakeholder involvement to exchange on early developments of the Electricity Balancing Network Code / Guideline. The material is published below.

Stakeholder Interaction

Go to -> Balancing Stakeholders Group

For more information, please contact Alexander Dusolt


Integration of Renewable Energy Sources

The European Union has adopted ambitious and wide-ranging binding targets for the reduction of greenhouse gases emissions and the transformation of our energy systems. By 2030, renewable energy sources (RES) are expected to make up 32% of final energy consumption across all sectors, thus translating into approximately 57% of the EU’s generation mix by then.

Achieving this target requires a deep transformation of European systems, markets, networks and regulatory frameworks. In fact, while investments in renewable energy sources have increased significantly over the past decade, harnessing their full potential while also maintaining security of supply and the stability of the physical grid poses new challenges with regards to market integration. Whether due to wind farms and solar parks being dispersed and often located in remote areas far from large consumption centres, to the difficulty in accurately forecasting their electrical output, or to other technical barriers, ensuring system stability with high shares of renewables necessitates important adaptations to the design of markets, products, processes, and coordination schemes. On the other hand, it is also necessary to align incentives and support schemes with system costs, needs and constraints. In this regard, the WG Market Design and Renewable Energy Sources (WG MD RES) plays a pivotal role in assessing challenges, sharing national best practices, and proposing solutions for an efficient integration of renewables into markets and grids.

In November 2016, the European Commission published its ‘Clean Energy for all Europeans’ initiative. As part of this legislative package, the Commission adopted a legislative proposal for a recast of the Renewable Energy Directive. In December 2018, the revised directive 2018/2001/EU (so-called RED II) entered into force. The RED II, among other things, raises the target for the deployment of renewable energy technologies, provides higher long-term certainty for investors while promoting increases competition and market integration of RES. In this context, ENTSO-E published in October 2016 a position paper reviewing the main types of current European renewables support schemes and providing some policy recommendations for RES promotion and integration.

In 2019, the WG MD RES conducted a EU-wide internal survey among TSOs on renewable energy support schemes currently in place. The focus was placed on both active financial promotion schemes and existing regulations concerning market integration for RES. As the latter aspect appears sometimes neglected in public studies, the survey was key in filling a crucial knowledge gap supporting future regulation on achieving a decarbonization of the EU’s electricity mix.

Since then, the WG MD RES has been working a position paper examining the various challenges and solutions brought about by different types of regulatory frameworks for the promotion of RES with specific focus on market integration and on the role of TSOs. The paper notably investigates the success factors of existing policies towards creating adequate market signals for RES (for instance in cases of negative prices), finding a cost-optimum in situations with RES curtailment, participation of RES in balancing markets, and the coordination of RES support with system development.

Furthermore, the WG MD RES has contributed to ENTSO-E work aiming at promoting further integration of RES, demand response and new market players at both transmission and distribution level. In 2017, ENTSO-E notably released a working paper and a position paper on unlocking distributed flexibility and promoting greater TSO-DSO cooperation. In the spring of 2019, the Active System Management report, a study co-authored by ENTSO-E and the four DSO associations, was published. The report provides concrete recommendations on TSO-DSO cooperation, market schemes for coordinated congestion management, and for creating an enabling framework that maximizes the value of flexibility.


Market Design (long term)

The European energy system is undergoing a profound change that impacts electricity grids as much as electricity markets. Decarbonisation, digitalisation and greater decentralisation are transforming the power system and its users. This includes Transmission System Operators’ responsibility to ensure a reliable power system and to facilitate market functioning and market integration.

As the power system evolves, along with technological progress and policy goals, it is important to periodically assess if the design of electricity markets is future-proof. In this context, TSOs and ENTSO-E can play a pivotal role in detecting possible shortcomings of market design, anticipating challenges, and analysing possible solutions.

ENTSO-E is fully committed to complete the implementation of the 3rd package and of the newly entered into force Clean Energy Package (CEP). We believe the CEP will accelerate the integration of European markets and further increase regional cooperation of TSOs, thereby bringing additional benefits to European consumers. Exposing more RES to wholesale price signals and facilitating participation of consumers and storage resources to all electricity markets will further improve liquidity and market efficiency. Nevertheless, further improvements will be needed to match the pace of the energy transition towards 2030 and beyond. Ongoing transformation of the power system, in particular increasing variable and unpredictable flows on all voltage levels, will require stepwise improvements of current models on both system operation and market design. In the current European debate, it is already acknowledged that today’s market design requires evolutions to efficiently meet the future challenges of the energy transition, as well as to accommodate new actors and new technologies.

One such example is moving to shorter gate closure times paired with increasing intraday volumes traded shortly before real time. These drivers require market design solutions that decrease the gap between market outcomes and the physical reality of the grid, so to ensure system security at all times in an efficient manner. Anticipating such longer-term challenges, ENTSO-E has assessed during 2018 and 2019 options for further improvements to the market design in the 2030 horizon and beyond, in particular focusing on better alignment of market operation to power system operation, as well as on better coordination of congestion management and balancing across the EU. A position paper including the result of this analysis should be published by the end of 2019.

Another key challenge for electricity market design is delivering price signals that incentivise the necessary generation investments – as well as demand response development – to ensure resource adequacy in the long term. As average wholesale prices decrease and volatility increases due to the increasing penetration of weather-dependent RES, system requirements for back-up capacity, flexibility and ancillary services increase. Questions arise about the ability of today’s electricity markets to value resource adequacy and Security of Supply, so that they can deliver – timely and efficiently - what the power system and consumers need. In this context, ENTSO-E is engaged in the analysis and public debate about the future design of electricity markets, capacity mechanisms, and emerging flexibility markets.

The Working Group Market Design and RES is the main ENTSO-E reference group in this field and has drafted several policy papers in recent years on market design, capacity mechanisms, demand response. A new paper on market design to ensure resource adequacy in 2030 and beyond is being prepared with the objective to publish it by end of 2020.

  • 2030 Market Design (Coming soon)

European Transmission Tariffs

​​​​Transmission tariffs are one of the key elements of the Internal Electricity Market. There is no single ’correct solution’ for recovering costs related to electric energy transmission such as costs for infrastructure, energy losses, ancillary services, system balancing and re-dispatching, or costs not directly related to TSO activities. Different methods work side-by-side and a direct comparison of tariff rates is not possible.

ENTSO-E’s Overview of Transmission Tariffs in Europe is published annually and analyses the design, structure and level of transmission tariffs in more than 30 countries. The report provides detailed descriptions of the different components that make up transmission tariffs and seeks to provide interested parties with an accessible and comparable overview of the alternative approaches used across Europe.

For more information on transmission tariffs, please contact Christophe Cesson.

Downloads


Inter TSO Compensation

​​​​​​​The Inter TSO Compensation Agreement is a multiparty agreement concluded between ENTSO-E and, ENTSO-E member countries. It is designed to compensate parties for costs associated with losses resulting with hosting transits flows on networks and for the costs of hosting those flows.

The Inter transmission system Operator Compensation for Transits (ITC) is governed by Article 13 of Regulation EC 714/2009. Regulation EC 838/2010 contains further specifications of this ITC mechanism.

According to the mandate, ENTSO-E is to publish the amount of losses incurred on national transmission systems and the methodology used according to art 4.3 of Regulation 838/2010.

For more information, please contact Gerda de Jong

Related Links


Transparency Platform for European Electricity Market Information

Transparency of market information is essential for the implementation of the Internal Electricity Market (IEM) and for the creation of efficient, liquid and competitive wholesale markets. It is also crucial for creating a level playing field between market participants and avoiding the abuse of market power.

Transparency in electricity market information has improved significantly over the past few years, partly thanks to ENTSO-E’s Transparency Platform, operational since January 2015. Many data items of great interest to electricity traders are published daily on the platform.

The Commission Regulation (EU) No 543/2013 of 14 June 2013 on submission and publication of data in electricity markets mandates a minimum common level of data transparency; publication of data on a non-discriminatory basis across Europe; and development of a central information platform, managed by ENTSO-E, to provide all market participants with a coherent and consistent view of the market.

Within this regulation, ENTSO-E is responsible for establishing a central information transparency platform and for leading the work required to define the data to be published on it. Substantial developments are made to enable delivery of reliable information from the larger volume of data. ENTSO-E also engaged in consultation with stakeholders before the delivery of the platform at the end of 2014. ENTSO-E’s Market Information & Transparency Working Group is coordinating and supporting the work flow. For more information related to theTransparency Platform, please visit the dedicated webpage.


Developing Cost Efficient Electronic Data Interchange

Cost efficient and reliably functioning electronic data exchanges in the context of achieving EU Energy policy goals are required to:

  • Facilitate the formation of a well functioning liberalised and harmonised European internal energy market (IEM), both wholesale and retail.
  • Enable smart grid deployment to:
    • Facilitate demand participation into the different market timeframes and ancillary services;
    • Facilitate the integration of renewables by balancing the fluctuations they bring into the grid;
    • Contribute to security of supply and generation adequacy.
  • Further enhance cooperation between all the different market parties.

Harmonisation and implementation of standardised and reliably functioning electronic data exchanges contribute to these objectives, and common business process descriptions and a harmonized role model are therefore necessary. In formats which are easily understood and implemented by the software industry, ENTSO-E’s Common Information Model Expert Group develops and maintains the detailed descriptions of these processes and model, partially in collaboration with other electricity and gas associations and through liaison with European and international standardisation bodies.

For more information on electronic data interchange, please contact please contact ENTSO-E at cim@entsoe.eu

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