ENTSO-EERAA
Revision of the ERAA methodology triggered by the Electricity Market Design Reform
Triggered by the energy crisis of 2022, the European Commission (EC) proposed an Electricity Market Design Reform (EMDR), including targeted updates to the Electricity Regulation. These updates entered into force in July 2024, and the Electricity Regulation (recast) now provides that:
- capacity mechanisms (CMs) are no longer last resort nor temporary measures;
- the EC had to adopt a report assessing the possibilities of streamlining and simplifying the process of applying a CM; and
- request that ACER amends the methodology for performing the European Resource Adequacy Assessment.
On 5 March 2025 the EC released its report on “the assessment of possibilities of streamlining and simplifying the process of applying a capacity mechanism”. The report highlighted that in addition to the complexity of the CM approval process, several stakeholders had been critical about the complexity of the ERAA methodology. To address these concerns, the EC requested ACER to update and streamline the ERAA methodology in a number of areas to ensure the robustness of the framework, ease its implementation by stakeholders (ENTSO-E at EU level and TSOs or other entities at national level) reflecting on the lessons learnt from case practice.
On 16 April 2025, ENTSO-E received an official request from ACER to propose amendments to the methodology for the ERAA based on the EC’s report. The final proposal should be submitted to ACER by 16 October 2025 for approval or amendment.
ENTSO-E’s principles for amending the ERAA methodology
With the publication of the ERAA 2024 in April 2025, ENTSO-E has delivered four editions of the ERAA. In doing so, ENTSO-E has gained significant experience in implementing the ERAA methodology and identified several lessons learned. Many of its member TSOs have also performed NRAAs national resource adequacy assessments (NRAAs) at national level based on the ERAA methodology. With the experience and lessons learned so far, ENTSO-E has identified severalENTSO-E’s main key principles for the future ERAA:
- The ERAA is a tool for identifying resource adequacy concerns;
- The ERAA is not a crystal ball, and key uncertainties that impact resource adequacy should be considered at the core of the ERAA;
- The number of reference scenarios, selection of target years and sensitivities are interdependent and should be carefully chosen to maximise the value for MSs, while ensuring the ERAA is feasible to deliver in the mandated time frame;
- The role of economic viability assessment (EVA) should evolve to further increase its robustness; and
- The complementarity and equal importance of the ERAA and NRAAs in identifying resource adequacy concerns and potential need for a CM should be affirmed.
On 29 April ENTSO-E published a reaction to the EC streamlining report. While welcoming several proposals of the EC, ENTSO-E cautioned against a number of proposals – including a proposal for a simplified State Aid process based on ERAA – that would significantly broaden the scope and complexity of the ERAA and risk delaying delivery and undermining its utility at national level.
In that context, ENTSO-E has proposed several draft amendments to the ERAA methodology which would streamline and simplify its implementation by stakeholders, enhance the robustness of the ERAA, increase its value for Member States, taking into account the proposals of the EC and ACER.
Revised ERAA methodology
ENTSO-E will launch a public consultation for the first version of its revised ERAA methodology, along with an accompanying explanatory note.