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 for approval or amendment.