Forward Capacity Harmonised Allocation Rules (HAR) contain the terms and conditions for the allocation of Long Term Transmission Rights.

         
          
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According to Article 52(1) of the Commission Regulation (EU) 2016/1719 of 26 September 2016 establishing a guideline on forward capacity allocation (FCA Regulation), the requirements for HAR for long-term transmission rights cover physical transmission rights (PTRs) and financial transmission rights (FTRs) in the form of FTRs-options and FTRs-obligations.

 

The provisions of the HAR are applicable to the bidding zone borders in the EU, unless otherwise decided by the relevant National Regulatory Authorities (NRAs) in accordance with Article 30 of the FCA Regulation.

 

HAR documentation is currently incorporated into Annex I of the Decision of the Agency for the Cooperation of Energy Operators (ACER) No 15/2021 of 29 November 2021 on the TSOs’ proposal for amendment of the harmonised allocation rules for long-term transmission rights.

It was preceded by ACER's Decisions No 14/2019 of 29 October 2019 and No 03/2017 of 2 October 2017.

 

HAR are to be read in the context of the objectives of Article 3 of the FCA Regulation.

 

The Recitals of the HAR refer to the objective of promoting effective long‐term cross‐ zonal trade with long‐term cross‐zonal hedging opportunities for market participants as the harmonisation of all the relevant rules will ease the creation of a level‐playing field across Europe.

 

In particular, the HAR set out the rights and obligations of registered participants (who will accede to these rules by the signature of the participation agreement) as well as the requirements for participation in auctions.

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See Harmonised allocation rules for long‐term transmission rights (Annex I to the ACER Decision No 15/2021 of 29 November 2021).

 

Moreover, they describe the process of auction, including the determination of marginal price as a result of auction, the conditions for transfer and return of Long Term Transmission Rights, for remuneration of holders of such returned Long Term Transmission Rights, and the processes for curtailment of Long Term Transmission Rights and invoicing/payment.

 

Before the ACER’s Decision 03/2017 there were multiple allocation rules across the EU which were required to be aligned and implemented by the single Forward Capacity Allocation Platform based on HAR.

 

This was the effect of actions in the course of the early implementation of the FCA Regulation (before its entry into force).

 

In 2015 ENTSO-E submitted the final version of the harmonised allocation rules to national authorities who approved it in the first quarter of 2015.

 

The first yearly allocation based on the harmonised allocation rules was organised by the Joint Allocation Office – joint service company of 20 TSOs at the end of 2015 (ENTSO-E Annual Report 2015, p. 21) and applied for the long-term auctions of 2016.

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See also: 

 

Forward Capacity Allocation

 
Firmness

 

Joint Allocation Office (JAO)

 

Bidding Zone 

 

Capacity allocation 

 

The development of Forward Capacity Harmonised Allocation Rules is envisioned in Articles 4(1), 6(d) and 51(1) of the FCA Regulation - see box.


Pursuant to Article 4(7)(e) of the FCA Regulation the regional rules for Forward Capacity Harmonised Allocation Rules require the approval by all regulatory authorities of the concerned region.

 

In the pursuance of Articles 4(6)(d) and 51(1) of the FCA Regulation all concerned Transmission System Operators (TSOs) submitted a common proposal regarding the harmonised allocation rules on Long Term Transmission Rights to their respective NRAs for approval.

 

The deadline for all TSOs to develop and submit a proposal for the harmonised allocation rules for LTTRs was six months after the entry into force of the FCA Regulation.

 

The proposal for the HAR was submitted for public consultation in the period 16 January 2017 - 17 February 2017.

 

The alignment process ended in summer 2016 when TSOs submitted the updated version of the HAR.

 

However, the NRAs were unable to reach a unanimous decision on the above proposal as stated in their letter of 17 August 2017 because they were not able to agree on the provisions concerning the required credit rating for banks issuing collaterals for market participants, therefore, in accordance with Articles 4(10) of the FCA Regulation and Article 8(1) of Regulation (EC) No 713/2009, the ACER became responsible for the process and adopted the aforementioned Decision 03/2017.

 

The approved rules applied for the first time to the long-term allocations for 2018.


Article 4(6)(d) and (12) of the FCA Regulation provides that amendments to the approved HAR in accordance with Article 51 of the same Regulation require the ACER’s approval.


 
On 29 October 2019 the ACER adopted the Decision 14/2019 on the TSOs proposal for HAR amendment.

 

The TSOs’ proposal for amendment consisted of the complete HAR as contained in Annex I to the Agency’s Decision No 03/2017, subject to the following amendments:
a) addition of one sentence in Recital (5);
b) deletion of redundant definitions in Article 2(2);
c) replacing the term ‘Allocation Platform’ with ‘Single Allocation Platform’ throughout the document;
d) amendments to the foreseen communication method in Articles 9, 50 and 74;
e) amendments in Article 7, 9, and 15 to apply the requirements of Directive (EU) 2015/849;
f) amendments in Articles under Title 3 for an earlier provision of bank guarantees;
g) deletion of the second part of the sentence in Article 31(1)(f), to support the amendment of bids in the auction tool;
h) amendments to Article 58 for a direct reference to the proposal pursuant to Article 69 of the CACM Regulation; and
i) addition of formulas for the calculation of compensation caps in curtailment situations in Article 59.

 

The consolidated version of Harmonised allocation rules for long‐term transmission rights  was incorporated in the Annex I to the ACER Decision 14/2019 of 29 October 2019.


In the framework of biennial review, on 25th June 2021 all TSOs submitted to ACER the HAR amendments in the number of areas, e.g. the introduction of electronic signatures, clarifications on the specific conditions to suspend the accounts of the single allocation platform's members, REMIT reporting and others.

 

ACER generally welcomed some improvements in the TSOs' proposal with the exception of the amendments regarding proposed a cap on remunerating the long-term transmission right holders in case of triggering fallback procedures during the day-ahead capacity allocation.

 

According to the ACER’s communiqué, the Agency believes this is not in line with the FCA Regulation as it clearly states that, under the current conditions in the day-ahead timeframe (i.e. using implicit auctioning), the remuneration principle is based on market spread – even in case of fallback. Therefore, ACER considers any remuneration different from a market spread as lacking legal basis.

 

The above process was concluded on 29 November 2021 when the harmonised allocation rules for long-term transmission rights were once more amended by the ACER Decision No 15/2021.