Coordinated net transmission capacity (CNTC) approach
Coordinated net transmission capacity (CNTC) approach is the capacity calculation method based on the principle of assessing and defining ex ante a maximum energy exchange between adjacent bidding zones (Article 2(8) of the Regulation establishing a Guideline on Capacity Allocation and Congestion Management - CACM (Regulation on market coupling)).
20 December 2021
ACER Recommendation on reasoned amendments to the Capacity Allocation and Congestion Management Regulation proposes changes to a wide range of topics, including capacity calculation.
The same definition of the CNTC is used in Article 2(68) of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (recast).
The alternative approach when calculating cross-zonal capacity is flow-based approach.
Both these methods are intended to maximise tradable cross-zonal capacity while safeguarding the operational security standards of the transmission system, also both result in the determination of possible commercial capacity that can be allocated for each direction on each bidding zone border.
However, the distinctive features of the CNTC method are:
It is an acceptable capacity calculation method for non-meshed networks, provided that a sufficient level of coordination is applied (ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Gas Markets in 2016 (Electricity Wholesale Markets Volume, October 2017, p. 22).
CNTC refers to one of the two possible capacity calculation methodologies envisaged in the CACM (in addition to the flow-based approach), while NTC is used to refer to existing capacity calculation methodologies, which are not necessarily as coordinated as required by the CACM.
According to ACER Recommendation of 20 December 2021 on reasoned amendments to the Capacity Allocation and Congestion Management Regulation the coordinated net transmission capacity approach "should only be applied in regions where interdependency of cross-zonal capacities between different bidding zone borders in a capacity calculation region is insignificant and it can be shown that the flow-based approach would not bring added value".
ACER also recommends that prior to the change in the capacity calculation approach, market participants should be consulted and given sufficient preparation time to allow for a smooth transition.