The Federation of Austrian Industry, Economic Chamber, EXAA Energy Exchange Austria and VERBUND draw attention to the possibility of indemnity claims, should ACER determine on the separation of the joint German-Austrian electricity market next week.
According to its own statements, the Agency for the Cooperation of Energy Regulators (ACER) will decide upon on the adoption of congestion management on the German-Austrian border at its next council meeting from the 8th to 10th November in the process of determining the Capacity Calculation Region. The Federation of Austrian Industry, Economic Chamber, EXAA Energy Exchange Austria and Austria's leading electricity company, VERBUND, submitted a legal opinion to all European regulators as well as ACER on 4th November 2016, according to which indemnity claims on the part of aggrieved market participants would be valid.
Adopting new bidding zones not within ACER's jurisdiction
The legal opinion by Clifford Chance Deutschland LLP, one of the world's leading law firms, refers to serious procedural and substantive errors. According to European law, the decision about new price zones ("bidding zones") is only possible within the framework of the "Bidding Zone Review Process" by the European transmission network operators and the member states, but not by ACER. This was confirmed by the Directorate General for Energy of the European Commission and the General Court of the European Union. Should ACER decide on the market-split of the joint German-Austrian bidding zone, the affected market participants would therefore have valid indemnity claims against ACER.
No capacity constraints on the German-Austrian border
Studies by renowned German energy sector consultants (such as Frontier Economics, Consentec or Energynautics) clearly demonstrate that capacity constraints exist within Germany, but not on the border to Austria. According to applicable E.U. legislation, congestion management may not be shifted to national borders, but capacity constraints must rather be rectified where they actually exist. Under the terms of Union law on free movement of goods, no trade barriers may be established on national borders, and these must be dismantled where they now still exist.
The Austrian Trade Associations and commercial enterprises urgently warn the European regulatory authority against premature steps that are not in conformity with the law, and once again call for steps toward better and fuller market integration, rather than fragmentation of the only functioning transnational price zone in Europe. Here it is important that the regulators demonstrate their independent status and withstand the political pressure from ACER.