Czech regulator backs split of controversial German-Austrian bidding zone

The Czech Energy Regulatory Office (ERÚ) has officially commented on the split of the Austrian-German bidding zone and supported the move. According to the ERÚ, an appropriate solution would be to introduce a standard system for allocating cross-border capacity, in line with EU Regulation 714/2009/EC.

Splitting the German-Austrian bidding zone is crucial to preventing electricity flows from Germany into the Austrian system via the Czech and Polish transmission systems. These flows place a long-term burden on the grids and increase their operating costs.

Due to the joint Austrian-German bidding zone, there is no standard process for allocating cross-border capacity at the border, allowing the countries to disregard the transmission capability of cross-border lines at this border. As a result, a greater volume of electricity is traded than the transmission capacity at the German-Austrian border can physically carry.

“The proposal has our unequivocal support. Today, Austrians and Germans can route electricity through our territory virtually without restrictions, even though this overloads the transmission system. If the proposal is adopted, they will have to take account of the capacity of our grid. This will strengthen system stability, which is a long-term objective of the ERÚ,” explains Alena Vitásková, chair of the Energy Regulatory Office (ERÚ).

ACER has also backed the split of the zone

ACER had previously commented on the split of the joint bidding zone in its opinion of 23 September last year. The opinion states, among other things, that the joint zone is contrary to the aforementioned regulation and that a standard process for allocating cross-border capacity should be introduced.

The review of the situation was initiated by the Polish energy regulatory authority, which at the end of 2014 requested that the bidding zone's compliance with EU legislation be examined. The ERÚ also submitted comments on this proposal, supporting the split of the zone.

The split of the Austrian-German bidding zone will be felt most by electricity consumers in Austria, where electricity prices are expected to rise if the zone is divided.