CACM Regulation (EU) 2015/1222

Title: Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (CACM) Reference: EU 2015/1222 (CACM Regulation) Official Journal: OJ L 197, 25.7.2015, pp. 24–72 In force: Yes; consolidated version 15/03/2021 ELI: http://data.europa.eu/eli/reg/2015/1222/oj Legal basis: Regulation (EC) 714/2009 Art. 18.3(b) and 18.5 Language: Clipping in Swedish (SV); original English

The CACM Regulation establishes harmonized rules for capacity allocation and congestion management across the EU’s day-ahead and intraday electricity markets. It is the primary legal basis for the flow-based capacity calculation methodology (Flow-Based Capacity Calculation) and for single price coupling (cross-border market integration). In the Nordics, CACM is the legal foundation for the transition from NTC to flow-based capacity allocation, which was implemented in October 2024.

Key provisions

Nominated Electricity Market Operators (NEMOs) (Arts. 4–8)

Art. 4: Each Member State must designate at least one NEMO (nominerad elmarknadsoperatör) to carry out price coupling and cross-zonal intraday markets. (The regulation names no NEMO; per Ei R2025:19, both Nord Pool and EPEX Spot hold NEMO permits in Sweden — see Source - Ei R2025-19 Sweden Electricity and Gas Market 2024 (2025).)

Art. 7: NEMO obligations include: receiving orders from market participants, matching and allocating orders per price coupling results, publishing prices, and determining/clearing resulting contracts.

Art. 6: Designation criteria include technical capability, non-discriminatory treatment of market participants, internal cost accounting separation between MCO functions and other activities, and arrangements for market surveillance.

Capacity calculation methods (Arts. 19–26)

Art. 20: Within each capacity calculation region (regions themselves are proposed and approved under Art. 15), TSOs must jointly submit a common capacity calculation methodology to NRAs for approval.

Art. 21: Two permitted methods:

1. Flow-based method (flödesbaserad metod) — the primary method where capacity between bidding zones is highly interdependent. Models power flows physically using PTDFs (power transfer distribution factors) to calculate available capacity at each critical network element. Must be applied first where interdependencies are significant.
2. Coordinated NTC method — may only be used where capacity between zones is less interdependent and flow-based provides no added value.

Recital 7: Flow-based should be introduced first after consultation with market participants and sufficient preparation time to allow a smooth transition (this is a recital, not an operative article — the operative exception allowing coordinated NTC instead of flow-based is Art. 20(7)). The CORE region (Central Western Europe) implemented flow-based for day-ahead in June 2021. Nordic/Baltic region implemented flow-based day-ahead coupling in October 2024 — this is the transition referenced in Flow-Based Capacity Calculation and Bidding Areas.

Common grid model (Arts. 17–19)

Art. 17: TSOs must jointly develop a common grid model (CGM) methodology, merging individual network models into a single EU-wide dataset for capacity calculation.

Art. 19: Each TSO must develop an individual grid model (including production units and loads relevant for capacity calculation) for its control area; individual models are merged into the CGM. The model must reflect the best available forecast of production, load, and network topology.

Price coupling and bidding zone configuration (Arts. 32–40)

Art. 32 (Bidding zone review process): ENTSO-E must perform reviews of bidding zone configurations to assess whether current zones reflect structural congestion. The review must consider:

• Price divergence between zones
• Cross-zonal capacity utilization
• Economic welfare effects of different configurations
• Physical congestion within zones

Sweden’s four bidding zones (SE1–SE4) were established and reviewed under this framework. The persistent SE1–SE4 price differences reflect the structural north-south congestion that NordSyd is designed to address.

Art. 38: Objectives of the price coupling algorithm — must maximize economic surplus for the day-ahead coupling, use marginal pricing (single price per bidding zone and market time unit), take into account cross-zonal capacity and allocation constraints, and be repeatable and scalable. (Fall-back/reserve procedures if the algorithm produces no results are a separate requirement, Art. 44.)

Art. 37: NEMOs, jointly with TSOs, must develop the price coupling algorithm and continuous trading matching algorithm to these requirements. (The regulation does not name the algorithm; “EUPHEMIA” is the name TSOs/NEMOs gave their implementation.)

Intraday markets (Arts. 51–63)

Art. 59: Cross-zonal intraday capacity allocation runs on a continuous basis, opening and closing per bidding-zone border and market time unit (the “continuous intraday cross-zonal gate”); the closing time is set as close to real time as possible while leaving TSOs enough time for balancing and security processes. (Art. 51 instead sets the objectives of the continuous trading matching algorithm itself — maximizing economic surplus per trade, subject to allocation constraints.)

Art. 20(1): The same flow-based/coordinated-NTC capacity calculation methodology applies to both day-ahead and intraday timeframes — there is no separate intraday-specific calculation method. (Art. 54 instead sets the process for NEMOs and TSOs to propose harmonized maximum/minimum intraday clearing prices.)

Art. 55: Minimum cross-zonal capacity available for intraday: no explicit 70% rule in CACM (that is in Electricity Market Regulation 2019/943 Art. 16); CACM establishes the framework within which the 70% rule operates.

Governance and cost recovery (Arts. 70–77)

Art. 75: Costs TSOs incur implementing CACM obligations, assessed by NRAs as reasonable, efficient and proportionate, shall be covered in due time through network tariffs or other appropriate mechanisms determined by the NRAs. (Recital 23 states the parallel principle for NEMOs — that they should be entitled to cover their actual, reasonable and proportionate costs — but this is not itself an operative article; Art. 70 and Art. 72 are unrelated provisions, on guaranteed day-ahead capacity and force-majeure/emergency curtailment respectively.)

CACM and Nordic implementation

The CACM is the primary legal instrument governing how the Nordic market (Nord Pool) operates its day-ahead coupling with Central European markets. Key Nordic applications:

1. Flow-based capacity calculation: CACM Art. 21 required this as the primary method; the Nordic/Baltic TSOs (including Svk) jointly agreed implementation for October 2024 under the Nordic CCM (Capacity Calculation Methodology) approved per CACM’s NRA approval process.

2. Bidding zone review: CACM Art. 32 reviews of SE1–SE4 configurations have been conducted. Sweden has maintained four zones despite discussions about reconfiguration.

3. NEMO designation: Nord Pool and EPEX SPOT both hold NEMO permits in Sweden (Ei R2025:19); Nord Pool’s day-ahead market is where most Nordic/Baltic physical trading takes place.

4. Congestion rent: Under CACM, revenue from capacity allocation (congestion rent) must be used for guaranteed capacity, investment in new capacity, or as a tariff-reducing measure — relevant to how Nordic TSOs use CRA (Congestion Rent Allocation) funds.

Relationship to existing wiki topics