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+ Ensure security of supply in France through obligation of obligated parties and by providing generation and demand response capacities in exchange for remuneration

Beneficiaries

  • Generators
  • Consumers
  • Suppliers
  • Obligated parties
  • Capacity Portfolio Manager
  • Certified Entity Holder
  • Aggregators
  • DSO

Presentation of the mechanism

The capacity mechanism is intended to safeguard the security of electricity supply in France during peak winter periods. It is based on the obligation for obligated parties to cover consumption during peak periods and on the certification of generation and demand response capacities.

  • Capacity operators (generation and demand response capacity) undertake to ensure availability during peak winter periods. The MW availability commitment over a year is established in a certification contract with RTE and constitutes the certified capacity level (CCL). RTE issues capacity guarantees (CGs) to the contract holder which it can sell to obligated parties OTC or at EPEX SPOT market sessions. In the capacity mechanism, the year is referred to as the delivery year (DY) and covers a period of 12 months from 1 January to 31 December.
  • Obligated parties demonstrate on an annual basis that they are able to cover customer consumption during peak winter periods. To meet this obligation, they must hold. Obligated parties are suppliers, as well as end consumers and system operators for their losses, which, for all or part of their consumption, are not supplied by a provider.

 

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The capacity mechanism begins four years upstream:

  • Generation capacity operators in service in DY-4 (4 years before the start of the delivery year) are required to certify their generation capacity for year DY by 31 October, DY-4.
  • Demand response capacity operators are not under obligation to certify their capacity. They may choose to certify their capacity for year DY up to the end of DY-1.
  • Depending on the evolution of the availability of certified capacity, and under certain conditions, it is possible to increase or decrease the certified capacity level by making adjustment requests until 15 January of year DY+1.
  • By certifying their capacity with RTE, capacity operators then become holders of certification entities (CE holders). RTE then issues them capacity guarantees on the capacity guarantees register (Rega register of CGs). CE holders sell them on the capacity market.

The trading sessions for exchanging capacity guarantees are held by EPEX. Results of each trading session are published on the website of EPEX.

The auction schedule for capacity guarantees is also available on the «Trading products»  page of the EPEX SPOT website under "Capacity".

During the year of delivery, RTE notifies each day in day-ahead the peak days PP1 (for the obligated parties) and PP2 (for operators) during which obligated parties and capacity operators will have to fulfil their respective obligations. 10 to 15 days PP1 and 10 to 25 days PP2 may be notified each year, from 1 January to 31 March and from 1 November to 31 December ), and from 7:00 to 15:00 and from 18:00 to 20:00 :

  • A PP1 day is also a PP2 day.
  • PP1 days may only be selected among business days, except for Christmas school holidays of the delivery year as defined in the national school calendar order in force.
  • PP2 days can be selected from any day aside Saturdays and Sundays, and Christmas school holidays of the delivery year as defined in the national school calendar order in force.

Retrospectively, in year DY+3, RTE carries out checks for year DY:

  • To verify that obligated parties have held the level of guarantees necessary for the consumption of their customers on the basis of actual consumptions. Imbalances result in a financial settlement.
  • To verify that generation and demand response capacities have fulfilled their availability commitment. For this purpose, RTE calculates the actual capacity level of the capacities and establishes the difference with the certified capacity level of the certification contract. Imbalances result in a financial settlement.

 

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Method for choosing PP1 days

The capacity mechanism terms and conditions, laid down by the 29 November 2016 decree, detail the principles for selecting the PP1 days used for calculating the capacity obligation of obligated parties.

RTE provides a note for market participants on the algorithm for selecting PP1 days by RTE.

Participate in the capacity mechanism

Participate as an obligated party:

Obligated parties by default are the suppliers, as well as end consumers and system operators for their losses, which, for all or part of their consumption, are not supplied by a provider.

However, the French Energy Code provides for several cases of capacity obligation transfers.

Consult the summary on the role and obligations of obligated parties.

Obligated party status is acquired by signing a dedicated contract with RTE.

Participate as a capacity operator, CE holder and capacity portfolio manager:

As a capacity operator, you can make a certification request yourself or mandate a company (including demand response aggregators for demand response capacities) that then becomes the "Certification Entity holder" (CE). Capacities are certified through a contract between the CE holder and RTE.

Aggregation is compulsory for generation sites with installed power below 1MW and consumption sites with available power below 1MW.

During certification, the CE holder must attach the CE to the perimeter of a Capacity Portfolio Manager (CPM) by becoming a CPM itself or by designating a company. The CPM is a legal entity that is financially responsible for the overall imbalances (the imbalance between the actual capacity level (ACL) and the certified capacity level (CCL)) on its perimeter.

In this capacity, it is subject to the financial settlement of the Capacity Portfolio Manager’s imbalance. The certification perimeter is the reference for calculating the CPM imbalance during the delivery period for the calculation of the financial settlement it is responsible for. The Capacity Portfolio Manager status is acquired by signing a dedicated contract with RTE.

View the summary on the role and obligations of operators, CE holders and capacity portfolio manager.

Call for tenders for new capacities

Every year, if there has been a benefit identified for social welfare, the minister in charge of energy holds a call for tenders for new capacities, four years ahead of the delivery year. Aim: to offer visibility and a stable price to facilitate new investments. New capacity providers will be awarded a contract for difference for their capacity revenue for a period of 7 years (set guaranteed price following the call for tenders).

Find out more > Responding to the call for tenders for new capacities.

Contracting

To participate in the capacity mechanism you are required to adhere to the rules and additional provisions of the mechanism. To do this, depending on your role in terms of the mechanism, you sign:

RTE also provides you with contractual models.

Price

Obligated party: 4€/MW of reference power per year (RTE fee for calculating obligation for the total perimeter of the obligated party).

Certification Entity:

  • 500€/account/year (fixed costs for REGA account management)
  • 0.38€/capacity guarantee/year (variable costs for managing the capacity guarantees registry invoiced during any sale of capacity guarantees, capped at 1€/guarantee/year).
  • 10€/MW (PTS certification fee)

Access the Information System

To participate in the capacity mechanism you are required to:

Data exchanges between actors and RTE are carried out via specific IS applications and according to defined file formats:

  • RMC platform: for data exchange relating to capacity obligation.
  • SFTP server: for data exchange relating to capacity certificates.

To help you use these applications, RTE provides tutorials for using IS applications in the context of the capacity mechanism.

Additional offers

To help you better understand how the capacity mechanism works, RTE provides you with:

For more transparency, RTE offers a set of data services.

Find out more

Distribution system operators

Reports relating to the capacity mechanism

Certification

The on-line certification process :

  • Tutorial "Change your “Entité De Certification (EDC) "parameters"

  • Tutorial "Viewing and managing your RPC (Capacity Portfolio Manager) perimeter"

CRE deliberations

Contact

Your sales representative is at your disposal for any additional information on the capacity mechanism. For any technical questions relating to the operational implementation of the mechanism, contact RTE at: rte-mecanismecapacite@rte-france.com