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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 31 October of year 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 30 September 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 from 7:00 to 15:00 and from 18:00 to 20:00. 

15 PP1 days are notified each delivery year, distributed as follows:

  • 11 PP1 days are notified over the January-February-March period,
  • 4 PP1 days are notified over the November-December period.

PP1 days may only be selected from the business days of the delivery period of the delivery year, excluding Christmas school holidays of the delivery year as defined in the national school calendar order in force.

The number of PP2 days is between 15 and 25 days per delivery year and are of two types:

  • 15 PP1 days which are also PP2 days
  • 0 to 10 days which are PP2 days excluding PP1 days.

PP2 days exluding PP1 days may only be selected from the days of the delivery period of the delivery year, excluding Saturday and Sunday, and may not be selected from Christmas school holiday days of the delivery year as defined in the national school calendar order in force.

The sum of November PP2 days and March PP2 days is less than or equal to 25% of the total number of PP2 Days for a given delivery year.

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 and PP2 days

The capacity mechanism terms and conditions detail the principles for selecting :

  • the PP1 days used for calculating the capacity obligation of obligated parties, and
  • the PP2 days used for calculating the actual availability of capacity operators

RTE provides a note for market participants on the algorithm for selecting PP1 and PP2 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:

In accordance with European regulations, Article L.335-3 of the Energy Code introduced CO2 emission limits that must be met by all capacities (generation or demand response) in order to be certified under the capacity mechanism. In accordance with Article D. 335-24-1 of the French Energy Code, capacities which do not use fossil fuels (generation capacities using renewable energy sources within the meaning of the French Energy Code, storage or demand response capacity operators which do not use fossil fuels) are exempt from demonstrating compliance with these limits. Compliance with the said limits is to be demonstrated thanks to the CO2 emission calculation tool available on this page, under the “Certification” section.

The emission limits to be respected are the following (in the table below: the contract(*) refers to either the system access contract or the contract for metering service) :

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.

Understanding financial settlements:

Find further information on how the imbalance settlement price is set in the "Calculation of Imbalances and Imbalance Settlement Price" file.

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 delivery year (TSO fee for calculating the obligation of the obligated party for its consumption on TSO level).
  • 7€/MW of reference power per delivery year (DSO fee for calculating the obligation of the obligated party for its consumption on DSO level).

Certification Entity

  • 10€/MW (TSO certification fee for the whole certified entity)
  • 57€/MW (DSO certification fee for the DSO-connected part of the certified entity only)

Costs for REGA account management 

Fixed costs (for Obligated Party, Certified Entity Holder, Capacity Portfolio Manager or Exchange) : 500€/account/year.

Variable costs invoiced during a sale of capacity guarantees (capped at 1€/guarantee exchanged) :

  • Delivery year 2016 and 2017 : 0.38 €/guarantee exchanged.
  • Delivery year 2018 : 0.33 €/guarantee exchanged.
  • Delivery year 2019 and 2022 : 0.11 €/guarantee exchanged.

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

Reliability standard in France

Provided for in Article L. 141-7 of the French Energy Code, the French reliability standard is set by the Minister in charge of energy on the proposal of the CRE. It represents the level of security of supply accepted by the community and is thus used as a reference in the dimensioning of the power system through RTE’s adequacy studies and notably the Bilan prévisionnel multiannual adequacy study published each year by RTE.

The reliability standard is a key parameter of the French capacity mechanism in that it determines the total capacity obligation that the obliged parties must cover by capacity guarantees: the capacity mechanism therefore aims by nature to ensure that this standard is met.

Pursuant to Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity, Decree n°2021-1781 of 23 December 2021 on the reliability standard mandated RTE to draw up, in accordance with the methodologies provided for in the Regulation, an estimate of the reliability standard and its parameters, that can be consulted to the link below and to notify them to the Minister in charge of energy and the CRE.

Reports relating to the capacity mechanism

Certification

Distribution system operators

The on-line certification process :

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

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

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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