From the New Year on, Slovakia is expecting a major milestone in its energy policy as our country will be actively connected to the transnational platforms MARI and PICASSO for cross-border exchange of regulatory electricity. "Connection to these platforms may lead to a change in the level of electricity costs and we will see whether to a significant or negligible extent. The whole process will certainly result in a supply of green electricity and its distribution that is stable, not only within the countries, but throughout the region," explains Barbora Balunová, an energy law expert at L/R/P advokáti.

EU energy security at first place

If one of the pillars of EU energy policy is decarbonisation, the other pillar is energy security, the absolute need for which has been underlined by the war conflict in Ukraine. "In light of the latest energy crisis, however, it is clear that these two pillars of the EU's energy policy are interlinked and will only stand firm together," says Barbora Balunová. Renewable energy sources reduce dependence on fossil fuel imports and increase the energy independence of Member States. This is a clear vision for European energy and individual Member States have already jumped on the bandwagon of building sustainable energy sources. Renewable energy sources are thus contributing more and more to the EU's total energy consumption. However, green sources have their natural limits, which are created by natural conditions and changes in natural conditions. Solar power plants produce more energy during the spring and summer months, while wind power plants have a more significant contribution to make during the colder and windier seasons. Therefore, in addition to building new green sources within the national and European area, we also need to ensure secure and stable electricity networks. Massive investment and upgrading of electricity transmission systems is one way forward. In this respect, several projects are being developed, the different Member States are being interconnected so that cross-border transmission and trade in electricity can take place. Another important aspect is the balancing of the electricity market. "In 2017, the EU Commission Regulation 2017/1485 was adopted, which regulates the guidelines on electricity market balancing. This is a major step forward in the regulation of electricity generation and consumption deviations. The Regulation introduces a transparent and participatory way of adopting pan-European or regional regulation and balancing rules, which should therefore be efficient, balanced and proportionate. The ultimate vision under the Regulation is an interconnected and secure European electricity market, cross-border exchange of electricity, including regulatory electricity, coordinated balancing of systems and, of course, affordable prices for consumers, " explains Balunová.

Exchange of regulatory electricity and balancing of deviations

The EU has been on a long-term path to harmonise rules in all areas, but in the case of balancing and the regulation of the electricity market, this is a very challenging and long-term project involving the cooperation of national electricity transmission system operators, ACER and ENTSO-E. ENTSO-E (European Network of Transmission System Operators for Electricity) develops expert guidelines on regulatory electricity sharing and balancing of deviations. ACER (or the European Union Agency for the Cooperation of Energy Regulators) is the EU body with its own competences. "In accordance with Article 8 of Regulation (EC) No 713/2009 of the European Parliament and of the Council, the Agency should adopt a decision if the competent regulatory authorities are not able to reach an agreement on common terms and conditions or methodologies. In principle, the NRAs and the TSOs, in close cooperation and consultation, with the assistance of ENTSO-E, develop common methodologies, procedures for regulating and balancing the regulating system. The Agency's competence remains supportive and consultative until the moment of stalemate between the TSOs and the NRAs," says Balunová.

The CORE region and the judicial dot on ACER's jurisdiction

Slovakia belongs to the CORE region, together with the Czech Republic, Hungary, Slovenia, Austria, Germany, France, the Benelux countries, Romania and Poland. The ROSC methodology (common methodology for regional coordination of operational security) is intended to provide a legal framework to ensure the proper functioning of the internal electricity market and the operational security of regional electricity systems. The Agency adopted a decision on this methodology in December 2020, as a result of long negotiations between TSOs and NRAs, which, however, did not find a common consensus within the set deadline. The Polish TSO disagreed with the Agency's decision and sued the Agency before the EU General Court. "The latter ruled in September this year that both the agency and the ROSC methodology are in line with the European legal framework, do not interfere with the TSO's competences, and also that the agency had the competence under the regulation to approve the ROSC methodology for the CORE region, " explains Balunová. "On the other hand, the EU General Court also ruled this year that ACER in another case exceeded its competence in adopting a methodology for cost sharing redispatch and countertrade for the CORE region."

New challenges for the Slovak energy market

Within the Central European region, the transition to a single European or regional platform for the purchase of regulatory electricity has been delayed for several years in order to ensure full security of supply and to avoid any malpractice. As of 1 January 2025, Slovakia is expecting a major milestone; as our country will be actively connected to the transnational platforms MARI (Manually Activated Reserves Initiative) and PICASSO (Platform for the International Coordination of Automated Frequency Restoration and Stable System Operation). Therefore, the total price of electricity supply will also reflect the costs of balancing deviation and the purchase of regulatory electricity within these platforms. There is an ongoing controversy within the expert community as to whether the overall electricity prices for consumers will increase or decrease. However, this change will happen against the backdrop of large energy companies, including national TSOs, and will ultimately mean an increase in the share of green electricity in the energy mix used by users for their consumption. "Connection to these platforms may lead to a change in the electricity costs and we will see whether to a significant or negligible extent. The whole process will certainly result in a supply of green electricity and distribution that is stable, not only across countries but throughout the region. After this important step, we will once again be a more stable and secure energy union," adds Balunová.

Read more: Slovakia will become part of European Regulated Electricity Market