Market codes

The aim of the market codes is to promote the uniformity of European electricity markets, by ensuring that interconnections between countries are available to market participants as efficiently as possible. In order to achieve this aim, market codes create harmonised operating practices for cross-border trade in long- and short-term electricity products and reserves, as well as harmonising procedures related to imbalance settlements.

​The market codes are:

  • Capacity Allocation and Congestion Management Guideline, CACM
  • Forward Capacity Allocation Guideline, FCA
  • Electricity Balancing, EB


Capacity Allocation and Congestion Management Guideline, CACM

Commission regulation (EU) 2015/1222 on the Capacity Calculation and Congestion Management Guideline entered into force on 14.8.2015. 

For electricity market participants, the regulation means, among other things, a larger amount of information collected on production and consumption. CACM also means the expansion of electricity market integration throughout the EU area, in terms of both the day-ahead market and the intraday market.

CACM requires that all bidding zones in the single market have at least one Nominated Electricity Market Operator (NEMO). CACM also allows competition between power exchanges. In future, several power exchanges may operate in Finland and the other Nordic countries.

As a new thing for the Nordic electricity markets, CACM requires that a price for cross-zonal capacity is also formed in intraday markets in case of congestions. One alternative for implementing this could be to organise intraday auctions. Development to solve this issue of intraday capacity pricing is currently ongoing.

Network Code at EUR Lex site

Forward Capacity Allocation, FCA

A draft guideline for forward capacity allocation was approved at a comitology meeting on 30.10.2015. 

In the Nordic countries, TSOs have not historically sold transmission rights; price hedging has been based on hedging carried out on the financial market (EPAD, EPAD combo).

In future, the Nordic model will still be possible, if the regulatory authorities consider that the hedging possibilities offered by the financial markets are sufficient. If hedging possibilities are insufficient, TSOs will be obliged to offer long-term transmission rights or to ensure in some other way that long-term hedging products to support the electricity wholesale market are available.

Network Code at EUR Lex site

Electricity Balancing, EB

The Electricity Balancing network code aims to promote the cross-border trade of reserves required by TSOs, in particular regulating power, and to harmonise procedures concerning imbalance settlements.

In the procurement of regulating power and reserves, the electricity balancing guideline means the expansion of the market area with the integration of national and regional balancing power markets. In future, the bidding curves of the balancing power markets must be made public.

The products structure of the balancing power markets will also change with the introduction of harmonised European products.

In the reserve markets, purchasing periods of no more than one month will be used. By special permission of the Energy Authority, the present yearly market of frequency-controlled reserves is, however, still possible.

The electricity balancing guideline requires harmonisation of the main principles of imbalance settlements. This may have an effect on the pricing of imbalance power, the calculation of balances and the scheduling of imbalance settlements, among other things. The Agency for the Cooperation of Energy Regulators ACER has proposed harmonisation of the length of an imbalance settlement period to 15 minutes.

Network Code at EUR Lex site