# C_2021382EN.01003502.xml

| 20.9.2021 | EN | Official Journal of the European Union | C 382/35 |
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20.9.2021

EN

Official Journal of the European Union

C 382/35

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Action brought on 9 August 2021 — TenneT TSO and TenneT TSO v ACER

(Case T-482/21)

(2021/C 382/49)

Language of the case: English

Parties

Applicants: TenneT TSO GmbH (Bayreuth, Germany), TenneT TSO BV (Arnhem, Netherlands) (represented by: D. Uwer, J. Meinzenbach, P. Rieger, R. Klein and S. Westphal, lawyers)

Defendant: European Union Agency for the Cooperation of Energy Regulators

Form of order sought

The applicants claim that the Court should:

| — | annul the decision A-001-2021 (consolidated) of the Board of Appeal of ACER of 28 May 2021, which upholds ACER Decision 30/2020 of 30 November 2020 on the Core CCR TSOs’ proposal for the methodology for cost sharing of redispatching and countertrading (RDCTCS), in its entirety; |
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annul the decision A-001-2021 (consolidated) of the Board of Appeal of ACER of 28 May 2021, which upholds ACER Decision 30/2020 of 30 November 2020 on the Core CCR TSOs’ proposal for the methodology for cost sharing of redispatching and countertrading (RDCTCS), in its entirety;

| — | order the defendant to bear the costs. |
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order the defendant to bear the costs.

Pleas in law and main arguments

In support of the action, the applicants rely on three pleas in law.

| 1. | First plea in law, alleging that the scope of the confirmed methodology for cost sharing of redispatching and countertrading costs is unlawful. According to this scope, in principle, ‘all’ network elements with a kilovolt level of 220 and higher shall be eligible for cost sharing under the Polluter Pays Principle under Article 16(13) of the Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (‘ER’). This is unlawful. The scope of the cost sharing methodology needs to comply with the capacity calculation process, according to which only network elements with a Power Transfer Distribution Factor (PTDF) of at least 5 % are technically feasible to limit cross-border trade and, thus, to require redispatching and countertrading measures of cross-border relevance.
  The contested decision has to be annulled, because it infringes, in particular, Article 16(13) ER and Article 74(2) and (4) of the Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (‘CACM Regulation’). The Board of Appeal mistakes that a legal basis is necessary to extend the cost sharing under the Polluter Pays Principle also to network elements with a Power Transfer Distribution Factor below 5 %. However, such legal basis does not exist. Moreover, including almost all network elements into the scope of the methodology in question infringes Article 74 CACM Regulation, because it results in wrong incentives and is incompatible with the statutory responsibilities and liabilities of the TSOs involved. |
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1.

First plea in law, alleging that the scope of the confirmed methodology for cost sharing of redispatching and countertrading costs is unlawful. According to this scope, in principle, ‘all’ network elements with a kilovolt level of 220 and higher shall be eligible for cost sharing under the Polluter Pays Principle under Article 16(13) of the Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (‘ER’). This is unlawful. The scope of the cost sharing methodology needs to comply with the capacity calculation process, according to which only network elements with a Power Transfer Distribution Factor (PTDF) of at least 5 % are technically feasible to limit cross-border trade and, thus, to require redispatching and countertrading measures of cross-border relevance.

The contested decision has to be annulled, because it infringes, in particular, Article 16(13) ER and Article 74(2) and (4) of the Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (‘CACM Regulation’). The Board of Appeal mistakes that a legal basis is necessary to extend the cost sharing under the Polluter Pays Principle also to network elements with a Power Transfer Distribution Factor below 5 %. However, such legal basis does not exist. Moreover, including almost all network elements into the scope of the methodology in question infringes Article 74 CACM Regulation, because it results in wrong incentives and is incompatible with the statutory responsibilities and liabilities of the TSOs involved.

| 2. | Second plea in law, alleging that the contested decision has to be annulled because the Board of Appeal unlawfully confirmed the Power Flow Colouring Method (‘PFC’) as the applicable flow decomposition method for the methodology in question.
  The PFC conflicts with the objective of Article 16(13) ER to establish the Polluter Pays Principle. The PFC is not based on actual physical flows, but rather on virtual market results. However, it is commonly known that physical flows deviate from market results. Therefore, the outcome of the PFC does not allow to reliably identify the actual causer of a respective congestion. As a result, the PFC also fails to set correct incentives to manage congestions, remedial actions and efficient investments contrary to Article 74 CACM Regulation. Further, the Board of Appeal did not duly assess the technical aspects which result in the unlawfulness of the PFC and draw implausible conclusions from incapable evidence.
  With regard to flow decomposition, the Board of Appeal also unlawfully confirmed specific assumptions which shall only apply to the flow decomposition process on HVDC network elements. These assumptions are physically unfounded, conflict with Article 16(13) ER and result in an increased cost allocation to HVDC network elements. Furthermore, these assumptions establish a discriminatory treatment of HVDC network elements as in relation to AC network elements. The Board of Appeal did not sufficiently assess these assumptions on HVDC network elements and draw implausible conclusions from incapable evidence. |
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2.

Second plea in law, alleging that the contested decision has to be annulled because the Board of Appeal unlawfully confirmed the Power Flow Colouring Method (‘PFC’) as the applicable flow decomposition method for the methodology in question.

The PFC conflicts with the objective of Article 16(13) ER to establish the Polluter Pays Principle. The PFC is not based on actual physical flows, but rather on virtual market results. However, it is commonly known that physical flows deviate from market results. Therefore, the outcome of the PFC does not allow to reliably identify the actual causer of a respective congestion. As a result, the PFC also fails to set correct incentives to manage congestions, remedial actions and efficient investments contrary to Article 74 CACM Regulation. Further, the Board of Appeal did not duly assess the technical aspects which result in the unlawfulness of the PFC and draw implausible conclusions from incapable evidence.

With regard to flow decomposition, the Board of Appeal also unlawfully confirmed specific assumptions which shall only apply to the flow decomposition process on HVDC network elements. These assumptions are physically unfounded, conflict with Article 16(13) ER and result in an increased cost allocation to HVDC network elements. Furthermore, these assumptions establish a discriminatory treatment of HVDC network elements as in relation to AC network elements. The Board of Appeal did not sufficiently assess these assumptions on HVDC network elements and draw implausible conclusions from incapable evidence.

| 3. | Third plea in law, alleging that the contested decision has to be annulled, because it unlawfully confirms a common loop flow threshold which ACER set to 10 % based on cost estimates. This contradicts Article 16(13) ER, because the threshold is not based on reliable factual data on the level of loop flows that would exist in the absence of structural congestions. ACER was not competent to determine a threshold of 10 %. The threshold also disregards Article 16(8) ER according to which Transmission System Operators may use up to 30 % for internal flows, reliability margin and loop flows. Moreover, the assessment of the Board of Appeal is
  based on factual errors and sets wrong incentives for network investments contrary to Article 74 CACM Regulation. Furthermore, the Board of Appeal committed a legal error by assuming that Article 16(13) ER would require a loop flow threshold only per bidding zone instead of per bidding zone borders. |
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3.

Third plea in law, alleging that the contested decision has to be annulled, because it unlawfully confirms a common loop flow threshold which ACER set to 10 % based on cost estimates. This contradicts Article 16(13) ER, because the threshold is not based on reliable factual data on the level of loop flows that would exist in the absence of structural congestions. ACER was not competent to determine a threshold of 10 %. The threshold also disregards Article 16(8) ER according to which Transmission System Operators may use up to 30 % for internal flows, reliability margin and loop flows. Moreover, the assessment of the Board of Appeal is

based on factual errors and sets wrong incentives for network investments contrary to Article 74 CACM Regulation. Furthermore, the Board of Appeal committed a legal error by assuming that Article 16(13) ER would require a loop flow threshold only per bidding zone instead of per bidding zone borders.

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