Publication of the report submitted by IPTO and approved by RAEWW on monitoring the margin of capacity available for cross-zonal trade for the year 20

(9)of the Regulation, the National Regulatory Authorities (NRAs) may grant a derogation from the provision of the minimum level of capacity, on foreseeable grounds where necessary, for maintaining operational security. In the case of the border between Greece and Bulgaria, the Regulatory Authority has granted a derogation to IPTO for the years 2020, 2021, 2022 and 2023 for the reasons analytically presented in the relevant decisions. For the border between Greece and Italy, there has been no need for granting a relevant derogation to the TSO since the full thermal capacity (500 MW) of the GR-IT interconnection (DC link) is usually offered to the market, complying this way with the minimum 70% target. In July of 2019, ACER issued Recommendation 01/2019 detailing a methodology for the computation of the level of cross-zonal capacity to be made available for cross-zonal trade. Based on the criteria included in the Recommendation, ACER has published two reports on the result of monitoring the margin available for cross-zonal electricity trade in the EU in the years 2020 (part a and

1. b)and 2021, respectively, and pointing out whether this is consistent or not with the 70% requirement. According to the provisions of Article 59 of Directive (EU) 2019/944 the effective compliance of each TSO with the 70% rule is the responsibility of the competent NRA. To this effect, IPTO has submitted to RAEWW its report on monitoring the margin of capacity available for cross-zonal trade for 2021 at the bidding zone borders of Greece with other EU-Member States (Italy and Bulgaria), based on computational results provided by ACER. After careful evaluation, RAEWW considered that the above-mentioned report for 2021 is sufficient for monitoring the level of capacity available for cross-zonal trade at the bidding zone borders of Greece-Bulgaria and Greece-Italy and for the effective compliance of IPTO with the 70% rule and approved the relevant report. Attached file: 1) IPTO’s report on monitoring the margin of capacity available for cross-zonal trade for 2021 MONITORING THE MARGIN OF CAPACITY AVAILABLE FOR CROSS-ZONAL TRADE FOR 2021 October 2022 Table of Contents Chapter 1: Introduction ........................................................................... 2 Chapter 2: Methodology for the compliance assessment ........................ 3 Chapter 3: GR-BG border ......................................................................... 5 Chapter 4: GR-IT border .......................................................................... 14 Chapter 5: Conclusions and further actions ............................................ 15 1 Chapter 1: Introduction In 2019, Regulation (EU) 2019/943 set new measures for electricity markets. One goal of the reform was to make sufficient capacity or Margin Available for Cross-Zonal Trade (MACZT). The associated measure, so called “minimum 70% target”, applies since January 1st, 2020 and requires Transmission System Operators (TSOs) to offer 70% of MACZT. Upon request of the TSOs, the National Regulatory Authorities (NRAs) may grant a derogation from the provision of the minimum level of capacity, on foreseeable grounds where necessary, for maintaining operational security. Moreover, Member States may adopt transitory measures through an action plan to cope with structural congestions. When an action plan is in place, the minimum level of capacity (70%) should be reached by 31 December 2025, while in the meantime, a linear trajectory should be matched. On the verge of the entry into force of the 70% rule, in July 2019, ACER issued Recommendation 01/2019 (hereinafter: the ACER Recommendation) detailing a methodology for the computation of the level of cross-zonal capacity to be made available for cross-zonal trade. Based on the criteria reported in the Recommendation, ACER published reports for the years 2020 and 2021, presenting the level of cross-zonal capacity offered on each border and pointing out whether this level is consistent or not with the 70% requirement. ACER reports have nonetheless only a monitoring scope, since assessing the effective compliance of each TSO with the 70% rule is the responsibility of the competent NRA. With this report, IPTO presents its assessment of the status of the 70% rule in 2021 on its EU borders with Italy and Bulgaria. This report is based on computational results provided by ACER. Chapter 2 describes how compliance with the 70% rule is assessed in a coordinated net transmission capacity (hereinafter: cNTC) environment. Chapter 3 is devoted to the GreekBulgaria border, while Chapter 4 focuses on the Greek-Italian border. Chapter 5 reports the conclusions. 2 Chapter 2: Methodology for the Compliance Assessment Following numerous interactions with the European Commission (EC), the European Network of Transmission System Operators for Electricity (ENTSO-E), NRAs and TSOs, ACER issued a Recommendation to ensure a consistent approach to the calculation and monitoring of the MACZT, and to support legal compliance enforcement. The main principles of the calculation are: 1. The MACZT is monitored for the limiting Critical Network Element and Contingencies (CNEC). 2. The MACZT is the sum of the Margin made available within Coordinated Capacity Calculation (MCCC), and the flow induced by cross-zonal exchanges beyond coordinated capacity calculation – the Margin from Non-Coordinated Capacity Calculation (MNCC). ACER recommends computing the Margin Available for Cross-Zonal Trade ( ZT) within a coordination area using the following equation for each CNECi, timeframe and timestamp (CC MTU): = + N The estimated MACZT focuses on the physical capacity offered for the long-term timeframes and the day-ahead timeframe. 3. The influence of flows on bidding-zone borders between EU and non-EU countries is monitored separately. is computed for each coordination area, i.e. for each set of borders on which the cross zonal capacity is computed in a coordinated manner. For cNTC areas, the following formula is applied : MCCC =  pPTDFb * NTC i i b b where: • pPTDF bi is the positive PTDF of CNEC i in the direction associated to border b • b is the net transfer capacity computed in the capacity calculation process for border b for the considered timeframe; • the sum is extended to all the borders within the coordination area. In both flow based and cNTC areas, is computed by multiplying the corresponding zone related PTDF with the net position associated to the bidding zones in the common grid model used for the relevant capacity calculation; before the computation the net position is adjusted in order to filter out the exchanges within the coordination area that are taken into 3 account in the MCCC. To calculate MACZT as the sum of MCCC and MNCC, the concept of coordination areas is used. It describes the sets of bidding-zone borders within which capacity calculation is performed. For the Greek TSO one national coordination area is the North Greek borders, which includes the TSOs of Albania, North Macedonia, Bulgaria and Turkey, because the flows as well as the exchange programs at the north Greek borders are independent, so the calculation for the total Greek imports/exports is managed initially and for each border afterwards. In case of borders consisting only of HVDC, the computation can be simplified: since the flows on HVDC are usually fully controllable, is equal to zero (i.e. no flows on the HVDC due to exchange outside the coordination area) and is equal to the on the considered border. The cNTC compliance with the 70% rule can be assessed by ensuring that the limiting CNEC has a margin equal to 70% in the original computation or by an adjustment of the original value of cross-zonal capacity, in case no limiting CNEC matches the 70% rule at the end of the cNTC calculation process. In that case, it is enough to evaluate the minimum increase of crosszonal capacity looking at the limiting CNEC. Besides CNECs, TSOs may introduce additional so-called allocation constraints, which may further limit cross-zonal exchanges. These constraints are used by TSOs, when they are needed, to maintain the transmission system within operational security limits; most often these constraints cannot be transformed efficiently into a maximum flow allowed on individual CNECs. 4 Chapter 3: GR-BG border This section presents the results of the compliance for the bidding-zone border GR-BG. Capacity calculation may be coordinated for several borders within a country, forming a national coordination area. For IPTO, this includes the north Greek borders with Albania, North Macedonia, Bulgaria and Turkey, and so the borders of IPTO-OST, IPTO-MEPSO, IPTOESO, IPTO-TEIAS. In view of the above, the figures that follow, show the percentage of hours for which the MACZT was above, or below, the minimum 70% target, for the North Greek capacity coordination area. At the Greek north borders the cNTC approach is used: the cross-zonal capacity has been computed on the entire Greek Northern borders by increasing/decreasing injections in Albania, North Macedonia, Bulgaria and Turkey and by decreasing/increasing injections in Greece. The capacity calculation methodology applied is the SEE CCM, which has been in force since July 2021. Data used for calculations To enable the monitoring of the MACZT on AC borders, ACER requested TSOs to provide the following data: -the description of their coordination areas (i.e. the bidding-zone borders on which a coordinated capacity calculation applies) -the list of all CNECs (for flow-based coordination areas) or at least the limiting CNECs per direction and coordination area (for NTC-based countries), for all hours, and the Fmax of each CNEC (Fmax is the maximum admissible flow on critical network elements, respecting operational security limits) -either: the PTDFs on all relevant borders; or at least one representative merged grid model and the grid model identifiers of the CNECs in the merged grid model, to allow ACER to calculate the PTDFs. The PTDFs describe the impact of a commercial exchange between two bidding-zones on a CNEC. -when and where relevant: the allocation constraints applied by TSOs, if any -the offered capacity (NTC values) calculated by the TSO, before consolidation with the neighboring country (i.e. before taking the minimum of the two TSOs’ values); -the TSO’s forecasts of cross-zonal exchanges between countries at the time of capacity calculation. TSOs were offered the possibility to perform themselves, partially or fully, the calculations of the MACZT and to provide the intermediate and/or final results to ACER. In this case, ACER 5 required that the underlying calculations be performed in line with the Recommendation. ACER evaluated both the quality of the data and the alignment of TSOs’ calculation with the Recommendation. IPTO provided ACER with the list of the limiting CNECs per direction for the coordination area of North Greek borders, for all hours and the Fmax of each CNEC. For all calculations, the offered capacity (NTC values) calculated by IPTO, before consolidation with the neighboring country (i.e. before taking the minimum of the two TSOs’ values when capacity is calculated unilaterally) was used. IPTO is not using any allocation constraints, so no results from such parameters which limit cross border exchanges are presented. ACER provided IPTO with the PTDFs based on representative grid models from the ENTSO-E merged models, however in these models the interconnection GR-TR is missing; for this reason, no results were provided during the timeframes where the line GR-TR was the Critical Network element of the capacity calculation. For these hours, the indication ‘’failure’’ appears in the graphs. The ‘’out of service’’ timeframe in the graphs appears when the tie line BG-GR was out of operation for maintenance purposes. ACER provided IPTO with the the MCCC and MNCC values for each limiting CNECs with and without third countries. 2021 status For the year 2021, the cross-zonal capacity was computed based on a CACM-compliant methodology but without considering the 70% requirement due to the non-compliance of the current SEE CCM with the 70% rule and the lack of agreement with any third countries. The impact of considering or not the exchanges with third countries may be significant, in particular for countries bordering non-EU countries. The figures that are presented in the report highlight that this impact is particularly noticeable for Greece, bordering with Albania, North Macedonia and Turkey. IPTO cases also indicate two particular situations: -failure where no results were provided when the critical network element is the tie line GRTR which is not presented in ACER models and analysis (indication “failure”). -timestamps when the line BG-GR is out of operation due to maintenance (indication “out of service”). ACER provided the initial results in April 2022 and an updated version in May 2022. All figures presented below are based on the updated results. Figures 1 and 2 below illustrate the percentage of the time when the minimum 70% target was reached not considering third countries and considering third countries for each direction (BG-GR and GR-BG) and totally for both directions, showing the time where the BG-GR border 6 was out of service and when there was a failure in the process. Failure in the process concerns 36% of the hours in the direction BG-GR when the CNEC was the interconnector between Greece and Turkey. Figures 3 and 4 illustrate the percentage of the time when the minimum 70% target was reached only in cases where MACZT was calculated. Figure 1.Percentage of the time when the minimum 70% target was reached for each direction 2021(on limiting CNECs) 7 Figure 2. Percentage of the time when the minimum 70% target was reached in total for both directions - 2021 8 Figure 3. Percentage of the time when the minimum 70% target was reached for each direction only in cases where MACZT was calculated - 2021 9 Figure 4. Percentage of the time when the minimum 70% target was reached in total for both directions only in cases where MACZT was calculated - 2021 10 Figures 5 and 6 below illustrate the average margin available on elements where the minimum 70% target is not reached, not considering (top) and considering (bottom) exchanges with third countries for 2021 per direction (GR-BG and BG-GR) and in total. Figure 5. Average margin available on elements where the minimum 70% target is not reached for each direction 2021 11 Figure 6. Average margin available on elements where the minimum 70% target is not reached in total for both directions - 2021 Considering 3rd countries 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 12 Figure 7 below illustrate the share of CNECs with positive and negative MNCC as a % of all CNECs and respective average levels of MNCC as a % of Fmax, not considering and considering exchanges with third countries per direction (GR-BG and BG-GR). Figure 7. Share of CNECs with positive and negative MNCC as a % of all CNECs and respective average levels of MNCC as a % of Fmax - 2021 (% of CNECS) 13 Chapter 4: GR-IT border Italy – Greece border belongs to GRIT CCR that implements a capacity calculation process based on a cNTC approach. Since the GR-IT interconnection consists of a DC link, the computation is simplified and the full thermal capacity (500 MW) is usually offered to the market, except when there is the need to reduce the flows because of congestions in the AC networks in Italy and/or in Greece. In 2021 the thermal capacity of the cable was always offered to the market whenever the cable was available for operation without any reduction requested by the TSOs. Congestions, if any, in the AC network were solved locally. In both cases the Italy – Greece border offered 100% of the available capacity. The analysis is complemented by pointing out the frequency of full unavailability of the interconnection. It should be addressed that the Capacity Calculation methodology for the GR-IT CCR (in force since July 2021), incorporates the 70% rule, reassuring that the minimum margin is always achieved. Figure 8 below illustrate the percentage of the time when the minimum 70% target was reached on the DC GR-IT border, showing the time where the DC cable was out of service. With the DC interconnector GR-IT in service the percentage is 100% as it is shown in the graph. Figure 8. Percentage of the time when the minimum 70% target was reached on the DC GR-IT border – 2021 14 Chapter 5: Conclusions and further actions As it is illustrated in Chapter 4, for 2021, IPTO reached 100% compliance on the Italy – Greece border. Thus, regarding the GR-IT CCR, no derogation applies because the 70% requirement is always fulfilled. Since July 2021 the new GRIT capacity calculation methodology for the day ahead and intraday timeframe is in operation and guaranties that the 70% rule is always considered. For the BG-GR border, the 70% requirement is not currently reached most of the time as illustrated in Chapter 3. Thus, a derogation applied in 2021 and was further requested for 2022. Regarding the justifications underlying this derogation, three main reasons are mentioned: • Absence of consideration of third countries flows, • Insufficient potential for remedial actions and • Development of new processes and/or IT tools However, as Figures 2 & 4 illustrate in Chapter 3, with the consideration of third countries, for both directions, on the 66% of all timestamps and on the 82% of timestamps where MACZT was calculated, the 70% requirement was fulfilled. Low MACZT values appear when third countries are not considered. In that case, three out of four North Greek borders are not included in the calculations. The European Commission recommended that the flows from a given third country are considered for the calculation of the MACZT if an agreement, in line with EU capacity calculation principles and rules, with the third country has been concluded. According to the guidance provided by the DirectorateGeneral for Energy of the European Commission in a letter of 16 July 2019, consideration of third (i.e. non-EU member) country flows in capacity calculation and MACZT could be possible on the condition that an agreement has been concluded by all TSOs of a Capacity Calculation Region (CCR) with the TSO of the third country, approved by the respective regulatory authorities. The agreement should be fully in line with EU capacity calculation principles and rules and should cover at least: (
2. i)consideration of internal third country constraints for intraEU capacity calculation, (
3. ii)consideration of EU internal constraints for capacity calculation on the border with the third country, and (iii) cost-sharing of remedial actions. As far as IPTO is concerned, despite its efforts and the efforts that took place in the SEE CCR level, such agreements were not yet in place in 2021. Apart from the inclusion of third country flows for the compliance with the 70% rule, the currently applied SEE CCM methodology must be amended. 15 Since the first quarter of 2022, SEE TSOs have started working on an amendment of the SEE CCM in order for the latter one to be compatible with the 70% rule. It is expected that within 2022, this new methodology will be given to the SEE NRAs for approval. Afterwards SEE TSOs will try to sign the relevant agreements with their non-EU neighboring TSOs including among others the adoption of the amended SEE CCM. 16