ACER calls for review of automatic maximum price adjustment mechanism

Article summary

The European Union Agency for the Cooperation of Energy Regulators (ACER) has called for a review of the automatic price adjustment mechanism in the day-ahead electricity market. The mechanism adjusts automatically in the event of price spikes. Through the Harmonised Maximum and Minimum Clearing Price (HMMCP) methodology, if prices reach 60% of the maximum price, an automatic maximum price increase will occur five weeks later, which has happened twice in France and the Baltic area since April 2022. With expected high electricity prices, ACER urges a review of the HMMCP methodology to limit the number of increases in the maximum clearing price, in order to allow consumers and market participants to better adapt to the scarcity in the market. To implement the changes, Nominated Electricity Market Operators (NEMOs) must propose amendments to the HMMCP methodology, and then ACER has six months to reach a decision, although the regulator aims to complete this in a far quicker time frame.