The European Commission, in conjunction with ACER, Europe’s Agency for the Cooperation of Energy Regulators, has begun preparing market revisions that, amongst other things, will change how market operator expenses are calculated.

The initiative’s aim is to establish new market rules that will support energy demand management, energy storage and also lift regulatory obstacles.

A related European Commission document points out that although existing legislation enables operators to provide flexibility services such as demand management, regulatory frameworks in most EU member states separate the capital cost (CAPEX) of operators from their operating expenses (OPEX), ultimately restricting investments and standing as a disincentive.

An approach through which both capital cost and operating expenses would be taken into account for a so-called TOTEX sum is now being looked at by the authorities.

This would help operators move more freely when committing capital to develop their networks and provide flexibility services, especially demand management, the ultimate goal being to increase renewable energy penetration.