title: "CACM Regulation (EU) 2015/1222 - Capacity Allocation and Congestion Management" type: wiki updated: 2026-04-10 tags: [market-coupling, interconnectors, nemo, euphemia, xbid, jao, brexit] primary_source: /sources/legislation/eu-retained/eur-2015-1222-cacm.md

CACM Regulation

Commission Regulation (EU) 2015/1222 of 24 July 2015. The foundational EU instrument for pan-European electricity market coupling. Revoked as retained UK law on 31 December 2020 by SI 2019/532.

What it did

CACM created the legal and technical framework obliging EU transmission system operators (TSOs) and power exchange operators (NEMOs) to couple their electricity markets across borders. The mechanism works by pooling orders and cross-zonal transmission capacity into a single simultaneous calculation rather than allocating capacity and energy separately.

The two live systems it underpins are:

• EUPHEMIA: the price coupling algorithm for day-ahead markets. Runs daily at noon D-1, simultaneously clearing prices and allocating cross-zonal capacity across all coupled EU bidding zones to maximise total economic welfare.
• XBID / SIDC: the continuous intraday market. Traders buy and sell cross-border capacity intraday against a shared order book, allowing positions to be adjusted continuously until gate closure.

Key structural requirements imposed by CACM:

• TSOs must build a Union-wide common grid model and calculate cross-zonal capacity at regional level via coordinated capacity calculators (CCCs).
• Flow-based capacity calculation is the mandatory approach unless a region can demonstrate it is not more efficient than the coordinated net transmission capacity (NTC) approach.
• All allocation of cross-zonal capacity in the day-ahead and intraday timeframes must be implicit (energy and capacity allocated together), unless explicitly allowed otherwise.
• NEMOs must jointly operate MCO (market coupling operator) functions and submit algorithms for regulatory approval.
• Congestion income (the revenue arising from price differences between zones) is collected by CCPs and transferred to TSOs within two weeks.

Why it was revoked in GB

CACM applied to GB as retained EU law from 31 January 2020 (end of EU membership). SI 2019/532 - enacted before the transition period ended - scheduled its revocation. SI 2020/1016 aligned the effective date with IP completion day (31 December 2020).

The political reason was straightforward: Brexit removed GB from the EU Internal Energy Market. CACM is the institutional architecture of that market. Retaining it would have imposed EU governance obligations (ACER, ENTSO-E, NRA coordination) on GB institutions without GB having any role in shaping the rules.

GB had no domestic interest in maintaining the instrument as operative law because:

1. Elexon, N2EX, and EPEX Spot GB had no obligation to join EU NEMO structures.
2. National Grid ESO (now NESO) was not required to participate in EU-wide capacity calculation.
3. ACER has no jurisdiction in GB post-Brexit.

What replaced it

Nothing formally replaced CACM in GB law. The post-Brexit framework for interconnector capacity allocation rests on:

JAO explicit auctions: The Joint Allocation Office runs long-term (annual, monthly) and short-term (day-ahead, intraday) auctions allocating cross-border capacity separately from energy. GB interconnector operators participate. This is the permanent mechanism as of 2026.

TCA energy cooperation (Title VIII, Articles 302-312): The UK-EU Trade and Cooperation Agreement includes obligations on GB and EU TSOs to cooperate on capacity calculation and data sharing. Uses CACM-derived concepts without making CACM operative in GB.

Bilateral TSO arrangements: NESO coordinates with RTE (France), TenneT (Netherlands/Belgium), and Elia (Belgium) at the borders of each interconnector, calculating available capacity outside the EU common grid model process.

Interconnector allocation mechanics today

GB has five main cross-channel interconnectors (plus Viking Link under commissioning in 2024-25):

All capacity is allocated at JAO explicit auctions. The key difference from pre-Brexit implicit coupling is:

• Under implicit coupling: energy and capacity are allocated simultaneously by EUPHEMIA. A trader never separately buys a "right to transmit" - the market does it automatically.
• Under explicit allocation: a trader first buys capacity rights at JAO. They then separately trade energy on their domestic exchange. If their energy trade does not materialise at the expected price, they may be left holding capacity they cannot use efficiently, or they may not use the capacity at all.

The efficiency loss is estimated at GBP 100m to GBP 150m per year in forgone market welfare (academic estimates; not an official figure). This reflects unused or under-used interconnector capacity plus execution risk from the two-step process.

Open question: re-coupling under UK-EU energy talks

Two options are discussed as of 2026:

Multi-region loose volume coupling (MRLVC): GB and EU day-ahead markets would coordinate capacity allocation without fully joining EUPHEMIA. GB would provide import/export constraints and receive coordinated allocation results without pooling its order books with EU exchanges. Would require TCA amendment or new UK-EU energy agreement. Status: under discussion.

Full re-joining of SDAC/SIDC: Would require GB to re-adopt CACM-equivalent obligations, accept ACER/ENTSO-E governance, and re-designate NEMOs. Politically blocked in the current post-Brexit framework. Not prohibited by TCA.

The baseline GB planning assumption is that explicit JAO auctions are permanent and that MRLVC (if it happens) is the realistic ceiling for re-integration.

Key references

• Canonical source: /sources/legislation/eu-retained/eur-2015-1222-cacm.md
• Revocation instrument: SI 2019/532
• Companion EU regulations: FCA (Reg 2016/1719), EBGL (Reg 2017/2195)
• GB equivalent processes: JAO (explicit auctions), NESO-TSO bilateral capacity calculation
• Related wiki pages: gb-electricity-system.md, interconnectors (if built)