This article examines the evolving role of the Transmission System Operator (TSO) in the aftermath of the 2021–2022 energy crisis with a particular focus on their involvement in the financial electricity markets through Electricity Price Area Differential (EPAD)-coupling. The Commission Regulation (EU) 2016/1719 of 26 September 2016 Establishing a Guideline on Forward Capacity Allocation (FCA Regulation) requires that the national regulatory authorities intervene when market failure is detected, this intervention requires that the TSOs take steps to ensure liquidity in the market. The article questions whether the role of the TSO as a provider of liquidity in the financial electricity market clashes with the fine-tuned structure of EU’s market design. Through an analysis of recent disputes between national regulators the article illustrates legal and structural concerns associated with the TSOs involvement, potentially creating conflicts of interest for TSOs and challenging the principle of unbundling which is fundamental to EU`s electricity market design (EMD). The article argues that the expansion of TSO responsibilities through financial transmission rights (FTRs) and now through EPAD-coupling, marks a shift in the regulatory understanding of the TSO’s role, with limited public debate on the implications.
European Energy and Environmental Law Review