Europex warns against the significant increase in collateral requirements that is expected to follow the introduction of Long-Term Flow-Based Allocation (LTFBA). While Europex welcomes ACER’s proposed long-term solutions to reduce unnecessary collateral requirements and improve bid filtering, these solutions are not expected to be available until at least one year after the planned LTFBA go-live. During this transitional period, market participants – particularly smaller firms – are likely to face substantially higher collateral requirements, potentially reducing participation in LTTR auctions and weakening competition. Europex therefore calls on ACER to closely monitor these market effects and to consider whether additional safeguards are needed during the transition.
