The ČEPS methodology described in this chapter is based on ENTSOE methodology adapted accordingly to be used for the transiting systems as the Czech transmission system to calculate cross border transfer capacities on a number of mutually interdependent interconnectors with various neighbouring transmission systems. The method is applied at all stages of cross border transfer capacity allocation, i.e. at yearly, monthly and daily auction. The same principles are also applied to calculations of available transfer capacities in the intraday market. New terminology has been developed by an international group of experts with respect to socalled “flow based allocation”. Since the method used by ČEPS has, from the beginning, been based on the “flow based” principles, it has been easy to implement the new ENTSOE terminology into ČEPS practice.
The methodology is based on the physical nature of distribution of the incremental flow between a power surplus area (injection of the electricity) and a power deficit area (demand/withdrawal of the electricity) among all the elements of the transmission system, in proportion to the impedance values of the electricity path. The resulting power flow on each element of the network is based on the superposition of individual incremental flows. The “Flow Based” principle with the use of zonal PTDF coefficients (ENTSOE methodology) is applied for the calculations.
TBC, NBC, FRM and ABC values are assessed separately for each interconnector with the neighbouring transmission system concerned, distinguished by index “i“. The coordination of resulting values for all directions is thus ensured. The following parameters are calculated for each time period:
TBCi

(Total Border Capacity) – Total crossborder capacity is the maximum transmission capacity of an interconnector, consisting of a number of tielines, between two neighbouring transmission systems. Since these tielines are in general unevenly loaded, the maximum transmission capacity of an interconnector cannot be simply calculated as an algebraic sum total of partial thermal capacities of all the tielines. But it corresponds to such a value, where any single tieline reaches its maximum transmission capacity. The limiting factor for a tieline consisting of a chain of different electrical equipment refers to the nominal load capacity of an electrical wire or the design conductor sag under a given thermal load, the load capacity of a measuring current transformer with a given voltage ratio, the current path of a disconnector, the load capacity of a circuit breaker or other element (e.g. a high frequency coil). In order to comply with the N1 security criterion, the TBCi value must also be calculated for a situation wherein one particular element within a given interconnector is tripped. 
FRMi 
(Flow Reliability Margin) – The flow reliability margin is a system security reserve for managing the variability of operational conditions during the relevant time period, inaccuracies of the forecasted scenario(s), e.g. area control errors, an outage of the largest generating unit in both neighbouring power systems involved and contracted power reserves. If a higher reserve is not justified, a basic reserve is applied which makes up 10% of the TBCi value. Dependent on input data accuracy, the FRMi value diminishes with the refinement of this data 
NBCi 
(Net Border Capacity) – Net crossborder capacity is the net capacity of an interconnector after the deduction of the reserve (FRM). 
BFLi 
(Base Flow) – The base flow is the physical flow across an interconnector in the model which comprises both the model proportions relating to all the known contracted commercial transactions in total (AACi) between the Czech transmission system and neighbouring systems (NFi) and “parasitic” parallel and loop flows (PF+LF)i. 
NFi 
(Net Flow) – The net flow forms part of the physical flow across interconnector i which comprises model proportions relating to all the known contracted transactions in total respectively capacities allocated at previous stages of capacity allocation. 
(PF+LF)i 
The residual power flow across a given interconnector after the deduction of capacities already allocated. This power flow comprises both the loop flows caused by geographical deployment of electricity generation units and consumption within the networks between neighbouring power systems (in other words they correspond to power flows as a result of intrazonal transactions flowing through other systems) and the parallel flows which result from transactions between other power systems. According to the superposition of individual partial flows and the dependence of these flows on operational changes within the power systems involved the distinction between them is not easily possible. A typical residual power flow for a given time period and a given interconnector is determined based on a statistical evaluation of historical time series data for past time periods. Existence of parallel and loop flows is inevitable and natural characteristic of a mutually interconnected synchronous network 
ABCi 
(Available Border Capacity) – Available crossborder capacity is the transmission capacity which remains available on each individual interconnector for each specific time period to be used for further commercial transactions. This value is calculated individually for each of the five Czech transmission system interconnectors. The ABCi value immediately changes with changing TBCi, FRMi, NFi or (PF+LF)i values. 
Total available transfer capacity cannot be calculated as the algebraic sum total of partial values, i.e. values of ABCi on individual interconnectors, since any power flow relating to a new transaction (import or export) is unevenly distributed among all the mutually affected interconnectors. The maximum transfer capacity of the Czech transmission system in respect to crossborder power exchanges is equal to the transmission capacity limit reached on the first individual interconnector.
Available transfer capacity on individual interconnectors (where i = 1...5) is calculated using the following basic formula:
In order to determine values, well in advance, for all the interconnectors in total while respecting the above relationships, an ordered set of values, so called “tradable capacity available for trading VOK“, is calculated, i.e. volumes of available transfer capacity on all the interconnectors combined which could be allocated up to the exhaustion of transmission capacity on the first interconnector. The following equation is used for such a calculation for interconnector k:
where: 

PTDFji 
(Power Transfer Distribution Factor) – A coefficient expressing the proportion of transactions in direction j on interconnector i. These typical values are obtained from calculations performed on the power system model for a given time period and anticipated operational conditions. 
AACj 
(Already Allocated Capacity) – Transfer capacity allocated on interconnector j for a given time period at previous stages of capacity allocation (at annual or monthly auction). 
k 
Index of that interconnector on which available transfer capacity has already been exhausted. 
PTDFjk 
Coefficient expressing the proportion of transactions in direction j on interconnector k. 
VOKj 
Tradable capacity available for trading in direction j. 