JAO (Joint Allocation Office)

JAO S.A. (Joint Allocation Office) is the EU's Single Allocation Platform under Articles 48–50 of the Forward Capacity Allocation Regulation (Commission Regulation (EU) 2016/1719). Headquartered in Luxembourg, JAO runs harmonised long-term cross-zonal capacity auctions on behalf of around 25 European TSOs — Elering among them.

What it auctions

JAO sells two product types: Physical Transmission Rights with Use-It-Or-Sell-It (PTRs/UIOSI) and Financial Transmission Rights as options (FTR Options). Both let market participants hedge the price spread between two bidding zones over future periods — annual, quarterly, monthly. Auction rules follow the EU-wide Harmonised Allocation Rules (HAR).

Baltic borders

JAO allocates long-term capacity on EE–LV (annual, quarterly and monthly FTR Option auctions) and on EE–FI / EstLink (annual and monthly FTR Options, available since 2023 by joint decision of the Estonian Competition Authority, the Finnish Energy Authority and the Latvian regulator). Both Baltic FTR products are baseload financial options settled against the day-ahead price spread, not physical PTRs. Capacity-curtailment notices on EE–LV are also published through JAO. See Baltic CCR for the underlying border list.

Why it matters

For a corporate buyer signing a 5–10 year PPA across the EE–LV or EE–FI border, JAO's FTR Options are the standard hedging instrument. Without them the buyer carries the full day-ahead spread risk over the contract horizon. Auctions are usually thinly liquid for Baltic products — fewer participants than on Central-Western European borders.

Sources

JAO S.A. · FCA Regulation (EU) 2016/1719 · Harmonised Allocation Rules