Day-ahead power markets
are set to be linked from Portugal to Finland as the European Union seeks to
integrate electricity markets by the end of this year across the 28-nation
bloc.
Spain and Portugal are due to today join the
existing 15-country market coupling project, linked through an interconnector
between Spain and France. Network operators and energy exchanges have held a
single auction at noon Paris time since Feb. 4 to determine next-day power
prices in the northwest of Europe.
Linking markets is part of the EU’s third
package of legislation intended to remove national barriers to power and gas
trading and reduce energy
costs. Market coupling aims to smooth price differences between nations through
better control of cross-border flows. Before coupling, traders selling power
into another country had to buy cable capacity in advance, and then make a
separate trade on another exchange, exposing themselves to two sets of price
risk.
“This is the first time a market coupling
arrangement has been geographically expanded,” Andrew Claxton, director of
business development at APX Group Holding BV, said by e-mail. “Previously this
has involved implementing a whole new solution. This shows that we have a
robust underlying solution that can be extended across Europe.”
Day-ahead power market coupling links
Austria, Belgium, Denmark, Estonia, France, Finland, Germany, Latvia,
Lithuania, Luxembourg, Norway, the Netherlands, Poland, Portugal, Spain, Sweden
and the U.K. excluding Northern Ireland, according to N2EX, a U.K. exchange.
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“Although the interconnection level between
the Iberian Peninsula and Central West Europe, through the Pyrenees, is very
limited, the new mechanism ensures a proper use,” Rafael Gomez-Elvira Gonzalez,
a Madrid-based spokesman for Iberian exchanges OMIE, said by e-mail. “Market
coupling optimizes the use of existing cross-border capacities.”
Day-ahead markets in Romania will be linked
to Slovakia, Hungary and the Czech Republic through the price coupling
mechanism on Nov. 11, Czech power market operator OTE AS said April 9.
Plans to link Swiss day-ahead markets with
European countries have stalled after the bloc halted talks on the Alpine
nation joining its energy market. The EU
suspended talks after Swiss voters on Feb. 9 approved immigrant quotas, a move
contrary to market-opening pacts with the EU going back to 2002.
Europe’s plans to link intraday power markets
ground to a halt after power exchanges failed to agree on who would develop a
platform. The European Commission said on Feb. 6 that it would propose legally
binding obligations to ensure the intraday platform is developed. Exchanges
from APX Group Holding BV to Epex Spot SE said on Feb. 10 they had reached an
agreement and are working on an EU-wide platform.
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