CWE-Nordic

CWE market coupling (CWE MC) and the Central West European-Nordic tight volume coupling were successfully launched on 9 November 2010. The ultimate aim of these projects is to harmonise prices and create lower average prices across the region. European consumers will thus benefit from the economic optimisation resulting in a more efficient use of the power system in the region, convergence or equalization of prices, improving social welfare and security of supply.

CWE market coupling
CWE market coupling (CWE MC) is the project in which various TSOs and power exchanges are working to couple the Dutch, Luxembourgish, Belgian, French and German electricity markets. The ultimate aim of the project is to harmonise prices and create lower average prices across the region.
In June 2007, a Memorandum of Understanding (MoU) was signed in Luxembourg by governments, electricity market regulators, power exchanges, grid operators and the collaborative organisation for the energy market parties of Belgium, France, Germany, Luxembourg and the Netherlands. This MoU marked the beginning of the coupling process. Market coupling in the CWE region means that price coupling is being implemented for the region’s of the power exchanges. Market coupling in the CWE region ensures that the available cross border capacity can be utilised more efficiently. The CWE MC project will start as a market coupling system based on transmission capacity determined in a coordinated manner. This interim step is necessary if implicit allocation of capacity on the basis of power flows (‘flow based’ allocation) is to be achieved.
The project counts three electricity exchanges (the British/Dutch APX ENDEX, the Belgian Belpex, and the German/French EPEX Spot) and seven grid operators (Amprion, Creos, Elia, EnBW TNG, RTE, TenneT and transpower) among its participants.

Nordic coupling : Interim Tight Volume Coupling 
On 7 May 2010, in Bonn and in the presence of the CWE Nordic regulators, the CWE Nordic TSOs and power exchanges and EMCC committed to prepare for a simultaneous go live (launch) of the CWE Nordic Interim Tight Volume Coupling (ITVC) solution and the CWE price coupling solution. The ITVC solution means that the coupling between Germany and Denmark will be implemented on the basis of all the order books of the energy exchanges in the CWE and Nordic region. This means that this market coupling will remain a form of tight volume coupling after the start of the CWE market coupling. The ITVC solution was launched at the same time as the CWE market coupling. This step is necessary to prevent a deterioration in the quality of the coupling between Germany and Denmark after the start of the CWE market coupling system.

ITVC stands for Interim Tight Volume Coupling. As the word ‘interim’ implies, this is a provisional solution that will be replaced by an enduring price coupling solution covering at least the entire CWE and Nordic regions. ITVC is a system whereby the energy volume traded between two countries or regions is determined before the various energy exchanges calculate their own prices. ‘Tight’ in this context means that the volume traded is calculated on the basis of all relevant information, as in the price coupling system. Tight volume coupling offers almost the same quality level as price coupling, and is a very acceptable solution. The new system is scheduled to be implemented in two steps, with the NorNed cable (the interconnector between the Netherlands and Norway) being integrated into the second step.