Steps towards coupled markets
The coupling of European markets is an intricate process that must be accomplished step by step. All the individual steps are important towards achieving the ultimate goal: a single European market. Here’s a short summary:
1993, Coupling in Scandinavia
Since 1993 the Scandinavian market has an implicit auction.
1999, The first independent power exchange
APX Power NL started as the first independent internet based power exchange in Continental Europe, operating a day-head auction.
2000: Start TSO auctioning
In spring 2000 TenneT and three of our fellow TSOs - Elia (Belgium) and E.ON Netz and RWE Netz (Germany) – decided to begin joint auctioning of cross-border electricity transfer capacity. TSO Auction is a wholly owned subsidiary of TenneT and now operates under the name of TSO Auction B.V.
2006: Price coupling between the Netherlands, Belgium and France
A important step in Northwest Europe came in 2006 with the establishment of an implicit market coupling system between the Netherlands, Belgium and France (Trilateral Market Coupling, TLC). This innovative market mechanism linked the APX, Belpex and Powernext power exchanges and the national grid operators Elia (Belgium), RTE (France) and TenneT (the Netherlands). The price coupling system has stabilised prices in this region and has led to a better use of capacity.
2008: Joint year and monthly auctioning in CWE countries
At the end of 2008 the TSOs of the Central Western European (CWE) region jointly started a single auction platform for the region. CASC-CWE S.A. (Capacity Allocation Service Company, Central West Europe) was appointed as the joint auction office to operate activities for the explicit long-term auctions (by year and month).
2008/2009: Volume coupling between Germany and Denmark
In 2008 the European Market Coupling Company GmbH (EMCC) was founded in Hamburg, EMCC has been appointed to operate this market coupling. On the 9th November 2009 the market coupling of the Nordic and the German spot market was launched. Thanks to the market coupling the average price difference between German spot prices and Danish spot prices decreased significantly.
2008-2010 Joint auctioning in CEE countries
In 2008 Central Allocation Office GmbH (CAO) was established to develop and implement coordinated congestion management solutions in the region of Central Eastern Europe (CEE) region.
2010: Central Western European/Nordic market coupling
The next significant step was taken towards the end of 2010 by coupling the Central Western European (CWE) markets. At the same time the CWE region was coupled to the Scandinavian region (Nordic). Price coupling in the CWE region and tight volume coupling between the CWE and the Nordic region started in November 2010. Coupling the CWE and Nordic markets was an operation that included harmonising the closing times of the day-ahead markets of the PXs involved. The NorNed cable between the Netherlands and Norway was added to the CWE/Nordic region. A next step in market coupling is to create flow-based coupling, in addition to the price coupling of PXs.
2012: Further integration with day-ahead and intraday price coupling
In 2011 a partial coupling with the United Kingdom will be added, with the commissioning of the BritNed cable. Complete day-ahead price coupling for the CWE, Nordic and UK countries is planned for the end of 2012. Besides an integrated day-ahead market also the intraday markets in CWE, Nordic and UK will be integrated. After that, integration of balancing and ancillary services will follow. These are specialised services procured by the TSOs to manage system balance and grid security.
2020: One European integrated electricity market
This is the TenneT vision - a truly integrated European electricity market by 2020. In this market there will be more stable electricity prices and a greater security of supply. The existing cross-border capacity will be used more efficiently and consumers will pay the most cost-effective electricity prices.
