EU single electricity market for 2014 an ‘ambitious' target
The EU's target of introducing a single integrated European electricity market by 2014 is unlikely to be met by network codes alone, the bloc's super-regulator the Association for the Cooperation of Energy Regulators (ACER) warned on Wednesday.
"We've an ambitious target to complete by 2014 - the framework guidelines and network codes are important, but we can't rely only on that process to meet expectations," ACER's electricity department head, Christophe Gence-Creux, told ICIS Heren.
Speaking at the Emart conference in Lyon, France, he said: "We need the regional initiative process in parallel to focus on how to implement these areas to meet the deadlines."
However, market participants appear less confident about integration than a year ago, with a poll of at least 200 conference delegates showing that 55% believe that Europe's regional markets will not integrate at all, compared with 66% at last year's conference. If the 2014 deadline is missed, 64% expect integration by 2020, with 33% expecting it later than that.
ACER is determined to deliver an integrated EU power market and is focused on the calculation of available capacity, long-term, Day-ahead and intra-day capacity allocations, and harmonising balancing market regimes across the member states.
Gence-Creux admitted that not all these aspects will be in place for 2014, although he expected all but the last element to be in place across most of Europe.
"Balancing is an important part," he said. "But we're still in the process of drafting the framework guidelines and agreeing on a target model. We still need a clear view on what that target should be."
Consensus for market coupling
Work to date has built a strong consensus among market participants that Day-ahead integration is best met by market coupling.
ACER expects that only a few exceptions will prevent all of Europe's Day-ahead power markets being coupled by 2014. The Irish electricity market, for example, could have until 2016 to implement the network codes.
"But, for others, we don't see any reason why they shouldn't be part of the European price coupling project," Gence-Creux said. "By 2014, I'm 100% sure that there'll be price coupling between all the regions."
For intra-day trading, continuous intra-day trading has emerged as the most desirable model. However, this area poses more of a challenge, with some member states such as Italy, Bulgaria and Romania not even operating a national intra-day market.
On long-term capacity allocation, most participants said they see a single platform for transmission capacity auctions as desirable. The CASC platform is fast emerging as a potential candidate for Europe's single allocation platform, hosting the Central West Europe (CWE), Central South East (CSE), Switzerland and Germany-Denmark cross-border auctions.
The South West region, including France, Spain and Portugal, is also signing up to CASC. The French-Spanish border is already down to use the platform from mid-2012, while the Spanish-Portuguese agreement should be signed in December to be implemented at the end of 2012.
Other areas are expected to take decisions soon, with the Nordic and Nordic-Continental regions to decide by mid-2012 and the Baltic region by the end of next year.
Capacity calculation and congestion management (CACM) illustrates the importance ACER attaches to the regional initiatives.
The CWE region, including France, Netherlands, Belgium and Germany, and the CSE region, including Italy, Slovenia, Greece, Austria, France and Switzerland, have harmonised rules, as has Central and Eastern Europe (CEE), including Germany, Austria, the Czech Republic, Slovakia, Poland and Hungary, although a single set of rules must still be agreed at a European level.
"Those three regions have networks that are highly meshed, and flow-based allocation could improve that. Flow-based price coupling is the target," Gence-Creux said.
The ACER executive said he expected CWE and CEE to achieve that target first, with national regulators in the CEE region expected to reach a decision on a method in the first quarter of 2012.
"I hope that, by 2012, we'll have a clearer view and by when," he said. ZD
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