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ACER reveals timeline for EU-wide Day-ahead electricity coupling

08 Dec 2011 15:43:13 | edem

The EU plan to implement Day-ahead price coupling in all wholesale electricity markets by 2014 will be extended to southeastern Europe, which it is hoped will join the rest of the bloc "not later than 2015".

The timeline was unveiled by the Agency for the Cooperation of Energy Regulators (ACER) at the Florence Electricity Forum earlier this week.

The last country to implement Day-ahead price coupling within across the borders of EU countries will be Ireland, which has committed to complete the process by the end of 2014. However, the country is due to put in place some transitional measures in the third quarter of the same year, ACER said.

The super-regulator also said that changes in the existing all-island electricity market, which incorporates both the Republic of Ireland and Northern Ireland, may be needed. ACER did not provide any further details.

In terms of hitting the wider 2014 EU target, the magnitude of the task is not lost on ACER, which itself said last month that the deadline was "ambitious" (see EDEM 23 November 2011).

The South-Eastern European region - which is formally made up of Italy, Slovenia, Croatia, Serbia, Bosnia and Herzegovina, Macedonia, Montenegro, Albania and Hungary - is to join the coupled bloc by 2015, the European regulator said. However, Italy and Slovenia - also part of the Central Southern region - are expected to implement price coupling by the first quarter of 2014, according to ACER's timeline.

Initial stage

ACER's grand plan to implement price coupling is due to take off from the North-Western European (NWE) region - including Denmark, Finland, Norway, Sweden, Germany, France, Belgium, the Netherlands, Luxembourg, Poland and Britain.

Those countries' national regulators and power exchanges were scheduled to develop a first proposal for a common algorithm as well as governance arrangements and any different approaches needed at each single border, ACER said.

Once the requirements for the algorithm were prepared, they were meant to be validated by the European association for electricity transmission system operators (ENTSO-E). However, the European TSO association was unable to confirm whether this has happened yet when contacted.

ENTSO-E and European exchange Europex have been also put in charge of deciding how to split costs related to the development of the common price algorithm between NWE and non-NWE countries.

The algorithm is to be approved by national regulators in the NWE region by the first quarter of 2012.

Thereafter, ACER is to coordinate approvals from all the other national regulators, possibly following a public consultation.

According to ACER's timeline, the algorithm should complete the national approval process within each European country involved by the end of September 2014.

Harmonised

The South-Western region - France, Spain and Portugal - should implement the Day-ahead price mechanism at the end of next year, according to ACER.

The Iberia peninsula is already coupled via the MIBEL mechanism and is due to start a testing phase for integration with France early next year, as necessary regulatory changes were due to start being prepared in the third quarter of this year.

Moreover the Central Eastern region - including Austria, Slovakia, Czech Republic, Poland, Hungary, Slovenia and Germany - should complete the integration process by the end of 2013, ACER said.

The Czech Republic and Slovakia are already coupled, with Hungary due to join them by the end of June next year.

Switzerland may also take part in the project with the country's TSO aiming to ensure it is integrated by mid-2012, ACER said.

The rest of the bloc should be harmonised as follows, according to the super regulator's time line:

Q4 2013: integration of other Baltic borders (Estonia, Latvia and Lithuania)

Q1 2013: integration of Romania and Bulgaria

Q1 2014: integration of the Central Southern European region (Italy, Greece, Slovenia, Austria)

Q3 2014: integration of Ireland

As for the Central Southern region, ACER said that talks on market coupling were due to start in before the end of this year. As things stand, Italy and Slovenia are the only coupled countries in the area.

No specification on the exact time line for the South-Eastern European region has been given by ACER, which stopped short of explaining the delay forecast in the area's market integration. MM

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