EU-wide Day-ahead, intra-day electricity markets expected by end-2014
New arrangements for harmonised Day-ahead and intra-day markets in Europe should come into force by September 2014, according to the final draft of the network code on capacity allocation and congestion management (CACM) published on Friday.
The European Network for Transmission System Operators for electricity (ENTSO-E) publication of the draft code does not deal with forward markets, which will be dealt with in a separate network code pegged to launch in October this year (see EDEM 23 March 2012).
The code states that each member state must appoint a body that will act as market operator, responsible for the correct functioning of the market, the flow of information available to participants and the allocation of capacities.
The Day-ahead market will be based on a price coupling algorithm, which should be easily extended to several bidding zones. This will be decided by grid operators and national regulators.
From the entry into force of the CACM code, regulators and grid operators will have one year to finalise the algorithm, which would then be put under consultation.
The process to determine the basic criteria of the price algorithm has already started, although the bodies involved - ENTSO-E and the agency for the cooperation of energy regulators (ACER) - are running late. ACER was expected to approve the starting point for the price algorithm by Q1 '12, but delays in preparatory work by ENTSO-E led to the agency missing the deadline (see EDEM 15 March 2012).
The draft code says that the Day-ahead markets should open by 11.00 local time - one day before delivery - and close at 12:00 local on day of delivery.
Intra-day markets will be based on a continuous trading mechanism, which will match bids and offers whenever possible during the day with capacity and power to be sold in one go (see EDEM 14 February 2012).
Capacity available to the market must be announced no later than 15 minutes prior to the intra-day cross-zonal gate opening time, the code reads. The market operator responsible for the bidding area will look after this.
In some bidding areas, regional auctions might complement continuous trading. National regulators will decide if the additional measure will be put in place.
Regional auctions will be taken into account only when they "shall not have an adverse impact on the liquidity of the pan‐European intra-day solution" and when it would help participants to trade as close to real time as possible, the code states.
They will be operated through the so-called capacity management module, which will include all the real-time information on available transmission capacity.
Some markets will need transitory regimes before being ready to put in place the arrangements proposed by the CACM in relation to the intra-day market.
These could include explicit allocation methods, rather than implicit auctions, which would be operated through a capacity management module. However, explicit allocation can last only up until 2016.
Proposals on new bidding zones should be presented by TSOs 12 months after the entry into force of the code. If this doesn't happen, it is the duty of national regulators to present proposals.
The determination of bidding zones should mainly reflect structural congestions in the network, consider the effects that transactions between different regions might have and, in general, ensure operational security.
TSOs, which are responsible for the aggregation of data on load and generation, are also required to submit a biannual report to ACER about how capacity is calculated.
As for how capacity is calculated, flow-based methods are preferred for Day-ahead and intra-day markets when the "distribution of power flows... is highly influenced by exchanges between other bidding zones", the code said.
The consultation on the CACM code, which was originally expected to launch in April, will close on 23 May (see EDEM 6 December 2011). ENTSO-E said that stakeholders' comments will be discussed in a workshop in July.
The code will then be submitted to the ACER by September 2012. ACER will make sure that the document complies with the previous framework guidelines, then pass it on to the European Commission, which will start the comitology process. MM
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