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Intra-day platform choice could delay EU electricity market integration by 2014

12 Dec 2012 18:52:23 | edem

Industry insiders have told ICIS that the implementation of the European intra-day target model could be delayed by at least a year, threatening the EU target for internal integration by 2014.

The intra-day target model should facilitate cross-border access to intra-day markets, improving liquidity and price signals, and enable better short-term management of the power system, especially for intermittent renewable energy (see EDEM 8 October 2011.

The model aims to bundle all intra-day liquidity on one single screen and use all cross-border capacity in an implicit manner, with capacity part of cross-border trade instead of bought separately under the explicit model. However, the model is expected to be at least one year late, which could delay the internal market being realised by 2014.

"The concern is that the intra-day is not as well advanced as day-ahead market coupling," said an expert from electricity lobby group Eurelectric.

There may be delays if power exchanges do not agree on the common platform at once, she added. This platform should consist of a single European integrated solution to handle the trading via a shared order book, and capacity allocation functions done by a capacity management module.

Common platform

"There is indeed some delay - at least one year - in the selection process of the intraday platform," said a spokesman for EU energy regulator group ACER.

In September, after a high-level meeting between power exchange CEOs and ACER to find a way out, the exchanges agreed to launch a transparent tender process to select this platform.

"We are convinced that holding a tender is the ideal way to determine a platform fulfilling all the needs of the intra-day target model," a spokesman for EPEX SPOT said.

The final decision from the power exchanges on the model is expected by the end of this year.

Deadlock resolution

However, the Eurelectric source warned that the exchanges might not be able to agree on a single solution, and ACER might have to put in place a panel of independent experts to take over.

It is also possible that if the platform built by exchanges fails, because of persisting divergence of views and blockage, grid operators will be asked to manage this on the exchanges' behalf.

"A credible deadlock resolution process - in case of disagreement among exchanges - is currently under discussion. ACER will play, in any case, an active role in this process," the ACER spokesman added.

Eurelectric hopes that this deadlock will be overcome and a platform will be selected in the first half of 2013.

"Eurelectric is happy that ACER and the European Commission are following the process carefully, and hence trust that they will make the right decision, ie, force the exchanges to agree and proceed with the implementation of the platform, or if unrealistic, place the burden on the part of the TSOs," said Eurelectric's expert.

On the long-term timescale, CASC-CWE has emerged as the front-runner to become the single European cross-border capacity market operator (see EDEM 25 May 2010), but intra-day integration has long posed a problem, with some states not operating an intra-day market at all (see EDEM 23 November 2011). MM

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