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GB Day-ahead hub-price delay looks certain – market sources

23 Jan 2013 17:54:41 | edem

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The long-awaited British Day-ahead power hub price will not be launched in the second quarter of this year as originally planned, market participants have told ICIS.

A number of market sources, including UK-based prompt traders, energy analysts and sources connected to the market coupling project at European level, have said that a launch later in the year looks certain, possibly after the summer.

The "GB hub price", as it is known, will be an hourly Day-ahead price published jointly by the UK's two power exchanges, APX-ENDEX and N2EX. Both exchanges declined to comment on the delay when contacted by ICIS this week, and as such, details remain thin on the ground.

But one source who is linked to the North West Europe (NWE) joint steering committee overseeing the market coupling project at European level, said a launch date after EU daylight savings at the end of summer seemed more likely.

"As I understand it, this is the fall-back launch date," he said. Clocks across the EU are put back an hour on 27 October this year.

This was backed by a UK-based source involved with the development of one of the two exchanges who said that the hub price "was not going to be operational before the summer".

CfD reference

A hub launch will be a major milestone in the development of the NWE Day-ahead market coupling project.

It is also vital for the UK's electricity market reform programme because of the reactive nature of the hub price, which will be set on an hourly basis and as such will reflect rapidly changeable supply drivers such as wind speed forecasts.

For this reason, it is intended that the price will act as a reference against which variable renewable generators will be able to settle contracts for difference (CfD), the subsidy model that is being adopted under electricity market reform for low-carbon generation.

Late last year, British energy regulator Ofgem said the wider market coupling project would "dramatically change" how electricity is traded through the UK market's interconnections with mainland Europe (see EDEM 28 November 2012).

Electricity flows across the 1GW BritNed interconnector between Britain and the Netherlands and the 2GW link to France will be taken into account in the setting of the price.

NWE market coupling involves 18 partners - five power exchanges and 13 system operators. JS

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