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EU electricity market integration facing major delays - ACER director

30 Jan 2013 20:03:00 | edem

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The EU's flagship plan to integrate electricity markets across the bloc by 2014 is facing major delays, the director of pan-European regulator body ACER, Alberto Pototschnig, warned on Tuesday.

But despite the setback, it also emerged that both Poland and Romania are to join the Central and Eastern Europe (CEE) market coupling project, despite Poland's previous assertion that its involvement would be conditional upon Germany also signing up.

The North Western Europe (NWE) day-ahead market coupling project, which was expected to begin operations this month, may not start until November or December, Pototschnig said.

And NWE intra-day coupling, which has also been eyeing a start date at some point this quarter, is also now facing a delay, and is not expected to start until the third quarter at the earliest, ACER's director said.

The schemes have been dogged by multiple issues that are behind the delays, Pototschnig told an energy conference in Brussels.

Renewables

The delays could also hamper the deeper penetration of renewables into the European power generation mix, Pototschnig told ICIS, because "intra-day market coupling is vital for integration of renewable energy sources" across the continent.

Pototschnig added that the official starting date for both market coupling schemes will be announced shortly.

Inge Bernaerts, who heads one of the European Commission's energy units, said the coming months will be crucial if 2014 targets are to be met.

European energy commissioner Gunther Ottinger urged member states to implement the third energy package.

"It is imperative that the rules in place [third package, REMIT and soon the infrastructure regulation] are correctly implemented by member states. And then it falls to the regulators to make sure that they are properly enforced," Ottinger added.

Infrastructure

According to the president of transmission system operators group ENTSO-E, Daniel Dobbeni, infrastructure development was one of the main challenges facing the integration project.

"Back in 2006 we thought infrastructure would have been sufficient to support integration," he said. But renewables grew quicker than anticipated, and the development of supporting infrastructure failed to keep pace, he added.

Participants mentioned issues raised by high volumes of renewable generation in Germany, which have created problematic loop-flows in neighbouring countries including Poland and Czech Republic, forcing operators to curtail clean power generation, which in turn led to financial payments as compensation for the curtailment.

It is believed that cross-border infrastructure regulation will play a vital role in speeding up the permitting process for new infrastructure, reducing the permitting time from an average of 10 years to around 3-4 years (see EDEM 18 December 2013).

Michael Goodwin, the representative of the Irish presidency of the European council, told the Brussels conference that speeding up and supporting new infrastructure would be one of the priorities of the council in 2013.

CEE

In a separate development, it emerged that Poland and Romania are to join Czech Republic, Slovakia and Hungary in the CEE electricity market coupling project.

The announcement followed a meeting on Monday between the CEE region's energy regulators, grid operators, and energy exchanges including OTE, CEPS, SEPS, MAVIR, PSE, HUPX, TGE and OPCOM.

Hungary coupled its day-ahead prices with Czech Republic and Slovakia in September.

A joint statement from the CEE region's transmission system operators said the market coupling project had been beneficial for participants, and described extending the scheme to Poland and Romania as a "logical step forward."

Poland's call to take the plunge came in spite of its previous insistence that it would not sign up without involvement from Germany (see EDEM 4 January 2013). MM/KB

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