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Tests for flow-based European electricity market integration start February, NWE coupling from April

18 Feb 2013 15:10:58 | edem

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The Central West European (CWE) market coupling project is due to begin running its flow-based market coupling parallel run by the end of this month, with the wider North West European (NWE) project testing from April.

The current plan for the next stage of the CWE project is to go live some time in the fourth quarter of 2013, although the exact date would depend on the results of testing, a spokesman for European power exchange EPEX Spot said.

The flow-based model for market coupling will incorporate all available capacity in a price-coupled region, rather than the current available transmission capacity (ATC) model, where grid operators specify capacity available on each border.

"We need this market coupling to expand and open up to further markets," Anglo-Dutch exchange APX Endex CEO Bert den Ouden said previously. "This will bring markets together much faster and more cheaply. There is a cost, but it's much more efficient than investing in new power lines. Of course, we still have to build new power lines" (see EDEM 21 November 2012).

Pan-European coupling

The EPEX Spot exchange also stated on Monday that the plan for wider NWE market coupling is expected to begin testing in April, with plans to go live in November 2013 if testing goes well.

The NWE project will couple the Day-ahead markets for the CWE countries of France, Belgium, the Netherlands, Luxembourg and Germany, along with the Nordic countries and the UK.

The project testing will also include Portugal and Spain from the South Western European region, as they are well advanced - making sure these countries can be included in the NWE project shortly after it goes live.

The NWE project has been flagged for the fourth quarter of 2013, although this target is flexible depending on the testing of the algorithm across different price coupling regions, an EPEX Spot spokesman said.

Complexity

The project couples the Day-ahead markets for 75% of Europe.

The complications of integrating so many markets together has meant that the launch to include the "GB hub price" is to take place after the time change for British Summer Time, instead of the second quarter of 2013, as was stated in the most recent plan (see EDEM 23 January 2013).

European regulatory body ACER has voiced concern that the target of full European market integration by 2014 might be missed (see EDEM 30 January 2013), although the target has been recognised as ambitious for some time now (see EDEM 23 November 2011).

The project requires cooperation between four electricity exchanges and 13 grid operators across Europe, covering 20 borders. The algorithm originated with the CWE market coupling project, but has been further developed to take into account regional disparities.

Other difficult factors include establishing the legal and regulatory framework across each country.

"We have to not only harmonise systems and the handling of data, but how to treat that data," a spokesman said.

Testing will begin as soon as the algorithm in use across the existing CWE market coupling area has been developed for additional markets.

Next steps

The next stakeholder meeting is scheduled for 14 June in London. All published material from the project, including monthly reports to the regulators, will be published on the websites of the exchanges, and also of the Capacity Allocating Service Company from March.

The Day-ahead target model is one of four projects for European integration being worked on.

Others include a continuous intra-day market, with the NWE region as the pilot project, and harmonising long-term transmission rights. Zoe Double

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