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NWE electricity market coupling price boundaries confirmed

17 Sep 2013 17:54:42 | edem

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European electricity exchange EPEX-Spot is to enforce price limits within the northwestern European (NWE) Day-ahead market coupling project, on condition that upper and lower boundaries are “periodically reassessed”, the platform confirmed on Tuesday.

An hourly price floor of -€500/MWh and a ceiling of €3,000/MWh will be enforced when NWE coupling launches in just two months’ time, the exchange said in a statement. These limitations are likely to be implemented across all markets involved in the scheme.

The reviews of these limits should help limit the price constraints, the exchange said.

The decision, confirmed by the exchange council which oversees the platform’s wider development, keeps NWE Day-ahead coupling “on track” to meet its November launch deadline despite the increasingly tight timeframe, the statement said.

Only last week UK power traders expressed doubt that the November date would be met, with many in the market expecting a launch towards the second half of the month at the earliest.

System stress

Hourly Day-ahead prices would only threaten to crash down through the floor or break up though the ceiling during times of extreme fundamental system stress, and as such are unlikely to constrain the market’s ability to communicate healthy pricing signals.

The wide floor-ceiling spread should be sufficient, however, to ensure that no individual market across the collective project adopts a higher floor or a lower ceiling.

The NWE price coupling project will bring together the already-coupled central and west Europe (CWE) Day-ahead markets of France, Germany, Belgium, the Netherlands and Luxembourg with Denmark, Estonia, Finland, Austria, the UK, Latvia, Lithuania, Sweden and Norway ( see EDEM 13 August 2013 ).

The exchange also added three more borders to the coupling area it operates, to include France-Great Britain, Germany-Denmark and Germany-Sweden. Jamie Stewart

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