Corrected: Doubts persist about central west Europe flow based electricity market coupling November start date

04 June 2014 16:40 Source:ICIS

Correction: This article has been updated to include a more accurate definition of flow-based market coupling.

The next step in the project to maximise day-ahead cross-border electricity trade between key markets like Germany, France and the Benelux region is set to start in late November, the regulators involved said in a statement on Tuesday.

But traders active in the wholesale power markets have told ICIS they still doubt the flow-based market coupling project would start on time, given previous delays to similar plans to merging the markets.

One source estimated delays of around two months, potentially taking the launch into December or January next year.

The central west European region – Germany, France, Belgium, Netherlands, Luxembourg and Austria – is already coupled under an available transmission capacity model.

Flow-based market coupling changes the method that transmission system operators (TSOs) use to calculate daily cross-border capacity. The expected result is that more power can flow to the cheapest market and price differences are ironed out in the region.

Despite the doubts traders agreed that progress has been made since the countries started to run tests for the flow-based system.

“The test simulation for flow-based results are becoming clearly more reliable and are being published more promptly,” a trader said. This is in contrast to the experience from last year when testing results were missing for many days( see EDEM 27 January 2014 ).

According to the project partners of the flow-based market coupling project – exchanges and TSOs in the six countries – the missing dates could be explained by technical problems with the prototype system, errors in the application of the methodology, and the need to conduct further training with TSOs to integrate new procedures.

Regulators of the involved countries will hold a consultation process on flow-based market coupling until 30 June. Martin Degen

By Martin Degen