NWE and CEE integration set for possible delay - Czech TSO

18 June 2014 15:52 Source:ICIS

The integration of the northwest European (NWE) and central and eastern European (CEE) electricity markets through flow-based market coupling is likely to face delays because grid operators are failing to reach consensus on how individual projects should work, according to Czech transmission system operator (TSO) CEPS.

The parties involved were intending to merge the two regions into one sprawling pan-European model in around 24 months, giving a mid-2016 launch date.

In addition, national TSOs need more guidance from authorities on the market design before reaching an agreement, said Martin Palkovsky, a CEPS representative, at an industry event in Budapest on Wednesday.

Flow-based market coupling will reform the method that TSOs use to calculate daily cross-border capacity. The expected result is that more power will flow to the cheapest market, ironing out price differences.

“TSOs can’t act on their own. We need a final legal framework. We are still waiting for a final version. Hopefully it will happen next year,” Palkovsky said.

If TSOs were more consistent in their approach things would happen quicker, said Peter Styles, member of the board of the European Federation of Energy Traders [EFET] during a panel discussion.

As a result, it appears the CEE region may need to use more force to speed up the decision-making process behind implementation of the project, according to Dennis Hesseling, head of gas at ACER.

Another important aspect, according to Palkovsky, is a constantly changing market condition which needs to be reflected in the new model.

“All these target models that we are trying to push, we have to make sure [they] benefit the market,” he noted.

The central west European region – Germany, France, Belgium, Netherlands, Luxembourg and Austria – are to implement flow based market coupling in late November.

However, market participants have recently expressed doubt that the deadline will be met given previous delays to similar plans to merge the markets ( see EDEM 10 June 2014 ). Irina Peltegova

By Irina Peltegova