Northwest European Power Market Coupling Delayed to November

Power markets in northwest Europe may be coupled in November, one year later than originally planned, before extending coverage to the Baltic states, and soon after to Spain and Portugal.

“The northwest European power market coupling project is targeted to go live in November 2013, subject to successful testing” of IT systems, procedures and contracts, the German- French power exchange EPEX Spot SE and Norwegian grid company Statnett SF said today in a joint e-mailed statement. Testing is scheduled to start in April, they said.

The northwest Europe project, originally planned to happen by December 2012, will include the Baltic countries to a merger of day-ahead power auctions in the U.K., central-west Europe, the Nordic countries, as well as for the Swe-Pol link that connects Poland and Sweden. It involves 13 transmission system operators and four power exchanges, and covers 75 percent of the European electricity market.

The European Commission, the bloc’s regulator, has set a target to create an internal energy market for the region by late 2014, allowing gas and electricity to flow freely across borders, based on price signals from day-ahead wholesale markets. To achieve this goal, national markets will first be linked with others in their region, before wider integration takes place.

Grid companies and power exchanges in the Nordic region, the U.K., Belgium, France, Germany, Luxembourg, the Netherlands and the Baltic countries are working together to remove price distortions where power may flow in the wrong direction, from a high price area to a cheaper area, by aligning the pricing and shipment of electricity, using so-called market coupling. The plan is to add Spain and Portugal “soon after” the northwest Europe coupling is implemented, it said.

Neither Bente Hagem, executive vice president at Norwegian grid company Statnett, nor Jean-Francois Conil-Lacoste, chief executive officer of EPEX Spot, the joint venture that was set up in 2008 between the German and French power exchanges EEX and Powernext SA, were available for comment when contacted by phone and e-mail.

To contact the reporter on this story: Torsten Fagerholm in Helsinki at tfagerholm@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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