Westward Group Renewable Energy News Paris: 17

Power Markets in Spain Set to Join

Europe Links 17 Power Markets as
Spain, Portugal Set to Join


Day-ahead power markets are set to be
linked from Portugal to Finland as the
European Union seeks to integrate
electricity markets by the end of this year
across the 28-nation bloc.

Spain and Portugal are due to today join
the existing 15-country market coupling
project, linked through an interconnector
between Spain and France. Network
operators and energy exchanges have
held a single auction at noon Paris time
since Feb. 4 to determine next-day power
prices in the northwest of Europe.

Linking markets is part of the EUs third package of legislation intended to remove national
barriers to power and gas trading and reduce energy costs. Market coupling aims to
smooth price differences between nations through better control of cross-border flows.
Before coupling, traders selling power into another country had to buy cable capacity in
advance, and then make a separate trade on another exchange, exposing themselves to two
sets of price risk.

This is the first time a market coupling arrangement has been geographically expanded,
Andrew Claxton, director of business development at APX Group Holding BV, said by e-
mail. Previously this has involved implementing a whole new solution. This shows that we
have a robust underlying solution that can be extended across Europe.

Day-ahead power market coupling links Austria, Belgium, Denmark, Estonia, France,
Finland, Germany, Latvia, Lithuania, Luxembourg, Norway, the Netherlands, Poland,
Portugal, Spain, Sweden and the U.K. excluding Northern Ireland, according to N2EX, a U.K.
exchange.

Related: Westward Group Alternatives - Blog

Optimizing Cables

Although the interconnection level between the Iberian Peninsula and Central West
Europe, through the Pyrenees, is very limited, the new mechanism ensures a proper use,
Rafael Gomez-Elvira Gonzalez, a Madrid-based spokesman for Iberian exchanges OMIE,
said by e-mail. Market coupling optimizes the use of existing cross-border capacities.

Day-ahead markets in Romania will be linked to Slovakia, Hungary and the Czech Republic
through the price coupling mechanism on Nov. 11, Czech power market operator OTE AS
said April 9.

Plans to link Swiss day-ahead markets with European countries have stalled after the bloc
halted talks on the Alpine nation joining its energy market. The EU suspended talks after
Swiss voters on Feb. 9 approved immigrant quotas, a move contrary to market-opening
pacts with the EU going back to 2002.

Europes plans to link intraday power markets ground to a halt after power exchanges
failed to agree on who would develop a platform. The European Commission said on Feb. 6
that it would propose legally binding obligations to ensure the intraday platform is
developed. Exchanges from APX Group Holding BV to Epex Spot SE said on Feb. 10 they had
reached an agreement and are working on an EU-wide platform.