emcc: News

On 7th May 2010, in Bonn and in presence of the CWE-Nordic Regulators, the CWE-Nordic TSOs, Power Exchanges and EMCC committed to prepare for a simultaneous go-live (launch) of the CWE-Nordic Interim Tight Volume Coupling (ITVC) solution and the CWE Price Coupling solution, as close as possible to 7th of September 2010, the initial target launch date for the CWE region.

The ITVC solution is based on the existing EMCC tight volume coupling model on the German borders with Denmark and Sweden. It is scheduled to be implemented in two steps, with the NorNed cable being integrated in the second step. The ITVC is an interim solution that will be replaced by an enduring price coupling solution covering at least the entire CWE and Nordic regions. The CWE and Nordic parties have established a detailed project planning, including alignment of business processes and testing of the solution according to the necessary quality standards. The planning also caters for testing of the operational fall back mechanism, i.e. shadow auctions performed by CASC-CWE which is planned to be in place from the start of ITVC.

According to this planning, the combined target launch date of the ITVC step 1 solution and CWE Price coupling is 9th November 2010. The target launch date of ITVC step 2, including NorNed capacity, is 14th December. Both target launch dates are subject to successful completion of all necessary tests and subject to regulatory approval of the solution. Confirmation of a firm launch date for step 1 is expected to be given by mid September.

CWE, EMCC and Nordic parties

Since European Market Coupling Company (EMCC) launched market coupling on Baltic Cable on 10 May 2010, the results have been satisfactory. Smaller technical deficits, which had appeared the first day, could be resolved quickly.

Within the first seven calendar weeks in operation, almost 516 GWh were traded on Baltic Cable between Sweden and Germany. 94% of the total electricity were sent in the direction according to the price signal. Considering the financial turnover on the interconnector, 99.81% went in the right direction.

The average price difference between Sweden, traded on Nord Pool Spot, and Germany, traded on EPEX Spot, ranged around 2.3 €/MWh. As this resembles the price deviation between Denmark and Germany, for example on DK1, it shows that market coupling can lead to a convergence of prices in different market regions.

During the first day of market coupling on Baltic Cable, EMCC’s website showed some incorrect price spreads. This was due to a programming error which was resolved within two hours. Since then, the system worked faultlessly.

“The results are even better than on our two Danish-German interconnectors,” Enno Böttcher, Managing Director of EMCC comments, adding “our system proved its productivity.”

Before the launch of market coupling on Baltic Cable, EMCC has already carried out day-ahead congestion management services on the two interconnectors between Denmark and Germany. With the introduction of market coupling on Baltic Cable, EMCC’s market coupling is now covering all interconnectors between the Nordic market and Germany.