emcc: Press Releases

E.ON Netz, Energinet.dk, VE Transmission, Nord Pool Spot and EEX agreed to start the operation of day-ahead market coupling between Denmark and Germany on 3rd June 2008 for delivery next day. With the start of day-ahead market coupling cross-border power trading will become easier. Previously separated activities to get cross border capacities from transmission system operators and energy volumes from power exchanges at different times are unified to one single step. Traders only have to approach power exchanges to execute energy businesses between Denmark and Germany. Therefore market coupling will further improve market efficiency and will promote the further integration of regional markets towards a European-wide electricity market. Market participants are informed in more detail at an Information Seminar held in Hamburg today.

Taking into account the significant importance of electricity trading between the most liquid European trading areas of the Nordic countries and Germany the five project partners set up a joint initiative in late 2006. The joint initiative faces some major challenges to be able to take up operation, such as the design of new complex IT-systems. Legally, also the notification of the planned European Market Coupling Company (EMCC), performing market coupling services, to the European Commission under the relevant competition regulation is of more complex nature as no case of precedence exists so far. Already today, the initiative has become a great success and is an important milestone on the way to a European wide electricity market.

The Danish-German market coupling scheme is open to include other congested network capacities and to offer specific congestion management services. This serves as a key to build a power bridge across regional markets in Europe.

Market coupling between Denmark and Germany: Establishment of a Company Decided

The initiative for the market coupling of Denmark and Germany has entered a new phase: At today’s Stakeholder Group meeting the principles for the establishment of a new company has been announced. The company’s working title is “EMCC European Market Coupling Company”. The company will be structured as a German private limited company (GmbH)
based in Hamburg, with both the TSOs and the exchanges as shareholders.

The task of EMCC will be the market coupling calculation based on the available transfer capacity (ATC) per interconnector from the TSOs as well as anonym order books from the Power Exchanges. Also, the placing of additional bids at the Power Exchanges and the scheduling of the respecting power transmissions belong to its tasks. At the same time it is
responsible for financial settlement of the congestion rent as well as for the publishing and maintaining of all necessary information.

EMCC will be owned by the five participants. The market size, which is characterised by the consumption on condition of a reasonable transmission capacity, is the key factor to divide shares between different markets. Based on these rules for the status quo it was agreed to stay with the share distribution of 40 % for Nordic and 60 % for the German market. 

The next steps will be the specification of the IT-system design and of course the legal approval of EMCC with the succeeding founding of the company.
 
Contact:
E.ON Netz GmbH: Dr. Christian Schneller, T: +49 921 915-4030
Energinet.dk: Lene Sonne, T: +45 23 338802
Vattenfall Europe Transmission: Gert Schwarzbach, T: +49 30 5150-2703
Nord Pool Spot AS: Jǿrn Limann, T: +47 920 213-85
European Energy Exchange AG: Daniel Wragge, T: +49 341 2156-204

Market coupling between Denmark and Germany: Project entered the implementation phase. Improved market integration expected in the 4th quarter of 2007.

In April the project “Market Coupling between Denmark and Germany” advanced from the conceptual phase into the implementation phase. Market coupling allows highly efficient use of existing cross-border interconnections and is an important step towards integrating wholesale electricity markets. With the market coupling procedure, so-called implicit auctions – joint allocation of energy and cross-border transmission rights – will be held on a daily basis. Operation is expected to start in the 4th quarter of 2007.  In a cooperative spirit, the five project initiators – the transmission system operators E.ON Netz, Energinet.dk and Vattenfall Europe Transmission and the power exchanges Nord Pool Spot and EEX – made every necessary effort to accelerate the implementation. Since October 2006, it has only taken the parties a few months to develop the idea, sign a Memorandum of Understanding, draft the concept and now start the implementation in order to make market coupling available to the market at the earliest possible point in time. Against this background, an external project manager from E-Bridge Consulting was appointed, who will be working full-time with the project, coordinating six task groups entrusted with elaborating implementation and decision proposals in relation to business process description, budget calculation, IT specification, company foundation, contractual framework and
communication.

The current initiative comprises the interconnector between E.ON Netz and Energinet.dk and the one between Vattenfall Europe Transmission and Energinet.dk (the Kontek Link) coupling the German and Danish market. The relevant processes and IT system for market coupling will, however, be designed to permit and support extensions on to other
interconnectors or markets.

The results of the cooperation will be available to other transmission system operators and power exchanges. The respective European regulators follow the project closely and have already welcomed the efforts made by the five parties as part of the European Regulators’ Electricity Regional Initiative, whose object is to promote enhanced electricity market
integration.

Contact:
E.ON Netz GmbH: Dr. Christian Schneller, T: +49 921 915-4030
Energinet.dk: Lene Sonne, T: +45 23 338802
Vattenfall Europe Transmission: Gert Schwarzbach, T: +49 30 5150-2703
Nord Pool Spot AS: Jǿrn Limann, T: +47 920 213-85
European Energy Exchange AG: Dr. Jan Sierig, T: +49 341 24680-515