In a move that brings it closer to integrated electricity pricing and reduces risks to supply, southern and northwestern European power grids and exchanges have linked markets to cover about 70 per cent of Europe’s consumers.
The physical and financial integration of the two regions creates a common day-ahead power market stretching from Portugal to Finland.
Reuters Newsagency reports the connection is likely to benefit consumers by enabling power to flow from cheaper to more expensive areas most of the time.
“In a landmark move towards an integrated European power market, the full coupling of the south-western Europe (SWE) day-ahead markets was successfully launched today,” grid operators and power exchanges said in a combined statement.
Reuters reports in a unified market, a rise in solar or wind power in one area may help balance a drop in hydropower from another.
At the same time a country may fire up its stand-by gas plants to help cover for a nuclear plant shutdown across the border.
“This will bring a benefit for end-consumers derived from a more efficient use of the power system and cross-border infrastructures as a consequence of a stronger coordination between energy markets,” the grid operators said.
Reuters reports that with the move, for the first time, a connection was enabled across the French-Spanish border, with day-ahead transmission capacity allocated by calculating power flows and prices at the same time.
Northwestern European power markets including Germany, Austria, France, Britain, Belgium, the Netherlands, as well as Nordic and Baltic states were already integrated in early February.
Reuters reports that since then, the daily cleared power volume for next-day delivery in the north-western region has amounted to 3.2 terawatt-hours (TWh), with an average value of €200 million.
The two combined regions, southwestern and northwestern Europe, account for about 2400TWh of annual consumption or about 70 per cent of the European total, excluding Turkey.
In the next step, power markets in the Czech Republic, Slovakia, Hungary and Romania are expected to link up in the same way and then connect to the rest of Europe.
Poland is already partly integrated with northwestern Europe via a subsea cable to Sweden, while Italy’s integration depends on Switzerland’s talks with the European Union on linking power systems.
