Energy prices of European wholesale market are standardised

The Northwest and Southwest regions of Europe (including Portugal and Spain) will now, for the first time, calculate electricity prices at the same time and in the same way. This is the first step towards the integrated electricity market, based on the 'Price Coupling of Regions' (PCR) system.

The four energy exchanges and 13 transmission system operators (TSO's) of the project for coupling the daily market of Northwest Europe (NWE) will operate according to a common price calculation for the daily market using the Price Coupling of Regions (PCR) solution. This comprises a landmark change for the future of European electricity markets. This solution is also used in the Southwest Europe (SWE) region in a generalised and synchronised manner.

The executive director of REN, João Conceição, states that this change 'allows European electricity consumers to benefit from more efficient use of the region's electricity system, resulting in a market that is more closely connected and integrated.'

The PCR is an initiative of seven European energy exchanges to develop a single price coupling solution for calculating electricity prices across Europe and to allocate cross-border capacity on a daily basis.

Price coupling allows cross-border transmission capacity to be used directly by Power Exchanges' day-ahead markets - a mechanism known as implicit allocation. The PCR solution has been developed by European Power Exchanges to provide a single algorithm and harmonised operational procedures for efficient price calculation and use of European cross-border transmission capacity, calculated and offered to the market in a coordinated way by TSOs.

All interconnectors within and between the following NWE countries will now be optimally utilised: Belgium, Denmark, Estonia, Finland, France, Germany/Austria, Great Britain, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland (via the SwePol Link), and Sweden. The SWE project covers France, Portugal and Spain.

About the projects:
North-Western Europe (NWE) Price Coupling is a project initiated by the Transmission System Operators and Power Exchanges of the countries in North-Western Europe. The 17 partners of this project comprise APX, Belpex, EPEX SPOT and Nord Pool Spot from the Power Exchanges' side; 50Hertz, Amprion, Creos, Elia, Energinet.dk, Fingrid, National Grid, RTE, Statnett, Svenska Kraftnät, Tennet B.V. (Netherlands), Tennet GmbH (Germany) and TransnetBW from the TSO side. This cooperation aims at establishing price coupling of the day-ahead wholesale electricity markets in this region, increasing the efficient allocation of interconnection capacities of the involved countries and optimising the overall social welfare. A single algorithm, calculating simultaneously the market prices, net positions and flows on interconnectors between market areas will be used, based on implicit auctions and facilitated through the Price Coupling of Regions solution.

Price Coupling of Regions (PCR) is the initiative of seven European Power Exchanges (APX, Belpex, EPEX SPOT, GME, Nord Pool Spot, OMIE and OTE), to develop a single price coupling solution to be used to calculate electricity prices across Europe, and allocate cross-border capacity on a day-ahead basis. This is crucial to achieve the overall EU target of a harmonised European electricity market. The integrated European electricity market is expected to increase liquidity, efficiency and social welfare. PCR is open to other European Power Exchanges wishing to join.

South-Western Europe (SWE) Coupling Project is a joint project between the French, Spanish and Portuguese TSOs, RTE, REE, REN, and the Power Exchanges OMIE in Spain and Portugal and EPEX SPOT operating the French market. This project aims to define the pre-coupling, post coupling and exceptional situations processes that are necessary to allow the implementation of market coupling between NWE region and the Iberian day-ahead markets.

To find out more about the PCR project and the regional price coupling implementation project in NWE and SWE, visit the following websites:

NWE region:

www.apxgroup.com
www.belpex.be
www.epexspot.com
www.nordpoolspot.com
www.casc.eu

PCR project:

www.apxgroup.com
www.belpex.be
www.epexspot.com
www.mercatoelettrico.org
www.nordpoolspot.com
www.omie.es
www.ote-cr.cz

SWE region:

www.epexspot.com
www.omie.es