The power exchanges APX?Endex, Belpex, EPEX Spot, GME, Nord Pool Spot, and OMEL announce the creation of a 6 party project aimed at delivering a single price coupling across the Nordic, Central West and Southern European regions, potentially as early as next year. The approach is called Price Coupling of Regions, or PCR, and is intended to provide the basis for a truly European market.
This follows the XVII European Florence Regulatory Forum last December where the PCR approach was initially outlined. PCR is a response to the common wish of regulators, TSOs and market participants for the rapid implementation of a single day?ahead price coupling solution across Europe. This is the dayahead element of the “target model” agreed by the Florence Forum.
The PCR project will address the implementation of a common price coupling solution through which spot electricity price formation will be coordinated in an area potentially covering Portugal, Spain, Italy, Belgium, the Netherlands, Great Britain, France, Germany, Austria, Switzerland, Denmark, Norway, Sweden, Finland and Baltic. This amounts to approximately 2,900 TWh pa of power consumption, or over 80% of the European total. Currently, more than 1,000 TWh are traded on the day?ahead markets operated by the 6 partners. The initiative is open to other PXs and market areas joining on fair and equal terms.
The concept of a single price coupling across Europe is an unprecedented challenge. The approach is designed to be fully transparent and to be able to produce reliable reference power prices for all European markets, whatever the operational conditions.
With the support of the relevant regulators and TSOs, the PCR solution has the potential to be jointly implemented as soon as next year. Power exchanges have started discussions with regulators, TSOs and all interested stakeholders to build support and plan implementation. Only then can an agreed target date for launch be available.
The 6 power exchanges already have extensive experience in successfully developing and operating price coupling arrangements, and are confident about the prospects for the cooperation. They are currently involved in several existing or planned regional market coupling initiatives – such as the CWE price coupling and the Danish?German tight volume coupling ? and the intention is to develop PCR in parallel.
The power exchanges hope that PCR could pave the way for the fast integration of all these projects into a wider and sustainable European solution starting in 2011. PCR aims to build on the existing arrangements, including the contractual and regulatory frameworks, thus minimizing the required changes and accelerating the speed of introduction.
As regulated spot power exchanges working closely with all stakeholders, APX?Endex, Belpex, EPEX Spot, GME, Nord Pool Spot, and OMEL are dedicated to the development of well functioning markets and, in particular, the pursuit of a truly integrated European spot market.