Nord Pool Spot has received the following message from the European Market Coupling Company (EMCC):
On Monday 29 September, market coupling will be introduced on the Kontek DC link between Germany and Eastern Denmark and on the AC link between Germany and Western Denmark.
This implies that the day-ahead plans for the energy flow on these two links between Denmark and Germany will be calculated by EMCC. 29 September will be the first day, where these day-ahead plans are produced by EMCC.
The daily market coupling procedure EMCC will have two daily tasks:
1. For each of the two links and for every hour of the next day, EMCC will determine the scheduled flow based on the bids in the two spot markets of Nord Pool Spot and the European Energy Exchange (EEX) including the available capacity.
In order to calculate the scheduled flow, the day-ahead capacities for the links West Denmark-Germany and Eastern Denmark-Germany are submitted by Energinet.dk, Vattenfall Europe Transmission GmbH and E.ON Netz GmbH. EMCC will shortly after 12.00 CET receive anonymous order books from EEX and Nord Pool Spot.
2. After having calculated the scheduled flow for each hour of the next day on the two links, EMCC will submit a purchase bid to one power exchange’s bidding area(s) and a sales bid to the other power exchange’s bidding area(s) which reflects the scheduled direction of the flow on the two links. Thereby, EMCC will be the cross-border trader responsible for the EMCC flow between the two spot markets of EEX and Nord Pool Spot.
After having received the EMCC bids for Western-Denmark and Eastern-Denmark, Nord Pool Spot will calculate the Elspot prices, the traded Elspot volume per participant and the day-ahead plans for the energy flows between the Nordic bidding areas. For the EEX area, EEX will carry out the similar day-ahead auction calculation (Phelix).
Day-ahead plans for the energy flow in emergency situations
In case of technical failure in the EMCC calculation system, the default EMCC bids to EEX and to Nord Pool Spot will be set to zero (ie. no EMCC trading). This means that if the market coupling fails, the day-ahead plan for the Kontek flow will be zero flow. For the link West-Denmark-Germany, the day-ahead nominations from players with cross-border capacity from the explicit auctions will constitute the day-ahead plans for the energy flow.
Dead band introduced on the Kontek link
The involved capacity holders have decided to take grid losses into account by introducing a so called “dead band” on the Kontek link between Germany and Eastern Denmark. As decided by the capacity holders, this means the market coupling and EMCC’s calculation system will only use the Kontek capacity to the extent that the Kontek congestion revenue can finance the grid loss on the Kontek link. The consequence of this new “dead band” constraint is that it may result in zero or little capacity used although a price difference exists between the EEX Phelix and NPS Elspot prices in the relevant price areas (Germany and Eastern Denmark).
Explicit auctions for the link Germany-Western Denmark
On the link Germany-Western Denmark, the explicit monthly and annual auctions will remain. On the Kontek link, there will not be explicit auctions.
Lysaker, 26 September 2008
For further information, please contact:
Enno Böttcher, European Market Coupling Company GmbH, phone +49 40 369 054 60
Toralf Michaelsen, European Energy Exchange AG, phone +49 341 2156 305
Dirk Biermann, Vattenfall Europe Transmission GmbH, phone +49 30 51 50 44 25
Carsten Pflanz, E.ON Netz GmbH, phone +49 921 91544 70
Klaus Thostrup, Energinet.dk, phone +45 2333 8816
Anders Plejdrup Houmøller, Nord Pool Spot AS, phone +45 2811 2300