Tuesday, September 11, 2012

Czech-Slovak-Hungarian electricity market coupling launched

On September 11, 2012, the organizers of short-term market in three countries – Slovakia, Czech Republic and Hungary – have officially launched common day-ahead electricity market coupling on the principle of implicit capacity allocation. Hungary has joined Slovakia and Czech Republic which formed market coupling on September 1, 2009. 

As of today, day-ahead bids (for purchase and demand) of registered traders of the three countries could be traded together up to available cross-border capacity. Neither the obligatory reservation of cross-border capacity by the means of daily explicit capacity auction nor new registration at system is needed. Slovak operator OKTE also warned that for market coupling CZ-SK-HU there will be change of Gate Closure Time - newly at 11:00 am. Publication of results is expected at 11:40 am.

Previously there was a two-steps process on the Slovak-Hungarian border – daily explicit cross-border capacity auctions followed by the power trading on local exchanges. With market coupling it was replaced by simpler and more efficient process.

Better utilization of cross-border capacities and the ease of daily export-import possibilities will ensure better opportunities for portfolio optimization. The three coupled markets together represent a scale of volume that altogether creates higher security of supply, higher liquidity and thus less price volatility on the coupled organized markets.

The three national power exchanges – OKTE, OTE and HUPX – consider it an important step to the creation of the European Internal Electricity Market.

In December last year also Romanian and Polish parties expressed their willingness to join the initiative.

The introduced implicit allocation uses the price coupling mechanism compatible with the algorithm used in the Central Western European region. The parties involved are ready to follow their cooperation on implementation of implicit flow-based allocation of the Central Eastern Europe region) and the North West Europe region as next steps to create single European electricity market.

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