Market coupling
Kurth: A huge step towards a European energy market
Year of issue 2010
Date of issue 2010.11.10
The decision by transmission system operators and energy exchanges in Germany, France and the Benelux countries to fully integrate their electricity markets ("market coupling") has been welcomed as a "huge step towards the completion of the European energy market" by Bundesnetzagentur President Matthias Kurth. The move will fulfil an important aim of German and European energy policy.
The new merger is particularly important in that it will immediately unify the new central European electricity network with the existing market coupling initiative between Germany and Northern Europe (Denmark, Sweden, Norway and Finland). The Bundesnetzagentur has been a staunch supporter of the integration of these initiatives and managed the negotiations on the necessary coordination. Coordination is essential owing to the divergent operational organisation of the two initiatives. Operations will be integrated as soon as possible, however.
The advantage of an integrated electricity market is that power can flow from regions where it is produced more cheaply to higher-price regions. This then leads to lower prices in these areas and to a general harmonisation in wholesale prices in the interconnected regions. This also boosts the liquidity of energy trading and stimulates competition. Owing to its geographical position and large number of interconnectors compared with other European countries, Germany is well placed to profit from the large integrated electricity market, according to Kurth.
Kurth also emphasised the contribution made by all the market players and the relevant regulators in working together to reach this successful outcome. The agreement is a particularly successful example of regional cooperation in a highly complex field. All the parties involved share the view that this can only be a beginning. The next step will be to bring southern regions on board and to link up with the markets in eastern Europe.
Kurth: "The launch of harmonised market couplings in western and northern Europe has now created a single electricity market which extends from Hammerfest to Marseille. Our vision for the future is to draw in Lisbon, Tallinn and Athens as well."