Market coupling contributed to maintaining a high level of efficiency in the usage of available cross-border capacity in the day-ahead timeframe, reaching 87% in 2018. However, the margin available for cross-zonal trade is often much lower than the 70% target required by the Clean Energy Package.
In 2018, average day-ahead (DA) electricity prices increased in most of Europe. Scope for further price convergence remains.
- In 2018, average DA electricity prices increased in all bidding zones, except in the Romanian market. Compared to 2017, increases of more than 30% were observed in several regions.
- Average price differentials of more than 10 euros/MWh were observed on nine borders: all British borders, the Bulgarian borders with Greece and Romania, and the borders between Spain and France, between France and Italy and between Norway and the Netherlands.
The level of efficiency in the use of available cross-border capacity in the DA timeframe remained high. However, several issues are still pending for single day-ahead coupling (SDAC) to be completed.
- The level of efficiency in the use of European interconnectors in the DA timeframe reached 87% in 2018.
- The main pending issues to finalise the completion of SDAC include the implementation of flow-based market coupling (FBMC) for the whole Core region and the integration of the various coexisting market coupling projects.
- The extension of DA market coupling to all European borders would yield additional benefits of more than 200 million euros per year.
Significant scope still remains for improvements in the use of capacity in the intraday (ID) and balancing timeframes.
- The launch of the Single ID Coupling (SIDC) in June 2018 was a major development towards completing the internal electricity market. It contributed to fostering ID liquidity and is expected to contribute to increasing liquidity even further.
- Despite this major step, the level of efficiency in the utilisation of cross-zonal capacity in the ID timeframe remained low (50%). A further increase in the level of efficient use of ID capacity is expected from the extension of SIDC to the whole of Europe and from the implementation of pan-European ID auctions.
- The consolidation of existing initiatives and the upcoming go-live of various platforms for exchanging balancing services across Europe is expected to improve the efficient use of cross-zonal capacity in the balancing timeframe, which remains low (23%).
On most of the analysed bidding-zone borders, the margin available for cross-zonal trade (MACZT) is much lower than the 70% target required by the Clean Energy Package. Important efforts to meet the minimum target that will apply from 1 January 2020 are needed.
Several MSs continued to apply or plan to apply a Capacity Mechanism, whereas a number of these MSs do not seem to face an adequacy problem in 2020 or 2025.
Source: ACER-CEER