After Brexit: Integration of a decoupled market

With the UK’s exit from the EU at the end of the transition period on 31 December 2020, the market coupling between the electricity markets of continental Europe and GB was terminated. Until the future trading arrangements are implemented, the EPEX SPOT GB Day-Ahead auctions will be decoupled from neighbouring countries.

After Brexit: Integration of a decoupled market

As set out in the Trading and Cooperation Agreement between the UK and the EU, the future trading arrangements are expected to see the GB market re-connected through a multi-regional, loose volume coupling by April 2022. These arrangements will see the return of coupling on the GB border but will not see a full reintegration into the European Internal Energy market. The detailed design for this solution will be worked out in 2021.  

From implicit to explicit

Whilst the electricity markets are separate, Great Britain’s electricity grids remain physically connected to those of the EU. This means that the interconnectors no longer benefit from allocating their capacity via market coupling but now must run their own day-ahead explicit capacity auctions. 

Complexity and efficiency of the cross-border arrangements have been made worse as electricity trading companies must now secure cross-border capacity separately to any energy transaction, if they wish to benefit from GB’s interconnectedness. EPEX SPOT acknowledged this change and adapted its GB markets and services to the new reality.

A new timing – with proven systems

To face these new challenges through Brexit, EPEX SPOT moved the Day-Ahead auction from 11:00 GMT to 9:20 GMT, with results being available at 9:30 GMT. The shift was made on trading day 31 December 2020, with delivery on 1st January 2021. 

EPEX SPOT made the process as easy as possible for members,
by making no changes to systems and processes – just moving the auction timing.

EPEX SPOT engaged with members and relevant stakeholders to ensure the most suitable auction timing for the market. The new timing is convenient for market participants, as it:

  • Allows to quickly react to the results of the daily capacity auctions at the interconnectors;
  • Offers enough temporal distance to the pan-European coupled auction;
  • And further extends trading opportunities with all EPEX SPOT markets.

An optimised offer for a decoupled market

For continued smooth trading until new arrangements are made, members of EPEX SPOT can rely on secure and robust systems as well as an optimised timeframe for both the Day-Ahead and Intraday markets.

In particular, the GB Intraday markets provide:

  • A coupling of both GB Intraday auctions with Ireland;
  • The high-performance M7 trading system with up to 2,000,000 orders submitted daily and over 99.9% availability;
  • Perfect tools to optimise renewable assets while benefitting from arbitrage opportunities;
  • Robust reference prices and indices.
After Brexit: Integration of a decoupled market

With these benefits, the GB Intraday market contributes to the decarbonisation and low energy prices for end consumers.

In addition, EPEX SPOT provides API solutions with scalability and high resiliency to system load, technical support from our most qualified experts and compatibility with the largest community of certified ISVs.

After Brexit: Integration of a decoupled market

What a year 2020 has been! We have had an unexpected and challenging year, in which we all needed to reinvent ourselves and our way of working and communicating. Nevertheless during these challenging exercises we managed to not only launch the Nordic markets successfully, introduce new local auctions but were also able to successfully deliver the complex post-Brexit arrangements for electricity trading: by supporting our clients in such challenging times enabling them to start prepared as much as possible into the new year.

Since then, at EPEX SPOT we have seen a strong increase in traded volumes, with new trading records on our GB Intraday auction and half hourly Day-Ahead auction. Our hourly GB Day-ahead auction has also seen a new record in trading participants and continued good liquidity.

We start 2021 with more innovation and developments to service our members to the best of our ability.

Nataša Miljuš

Senior Key Account Manager
at EPEX SPOT