More power for the Nordic markets
Energy markets get more and more liberalised. In 2020, it entered a new phase: thanks to European regulation and a new contractual framework, EPEX SPOT extended its services to the Nordic countries.
When the European Union kicked off the liberalisation of power markets in 1996, power exchanges were making their first steps in setting up national spot power markets. Still, the core idea was already well visible: to foster competition at all steps along the value chain of electricity.
When EPEX SPOT was created through the merger of the power spot activities of the French and German energy exchanges in 2008, another core idea had driven the process: that electricity needs to be traded at European level across borders, regardless of national borders. Further steps followed: to increase liquidity, exchanges cooperated to create a pan-European Market Coupling by optimizing electricity flows on interconnectors. EPEX SPOT grew further by integrating APX to form one single power exchange for Central Western Europe.
A new regulatory framework for competition
Since 2015, the situation between power exchanges has changed. The EU regulation on Capacity Allocation and Congestion Management (CACM) for the first time established competition among exchanges – and paved the way for EPEX SPOT to extend its services to regions outside the markets it historically operated. One of the goals of CACM is to foster competition among power exchanges in the core markets of Europe, supporting the target of achieving a fully integrated European Energy Market.
Consequently, EPEX SPOT worked hard to become a so-called Nominated Electricity Market Operator (NEMO) in the Nordic countries, Poland and the Baltics, with an ad hoc license for Norway. On 25 May 2020, EPEX SPOT launched Intraday trading in the Nordic countries. The markets are coupled via the pan-European Single Intraday Coupling (SIDC, formerly XBID).
Thanks to EU regulation, EPEX SPOT was able to extend its services to new regions.
On 3 June 2020, Day-Ahead trading followed. Products were launched in Denmark, Finland, Norway and Sweden simultaneously, with transactions registered in all 12 bidding zones from day one. The Day-Ahead auction is coupled via the Single Day-Ahead Coupling (formerly Multi-Regional Coupling or MRC) which secures one single price in the Nordics.
Innovation for the Nordic countries
The extension was enabled through the Nordic Multi-NEMO Arrangements (MNAs) implemented on 3 June. The Nordic region is the second in Europe to implement the MNA framework in compliance with the guidelines on CACM. The Nordic MNA makes the Single Day-Ahead Coupling accessible for more than one Nominated Electricity Market Operator (NEMO) per bidding zone in the Nordic region, while maintaining the general market coupling principles of capacity calculation and allocation.
The extension to the Nordic countries marks a huge milestone – for EPEX SPOT but also for the trading participants in the region. This launch brings our powerful trading system to the Nordics and opens up the market to an unprecedented level of performance. EPEX SPOT’s ambition is clear: to become the preferred power exchange in the Nordic region too.
We do so by pushing boundaries and bringing innovations to the market. Based on the most advanced trading standard offered in the region from the start of the operation, EPEX SPOT participates in a pilot project managed by the Finnish Transmission System Operator Fingrid, allowing trading until delivery in Finland. On the Day-Ahead markets, customers in the Nordics benefit from block orders in the Day-Ahead segment that are highly suitable for the Nordic generation mix. On the Intraday, EPEX SPOT has responded to market needs by providing innovation and performant systems. This has led to an increase in liquidity in the Nordic market.
In 2014, EPEX SPOT covered just four countries. In 2020, EPEX SPOT has extended its offer to its clients to twelve countries.
have been traded on the Nordic Day-Ahead markets in 2020
have been traded on the Nordic Intraday markets in 2020
These volumes are off to a good start in 2021. The idea of European-wide power trading on one robust and efficient system in shaping up more and more.
We have found EPEX SPOT to be a great partner for our growing asset optimisation business and we look forward to further contribute to the growth of the Nordic markets. By working together on innovative solutions for both PPAs and supply customers, we contribute to the acceleration of the energy transition.
