Montel Magazine 2 2021 - Border control - Page 18

Delays to the restart of the 1 GW BritNed UK-Dutch interconnector , for example , were cited by some traders as impacting market volume . BritNed went offline on 8 December for two months following a cable fault . In early April , UK day-ahead power prices hit GBP 300.61 / MWh at Nord Pool ’ s N2EX spot auction , while in March they had risen to nearly GBP 500 / MWh , amid cold weather , subdued wind supply and nuclear outages . These peaks were around GBP 143 and GBP 177 higher , respectively , than the equivalent Epex Spot auctions . UK spot prices hit all-time highs on 12 and 13 January at GBP 1,500 / MW .
The decoupling of the two UK power exchanges has meant there are now two day-ahead prices within the country and this “ has reduced liquidity and increased risk , to the detriment of market efficiency ”, says the European Federation of Energy Traders ( Efet ). The energy trading lobby says it is taking steps to find an enduring solution , consulting with both the UK government and regulator Ofgem . “ This is particularly important in the case of new electricity trading arrangements for all market timeframes – which need to be developed , consulted , discussed , tested and implemented within a short period of time if beneficial for the market .”
A spokesman for Epex Spot , who asked to remain anonymous , says there have clearly been some impacts from the post-Brexit arrangements . “ Prices between the two power exchange markets have started to diverge and have been a bit more volatile ,” he says , however noting this could also be due to fundamental drivers , such as specific weather conditions in the first four months of 2021 . He says also that the loss of implicit use of cross-border capacity towards the continent had seen day-ahead 60-minute trading volumes decrease suddenly on both exchanges . Yet these impacts have been manageable , he says . “ Even though prices diverged between the exchanges , the spread has been rather small most of the time and the markets have stayed liquid enough to avoid extreme prices ,” he says , noting however the exception of “ special weather constellations ” in January , which would also have produced turbulence before Brexit as well . Furthermore , he points out , volumes have seen an increase on other parts of the power market , especially on the Epex Spot 30-minute day-ahead market auction and all intraday segments .
Nevertheless , there are plans in place to re-establish links between the exchanges , with a loose volume market coupling solution earmarked for April next year , which could again bring about again a single British price for the day-ahead market . “ All relevant stakeholders are in talks for the implementation ,” says the Epex Spot spokesman , noting both aspects – market coupling as well as the single price – were dependent on each other . “ A single [ British ] price is needed to allow discriminatory-free access to cross-border capacity ,” he says .
Nord Pool ’ s McKiernan says , as a first step , there had been costbenefit analysis of possible technical solutions for future cross-border electricity trading between the UK and the EU published in late April . “ Industry has been invited to provide comments on these [ and ] Nord Pool is in the process of analysing the proposals and , using our extensive experience and expertise in this area , providing a view on their technical feasibility , as well as their possible impact on market integrity ,” she says . n
Montel Magazine 2 – 2021