Nord Pool is deeply disappointed that the Agency for the Cooperation of Energy Regulators (ACER), in its proposal to amend the Capacity Allocation and Congestion Management (CACM) Regulation, recommends the establishment of one single legal entity to perform all market coupling operation (MCO) tasks. This includes the creation of one legal entity to operate the market coupling algorithms, acting as a central counterparty to all Nominated Electricity Market Operators (NEMOs). With this proposal ACER acts against the advice and wishes of the vast majority of NEMOs, TSOs and market participants.
Nord Pool, together with all European NEMOs and TSOs, proposed a solution closer to what we have today – a solution which would be more robust, more flexible in the face of the market’s ‘green shift’ and more cost- and time-efficient than that which ACER has, unfortunately, opted for.
A European single legal entity will add an expensive additional layer to the market coupling process, removing that process from market participants and the regional specifications of the markets. It will divert already scarce resources from implementing necessary projects. In addition, it will take away from NEMOs their core competence of operating markets, while placing market operation into the hands of a newly established entity with no credentials.
If ACER’s proposal is implemented, it will increase the risk of a far-reaching market failure, by bundling all operations into a single legal entity which is “too big to fail”. Nord Pool urges ACER and the NRAs to seriously reconsider this recommendation.
ACER’s latest proposal does, however, contain some much-needed improvements to the level playing field for competing NEMOs. Nord Pool very much welcomes the clear statements in the draft that NEMOs shall not organise trading outside the Single Day Ahead Coupling (SDAC) and the Single Intraday Coupling (SIDC), and that the intraday timeframe should only end with the latest point in time when continuous trading stops matching orders for a given bidding zone. This means that market participants will benefit from increased liquidity in both the SDAC and SIDC in the future, as all NEMOs will have to submit any orders received from market participants for single matching during these timeframes and for the entire duration of the intraday market in a bidding zone.
While, from Nord Pool’s perspective, these long-overdue improvements to multi-NEMO competition will greatly benefit market participants, we are extremely worried that these benefits are more than off-set by the planned centralisation of the MCO in one single legal entity.
The ACER Recommendation 02/2021 can be found at: Recommendations | www.acer.europa.eu.
About Nord Pool
Nord Pool, Europe’s leading power market, delivers efficient, simple and secure trading across Europe. The company offers day-ahead and intraday trading, clearing and settlement to customers regardless of size or location. Today 360 companies from 20 countries trade on Nord Pool’s markets.
Nord Pool operates markets in the Nordic and Baltic regions, Germany, Poland, France, the Netherlands, Belgium, Austria and the UK. Nord Pool is a Nominated Electricity Market Operator (NEMO) in 15 European countries, while also servicing power markets in Croatia and Bulgaria. In 2020 Nord Pool had a total turnover of 995 TWh traded power. The company has offices in Oslo, Stockholm, Helsinki, Tallinn, London and Berlin.
Nord Pool has 25 years of power market experience built on offering flexibility, transparency, innovation, greater choice and participation to our customers.
Oslo, 21 December 2021
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