Nord Pool, the European power market, has welcomed a vote to enact a new EU law that will make it possible for all European power exchanges to offer their customers the same liquidity from the beginning to the end of intraday trading, in all bidding zones.
A previous loophole in EU regulation meant that, in intraday markets such as Austria, Belgium, France, Germany, Luxembourg, France and The Netherlands, intraday liquidity in the final hour of trading could be ‘ringfenced’ in local markets - a power exchange had no obligation to share it with other exchanges, as is the case the rest of the time in intraday trading.
The European Parliament voted on 11th April 2024 in favour of the revision to the Electricity Market Design Reform (EMD), negotiated with EU Member States and the European Commission at the end of last year. An obligation on Europe’s Nominated Electricity Market Operators (NEMOs i.e. power exchanges) to share their intraday orders with each other in a ‘Shared Order Book’ until the end of intraday trading in a bidding zone, is part of this revision.
Tom Darell, CEO at Nord Pool, commented: “We are delighted that this vital and long anticipated extension of the ‘Shared Order Book’ into the final hour of intraday trading is coming to the European power market at last – delivering a more efficient, more transparent, more competitive and more innovative trading environment.”
This important change comes after a lengthy and detailed consultation process. During this Nord Pool, its customers and important industry organisations, sought to ensure the extension of mandatory liquidity sharing between NEMOs to the final 60 minutes of intraday trading in the markets mentioned above, to ensure a level playing field in power trading at European level.
Next steps in the process of realising this goal will be a formal vote by the Council of EU Member States scheduled for Thursday 30th May, followed by the publication of the new law in the Official Journal of the EU. The sharing obligation will be binding upon NEMOs 20 days thereafter. Nord Pool expects this to be in force by the end of June/beginning of July.
Camille Beudin, Chairman at Nord Pool, added: “We welcome this change enabling a truly open and competitive spot power trading environment in Europe. This will permit Nord Pool customers to trade right up to real time in key markets, something they have not been able to do before.
“The final hour of intraday trading is crucial to the effective integration of renewable generation into our power systems, so this will be a game-changer for Nord Pool customers and the integrated European power market.”
The technical changes required to the so-called ‘XBID System’, which allows for intraday trading on the basis of shared liquidity, are minimal and easy to implement. NEMOs will now have ample time in which to make any adaptations or changes in their own trading systems to ensure their order books are immediately open to all trading entities, when the sharing obligation becomes binding. It will similarly give plenty of time for Transmission System Operators (TSOs) in the affected markets to prepare for a likely boost in market activity. It is important that the necessary changes are implemented as soon as possible in the interests of market participants and, ultimately, end consumers.
For further information on Nord Pool’s position on shared order books, read our whitepaper here.
About Nord Pool
Nord Pool, Europe’s leading power market, delivers efficient, simple and secure trading across Europe. In 2023 the company, which is majority owned by Euronext, celebrated 30 years of powering the market. Nord Pool offers day-ahead and intraday trading, clearing and settlement, and additional services, to customers regardless of size or location. Today 370 businesses 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, Luxembourg and the UK. Nord Pool is a Nominated Electricity Market Operator (NEMO) in 16 European countries, while also servicing power markets in Bulgaria, Croatia and Georgia. In 2023 Nord Pool had a total turnover of 1103.83 TWh traded power.
Nord Pool’s three decades of power market experience is built on offering flexibility, transparency, innovation, greater choice and participation to our customers.
For more information, please contact:
Stuart Disbrey
Communications Director
[email protected]
Irene Zeier
Communications Director
[email protected]
Oslo, 15 April 2024