Nord Pool Spot has received the following message from the European Market Coupling Company (EMCC):
The market coupling on the Kontek DC link between Germany and Eastern Denmark and on the AC link between Germany and Western Denmark experienced some challenges yesterday, aligning flow results and price calculations in some hours between DK1-GER and DK2-GER for delivery date 30 September 2008.
EMCC has with support from their IT vendor and the involved power exchanges analysed the planned day-ahead flow result for delivery date 30 September on the links Denmark West-Germany and Denmark East-Germany and both short term and long term measures are taken to avoid these incidents in the future.
Summary of incident:
Especially hour 19-20 and hour 20-21 were affected where the EMCC and the Nord Pool Spot price calculation diverged. Also other hours were affected, but to a less extent. During hour 19-20 and hour 20-21 there were restrictions in capacities within Sweden (Cut 2 South) affecting the available capacity towards Denmark and zero capacity from Norway to Sweden (NO1-SE).
The following could be seen:
• There were extensive vertical overlaps in DK1 and in DK2
• There were limited capacity from Northern Scandinavia towards DK1 and DK2
Measures to be taken:
The analysis has detected that the results are caused by a small, but different set up in the price calculation algorithm for the EMCC and Nord Pool Spot price calculation application. The Nord Pool Spot calculation system chooses a common price for two neighbouring areas when capacity is not fully utilized whereas EMCC strictly applies the social welfare optimization principle. This will be aligned as soon as possible and tested thoroughly before put into operation. However, in order to secure short term and long term predictability for the market, the following actions will be taken.
Short term solution:
The short term solution will be to implement the day-ahead plans for energy flow in emergency situations as described in exchange information 61/2008.
In order to avoid this incident in today’s price calculation, following will take place:
1. EMCC will determine the scheduled flow and bids on the two connections.
2. EEX and Nord Pool Spot will then calculate Spot prices for respective market areas.
3. The flow and prices will be checked by the respective power exchanges in order to confirm correct flow between areas.
4. If there are adverse flows and the price difference exceeds 10 euro, the capacity used by EMCC between Denmark and Germany will be set to zero.
5. If this affects the majority of the hours, the whole day-ahead capacity used by EMCC will be set to zero.
6. If not, the bids will be put into effect as planned.
Long term solution:
The parties are agreeing that EMCC and the adjacent exchange market areas coupling shall have the same principles regarding algorithms and this will be put in to effect as soon as possible.
Lysaker, 30 September 2008
For further information, please contact:
Enno Böttcher, European Market Coupling Company GmbH, phone +49 40 369 054 60
Toralf Michaelsen, European Energy Exchange AG, phone +49 341 2156 305
Dirk Biermann, Vattenfall Europe Transmission GmbH, phone +49 30 51 50 44 25
Carsten Pflanz, E.ON Netz GmbH, phone +49 921 91544 70
Klaus Thostrup, Energinet.dk, phone +45 2333 8816
Anders Plejdrup Houmøller, Nord Pool Spot AS, phone +45 2811 2300