Market

In an effort to make the European energy system more competitive, secure and sustainable, the European Union has set out ambitious 2030 Climate and Energy Goals. Besides the objectives on energy efficiency, the development of renewables and greenhouse gas reductions, the EU also wants to speed up the development of the European energy market.

The agreement reached in October 2014 included amongst other objectives a minimum of 10% of electricity interconnection and an obligation of the Commission to make progress reports with the objective of arriving at a 15% target in interconnections by 2030 in order to raise competition amongst market actors and to allow for the best use of energy resources across Europe.

Despite the dynamic changes due to the rapid development of volatile renewables occurring in Europe, the transmission system operators of the Elia Group:

  • maximize the possibilities of commercial use of their grids in a transparent and non-discriminatory way for all market participants,
  • develop new infrastructure - especially interconnectors to create new trading possibilities,
  • develop new products for increasing liquidity across the European electricity market.
The benefits of these activities will not only be felt by energy market players, but also by Europe’s overall economy and the entire society. On the basis of the knowledge and the experience of the two TSOs of the Elia Group, Elia Grid International (EGI) develops market integration solutions in key aspects of market deregulation. EGI gives support in setting up capacity calculation and allocation mechanisms for ensuring balance between a high level of security of supply and the creation of a smoothly functioning electricity market. Elia Grid International also helps to develop and deploy power exchanges.

Integration of the European Electricity Market

Although European transmission system operators always have been working closely together since decades, the shift towards more renewables has led to a new quality of cooperation.

The Third Energy Package and the establishment of ENTSO-E (European Network of Transmission System Operators for Electricity) in 2008 enshrined the voluntary TSO co-operation into a legal framework and elevated it to a more ambitious level.
                    
Within ENTSO-E, the Elia Group has been at the forefront to harmonize standards and implement procedures establishing the necessary market platforms in central Europe and to proceed evolving towards the European so-called “Target Model” for the Electricity Market.

A crucial element in designing and facilitating the European electricity market is the creation of a set of rules or network codes. ENTSO-E was mandated by the European Commission to draft these codes, with guidance from the Agency for the Cooperation of Energy Regulators ACER.

Each network code is an integral part of the drive towards completion of the internal energy market and achieving the European Union’s goals on climate and energy.

Find more information about these common rules on

Market Coupling

European electricity markets have developed progressively since the 1990s, with considerable integration between some neighbouring countries. Regional initiatives make the electricity markets converge step-by-step across Europe.

The Elia Group is participating actively in a number of projects, especially with Power Exchanges, to facilitate better trade possibilities across Europe. This allows benefiting from a price that is fixed by as many market players as possible, creating competition and thus profitable for competitive electricity prices.

After having made substantial progress in the coupling of day-ahead markets, the Elia Group now advocates to continue in progressing with intraday couplings to allow wider regions trading closer and closer to real-time.

Central-Western Europe (CWE) price coupling

In 2010, Elia and 50Hertz - together with some other TSOs and Power Exchanges - initiated the (day-ahead) market coupling of three countries: Belgium, France and the Netherlands. This initiative expanded in 2013 with the accession of Germany and Luxembourg to the Central Western Europe zone as flow-based market coupling.

North-Western Europe (NWE) price Coupling

Since 2014 a major step towards a fully integrated European electricity market has been realised with the go-live of the North-Western Europe (NWE) day-ahead price coupling project. The NWE Price Coupling initiative covers the Nordic region (Denmark, Finland, Norway, Sweden), Great Britain, and the CWE region (Belgium, France, Germany, Luxemburg and Netherlands).

Central East Europe (CEE) To develop the cross-border electricity market in Central and Eastern Europe, 50Hertz has established the "CAO Central Allocation Office" for coordinated congestion management with seven neighbouring transmission system operators. The so-called CEE market region now covers Germany, Austria, Poland, Czech Republic, Slovakia, Hungary, Slovenia and Croatia.

Market Products and Platforms

The evolution of electricity markets shouldn’t just be considered at geographical level, but also at different time scales: from day-ahead to intraday market activities closer and closer to real-time. These various time frames foster the well-functioning and the effectiveness of the electricity market with increasing volatile generation units from renewable sources to get value from a near-real time market (intra-day or balancing market). Market coupling projects require highly skilled personnel and specialized programmes and platforms.

Cooperation with Power Exchanges

The Elia Group is closely cooperating with all important European Power Exchanges for the benefit of European society in bringing markets closer together.

Elia and 50Hertz are shareholders of Powernext and EEX to state their close link and their intensive cooperation with European Power Exchanges to the benefit of the European electricity market.

Capacity Allocation and Congestion Management

The way of handling transport capacities must be harmonized in Europe for an efficient and non-discriminatory use of available grid capacities. The Elia Group is a driver in the development of methods for allocating capacity in day-ahead and intra-day timescales with the other European TSOs. Implementing a common way to calculate capacities across zones and to address cross border capacities in different timeframes will lead to a more efficient European market and will benefit customers in an integrated European energy market.

Due to the highly saturated grids in Continental Europe, an efficient, non-discriminatory way of managing congestions management is increasingly important. Together with the development of the European electricity market, transmission system operators have to develop and implement coordinated procedures to manage bottlenecks with market-oriented mechanisms such as auctions.