Cross-border exchanges in electricity

A user of a network, who wants to import, export or transfer electricity over the Slovenian transmission network must be granted access to the cross-border transmission capacities. Unlike between the two points of the Slovenian transmission network where never comes to congestions, in cross-border transmission capacities congestions are very frequent since the demand for capacities is higher than available.

 

Access to the network for cross-border exchanges in electricity in the European Union is governed by Regulation (EC) No 714/2009. The Regulation establishes uniform methods of the allocation of free cross-border transmission capacity under market-based methods and a payment for the use of the network for cross-border exchanges in electricity through a settlement fund. By means of this fund, the electricity TSOs involved covering each other's costs, incurred as a result of cross-border exchanges. The result is that the users of the cross-border transmission capacities do not pay the same price for the use of the transmission network as other network users.

 

When demand for the available cross-border capacities (CBTCs) at the specific border exceeds their total amount, we talk about the limited CBTCs or congestion. In such case, Regulation 714/2009 requires the allocation of capacities by using market-based methods, which imply implicit or explicit auctions. In case of implicit auctions, the allocation of available CBTCs is conducted at the same time as trading on the electricity exchange. Since trading on power exchanges is conducted only for a day ahead or even shorter periods of time from a closure of the business to the start of delivery, the implicit allocation is carried out only for a day ahead. In a case of allocations for longer periods such as allocations of CBTCs on yearly or monthly level, explicit auctions are used. Participants in auctions submit bids only for transmission capacities, and the purchase of energy must be handled separately. On the Slovenian borders, explicit auctions are carried out for all time-frames (year, month, day), except on the border with Italy where allocations of CBTCs for day ahead is conducted with implicit auctions within the Slovenian and Italian market coupling.

 

Regulation 714/2009 also requires that the allocation of CBTCs is carried out in a coordinated way within individual European regions that are also set in the Regulation. On the border with Italy, Slovenia belongs to the Central-South Europe (CSE) and on the border with Austria to Central Eastern Europe (CEE). On these two borders, for the past few years joint coordinated auctions are carried out. All explicit auctions on the border with Italy were conducted by the auction house CASC.EU with its headquarters in Luxembourg, and all explicit auctions in the region CEE by the auction house CAO based in Germany, Freising. The border between Slovenia and Croatia does not belong to any of the regions determined by the Regulation. By 2012, explicit auctions were exercised by the Slovenian and Croatian TSOs, which means that each TSO carried out explicit auctions for one way of the transmission. Since 2013, all auctions on this border as well as on the border between Croatia and Hungary are conducted by the auction house CAO.

 

Meta information
Display date
09.01.2015 11:10
Modified date
15.11.2017 12:17
Tags
cross border exchanges explicit auction
Area
Energy service providers Electricity