The need for new grid developments and new production will decline once we have efficient power flow on existing grids. The project is a joint initiative between the power exchanges and the transmission system operators (TSOs). The market connection will be operative in 2013, and we will then have established the largest multinational power market in the world, totalling 2300TWh.
Europe is copying and improving the Nordic trade model, implicit auction, i.e. that computer in Northwest Europe will calculate hourly rates daily based on supply and demand, as well as capacities between countries. This will be an important milestone for phasing in considerable amounts of wind and solar power and achieving good utilisation of flexible Norwegian hydropower. The project is a pilot project for all of Europe, and a matter of prestige for the European Commission.
The need for new grid developments and new production will decline when we have an efficient flow of power on existing grids. 600 large power line projects are being planned in Europe to reach the EU’s ambitious renewable goals. As in Norway, the realisation is difficult and the processes take a considerable amount of time. Market connection will reduce the need for new projects. “This is a market project that is important for both the climate and supply security,” says Bente Hagem. “We are also better utilising existing grids and production”
The project will be managed by power grid companies and power exchanges in Europe and will be implemented place in different stages, where Northwest Europe will be a pilot for the rest of Europe. Nord Pool Spot and the other European power exchanges will be key in developing the trade model to be used to set the daily prices.
"I know this will be a demanding task where four power exchanges and 13 power grid companies will initially agree on a solution. The expectations are also great from customers and authorities,” Bente Hagem concludes.