Open Market Coupling benefits North-West European power market
The North-West European power market would benefit from the introduction of a new regime for the management of cross border interconnections. In a new study for the German energy regulator, Bundesnetzagentur, Frontier (Cologne), Consentec and IAEW of Aachen University found that the benefits of the regime known as Open Market Coupling (OMC) would significantly exceed the direct cost of introducing this new auction regime. On the other hand the study cautions excessive expectations about the benefits of the regime.
Under OMC the Power Exchanges in different countries would pool bid information and would use existing interconnector capacity to clear additional bids in cases where otherwise price differences would prevail between different national markets. This regime can be expected to lead to a more efficient utilisation of existing cross-border capacities. The regime can also be combined with the trading of explicit cross-border capacity rights.
The study was conducted in close collaboration with the German working group on congestion management which brings together key stakeholders in the German energy industry including government bodies, network operators, traders and the German power exchange EEX. Inspired by the findings of the study a number of stakeholders are currently developing a concrete implementation of OMC on the German-Danish border.
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