Brussels, 6 June 2007 | This statement was done jointly on behalf of the CEO’s of the four involved power exchanges, being in alphabetical order: APX (Bert den Ouden), Belpex (Catherine Vandenborre), EEX (Hans-Bernd Menzel), Powernext (Jean-François Conil-Lacoste).
Honoured Excellencies, Energy Commissioner, representatives of regulators, transmission system operators, market parties, and other delegates,
In September 2004, a joint document was presented in the European Regulatory Forum on electricity, the so-called Florence Forum. It was at that time an honor for the representatives of Power Exchange and TSO associations to present ”Flow based Market coupling”. In that Florence Forum chaired by the European Commission, it was concluded to support and develop this market coupling idea further and also to develop regional market integration initiatives.
Now, less than three years later, we can see that we are truly on that path, and the first results are there. The power exchanges have been designing operational solutions, which were already implemented between France, Belgium and the Netherlands last November in the Trilateral Market Coupling, with results that have been hailed by The European Commission as great progress. At the same time, in Germany, studies were conducted even more supporting the integration model we sign up for today. And although the larger part of the work is still ahead of us, we can be even more confident today, when we sign the Memorandum Of Understanding, promising to do that together for this region.
Because the first result are impressive. Since the first establishment of the market coupling, the utilisation of involved border capacities has strongly improved. Unlike before, border flows are now always in the right direction, with netting of im-en exports. With 100% utilization of the remaining capacity in order to reduce the price difference as much as possible, even often to zero. And as a result, prices have come together, converged, yielding a common integrated market with often one single price.
The same can be achieved, and improved upon, in the larger region of the Pentalateral forum, through market coupling. We could have one common price for this wider region Germany, France, Belgium, Luxemburg and the Netherlands for the great majority of time, and price differences strongly reduced during the rest of the time. So a freely connected European “copper plate” with a single market is possible. A wider geographic market with better competition and outstanding market quality, beneficial to consumers and producers. Generating price signals for market decisions and investments to drive a competitive European economy with good security of supply.
This is a perspective so compelling that we should do what is needed for that. Namely, to co-operate; to set aside differences, local interests and institutional barriers. In doing that, we should not forget the wider scope as intended by the European Commission. Apart from this Northwest European region, other regions in Europe are working on integration. Therefore, our solution in the Pentalateral region has to be an example, open and compatible to countries from other regions: the Northern region, South-West region, Central South region, Central East region, UK and Ireland, and Baltic.
Like before, the power exchanges will design and implement solutions to make that happen. The power exchanges in the Pentalateral region are already in close co¬operation and will come up with plans for the implementation, together with TSO’s, regulators and the market, of the document we sign today. And we are very grateful for the cooperation and support from regulators, TSO’s, ministers and market parties thus far. We wish to continue this in what we sometimes call the spirit of market coupling, based on past years experience: the political will from all the parties, to be true to the joint objective and, in good co-operation, overcome all the practical hurdles. A true breakdown of the barriers, which was what the European Union was created for.