Lysaker, 17 April 2012
Nord Pool Spot, the Nordic operator of Europe’s leading energy trading markets, has been chosen to develop and operate a ‘virtual hub’ to facilitate the full participation of the GB electricity market in the North West European (NWE) market coupling project.
Nord Pool Spot was selected following a competitive tendering exercise run by National Grid Interconnectors Ltd, the GB operator of the electricity interconnector to France (IFA).
The virtual hub will facilitate the pooling of GB liquidity and the formation of a common reference price for electricity across all participating GB power exchanges by the end of 2012, in line with the objectives of the NWE project.
Welcoming the new agreement Mikael Lundin, CEO of Nord Pool Spot, said: “Nord Pool Spot is closely involved in the development of the Price Coupling of Regions (PCR) project and the NWE initiative.
“Our experience in market coupling has seen us already successfully integrating the Nordic countries and Estonia, working with the Polish Power Exchange to establish price coupling between the Nordic markets and Poland, as well as developing the N2EX market, operated jointly with NASDAQ OMX Commodities, here in the UK.”
Under the NWE umbrella Nord Pool Spot, together with other GB and European energy exchanges, will deliver market coupling and capacity allocation services to Great Britain, the Central Western Europe region and the Nordic areas providing a common algorithm covering all requirements from the relevant Transmission System Operators.
Mikael Lundin continued: “We are looking forward to working with National Grid Interconnectors to help meet the challenges ahead of a fast changing market.”
In contrast to the other countries involved in the NWE market coupling project, the GB market allows for multiple power exchanges and interconnector operators to participate in the market.
The purpose of the GB hub will be to facilitate open access and participation of all these parties and to ensure that there is a single electricity market price for GB, rather than potentially having differing prices on each GB exchange.
The hub will form a key part of the NWE market coupling project and will ensure that GB liquidity will be pooled, along with the liquidity of the other exchanges in the NWE region. This will allow demand to be matched with the cheapest generation in the region, subject to there being sufficient available interconnector capacity
GB traders will continue to have their usual contractual relationship with their power exchange, Nord Pool Spot’s role as hub operator will be to seamlessly facilitate the inter-exchange transactions and arrange for interconnector flows with the interconnector operators.
Alison Kay, Director of National Grid Interconnectors Ltd, commented: “We are delighted to have chosen Nord Pool Spot as our partner to develop and operate the GB virtual hub.
“The appointment of the hub operator and the development of the hub arrangements during 2012 are important steps towards the goal of a single European market by 2014. We are proud to have taken a leading role in establishing the hub arrangements for the GB market and look forward to the widest possible support and participation of other GB exchanges and interconnector operators going forward.
“We believe that the ‘virtual hub’ will lead to more efficient allocation of interconnector capacity and through its role in pooling liquidity promote a more robust GB electricity reference price for market coupling.”
For further information, please contact N2EX:
Press contacts:
Stuart Disbrey, Communications Manager UK, Nord Pool Spot AS, phone +44 7887 409 044
Sara Aadnesen, Director Communication, NASDAQ OMX Commodities, phone +47 9060 0759
About N2EX
N2EX is the name of the UK power market offering from Nord Pool Spot and NASDAQ OMX Commodities. NASDAQ OMX Clearing is the authorized clearinghouse.
The web site, www.n2ex.com, provides market information and documentation for the UK power market.
About Nord Pool Spot
Nord Pool Spot runs the leading power market in Europe and offers both day-ahead and intraday markets to its members. 350 companies from 20 countries trade on the market. The Nord Pool Spot group has offices in Oslo, Stockholm, Helsinki, Copenhagen, Tallinn and London. In 2011 the group had a total turnover of 316 TWh, which includes the auction volume in the UK market N2EX.
For more information, visit www.nordpoolspot.com.
About NASDAQ OMX Commodities
NASDAQ OMX Commodities is the brand name for the NASDAQ OMX Group’s worldwide suite of commodity related products and services. The NASDAQ OMX Commodities offerings include power, natural gas and carbon emission markets and clearing services. NASDAQ OMX Commodities is a trademark of the NASDAQ OMX Group, Inc.
NASDAQ OMX Commodities Europe is the trade name of NASDAQ OMX Oslo ASA which is authorized as a commodity derivatives exchange by the Norwegian Ministry of Finance and supervised by the Norwegian Financial Supervisory Authority. All trades with NASDAQ OMX Commodities Europe are subject to clearing with NASDAQ OMX Clearing.
NASDAQ OMX Clearing is the trade name of NASDAQ OMX Stockholm AB which is authorized and supervised as a multi-asset clearinghouse by the Swedish Financial Supervisory Authority in Sweden as well as authorized to conduct clearing operation in Norway by the Norwegian Ministry of Finance. NASDAQ OMX Commodities has more than 350 members from over 15 countries covering a wide range of energy producers, consumers and financial institutions.
For more information, please visit www.nasdaqomxcommodities.com.
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