No.16/2006 Market Coupling between Denmark and Germany

Energinet.dk
E.ON Netz GmbH
European Energy Exchange AG
Nord Pool Spot AS
Vattenfall Europe Transmission GmbH

would like to inform:

Market Coupling between Denmark and Germany

The European Energy Exchange AG, Nord Pool Spot AS, Energinet.dk, Vattenfall Europe Transmission GmbH and E.ON Netz GmbH have adopted a Memorandum of Understanding concerning market coupling.

The companies agree that the integration of wholesale electricity markets requires a more efficient utilization of existing interconnectors. During the next three months an implicit auction concept shall be developed. The aim is to introduce an implicit auction, i.e. the joint allocation of energy and capacity, for the daily cross-border capacity allocation for both interconnectors between Denmark and Germany (i.e. the connection between E.ON Netz and Jutland as well as the KONTEK interconnector).

This initiative will connect the Nordic market where implicit auctions are already implemented and the German market. This will be an important step towards integrating two major European electricity markets. The objective is to make this ‘market coupling’ operative by the 4th quarter 2007. A central auction office shall be responsible for the performance of market coupling.

The NorNed cable project as well as the progress of market coupling in the Central Western Europe region shall be considered for compatibility reasons; also, possibilities for later integration of cross-border intraday trading and balancing markets shall be taken into account for the development of the implicit auction concept.

Any results of the co-operation, especially a joint mechanism with a joint auction office, shall be open to other TSOs and power exchanges.

The initiative will be closely coordinated with the European Regulators’ Electricity Regional Initiative. It was presented to and welcomed by the involved regulators at a joint meeting on October 31st.

For further information, please contact Nord Pool Spot AS:

Energinet.dk: Director of Market, Lene Sonne, Tel.: +45 23 33 88 02
E.ON Netz GmbH: Dr. Christian Schneller, Tel.: +49 921 915 4030
European Energy Exchange AG: Dr. Albert Moser, Tel.: +49 341 24680 500
Nord Pool Spot AS: CEO Jørn Limann, Tel.: +47 920 213 85
Vattenfall Europe Transmission : Gert Schwarzbach, Tel. +49 30 5150 2703