European Electricity Market

11/7/2002Wien

VERBUND-Austrian Power Grid AG (APG) and RWE-Net are trailblazers for the European Electricity Market.

The two control block leaders VERBUND-Austrian Power Grid AG (APG) and RWE-Net have made an important step in the direction of a far more flexible international electricity market. The launch of the Multi-Time-Frame system (MTFS) on November 1, 2002 enables the power traders to provide a more targeted response to the customers’ buying behaviour. Furthermore, it is the basis for the creation of a future international market for balance energy across control zones.

This change eliminates the previous difference between the conditions prevailing in the domestic Austrian market and international energy trading (measuring period and resolution). Thus the power traders can profit from concrete advantages, particularly since products that could only be offered on a national level so far are now also internationally tradable

APG and RWE-Net were the first TSOs (Transmission System Operators) in Europe to create the technical and organizational conditions for exchanging electrical energy between the control blocks Austria and Germany at a 15-minute measuring period at a minimum resolution of 1 kW. Up to now this was only possible at schedules of a 1-hour measuring period at a resolution of 100 kW, whereas the balance energy is predominantly determined on a ¼-hour basis and in kWh within the control zones.

Under the previous regulation, supplying the customers through suppliers and traders who get their energy outside the control zone was difficult because full cross-border supply of measured consumers across control zones and supply of non time based end consumers (households and industry) inevitably involved a considerable portion of balance energy. Thus local suppliers who dispose of their own adequate controllable production or have contracts with in-suppliers inside the control zone enjoy a substantial competitive advantage over competitors outside the control zone.

With the new regulation, another major step was made towards “Europeanizing the Austrian electricity markets”. Moreover, the launch of the Multi-Time-Frame system (MTFS) is also an important step in the direction of a market of suppliers of balance energy across control zones.

From what one hears, other control zone leaders from the German control block, especially also the Austrian control zones TIRAG and VKW UNG, as well as several Swiss TSOs also plan to follow the example of the two leading TSOs, APG and RWE-Net, in the foreseeable future.