Verbund gets leadership role


The position of VERBUND-Austrian Power Grid AG in the further development of an integrated European electricity market has been enhanced once more. Manfred Pils, Head of the Market Management Unit, has been unanimously elected to Chairman of the Supervisory Board of the Central Allocation Office (CAO GesmbH), based in Freising/Germany.

In order to carry out regionally coordinated congestion management for the ever-tighter transmission capacities in the CEE region, the CAO was established in the middle of last year as a common allocation office for cross-border transmission capacities for the grid region of Central Eastern Europe.

The coordination committee comprises a total of eight transmission system operators (TSOs)  from Austria (VERBUND-Austrian Power Grid AG), the Czech Republic (CEPS a.s.), Germany (E.ON Netz GmbH and Vattenfall Europe Transmission GmbH), Hungary (MAVIR Hungarian TSO Company Ltd.), Poland (PSE-Operator S.A.), Slovakia (SEPS a.s.) and Slovenia (Elektro-Slovenija d.o.o.).

The quantitative electricity exchange for the grid region under CAO’s jurisdiction amounts to 69 terawatt hours (TWh); this is around one fifth of Europe’s entire electricity exchange and is of a magnitude corresponding to the annual electricity consumption of Austria. The quantity of the installed power plant capacity in the region for which the CAO conducts the congestion management, which is so extremely important to safety and moderate electricity prices, amounts to 218,000 megawatts (MW). By way of comparison: Malta, Austria’s largest reservoir power plant, has access to an installed capacity of around 890 MW; as the largest electricity producer of the Alpine republic, Verbund has a total of 8,000 MW of installed power plant capacity in Austria.

The CAO’s most important tasks comprise the conducting of annual, monthly and daily allocations of rights for cross-border capacities in the CEE region in the name of the eight TSOs, as well as the handling of payments. With the collaboration of VERBUND-Austrian Power Grid AG as central coordinator, a bidding procedure has been developed for this purpose in order to achieve a precise conformity between physical electrical power flows and the allocation of the corresponding transmission rights.

"The appointment of the CAO is an important step in the establishment of a standardized and common electricity market in Europe, in which new possibilities are opened for the pan-European electricity industry amid unchanging levels of safety," says Mr. Pils, the new Chairman of the Supervisory Board of CAO, explaining the importance of the organization.

An overview of the Central Allocation Office (CAO):

Task: to be a processing centre for the common management of all transmission capacities in Central Eastern Europe

Goal: to provide more electricity exchange opportunities for the safeguarding of supply security in individual countries, while simultaneously continuing to guarantee a more secure grid operation in each country. This is an important step for the creation of a uniform and common electricity market in Europe.

Allows direct electricity trading to take place via several countries. (At present, trade can only take place from country to country.)

Total sum of all capacity bidding: approx. 200 million Euro p.a.

Proprietors: eight grid operators of the seven countries of the Central Eastern Europe grid region

Bidding system in preparation and voting between market participants and regulators – operative start planned for 1 January 2010.