Implementing the Internal Energy Market through European Regions

The Internal Energy Market is not completed yet. European network codes lay out the way towards full market integration and often use regional approaches to facilitate its implementation.

Day-ahead and intra-day markets have been coupled in large parts of Europe already: Coupled markets have grown organically and have been merged together. Software and processes involving both TSOs and power exchanges have been designed with a view on pan-European coverage. Capacity calculation regions are currently being created to facilitate the implementation of the flow-based capacity calculation methodology in Europe. The Network Code on Electricity Balancing sets out an ambitious plan towards a fully integrated European market. To do so, solutions are currently being experimented with through several regional pilot projects. Regional balancing target models will be defined to allow a smoother transition from the current heterogeneous framework towards full European integration.

Reinforcing regional regulatory cooperation is necessary in light of these new developments. Although a new administrative layer should be avoided to keep the system as simple as possible, regulators should put in place sound and effective sets of coordinated activities, framework and good regulatory practice to facilitate market and the security of European electricity supply.

Recommendations

  1. Member States should reinforce their regional collaboration to facilitate the implementation of new grid infrastructure.

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From Regions To Europe: A Bottom-up Approach To Build The Integrated Electricity Market.
These maps illustrate the organic growth towards the coupling of European day-ahead electricity markets. The journey started as voluntary projects in some Member States. The European network codes will formalize the approach, and facilitate its expansion to cover all Europe.