January 24, 2019 (06:50)

Scandinavian trading platform, the Nord Pool, is divided into a company that combines electric power markets and a company-operator of the electricity exchange

Scandinavian trading platform, the Nord Pool, is divided into a company that combines electric power markets and a company-operator of the electricity exchange. This is done in order to increase its own competitive advantage and avoid conflicts of interest. The company’s management believes that in the coming years such a process will take place on all European exchanges of electric power industry.

The Nord Pool Energy Exchange, which according to the results of the year 2018, became the most efficient trading platform in Europe with a turnover of 524 TWh, plans a fundamental change in its activities, which is caused by the need to increase its own competitive Scandinavian trading platform, the Nord Pool, is divided into a company that combines electric power markets and a company-operator of the electricity exchange. This is done in order to increase its own competitive advantage and avoid conflicts of interest. The company’s management believes that in the coming years such a process will take place on all European exchanges of electric power industry. in connection with the growing merger of the electricity market in Europe. For this purpose, the company carries out its own so-called “division” in its activity to separate its own commercial interests and to ensure the implementation of pan-European projects for the integration of the energy market.

The company considers the creation and implementation of intergovernmental electricity trade projects as a new and promising area, while remaining a reliable platform for safe and transparent trade in electricity. In this case, previously limited to national borders, energy exchanges can compete with each other, while remaining natural partners in ensuring the functioning of a reliable electricity market.

Based on the analysis of the operation of the electricity market and its activities for several years, as well as the lack of clarity of Network Guidelines on Capacity Allocation and Congestion Management (CACM), the company decided on the need for separation of functions – commercial activity in market operations and tasks for the unification of interstate markets for market operations.

Nord Pool believes that the CACM requirements create a conflict of interest for competing energy exchanges and will therefore be an obstacle to the effective implementation of projects of common interest within the EU. In addition, certain provisions of the CACM are considered by the company as barriers to free access to certain regional electricity markets in Europe. The company hopes to show by its own example the need for division of activities to achieve better results from the integration of the energy market.

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