NMa and Ofgem Clear the Way for Duch-British Trade in Electricity

The Netherlands Competition Authority (NMa) and British energy regulator (Ofgem) today approved the rules for auctioning capacity on the BritNed electricity interconnector linking Britain with the Netherlands.

The link marks a significant step toward creating a single European energy market and the approval of the access rules has cleared the way for putting the cable into operation.

Capacity on the 1000 MW link, which is being developed by an independent company co-owned by National Grid and TenneT Holding, will be available to the market through various types of auctions. For example, capacity can be obtained for one year, one month, or the next day ahead. It can even be obtained for the day of transportation itself. The link will also introduce market coupling between the Dutch and British wholesale electricity markets which should help to optimise its use.

Member of the Board of the NMa, Jaap de Keijzer said: “Like earlier couplings with Germany and Norway, this Dutch-British market coupling will benefit consumers on both sides of the cable. A larger market means more options, increased competition, and thus, better prices for electricity. That is why a European electricity market will benefit consumers.”

Martin Crouch, Partner, European Strategy, Ofgem, said: “Increasing interconnection is an important way of making sure Britain can get electricity from a wide range of different sources. The approval of the access rules by Ofgem and the Dutch regulator is a big step forward for the project, and it safeguards customer interests by ensuring that access to capacity is fair and transparent.”

Regulators have listened closely to interconnector customers and BritNed, to ensure that the auction rules provide an appropriate balance of risk between BritNed and its customers. To assess and approve the rules, there was close collaboration between NMa and Ofgem.

Mr. De Keijzer continues: “During the approval procedure, the Regulators have explicitly made sure that the rules applied are compatible with the regions these two countries are part of. We will continue to do so in the future by seeing to it that BritNed will continue to adapt the auction rules to market developments. This way, the markets in the regions of the Netherlands and Great Britain will eventually integrate further.”


Source: ofgem, February 25, 2011