ACM designates power exchanges as NEMOs

The Netherlands Authority for Consumers and Markets (ACM) has designated the power exchanges APX and Nord Pool Spot as nominated electricity market operators (NEMOs), which means they are allowed to sell electricity on the cross-border connections of the Netherlands. Businesses that supply cheap electricity are more likely to be allocated capacity to transmit that power across borders. As a result, consumers and businesses are able to benefit fully from cheap electricity.

Electricity at the lowest price

Scarce cross-border capacity is traded on these two exchanges, which, as such, establish the so-called market coupling, where supply and demand across Europe are matched. Henk Don, Member of the Board of ACM, explains: “We welcome optimization of the allocation process of cross-border capacity. As a result, more and more barriers are removed that prevent people from buying electricity in Europe where it is cheapest. Consumers and businesses will thus benefit.”

Fair opportunities

ACM has assessed whether APX and Nord Pool Spot meet the requirements that apply to exchanges that are allowed to allocate cross-border capacity such as integrity, non-discrimination, and barriers to entry. Based on said assessment, the exchanges must have compliance officers in order to ensure compliance with the rules. ACM’s decision to designate APX and Nord Pool Spot as NEMOs is the result of new European regulations, and will create direct oversight of these exchanges.

More cross-border capacity

Earlier this year, ACM took more decisions that improve cross-border trade such as Flow-based market coupling in order to optimize cable utilization rates, and the introduction of new auction rules for long-term trade.  In that context, the allocation of cross-border transmission capacity using the market mechanism of exchanges is crucial.