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NMa allows intra-day trade in electricity with Norway to start

The Netherlands Competition Authority (NMa) today issued the decision allowing within-day trade in electricity between Norway and the Netherlands, also known as intra-day trade, to start.

With the NMa’s decision, Dutch transmission system operator TenneT and its Norwegian counterpart, StatNett, will be able to allow power exchanges APX and NordPool Spot to further integrate the intraday markets. Market participants are thus able to increase their options for buying and selling electricity.

This is a very interesting development for the Netherlands because Norway generates a considerable amount of hydropower. If the Norwegian water reservoirs are filled, they could, for example, serve as an affordable alternative for balancing the volatile production of wind power. Likewise, intra-day trade with the Netherlands may prove to be attractive for Norway in periods of low precipitation. The increases in demand as a result thereof could be satisfied by Dutch natural-gas power plants.

Intra-day trade in electricity is characterized by low volumes, in comparison with the day-ahead markets. However, its importance is on the rise, because it enables market participants to manage the increasing short-term risks in their trading portfolios.

At this moment, the Dutch intra-day market is already partially integrated with the Belgian one. With the expansion over the NorNed cable, which is expected to become operational in March 2012, the goal of a single European energy market has come another step closer. Chairman of the NMa Chris Fonteijn adds: ‘We are expecting TenneT to start intra-day trade capacity allocation on the NorNed cable by the first quarter of 2012’.