NMa issues commencement decision on NorNed cable

As of today, the capacity of the so-called NorNed cable has been added to the coupled electricity markets in the Central Western and North European regions. The Board of the Netherlands Competition Authority (NMa) has issued a commencement decision effectuating the addition. Jaap de Keijzer, member of the Board of the NMa, reacts: ‘With this decision, market coupling for all Dutch cross-border connections has become reality from now on.’

The NorNed cable is a 580-kilometer long submarine power cable between the Norwegian city of Feda and the Dutch seaport of Eemshaven. Operation started in May 2008 and the cable transports electricity from Norway to the Netherlands or vice versa. The NorNed cable’s capacity has been offered to the market through explicit auctions since 2008, meaning that transport capacity on the cable and electricity were traded separately. This situation has thus come to an end now. From now on, transport and electricity are traded simultaneously. Ever since May 2008, coupling of the Northwestern European markets was supposed to be realized as soon as possible, but this could not immediately be done due to the different closing times of the markets. The closing times of the markets in the countries in question have now been harmonized and set to noon.

Mr. De Keijzer continues: ‘Market coupling will lead to increased competition, more stable prices for electricity in the Netherlands, and to substantial societal benefits to the Dutch economy. We expect this market coupling expansion to yield the Netherlands EUR 4.5 million per year. It should be noted that this figure does not yet even include the benefits of improved competition between European energy companies in an integrated European electricity market.’

This expansion of the market coupling is the final step in the coupling process between the Central-West European and North European regions, which has been realized in a little over six months. ‘All of the parties involved deserve a big hand for achieving this, including the national transmission system operators, the electricity exchanges and the national regulatory bodies,’ Mr. De Keijzer says.