©THE HEREN REPORTS - Czech and Slovak governments announced MOU on spot market coupling
Czech Industry and Trade Minister Martin Riman and Slovak Economy Minister Lubomir Jahnatek have signed a memorandum of understanding (MoU) paving the way for the coupling of their respective countries’ spot markets, the Czech ministry said on Friday (23rd May). “The two ministries declare unification of the Czech and Slovak markets by means of implicit allocation of cross-border capacity through an organized spot market, which is in the Czech Republic operated by OTE. Market participants will be able to bid and offer electricity on a single market regulated by unified rules“, the statement said. The Czech ministry said the MoU will increase cooperation between Czech and Slovak TSOs – Ceps and Seps – but each will retain their autonomy. OTE was not available for comment on Friday (23rd May). Czech TSO Ceps, however, told Heren Energy the recent development currently remains on political level, although the grid operator said some steps towards a coupled market had already been made by the Czech TSO in February (see EDEM 12.040). Prague Energy Exchange (PXE) on Friday (23rd May) spoke in support of the process and said it would play a role in the project, but declined to pride further details at this point. Market participants welcomed the news, saying unification would stabilise both markets and boost their liquidity. Some noted the Slovak market, which is growing increasingly dependent on imports while liquidity has remained low, could especially benefit from the move. “It is a good idea that the German, Czech and Slovak markets are moving closer together”, one said. Traders pointed out, however, the two markets currently have different spot prices and development of the Slovak market is being hampered by an export fee on domestically produced electricity. This prompted some scepticism on whether the two governments have enough political will to complete the move, which has been on the cards for the past five years. The ministry said the two countries will create a joint team to implement the project but provided no timetable. The decision coincided with Central and Eastern European (CEE) TSOs plan to establish a single coordinated cross-border auction office, including the Czech Republic, Slovakia, Hungary, Poland, Austria and Slovenia. Project organisers have previously said they expect the office to be opened this summer, and the system to be up and running by the time of the 2009 yearly auction. Heren Energy launched a weekly assessment of the Slovak prompt and curve, alongside its Czech coverage, on Tuesday (20th May). (THE HEREN REPORTS - EDEM 12 100 / 23 May 2008)

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