Fortum’s preliminary view on the Nordic TSOs’ proposal for Nordic bidding zone review

In the context of the European regulation on the internal market for electricity, part of the Clean Energy Package, the European TSOs will conduct a common study into alternative bidding zone configurations, the so-called bidding zone review. On 4 October 2019, the TSOs have submitted their proposal for the methodology and the configurations to be studied in the bidding zone review to the national regulatory authorities.

For the bidding zone review region “Nordics”, the Nordic TSOs’ proposal presents four alternative Nordic bidding zone configurations to be considered in the bidding zone review. According to the document, the possible bidding zone changes would be a split of the northern Norwegian bidding zone NO4, and a Swedish change of setting up a new bidding zone for the Stockholm Metropolitan Area and merging the southern zones SE3 and SE4.

Key Fortum views on the Bidding zone review:

  • Fortum supports regularly reviewing the Nordic bidding zones in order to increase market efficiency
  • Fortum expects bidding zones to be large enough in order to enable liquid financial forward trading and to include sufficient balancing resources to operate 
  • Fortum considers that new configurations should be based on less bidding zones by merging some of the current bidding zones
  • Fortum supports the target to keep Finland as a single bidding zone
  • Fortum supports the merger of SE3 and SE4 to one price zone, but opposes the establishment of a separate Stockholm region price area, as it is too small and unbalanced for underlying energy markets to operate
  • Fortum is disappointed that a merged to SE1 and SE2 is not proposed in this review
  • Fortum does not support splitting of the Norwegian bidding zone NO4
  • Fortum would propose that such bidding zone reviews would study a larger number of alternatives than now presented 

Read the whole document: Fortum’s preliminary view on the Nordic TSOs’ proposal for Nordic bidding zone review

More information: Pekka Vile, Analyst, pekka.vile@fortum.com