16.11.2021 12:31
Current News, Electricity Market

Information on the Nordic Bidding zone review process and schedule

The Nordic transmission system operators are together investigating alternative Nordic electricity bidding zone structures. The Bidding zone review is governed by EU regulations, including Article 32 of the Capacity Allocation and Management of Congestion (CACM) and Article 14 of the Cross-border exchanges in electricity ((EU) 2019/943).

The ongoing Bidding zone review in Finland is part of a joint European bidding zone review that is governed by European regulations. This means, among other things, that the next step in the process begins when ACER (the European cooperation organization for energy regulators) decides which alternative electricity bidding zones are to be analyzed and compared with the current ones. Fingrid and other Nordic TSOs will carry out so-called nodal price simulations, the results of which will be used as a basis for ACER's decisions. The request of the nodal price simulations has delayed the process of the Nordic Bidding zone review.

The idea of the nodal price simulations is that each node in the transmission network is modeled as its own electricity area. The simulations are used to map the presence of structural bottlenecks in the transmission network i.e., where the new bidding zone boundary may locate. This means that all relevant transmission restrictions are taken into account in the market connection and as a result the local value of energy in each node is obtained. The results of the nodal price simulations are expected in February 2022.

Thereafter, ACER will make its decision on which alternative bidding areas are to be investigated further in the Bidding zone review. From ACER's decision, the TSOs have one year to complete the Bidding zone review. The review involves public consultation organized by the Nordic TSOs. The public consultation will be carried out in spring 2022.

Later, the Nordic TSOs deliver a proposal of potential changes to the Nordic bidding zone structure. The Nordic TSOs proposal to maintain or change bidding areas of the Nordic bidding zones is submitted to the member countries or their designated supervisory authorities. For Finnish bidding zone, no alternative bidding zones are proposed. The basis of the Bidding zone review is that Finland has one bidding zone and one price.

Possible changes in the bidding zones structures will be implemented beginning of 2025 at the earliest.

More information:

Niko Korhonen, specialist, Fingrid Oyj