Christian: Are emergency measures planned for such a case?
Johannes: In such a case, the regulations of the European market coupling system provide for decoupling of the individual market areas: From this point on, auctions for the following day will no longer be held within the European electricity markets, but in each country individually.
Christian: What are the consequences?
Johannes: First of all, it causes a lot of excitement: The elimination of market coupling has similar effects to closed border crossings for freight transport: differences between production and consumption can no longer be balanced out via the border couplings. The prices start to diverge - the initial aim of market coupling is to achieve price convergence by making sensible use of cross-border capacities.
Christian: Has this led to the large price fluctuations in Belgium? High negative prices of around minus 134 per megawatt hour occurred there on the affected day...
Johannes: Basically yes, but the decoupling is only one reason for this negative price increase. The other and more important reason is the cancellation of the erroneous prices by EPEX after it had established that the figures obviously could not be correct.
Belgium suddenly had an electricity price of plus € 2233.39 per MWh in the first, erroneous round - on a sunny and very windy day. Something could not be right. After the cancellation and reopening of the bidding phase until 2:35 p.m., the price was around minus 134 euros per megawatt hour.
Christian: So the weather at Whitsun contributed to the negative price development?
Johannes: Not only the sunny and windy weather - also Whitsun itself. We had a very good PV day, an enormously good wind day and a low consumption throughout Europe due to the holidays. In Belgium, the wind forecast was even higher than ever before.
Specialized publications in Germany therefore regarded the weather situation in particular as the reason for the negative price development in Belgium - this is not wrong, but ignores the extraordinary events on Friday before the holidays. It is also remarkable that we were technically already in the intraday market with the delayed, renewed bidding until 2.35 p.m. - this is unusual in every respect.
Christian: Can you explain that in more detail?
Johannes: The publication of the first, massively too high prices has definitely influenced the market in Belgium and elsewhere. In the first auction the prices for Belgium were plus € 2233.39 - the operators thought "Wow, we make infinite money".
A comprehensible reaction with such prices is, of course, to step on the accelerator: "Can't we get another megawatt hour into the market somewhere after all?“ Then the cancellation and everything turns around - the operators had to pay extremely high prices, there was far too much electricity in the market. From cheering sky-high to saddened to death - that day everything was on offer.
Christian: Is this a direct consequence of market decoupling?
Johannes: In any case. The aim of the market coupling is to harmonize prices within the entire coupling zone, i.e. to create an even distribution - naturally taking into account the limited capacity of the cross-border coupling points. EPEX's Euphemia algorithm takes all of this into account when determining the price.
If, however, the coupling is omitted, more electricity remains in one country while it is missing in another, the compensation is no longer given. The interruption has therefore definitely led to welfare losses for all concerned.