Estonia and Latvia Agree On New Electricity Trading Rules

Elering and Augstsprieguma tīkls (AST), the Estonian and Latvian system operators, have agreed to implement new rules to provide market participants with the ability to hedge the risks connected to the electricity trading between Estonia and Latvia from the beginning of 2016. The new principles are better in supporting electricity market participants’ opportunities in cross-border electricity trading and greatly consider the proposals made on the public consultation.

Commenting on the new rules, Chairman of the Elering Board Taavi Veskimägi said: “Compared to solutions in recent years, the agreement that has just received approval from the regulators is a step forward in integrating the electricity markets of the Baltic countries, specifically benefiting standard consumers.” He added, “We are glad that we had the chance to largely meet the requests of market participants and to enlarge the transmission capacity sold a year ahead on the Estonian-Latvian border.”

According to the new agreement, the rules that have been in use this year will be replaced with the pan-European cross-border capacity allocation rules (Harmonised Allocation Rules), and separate regional annexes have been created for the Estonian-Latvian cross-border rules. The aim of the pan-European rules is to develop a liquid and competitive forward market and to help market participants to hedge the risks connected with cross-border electricity trading.

Market participants will also be able to buy risk-hedging instruments (PTRs-limited) yearly, quarterly or monthly next year. Elering is planning to sell PTRs-limited a year ahead to the amount of 300 megawatts, which is 50% more than last year. The quarterly risk hedging instruments are planned to remain between 50 and 100 megawatts, and the monthly instruments between 50 and 150 megawatts.

The relevant announcement is published on the website of the Nord Pool Spot Nordic electricity exchange.