All PTRs Sold at PTR-Limited Auction

On Friday, the first PTR-limited auction took place for part of the transmission capacity on the Estonian-Latvian border.

The auction, organized by Elering, offered PTRs representing 50 MW of transmission capacity for each hour of the year 2014, and 150 MW for each hour of January 2014. There were seven market participants taking part in the auction, out of which four made successful bids. The auction was met with approval by the Estonian and Latvian energy sector regulators.

The opening price for the yearly PTR-limited auction was 0.78 euros per MW/h and 0.05 euros per MW/h for the monthly auction. The prices rose to 6.35 and 0.45 euros respectively. The total revenue generated at the PTR-limited auction is more than 2.8 million euros.

The PTR-limited auction condition is that the bought capacity will need to be sold back to the Transmission System Operators. The TSOs, in turn, will pay the market participants a fee for the repurchased transmission capacity, equivalent to the price difference between the NPS Estonian and Latvian price area in the corresponding period.

The TSOs will give the transmission capacity repurchased from market participants to NPS to be allocated in the day-ahead market. Therefore the implemented distribution mechanism will not diminish the total transmission capacity volume given to the market by NPS.

The solution offered by Elering and Augstsprieguma tīkls (AST) is based on the EU regulation according to which market participants need to have a possibility to hedge price risks in case of structural congestion between two price areas.