Elering has started placing bids in the NPS SESAM system to avoid possible curtailment

On 26 July Elering started putting bids into SESAM, the Nordic power exchange Nord Pool Spot’s platform for day-ahead electricity purchases and sales, in order to reduce the risk to market participants in the Estonian price area of imbalance and of price peaks.

Bids are submitted on a daily basis in a separate bidding portfolio. The principles for the use of the bids are similar to the principles for the peak-load reserve currently applied by Finland and Sweden. The principles currently in use are temporary and apply only until NPS opens price areas for Latvia and Lithuania.

The bids are realised only if the purchase and sale curves in the Estonian price area do not intersect. If this happens, SESAM will now take extra sales offers first of all from Lithuania, and it is expected that in the near future offers from the Latvian system will also be added. Offers from Latvia and Lithuania are guaranteed by the Transmission System Operators (TSOs) of those countries. LITGRID, the Lithuanian TSO, has already signed a contract to this end, and AST, the Latvian TSO, is expected to do so very soon.

Taavi Veskimägi, Elering's CEO, said that in the last year Elering has taken many steps together with the power exchange operator Nord Pool Spot to ensure the exchange functions effectively in Estonia and to avoid the recurrence of the situation of 24 August last year when the price in the NPS SESAM system based on purchase bids rose to 2000 EUR/MWh for several hours in the Estonian price area.

“The market participants certainly learned a lot from this experience, because electricity trading today has become much smoother. However the risk of a similar situation occurring is still there in the summer because Latvia and Lithuania have not managed to start up the NPS power exchange and as a result traders from those countries are playing a very active role in the Estonian market. We believe that this situation can only continue if Latvia and Lithuania take on some of the costs of supporting the functioning of the market and hold a reserve that can be used if purchase bids exceed sales offers in the Estonian price area,” he added.

The bids in the Nord Pool Spot system can be activated for up to one hundred hours per year.

Elering is the independent Transmission System Operator for Estonia, whose main duty is to ensure high-quality supplies of electricity to consumers at all times. To achieve security of supply, Elering maintains and develops the national transmission grid and international connections. Elering controls the Estonian electricity system in real time, ensuring the operation of the transmission network, and the balance between production and consumption.