European power exchanges to unite intraday electricity markets

On 13 March, European system operators and power exchanges will launch a single integrated European-wide intraday trading system of electricity markets, XBID, which will enable the trading of power between different bidding zones one hour before delivery.

According to Elis Paas, Elering’s Head of Energy Markets Department, XBID is a key project in a functional integrated European energy market and its purpose is to increase the efficiency of intraday markets. “The system enables trading between bidding zones and exchanges of different countries. By launching the project, all of the European power exchange areas will be connected,” remarked Paas. The first physical electricity deliveries will take place on 14 March.

To date, Estonian market participants have been able to trade on an intraday basis up to one hour before the start of delivery inside the Estonian zone, and cross-border with a specific amount of countries in situations where there is sufficient cross-border transmission capacity. XBID will change the situation where the market participants were only able to trade between the areas of Nord Pool power exchange (Lithuania, Latvia, Estonia, Finland, Sweden, Norway and Denmark). The capacity to trade on an intraday market will not be reserved, but the capacity remained from earlier trading will be used.

“Near real-time operations in a changing market situation become increasingly important. Therefore, the launching of this project is a significant milestone for a better functioning of the market. The XBID system enables trading across Europe up to one hour before the delivery of electricity. While the day-ahead markets, where trading takes place on the day before delivery, were connected back in 2014, trading on intraday markets was so far only possible in the Nordic-Baltic market areas. The new market organisation supports the liquidity growth of intraday markets,” added Elis Paas.

A common organisation between countries enables the trading of electricity between Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Latvia, Lithuania, Norway, the Netherlands, Portugal, Spain and Sweden. Other European countries will join the project in spring 2019.

The power exchanges to develop the project are EPEX SPOT, GME, Nord Pool and OMIE. Western European and Baltic system operators took part in the development of XBID, including Elering, the Estonian electricity and gas system operator.