KEY MESSAGES
- Eurelectric welcomes the opportunity to comment on the proposed fallback concept for SDAC decoupling.
- While no SDAC full decoupling has ever occurred, its economic and system consequences would be massive, and a good fallback needs to be in place to weather potential impacts.
- The June 2024 partial decoupling incident in SDAC highlighted the need for robust fallback mechanisms. We regret the lack of transparency and stakeholder involvement in the process that this incident set in motion and call for a better justification of the proposed solutions.
- Every effort should be made to avert a possible decoupling. Eurelectric recalls its support to postponing the nomination deadline when this risk appears, providing more time to NEMOs to resolve incidents.
A good fallback needs to (i) produce a single price per bidding zone, (ii) which price should be economically relevant and representative of system conditions. This entails the ability for market participants (MPs) to clear sufficient volumes for day-ahead nominations.
- While the proposed intraday continuous fallback with reference price offers benefits, such as a separate, coupled market infrastructure, its implications are multiple, consequential and uncertain.
- Assessments under way need to demonstrate that the fallback would effectively work in a decoupling situation, satisfying the conditions mentioned above.
- Day-ahead prices serve as the underlying for numerous forward market contracts, including LTTRs, requiring a system-relevant day-ahead price for settlement.
Further information is needed on the impacts of this fallback on price formation and the level playing field, and on market participants’ ability to clear sufficient volumes during the fallback time window to produce a relevant reference price