April 1, 2011 / 3:55 PM / 8 years ago

UPDATE 1-Britned power link unites UK, Dutch markets

* UK day-ahead baseload traded for 49.80 pounds in auction

* Full capacity used for 5 hours on first day

(Updates throughout)

By Ivana Sekularac

AMSTERDAM, April 1 (Reuters) - The Britned power cable between Britain and the Netherlands began commercial operations on Friday in a key step towards creating a single European power market that can better manage big swings in green energy output.

The 1,000-megawatt cable — a 600 million euro ($849.2 million) joint venture between Britain’s National Grid and Dutch TenneT — is part of a larger project to improve links across Europe to help manage variable supply from renewable energy sources across the region.

“This is good news for our energy security, for UK renewables and for consumers,” British Energy Secretary Chris Huhne said.

“It plugs the UK directly into a wider European electricity market, allowing us to import our peak needs cheaply rather than hold expensive plant in readiness.”

“This ability that we will now have to move power across national borders means we can use the full potential of renewable energy from wind, making it easier to import when wind is not available and export when there is a surplus,” Nick Winser, executive director of National Grid said.

INCREASES LIQUIDITY

Britned helps join the Dutch and British wholesale power markets, which should increase liquidity in the UK wholesale power market, energy market operator APX-ENDEX, which runs the capacity auctions on Britned, said in a statement.

APX-Endex said full power flow capacity was used for five hours on the first day of commercial operations on Friday, while eight hours saw no flow on the cable because there was little price difference between the markets.

APX-ENDEX’s spokeswoman said there were 10 participants in Friday’s auction on the UK side, in which a total of 12,483 MWh day-ahead baseload power was traded for an average price of 49.80 pounds ($79.93) per MWh. Dutch baseload traded for an average 52.01 euros per MWh.

TenneT top executive Mel Kroon said BritNed would be extremely important for bringing electricity generated in onshore and offshore wind farms to final consumers.

“The only way to integrate renewable energy is if you have the answer for the timing problem. Connecting areas with other areas enables energy to flow to locations where the consumption is,” he told Reuters.

Kroon said he expected electricity flow in BritNed to switch direction almost hourly due to price differences that exist in the markets.

“It (BritNed) enables markets to make use of price differences,” he said. “It will become more and more important as more fluctuating energy will come to the market.”

BritNed is a commercial link interconnector allowing third parties access to all the capacity. Customers have open access through a combination of ‘implicit’ day-ahead auctions run by Anglo-Dutch power market operator APX-ENDEX, and ‘explicit’ auctions for annual, monthly, and intraday capacity.

The only other link between Britain and continental Europe is a 2,000-MW link to France. (Additional reporting by Daniel Fineren in London; editing by James Jukwey)

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