Response to the Swedish TSO survey on the market liquidity and transaction costs impacts of alternative bidding zones

On a general level, we favour stability in the configuration of bidding zones along the lines of longstanding structural congestions. This certainty and continuity are essential to underpin cross-border competition, as well as liquidity in the forward, day-ahead, and intraday wholesale power markets. Liquid wholesale markets are key to managing and reducing risks for market participants, and in turn, reducing the cost of trading electricity for the benefit of consumers.

Stable, liquid markets also contribute to a positive climate for investments in generation, storage and demand response that are necessary to secure our electricity supply. And they help foster innovation and the development of new contracts, such as PPAs, that are essential for the energy transition.

Decision makers should consider:

<!-- [if !supportLists]-->·       <!--[endif]-->Preserving the liquidity and the functioning of our internal electricity market to match production and demand at the least cost for consumers, including across borders

<!-- [if !supportLists]-->·       <!--[endif]-->Ensuring stability and predictability in the delineation of bidding zone with at least five years implementation lead-time, to reduce transition costs

<!-- [if !supportLists]-->·       <!--[endif]--> Promoting optimal grid usage and, where needed, expansion to make the most of the investments needed for the energy transition and European industrial competitiveness.

We support Svenska Kraftnät’s efforts in looking at the market liquidity and transaction costs impacts of alternative bidding zones in their upcoming study. We stress the importance of having quantified results on these key indicators, in addition to qualitative market survey input.