The target model – the wholesale electricity market model being implemented by virtually all European countries with an aim to gradually harmonize markets, through coupling, for a unified EU electricity market, a key EU objective – promises to improve the operating ability of markets, Sotiris Hatzimichael, power utility PPC’s General Manager of Strategy & Transformation, has noted in an article published as part of an energypress target model special ahead of Greece’s forthcoming launch of new market systems.
Electricity companies will, as a result of the target model, not only have access to national markets but also bigger regional markets, initially, before eventually also gaining access to a European market, the PPC official noted, explaining that this extroversion promises benefits such as broadened customer bases and revenue and profit boost opportunities.
This extroversion will also subject electricity companies to greater competition, forcing optimization, cost minimization and performance maximization, all of which will ultimately benefit energy consumers and the economy, Hatzimichael pointed out.
The results of this effort to restructure wholesale markets will become apparent over time, while, for the Greek market, the target model’s implementation of four market systems – forward, day-ahead, intraday and balancing – will offer benefits to producers, suppliers and consumers and also present a series of challenges, the PPC official noted.
The target model’s four new markets will require new infrastructure, software and hardware, new risk management procedures, as well as many specialized individuals qualified to take on jobs demanded by the target model, Hatzimichael noted.
The transition will be crucial and needs to be handled with great care to avoid market turmoil and instability, he added.
However, true convergence of the Greek market with those of other EU member states will require the swift removal of any local peculiarities that have been incorporated into the Greek version of the target model, such as forward market participation limitations, Hatzimichael stressed.