Power market coupling could spur derivatives activity

Market coupling may result in greater derivatives use and falling participation in both explicit auctions and physical nominations, survey finds

As market coupling is implemented across European power markets, participants expect their use of electricity derivatives to increase, according to the results of a recent survey conducted by Energy Risk and London-based energy and financial consultancy Baringa Partners.

At the same time, respondents expect their use of explicit capacity auctions to decrease and believe they will submit fewer physical nominations as a result of market coupling, the survey reveals.

“These results suggest we could