Does the EC prefer implicit auctioning of cross-border electricity capacity to explicit auctioning?
The Preliminary Report illustrates that, although explicit auctioning is theoretically an efficient mechanism and it is in practice compatible with Regulation 1228/2003, it has efficiency deficits compared to implicit auctioning. Practically, traders have no perfect foresight; they have to bid in the explicit auction without knowing what the prices are on the spot markets in two connected markets. With implicit auctions, results of trade are not likely to have economically irrational use of the interconnector capacity as is the case for explicit auctions. In this context is should be mentioned that new important congestion management guidelines are currently being discussed.
