EUROPE Germany and eleven of its "electrical" neighbouring countries, among them the Netherlands and Sweden, have signed an agreement in which they pledge to avoid price caps in wholesale power markets and to reduce restrictions of cross border trade in times of scarcity.

A t the end of February this year, the European Commission outlined a framework for a European Energy Union with a joint energy policy. The idea behind the Energy Union is that a common European energy policy will replace the 28 different national policies we have today.

Mini energy union
Now Germany is setting an example by the Baake Declaration, named after Rainer Baake, State Secretary at the German Federal Ministry for Economic Affairs and Energy, establishing a blueprint for regional cooperation with eleven of its “electric neighbours” including Sweden and Norway.
In the declaration the signing states agree on the importance that “making the most of the internal market will be crucial for ensuring security of supply in a cost-effective way”.

Letter of intent
European Affairs & Policy Management at Vattenfall, explains that the declaration is to be considered a letter of intent, not a legally binding document.
“The intention is to foster further market integration with an enhanced level of cross border trade. The 12 countries now showcase that regional co-operation is an important step towards further EU market integration. Rightly implemented, it will increase energy security, reduce energy prices and costs by efficient use of resources across borders and promote further integration of renewable energy.”

Good sign
The signing states also pledge to allow prices to freely fluctuate in wholesale power markets.
“The declaration is a good sign that the countries aim to upgrade the existing market framework and think across borders, thereby reducing the need to introduce national capacity markets to provide security of supply,” says Töpfer.

Countries signing the Baake declaration:
Germany, France, Belgium, the Netherlands, Luxemburg, the Czech Republic, Poland, Sweden, Norway, Austria, Switzerland and Denmark

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