On the Italian-Slovenian border, the allocation of daily capacities is done by the Italian-Slovenian Market Coupling (hereinafter: ITA-SI MC), that simultaneously effects an implicit allocation of physical daily transmission rights and a clearing of energy offers-demands.

This project was initiated in April 2008, when GME, Borzen and BSP have entered into a collaboration by signing a Memorandum of Understanding, for the purpose “to develop a proposal of market coupling mechanism for the management of the interconnector capacity, starting with electrical border between Italy and Slovenia” and with the final aim of offering a response to the challenges of a further regional integration of electricity markets within the EU.

This initiative has been supported by the Ministries of Foreign Affairs of Italy and Slovenia, that, on behalf of the respective Governments, stated their cooperation to the aforementioned MoU by signing a Joint Declaration on September 8^th 2008, which stated “to support the activities aimed at further integration of European internal energy market, also in the field of Energy Community, including the cooperation between GME and Borzen”.    

GME, BSP and Borzen, presented in November 2008 a Discussion document “Establishment of A Market Coupling Mechanism On The Slovenian-Italian Border” to set up the technical and operational features for the integration of Market Coupling activities. This document was formally submitted to the Italian Ministry of Economic Development (MSE - Italy) and the Slovenian Ministry of Economy (ME - Slovenia), the Italian Regulatory Authority for Electricity and Gas (AEEG), the Energy Agency of the Republic of Slovenia (AGEN-RS), the Italian TSO (Terna), the Slovenian TSO (ELES), with a view to possibly enter into a wider agreement under which the parties involved will jointly organize and manage the Market Coupling project, with no prejudice to their respective activities.

On May 22^nd 2009, a Kick-off meeting was organised, attended by the MSE – Italy, the AGEN-RS, the TSOs and the PX/MOs, where the participants established a bilateral Working Group (WG), involving representatives from relevant Ministries, NRAs, TSOs and PX/MOs, to work in parallel both on the technical aspects and the governance/contractual issues for the implementation of the ITA-SI MC. The participants also agreed to periodically inform the Implementation Group of the Central-South Region about the progresses of the ITA-SI MC project.

The Ministries of Foreign Affairs of Italy and Slovenia, on behalf of the respective Governments, re-affirmed their support to the WG by signing a Joint Declaration on November 9^th 2009, which agreed “to provide every support to the interstate expert working group in pursuing the objective of integrating the electricity markets”.

In accordance with the conclusions of the Kick-off meeting held in Rome on May 22^nd 2009, the NRAs presented the Italian - Slovenian Market Coupling project during the 14th Implementation Group meeting for the region of Central South Europe.

The MSE – Italy and the ME – Slovenia, on behalf of the respective Governments, stated their institutional support to the implementation of Market Coupling project on the Italian-Slovenian border by signing a Memorandum of Understanding on August 27^th 2010, which agreed “to ensure institutional support to the process aiming to allocate cross border capacity on Italian-Slovenian border through implicit method by organizing a day-ahead market coupling on the Slovenian-Italian border.”

The AEEG (Resolution ARG/Elt 143/10, of 13^th September 2010) and AGEN-RS (Approval n. 141-4/2010-3/EE-03, of 13^th October 2010) approved the draft of the Master Agreement that establishes a reference frame for the identification of main features regarding the ITA-SI MC.

In the field of the EU regulation for the electricity sector, the ITA-SI MC project is in compliance with and support the provisions stated by the Regulation (EC) n. 714/2009 which in detail establishes (Art.12) to apply “the coordinated allocation of cross-border capacity through non-discriminatory market-based solutions, paying due attention to the specific merits of implicit auctions for short-term allocations”.

In the specific context of the Italian Legislation, the achievement of the aforementioned object, follows up the regulation in force issued by the Italian Law n. 02/2009 (Art. 3 comma 10-ter) which requires to promote the activities for a wider integration of the Italian power market with the other power markets of the neighbouring countries.