Recommendations for the Dutch electricity market

In late June and early July 2001, the Amsterdam Power Exchange (APX) witnessed extraordinary price spikes. For two weeks, prices frequently reached levels of 600 euro/MWh or more, with peaks reaching 1,200 euro/MWh. We have compared these spikes to historical pool prices in England and Wales, and determined that over a period of several years, England and Wales has never witnessed a similar episode. The unusual nature of the price spikes has provoked a serious and broad analysis of the Dutch power market. We have examined whether the price spikes could be attributed to insufficient capacity relative to demand in the Netherlands. However our analysis shows that the reserve margin in the Netherlands is not significantly lower than has been witnessed in other countries. The principal cause of the spikes appears to be plant outages in Belgium and the Netherlands, combined with a lack of sufficient transparency