The Iberian electricity market - merging two commercial operation models into an integrated market structure

Abstract

After some years of independent development of their liberalization processes, Portugal and Spain decided to create the Iberian Market for Electricity (MIBEL), to start in 1 January 2003. Although the final organization is still to be approved from the governments, it is already possible to describe the main lines of the proposed model, as developed by the regulators of both countries. The paper reviews with some detail the present situation of Portugal and Spain regarding the electricity sector organization, and discusses the fundamental issues associated to the development of the new integrated market. The main obstacles for integration are identified, and solutions to specific issues (like renewables) are addressed.