Nord Pool Targets 2027 Return of Bank Guarantees as EU Collateral Rules Near Revision
The exchange's CEO says EU rulemaking progress will determine whether utilities can again post bank guarantees instead of cash at the Nordic power clearing house.
Nord Pool expects to reintroduce bank guarantees as eligible collateral for financial power trading in 2027, the exchange's chief executive told Montel on Tuesday (2026-07-07), contingent on European Union rulemaking proceeding to schedule. The announcement from CEO Tom Darell marks the most explicit timeline the exchange has given for restoring a collateral instrument that Nordic power traders lost access to under earlier regulatory changes.2
Bank guarantees matter because of what they are not: cash. Posting cash collateral at a clearing house ties up working capital for the life of the position, raising the effective cost of holding forward power contracts. For Nordic utilities — many of them hydro-heavy generators that carry large seasonal positions across summer and winter periods — the shift from bank guarantees to cash-only collateral increased balance sheet drag and, for smaller players, priced some out of financial hedging markets altogether.2
The timing is not incidental. Nordic power markets are under pressure from structural shifts in flows. Data published in May showed Norway likely to import a net 0.6 TWh across the 1.4 GW Nordlink interconnector to Germany in the April-June (2026) period, against a net export of 1.7 TWh in the same period a year earlier — a reversal driven by a large hydro deficit and rising solar capacity on the continent.1 That swing cuts into the hedging revenues Norwegian generators historically extract from their reservoir flexibility. Cheaper collateral would reduce friction at a time when margins are under pressure.
European gas prices provide the broader backdrop. ICE Endex TTF front-month was trading at €46.22 on Tuesday (2026-07-07), broadly flat on the session, while German power futures were up 4.5% on the day at €102.67. The elevated power price reflects tight summer thermal conditions, and with gas-fired generation still a marginal price-setter across Central European markets, participants carrying large forward hedges face meaningful mark-to-market swings — exactly the collateral environment where bank guarantee flexibility carries practical weight.2
The regulatory dependency is the key caveat. Darell told Montel the 2027 target holds "provided EU rulemaking proceeds on schedule," a qualification that places the outcome firmly in the hands of Brussels and the European Securities and Markets Authority. The broader EMIR regulatory framework governs what clearing houses can accept as variation margin, and any expansion of eligible non-cash collateral requires amendments that pass through the European Parliament and Council process. Delays in that chain — not unusual for EU financial regulation — could push the timeline back.2
Nordic market participants will be watching the EMIR review calendar closely. The mechanism is straightforward: if bank guarantees are re-approved as eligible margin at central counterparties like Nasdaq Clearing — which clears Nord Pool financial contracts — exchanges can update their rulebooks accordingly. But the exchange cannot move ahead of the regulation. Darell's comment effectively sets a soft deadline: if the EU process slips past 2026, Nord Pool's 2027 implementation window closes.2
The change, if it materialises, would reopen Nord Pool financial trading to market participants currently deterred by cash-posting requirements. Whether that expands open interest materially or simply restores pre-existing participation depends on how many counterparties departed and whether they return. Nordic power has already seen a migration of liquidity toward OTC bilateral markets and other venues in the years since bank guarantees were constrained. Re-centralising that liquidity through the Nord Pool screen would benefit price discovery and bid-ask spreads.2
The pace of EU rulemaking through the second half of 2026 is the variable to watch. Commission and ESMA consultations on EMIR revision would need to close and legislative text finalised for Nord Pool to have enough lead time to implement collateral changes before 2027 trading. Any slippage in that calendar is the most direct risk to Darell's forecast.2