Czech, Hungarian and Slovak grid operators and regulators said on Tuesday they are on track to integrate their power markets by the second quarter of 2012 and then to join with those of western Europe later that year.

They said after a first meeting that the market coupling plan announced in May would be ready in the second quarter and also set a new goal of linking up with power markets of the neighbouring Central Western European region in 2012.

That market includes Germany, France, Belgium, the Netherlands and Luxembourg.

"All parties involved expressed their motivation to proceed quickly and agreed on an ambitious goal for the introduction of coupled day-ahead auction in Q2 2012 with an additional goal to be ready to join the CWE region in 2012," the grid operators and regulators said in a statement.

The plan to combine electricity markets is aimed at spurring more competition, providing better supply and more stable prices for consumers. Traders say it will also drive up liquidity.

Regional market coupling is also a step toward European Union plans to ultimately bind together the power networks of all 27 EU countries to boost distribution of renewable energy and to help in the event of an energy crisis.

Central and eastern Europe offers traders a potentially lucrative place to trade power but fragmented national power markets and a lack of liquidity stand in the way.

The Czech and Slovak electricity markets merged in 2009 in a move that boosted liquidity and showed other central and eastern European countries that integration could work. – Reuters