May 29th 2013 THE LEADING POWER MARKET

Transcription

1 May 29th 2013 THE LEADING POWER MARKET

2 Special Thanks Author of main presentation: Hans Randen, Director European Integration, Nord Pool Spot Presented by David Elzinga, Analyst, IEA Contributors: Lars Audun Fodstad, SvP at Statkraft Energy AS Stig Goethe, President, Power Circle Publications and resources : Cross-border Trade In Electricity And The Development Of Renewables Based Electric Power: Lessons From Europe, OECD Nordic Market report 2012, NordREG, Nordic Energy Regulators /

3 Nordic Interconnections One synchronous market covers most of the region (except western Denmark is synchronous with continental Europe) Additional links are being added. Physical connections combined with a market structure /

4 Main participants annual production Figure Source: Cross-border Trade In Electricity And The Development Of Renewables Based Electric Power: Lessons From Europe, OECD /

5 Main participants installed capacity Figure source: Nordic Market Report 2012, NordREG /

6 About Nord Pool Spot Europe s leading energy exchange since 1996 Run the Elspot day-ahead and the Elbas intraday markets in the Nordic and Baltic regions The N2EX market in the UK Covers 77 % of the consumption in the Nordic region 370 companies from 20 countries trade on Nord Pool Spot s markets In 2012 Nord Pool Spot had a turnover of 432 TWh, including the N2EX day-ahead auction volume in the UK 6 / Nord Pool Spot company presentation

7 History 1991: The Norwegian power market is deregulated 1993: Nord Pool Spot is established by the Norwegian TSO under the name Statnett Marked 1996: Rebranded to Nord Pool when Sweden joins; the world s first international power exchange is created 1998: Finland joins the Nord Pool market and Elbas becomes the world s first international intraday market 2002: Nord Pool Spot is established as a separate company for the short term trading of physical power 2005: Nord Pool Spot opens the Kontek bidding area in Germany for both day-ahead and intraday 2008: The financial part of Nord Pool is sold by the TSOs to NASDAQ OMX Commodities 2009: Market coupling of 11 European countries is launched through EMCC by Nord Pool Spot and EPEX 2010: N2EX, the UK power market, is successfully launched by Nord Pool Spot and NASDAQ OMX Commodities Nord Pool Spot opens a bidding area in Estonia and delivers the technical solution for a new Lithuanian power market. Price coupling established between PolPx and NPS on SwePol-link 2011: Elbas is licenced to APX-Belpex as the new intraday market in both Belgium and the Netherlands. Nord Pool Spot and EPEX SPOT sign a letter of intent to create a joint venture. The goal is to develop an optimal joint system platform for both day-ahead and intraday trading to meet customers expectations 2012 : Elbas opened on NorNed with SOB/CMM together with APX-Belpex Opening of Lithuanian bidding area 18 th June / Nord Pool Spot company presentation

8 Ownership Nord Pool Spot is owned by the Nordic and Baltic transmission system operators Elering (Estonia) 2% Statnett (Norway) 28.2% Svenska Kraftnät (Sweden) 28.2% Fingrid (Finland) 18.8% Energinet.dk (Denmark) 18.8% Litgrid (Lithuania) 2% Nord Pool Spot AS AST (Latvia) *) 2% Regulated by the Norwegian Water Resources and Energy Directorate (NVE) Regulatory Council: representatives from regulators in the Nord Pool Spot area and Nord Pool Spot executive management 8 / Nord Pool Spot company presentation *) Latvian TSO has an agreement in place to acquire 2% of Nord Pool Spot once the Latvian market is opened for trading.

9 High degree of transparency one of the keys to the Nordic success Nord Pool Spot has historically been at the forefront when it comes to publishing relevant information that the market participants need. A prerequisite for a well functioning, competitive and efficient market is that all players have access to relevant and equal information. NPS ensures high degree of market transparency through rules, regulations and agreements connected to operation the exchange. 9 / Presentation footer

10 The Nordic power exchange concept Elspot market Day-ahead auction for all price areas. Equilibrium between supply and demand is established for delivery the following day. Average price - System price. Elbas market Intraday market with continuous trading up to one hour before delivery. Approximately 34 hours. Balancing market Operated by the respective TSOs where final adjustments are made to achieve balance between supply and demand. Price set after delivery by TSO, participant is price taker. Time 6 Years 24 Hours 0 Reference price Financial market Elspot market Elbas market Balancing market Financial market Cash settled futures, forwards and options. Clearing services. Cash settled Physical delivery 10 / Nord Pool Spot company presentation

11 The Elspot market The spot market for electrical energy and the cornerstone of Nordic trading Auction-based market for trading of electrical energy for delivery the next day Prices calculated based on supply, demand and transmission capacity (how much power can be moved from one area to another) Covers Norway, Sweden, Finland, Denmark, Est onia and Lithuania 77 per cent of the total consumption of electrical energy in the Nordic countries is traded on the Elspot-market Elspot is Europe s most liquid day-ahead market, producing a robust and credible reference price Elspot bidding areas in the Nordic and Baltic regions Interconnectors to adjoining markets 11 / Nord Pool Spot company presentation

12 NPS and Market Coupling Using the Day Ahead market to have an efficient use of the main grid has been a corner stone since the Nord Pool market started up in 1993 Today the Nordic/Baltic market is covering Norway Sweden Denmark Finland Estonia Lithuania Latvia 5 areas 4 areas 2 areas 1 area 1 area 1 area 1 area 12 / Nord Pool Spot company presentation

13 European power exchanges Yearly turnover in TWh Day Ahead Auction Volumes 350 EPEX FRA EPEX GER-AUT Nord Pool Spot APX NL N2EX / Nord Pool Spot company presentation

14 The Elbas market Elbas is a continuous market where power trading takes place until one hour before the power is delivered Members can adjust their power production or consumption plans close to delivery Every day, transmission system operators publish their power transmission capacity to Elbas Members offer how much power they want to sell and buy and at what price. Trading is then set based on a first-come, first-served basis between a seller and a buyer If transmission capacity is available, neighbouring countries can trade on the Elbas market Elbas areas, including licenced areas Additional countries with Elbas members 14 / Nord Pool Spot company presentation

15 May 29th 2012 Thank you for your attention!