Market report. Fall in Spot Prices but High Winter Prices still Expected. No 12 September The electricity market in September:

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1 Market report No 12 The electricity market in September: Fall in Spot Prices but High Winter Prices still Expected September saw an increase in precipitation in both Norway and Sweden. Moreover, falling gas and oil prices brought about lower CO 2 prices. These contributed to a fall in electricity peak spot prices in Denmark and the other Nordic countries from DKK 6/MWh in August to about DKK 45/MWh at the end of September. The Swedish nuclear power plant, Forsmark, also came back on the grid, contributing to the fall in spot electricity prices. CO 2 allowance prices were constantly around 16 euro/tone CO 2 all summer, but fell down to 12 euro/ tone CO 2 at the end of September due to the fall in natural gas prices. Since gas fired generators have lower CO 2 emissions than coal fired generators, the increase in use of gas will result in lower demand for CO 2 allowances. Natural gas prices at the Dutch gas market place (TTF) fell to DKK,11/KWh from DKK,2/KWh at the start of the year. The fall in the price of CO 2 and the generally tight hydro situation in the Nordic area led to an even higher difference between the marginal cost of continental thermal generators and the marginal costs of hydro generation( hydro value) in the Nordic region. For this reason the north bound export that started in August continued throughout September and the market expects this to continue all through winter. The increase in precipitation in September was not enough to compensate for the large deficit in the Nordic reservoirs and this is reflected in higher forward prices. The forward contract for the nearest year traded for DKK 28/MWh in September last year but traded for DKK 38/MWh September this year. High wind power production, low weekend consumption and bottleneck in export direction led to zero prices on the 3rd of September in both West and East Denmark. In a completely different scenario, the weekend of 23rd and 24th of September saw high prices of DKK 45/MWh, which is unusual for a weekend. There was full import from the KONTEK price area and the export to Sweden was not unusually high. There was production outage on a single generator with total capacity of 25 MW. Elbas was introduced to the KONTEK price area in September; this gives players the possibility to trade close to the operation hour. In the first week of trade 18 MWh was imported to East Denmark from the KONTEK price area using Elbas.

2 Market area Western Denmark 1 9 Area prices at Nord Pool Spot Denmark West Sweden Norway - Kristiansand Kontek DK NO+SE Spot exchange and available trade capacity between Denmark West and Norway+Sweden DK NO+SE Capacity with internal bottleneck Spot exchange: Norway+Sweden DK NO DK NO Spot exchange and available trade capacity between Denmark West and Norway Capacity with internal bottleneck Spot exchange: Norway DK SE DK SE Spot exchange and available trade capacity between Denmark West and Sweden Capacity with internal bottleneck Spot exchange: Sweden Page 2 Doc.no

3 14 Spot exchange and available trade capacity between Denmark West and Germany*) *) Excl. Flensborg Available trade capacity Spot exchange Utilisation of the annual and monthly auctions of available trade capacity between Denmark West and Germany Sold capacity at the monthly auction: 2 MW southwards, 4 MW northwards. Sold capacity at annual auction: 35 MW southwards, 2 MW northwards -12 Sold available trade capacity Utilised 18 Utilisation of the daily auctions of available trade capacity between Denmark West and Germany See next figure for the part of the offered capacity transferred to Nord Pool Spot (CBO-scheme) -22 Offered available trade capacity Spot exchange Sold capacity Doc.no Page 3

4 Spot exchange and available trade capacity (Nord Pool CBO) between Denmark West and price area Kontek Available trade capacity Spot exchange 6 5 Price EUR Daily auction price of available trade capacity between Denmark West and Germany Price difference: DK-West minus EEX, EUR per MWh Import auction price, EUR per MWh Export auction price, EUR per MWh 5 Consumption and production in Denmark West Total consumption Total production Wind power production søndag! Page 4 Doc.no

5 1 Regulating power and prices in the real-time market in Denmark West Upward regulation Downward regulation -12 Activated regulating power, Addition to price - upward regulation, Deductions from the price - downward regulation, 1 9 Area price Denmark West and EEX and German OTC prices Denmark West EEX - E.ON area GPI Peak GPI Base Market area Eastern Denmark 1 9 Area price at Nord Pool Spot Denmark East Sweden Kontek Doc.no Page 5

6 -2-16 Spot exchange and available trade capacity between Denmark East and Sweden DK SE DK SE Available trade capacity Spot exchange Spot exchange and available trade capacity (Nord Pool Spot) between Denmark East and Kontek price area Available trade capacity Spot exchange 5 4 Real-time prices and system imbalances in Denmark East Surplus of energy Deficit of energy -6 System imbalance, Downward regulation price, Upward regulation price, Page 6 Doc.no

7 1 8 Elbas prices and real-time prices in Denmark East Upward regulation Downward regulation -1 Elbas min. and max. Upward regulation price Downward regulation price 35 Consumption and production in Denmark East Total consumption Total production Wind power production søndag! Market area Eastern Denmark and Western Denmark 1 9 Area prices at Nord Pool Spot and EEX Denmark West Denmark East Kontek EEX - E.ON area Doc.no Page 7

8 Market data for Denmark Consumption and production in Denmark Market prices Western Denmark Eastern Denmark Average prices Production GWh GWh Primary units 1,312 1,14 System price Local units Western Denmark Wind turbines Eastern Denmark Norway - Kristiansand Total 2, 1,336 Sweden 65.1 Kontek Market based EEX - area E.ON 45.7 Not market based Elbas - Eastern Denmark Consumption 1,73 1,12 Net imports Exchange EU-tender concerning manual regulating reserves Western Denmark Eastern Denmark Western Denmark Imports GWh GWh Sweden 9 18 Upward regulation, MW 334. Norway Price, EUR/MW 16,36 Germany Downward regulation, MW - Exports Price, EUR/MW - Sweden Norway Germany Net imports Real-time market Purchases and sales at Nord Pool Spot Western Denmark Eastern Denmark Western Denmark GWh GWh Market share in % of consumption GWh Upward regulation Purchases 9 1,529 Downward regulation Sales 111 1,886 Average additions to price, upward regulation Average deductions from the price, downward regulation Eastern Denmark Market share in % of consumption GWh Purchases Sales 18 1,195 Auction of Available Trade capacity between Western Denmark and Germany Elbas Monthly auction Volume, MW Price, EUR/MW Eastern Denmark Northwards 4 7,921. GWh Southwards 2 2,71. Volume (bought and sold) 37 Daily auction (average) Northwards Southwards 1, Nord Pool - financial futures price, 9 8 Forward prices: Oct. - Dec. 26 System price Difference contract - DK East Difference contract - DK West 9 8 Forward price: 27 System price Difference contract - DK East Difference contract - DK West Forbrug 1 og produktion i September Danmark September Further information is available at Energinet.dk. Please contact Klaus Thostrup, Tel or see our web-site Energinet.dk disclaims responsibility for possible errors in the data used in the publication. Page 8 Doc.no October 26