EPEX SPOT Markets and Products 2012 Review & Current developments

EPEX SPOT Markets and Products 2012 Review & Current developments Sylvie Tarnai & Katharina Niciejewska EEX Summer Workshop Marriott Hotel Leipzig 6 th June 2013 EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE

Agenda 1. EPEX SPOT Market review 2012/2013 EPEX SPOT Markets & Membership Day-Ahead markets evolution: volumes & prices, CWE price convergence Intraday markets: dynamic growth, liquidity indicators 2. Current EPEX SPOT developments 2.1. Current developments on the Day-Ahead market New ETS release 2.7.1. Consultation about a possible introduction of negative prices on the Swiss auction Introduction of Smart block bids Status on Market Coupling initiatives (Flow-Based Market Coupling/NWE) 2.2. Current developments on the Intraday market Launch of the Swiss Intraday market Status on the EU Intraday cross-border trading system New ComTrader Implementation of the Public Message Interfaces 3. EPEX SPOT News Info products offers Last updates in the EPEX SPOT E-Learning offer EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 2

Agenda 1. EPEX SPOT Market review 2012/2013 EPEX SPOT Markets & Membership Day-Ahead markets evolution: volumes & prices, CWE price convergence Intraday markets: dynamic growth, liquidity indicators 2. Current EPEX SPOT developments 3. EPEX SPOT News EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 3

1. EPEX SPOT Market review 2012/2013 Markets, volumes 2012 and delivery zones 261 TWh + 9 % Intraday: 15,8 TWh (± 0 %) 17 TWh + 38 % 61 TWh ± 0 % Intraday: 2,2 TWh (+ 28 %) Share of national consumption: Delivery zones: 339 TWh in 2012 on all EPEX markets + 8% Swiss Day-Ahead volumes increase by almost 40 % Spot market gains in importance EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 4

1. EPEX SPOT Market review 2012/2013 Membership Day-Ahead 210 EPEX SPOT Members 205 200 195 190 EPEX SPOT Members Intraday 185 180 175 2009 2010 2011 2012 2013 In total, EPEX SPOT counts 209 Exchange Members (Day-Ahead & Intraday) as of 1 st June 2013. EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 5

1. EPEX SPOT Market review 2012/2013 Day-Ahead volumes on all 3 hubs TWh 30 28 25 23 20 18 15 13 10 8 5 3 0 DE/AT FR CH On the Day-Ahead auction, 321 TWh were traded in 2012 (296 TWh in 2011) Steady increase of Swiss auction volumes with a monthly record in May 2013 (1,79 TWh) and a recent daily record volume, i.e. 82.744 MWh for delivery 1 st May 2013 EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 6

1. EPEX SPOT Market review 2012/2013 Day-Ahead market: Price evolution Year to year prices: went up for FR +2% (45.94 ) down for CH -4% (45.37 ) down for DE-AT -13% (37.92 ) Price convergence from April 2012 to April 2013: 58% price convergence between FR and DE (64% for the year 2012) 38% overall convergence in the CWE region (46% for the year 2012) Clear trend showing markets converging less than in the past EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 7

1. EPEX SPOT Market review 2012/2013 Intraday market: Volumes & liquidity Total traded volume amounted 17,9 TWh in 2012 (17,6 TWh in 2011) FR Monthly Volumes TWh 20 18 16 14 12 10 8 6 4 2 0 EPEX EPEX SPOT Intraday Yearly Yearly Volumes Volumes 2007 2008 2009 2010 2011 2012 DE Monthly Volumes In 2012: cross-border trades represented : 54% of total traded volume on the FR market 8% of total traded volume on the DE market AU Monthly Volumes March 2013: 17 trades/hour on the FR market 164 trades/hour on DE market (including 15min) EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 8

1. EPEX SPOT Market review 2012/2013 Intraday market: Focus on 15-min contracts 15-min Volumes Since January 2013, already 622.349 MWh have been traded 15-min Volumes In April 2013, 235.397 MWh traded, (more than doubled compared to last year) with a daily average of 7.847 MWh, representing 14% of Intraday volumes Most traded products are the morning and afternoon hours which shows a strong correlation between the solar ramp and the traded volume EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 9

1. EPEX SPOT Market review 2012/2013 Intraday market liquidity: trade occurences Trades occurrences for hourly product Hour 19 from 1 st January 2010 through 31 st December 2012 Extensive Intraday study available on the EPEX SPOT E-Learning platform (module A or B) More and more animation during the trading session: volumes increased and exhibit a clearer seasonal trend, the period of intensified intraday trading tend to start earlier Hourly trading on the Intraday market is more and more mature EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 10

Agenda 1. EPEX SPOT Market review 2012/2013 2. Current EPEX SPOT developments 2.1. Current developments on the Day-Ahead market New ETS release 2.7.1. Consultation about a possible introduction of negative prices on the Swiss auction Introduction of Smart block bids Status on Market Coupling initiatives (Flow-Based Market Coupling/NWE) 2.2. Current developments on the Intraday market Launch of the Swiss Intraday market Status on the EU Intraday cross-border trading system New ComTrader Implementation of the Public Message Interfaces 3. EPEX SPOT News EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 11

2. Current EPEX SPOT developments Day-Ahead market: New ETS release 2.7.1. New ETS Release 2.7.1 for Auction trading as of June 25 th (first trading date) Main changes: View of previous versions of a block order Select a preferred area 2 nd auction alerts: In order to help members with their compliance obligations, the new ETS release will contain checks on orders submitted during a Second Auction phase so that the user is warned that his/her submission may not be compliant with the Second Auction rules A warning message will pop up: Please make sure your submission for Portfolio name of portfolio in Market Area name of market area is compliant with EPEX SPOT Rules for following Hours list of hours Those warning messages are for information purposes only. They will not prevent from entering an order in the order book if the user chooses to do so. Next member-testing session is scheduled for the 11 th June: ets-demo.epexspot.com EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 12

2. Current EPEX SPOT developments CH-DAM: Evaluating the introduction of negative prices Purpose of negative prices Constitute an important indicator for the demand-supply equilibrium Send a price signal for flexibility and storage opportunities Context in Switzerland No negative prices exist on the Swiss Day-Ahead market (min. price: 0 /MWh) Plan to introduce negative prices on the Swiss Intraday market (min. price: -9999.99 /MWh) In collaboration with Swissgrid, EPEX SPOT investigated the request of negative prices on the Swiss Day-Ahead market in an internal study, evaluating the following options: - Short term: negative prices on the isolated Swiss DA market before coupling with other markets. - Mid- to long term: negative prices once the Swiss DA market is coupled to CWE markets. Currently an online member consultation on this topic July is available to all EPEX members: 31 st May Start of online consultation 30 th June Deadline for online consultation Internal assessment of consultation results 16 th September Final decision (EPEX SPOT Exchange Council) EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 13

2. Current EPEX SPOT developments Smart Block Bids: Linked Blocks A linked block order is an order ( child ) which execution is subject to the execution of another block order ( parent ) Possible to design complex structures (several generations and/or large families ) Generation 1 Grand parent 1 Generation 2 Parent 1 _ 1 Parent 1 _ 2 Parent 1 _ 3 Generation 3 Child 1 _ 1 _ 1 Child 1 _ 1 _2... Child 1 _ 2 & 3 _ 1 How to use it? Allows to take into account financial and technical constraints of power plants (start-up costs in the first block and then higher costs, such as fuel costs, in the linked block) Enables to link purchase and sell block orders (representation of pump-up storage, for ex.) EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 14

2. Current EPEX SPOT developments Smart Block Bids: Exclusive Blocks Block orders can be grouped in an exclusive group. Within this group, a maximum of one block order can be accepted It is not possible yet to mix Linked Blocks and Exclusive Blocks Groups How to use it? Allows to propose for trading different production patterns: submit different profiles with different prices for the same delivery day for the same power plant, with only one being executed For example a specific production plant can be offered at a low price for baseload production, medium price for peak load production, and high price for super peak load production EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 15

2. Current EPEX SPOT developments Smart Block Bids: Implementation Implementation is foreseen together with NWE Market Coupling launch (planed for November 2013) Some adaptation of EPEX Trading System are however necessary (interface design) Simulations are on-going, together with APX-ENDEX, which plans similar smart block bids: The aim is to fine-tune the characteristics of smart blocks and define the corresponding restrictions: Maximum number of generations, maximum number of blocks in each generation, maximum number of blocks in an exclusive group Indeed, performance of the current algorithm can be affected by the number and the complexity of submitted smart blocks EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 16

2. Current EPEX SPOT developments Price Coupling of Regions & NWE Price Coupling Price Coupling of Regions (PCR): cooperation between seven Power Exchanges (APX, Belpex, EPEX SPOT, GME, NPS, OMIE & OTE) to deliver standards for the Internal Electricity Market 2014 Supported by European Authorities Selected as the solution for NWE Price Coupling and other regional coupling initiatives Based on three main principles: One single algorithm, compatible with all national market features in Europe Robust governance based on rotating operation principle Individual accountability of the involved Power Exchanges First regional implementation of PCR: NWE (CWE + Nordic + GB) Agreements and bottom-up planning finalized (see next slide) Testing phase started in April 2013 Launch scheduled for November 2013 EPEX SPOT SE Any use of information contained in this document is expressly prohibited without prior written consent of EPEX SPOT SE 17

2. Current EPEX SPOT developments The North Western European (NWE) Price Coupling project The NWE region encompasses Germany, France, Belgium, the Netherlands, Luxemburg, Denmark, Sweden, Norway, Finland and the UK Objective: To couple the NWE electricity wholesale markets by November 2013 on the basis of the Price Coupling of Regions (PCR) algorithm. Involved parties: 4 Power Exchanges 13 Transmission System Operators (NL) (DE) EPEX SPOT SE Any use of information contained in this document is expressly prohibited without prior written consent of EPEX SPOT SE 18

2. Current EPEX SPOT developments NWE: Planning and current status 2012 2013 December January February March April Mai June July August September October November NWE REGULATORY DELIVERABLES REGULATORY APPROVAL PROCESS NWE TESTING ENTRANCE TESTING NWE INTEGRATION TESTING NWE SIMULATION TESTING CONTINGENCY MEMBER TEST GO LIVE PREPARATION Current status: Regulatory deliverables done Technical solutions (PCR algorithms and systems) handed over to NWE for testing NWE integration testing started in April NWE integration and simulation tests in summer Member testing scheduled for October REMINDER: NWE Stakeholder Forum will take place on 14 th June in London (registration by tomorrow, 7 th June, by e-mail to anthony.autwal1@nationalgrid.com EPEX SPOT SE Any use of information contained in this document is expressly prohibited without prior written consent of EPEX SPOT SE 19

2. Current EPEX SPOT developments Status on CWE Flow-Based Market Coupling project: planning The external parallel run has been successfully launched and results published since 1 st January 2013, next milestones will follow 2013 Jan Feb March April May June July Aug Sept Oct Nov Dec Parallel run Stakeholders acceptance Support Stable results (ex post monthly publication) First weekly publication of parallel run results The consultation is open until the 30 th of June 2013 Delivery of PC documents to NRAs Market Forum Sending of information for approval package Delivery to NRAs Public Consultation Survey External parallel run Final approval package* Market Parties implication through FB_UG meetings TODAY Utility tool and Q&A Forum Market Forum NRA approval NWE Go live Market Forum All CWE parties and systems technically ready for GO LIVE * Including answers to public consultation s outputs Source: project partners presentation for CWE FB MC Market Forum on 7th March 2013 EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 20

2. Current EPEX SPOT developments Status on CWE Flow-Based MC: parallel run reports http://www.casc.eu/en/resource-center/cwe-flow-based- MC/Parallel-Run-Results Typical displays: Results provided by the Simulation Facility, which couples the Flow Based Parameters with the ATC order books Publication of weekly FB parameters and market simulation results every Thursday before 12:00 Access FTP for Market Coupling results Market Coupling Results CWE_MC_FB CAn2Buse Source: project partners presentation for CWE FB MC Market Forum on 7th March 2013 EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 21 21

2. Current EPEX SPOT developments Status on CWE Flow-Based MC: parallel run market simulation results Price convergence 100% 80% 60% 40% 20% 0% Flow based impacts on prices FB - ATC FBI - ATC ATC FB FBI -20% 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Week Price convergence = percentage of hours with single CWE price Full price convergence better under FB than under ATC EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 22

2. Current EPEX SPOT developments Status on CWE Flow-Based MC: market support and consultation process The project is keen to provide an efficient and reactive support to Market Parties during this period via the following initiatives: Launch of Utility tool displaying the relevant FB parameters Launch of Q&A Forum for MPs questions on practical matters A Public Consultation is currently in process: Market Participants are invited to respond to an online survey/consultation and to make free comments. Answers are welcome until 30 th June 2013 EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 23

Agenda 1. EPEX SPOT Market review 2012/2013 2. Current EPEX SPOT developments 2.1. Current developments on the Day-Ahead market New ETS release 2.7.1. Consultation about a possible introduction of negative prices on the Swiss auction Introduction of Smart block bids Status on Market Coupling initiatives (Flow-Based Market Coupling/NWE) 2.2. Current developments on the Intraday market Launch of the Swiss Intraday market Status on the EU Intraday cross-border trading system New ComTrader Implementation of the Public Message Interfaces 3. EPEX SPOT News EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 24

2. Current EPEX SPOT Projects Launch of Swiss Intraday Market Project TSOs are currently harmonizing their Intraday cross-border capacity allocation mechanisms on the FR-CH and DE-CH borders In parallel, EPEX SPOT will launch a Swiss Intraday market Intraday trading mechanism Trading is based on EPEX SPOT s system ComXerv, which allows continuous cross-border Intraday trading All local and cross-border nominations are performed automatically by ECC, together with the clearing ComXerv s connection to the Intraday Capacity Service enables trading members to access Intraday crossborder capacity implicitly Explicit capacity allocation will be possible in parallel (OTC), as access to the cross-border capacity is nondiscriminatory EPEX SPOT 2013 25

2. Current EPEX SPOT Projects Launch of Swiss Intraday Market: lead-times 15min contracts Hourly contracts DE CH DE CH DE D-1: 16h D-1: 18h D: delivery time 75 min (*) FR DE AT CH FR DE AT CH FR DE AT CH D-1: 15h D-1: 18h D-1: 21h05 D: delivery time 45 min (*) FR DE D: delivery time 75 min (*) A lead time of 75 min is envisaged at market launch, however EPEX SPOT and ECC aim at a reduction of the lead time to 60 min for Q3 2013 FR DE D: delivery time 60 min (*) Reduction of lead time currently under investigation EPEX SPOT 2013 D: delivery time 45 min (*) 26

2. Current EPEX SPOT Projects Launch of Swiss Intraday Market: switch to 0.1MW Background switching volume tick from 1MW to 0.1 MW TSOs are currently working on 0.01 MWh Intraday capacity allocation and nomination at both FR-DE and FR-CH borders European Power Exchanges have committed to implement a common Intraday European market system through a Shared Order Book (SOB) As most partner exchanges have 0.1MW as smallest volume ticks, harmonization will be required for EPEX SPOT Intraday markets Impact on members expected to be low Before FR-DE Intraday coupling, German Intraday market was in 0.1 MW Only 2% of volumes were in decimals, representing 5% of transactions 1.4% or transactions were under 1MW Smaller trading participants will benefit from increased granularity enabling them to better tackle balancing issues. Implementation on all Intraday markets at the same time as the introduction of the Swiss Intraday German 10 th MW order book will be removed EPEX SPOT 2013 27

2. Current EPEX SPOT Projects Intraday CH: Admission and Planning Costs Access to the CH IDM without any extra fees: For all market participants active on the CH Auction For all market participants of the Intraday market (DE, AT, and/or FR) Transaction based trading fees: 0.11 /MW Membership & Formulars Around 50 Members have already expressed their interest Submission of membership documents as soon as possible to the Membership Department in order to guarantee your start of trading at the launch Launch date of the Swiss Intraday market: 26 th June 2013 EPEX SPOT 2012 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 28

2. Current EPEX SPOT Projects Launch of Swiss Intraday Market: Summary of benefits Standard cross-border matching, clearing and settlement tools Simplified access to cross-border capacity and easier settlement operations Increased overall liquidity thanks to better market integration Full optimization of cross-border Intraday capacity between FR, DE/AT and CH Non-discriminatory access through explicit capacity allocation possibility PLEASE CONTACT US FOR FUTHER INFORMATION ON EPEX SPOT S SWISS Intraday MARKET! EPEX SPOT 2013 29

2. Current EPEX SPOT Projects Tender process for an EU Intraday cross-border trading system: scope of the tender The EU Intraday Target Model: What and why One European integrated solution, handling the trading and the capacity allocation functions Power Exchanges in charge of both functions using one single IT provider The model is made mandatory by law (defined in the CACM Network Codes and governed by the Day-Ahead / Intraday Governance Guidelines) SCOPE OF THE TENDER In the long run, all cross-border capacity will be allocated on the single SOB/CMM solution Explicit capacity allocation to enable OTC trading will be allowed on certain borders, for an interim period only Power Exchanges outside of the cooperative agreement will not be able to offer cross-border trading to their members anymore Objective: ONE SINGLE PLATFORM ONE SINGLE TRADING SCREEN For all implicit Intraday cross-border capacity allocation For all Power Exchange s Intraday liquidity EPEX SPOT 2013 30

2. Current EPEX SPOT Projects Intraday Cross-Border tender process: status The following Power Exchanges as well as ENTSOE-TSOs are also involved in the selection process: Two vendors submitted their offers by the 18 th January 2013 deadline Three of the mentioned PXs indicated their preference for one system, one indicated its preference for the other system and another PX did not express any clear-cut preference ACER is now called to provide its opinion (PXs are contractually bound to adopt ACER s advice on the Vendor choice) ACER s opinion should be provided before the end of June EPEX SPOT 2013 All rights reserved 31

2. Current EPEX SPOT Projects New ComTrader EPEX SPOT is planning to introducte a new, improved version of ComTrader by the end of this year > The overall performance of the ComTrader has been improved and simplified for a faster, intuitive and more effective use Some of the highlights of new ComXerv Release include: Multi-exchanges Access More flexibility in windows display/parameters More graphical views in market details window New functionalities: i.e. Linked Orders -> submission of a basket of orders with FOK restriction Easier trades retrieval: i.e. No more extra window needed for continuous export of own trades More information and member-testing sessions will be scheduled in the coming weeks EPEX SPOT 2013 All rights reserved 32

2. Current EPEX SPOT Projects Implementation of the Public Message Interfaces Since 2012 two Message Interfaces (API s) are offered to EPEX members: ComXerv API: Receiving in real time updated information from ComXerv Interacting with ComXerv Already 12 members are using the ComXerv API in production (16 members are currently developing the API solution on their side) ETS API: Manage Orders (Submit / Modify / Cancel / Retrieve Hourly and Block orders) Retrieve Market Results for a given area and delivery day Possible uses of the API: Back office application, GUI (Graphical User Interface), Interface with own internal systems, etc.. Market participant Market participant ComTrader/ETS Client (front end) Message interface client software Message interface (API) ComXerv / ETS (back end) EPEX SPOT Market participant Member infrastructure EPEX SPOT 2013 All rights reserved EPEX SPOT infrastructure 33

Agenda 1. EPEX SPOT Market review 2012/2013 2. Current EPEX SPOT developments 3. EPEX SPOT News Info products offers Last updates in the EPEX SPOT E-Learning offer EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 34

3. EPEX SPOT News EPEX SPOT s Info Products Intraday SMS alerts What does the Intraday alarm SMS service consist of? According to his needs, a member can define lower and upper price limits for each Intraday market where he is active and receive SMS as soon as these limits have been reached This facility enables members to keep a constant eye on the market and when markets are volatile react immediately if needed How to register? www.epexspot.com/en/extras/shop/product-settings Subscription and payment are made on the EPEX SPOT website via the EPEXme account) 2 subscriptions are available Selection of the Intraday market EPEX SPOT 2013 All rights reserved 35

3. EPEX SPOT News E-learning / how to certify new traders? Reminder about the EPEX SPOT exam The EPEX SPOT exam is mandatory for those who create or enter orders in the day-ahead or intraday trading systems (even occasionally). The exam (3 attempts) is available online and can be taken at any time After passing the exam, the trader can start trading immediately after being registered in the customer center The EPEX certificate is good for life Trading certification is linked to a person and not to a company EPEX SPOT 2013 All rights reserved 36

3. EPEX SPOT News E-learning / what s new? 2 new E-learning courses about Clearing (April) Basics about clearing and focus on ECC The ECC clearing process New study about the intraday market available in the module EPEX trading handbook (A or B) in addition to: Trading renewable energy on the European exchange 15-minute-contract opening times Resiliency: how liquid are our day-ahead markets? Ongoing discussions between EEX and EPEX to cooperate on the development of new online training courses to be delivered in early 2014: Power derivatives market Gas spot market Gas derivatives market EU emission allowances Options trading Trading systems training EEX general training EPEX SPOT 2013 All rights reserved 37

Thank you for your attention! Trading results can be downloaded on the EPEX SPOT website under: www.epexspot.com EPEX SPOT 2013 All rights reserved Use of information prohibited without prior written consent of EPEX SPOT SE 38

Your contact persons at EPEX SPOT Audrey Mahuet, Director Customer Care a.mahuet@epexspot.com Sylvie Tarnai, Key Account Manager s.tarnai@epexspot.com Yahoo-ID sylvietarnai Katharina Niciejewska, Key Account Manager k.niciejewska@epexspot.com Yahoo-ID kniciejewska Françoise Maguet, E-Learning Sales & Business Development f.maguet@epexspot.com EPEX SPOT 2013 39

POWER FOR TODAY. POWER FOR TOMORROW. EPEX SPOT 2012 40