The European Power Exchange, EPEX SPOT, looks back on a year 2011 full of projects which further integrate the European power market – in particular the plan for a joint venture with the Nordic power spot exchange Nord Pool Spot, scheduled for launch in 2012. At the same time, trading volumes increased noticeably. 314 TWh were traded on EPEX SPOT markets, which corresponds to a 12.5 percent increase compared to the previous year (279 TWh).
Day-Ahead Markets
The 2011 trading volume in the Day-Ahead auction for the market areas Germany/Austria, France and Switzerland on EPEX SPOT accounted for 296 TWh (268 TWh in 2010). Besides the increase of exchange members from 192 to 201, the growth of the Day-Ahead Market volumes since the beginning of 2010 is also due to the obligation for Transmission System Operators (TSOs) to market power from renewable energy sources on the spot exchange, according to the German law on renewable energy, EEG. The spot market has in this way proven to be a suitable tool for integrating renewable energy sources into the market.
The auction volume can be broken down as follows:
Areas |
Volume 2011 in MWh |
Volume 2010 in MWh |
Average Base Price 2011 / 2010 Euro/MWh |
DE/AT |
224,550,815 |
205,479,149 |
51.12 / 44.49 |
FR |
59,692,111 |
52,629,636 |
48.893 / 47.495 |
CH |
12,060,799 |
9,324,648 |
56.18 / 51.02 |
For EPEX SPOT’s Day-Ahead Markets, 2011 has been year of convergence. Since 9 November 2010, the power markets of Central West Europe (CWE), including Germany, France and the Benelux countries, have been successfully coupled. Additionally, CWE has been coupled with the Nordic power markets via Interim Tight Volume Coupling (ITVC). This unprecedented achievement allows the optimal use of cross-border capacity and favors price convergence. As a result, a 66 percent price convergence was observed over all CWE countries in 2011.
2011 has also been a year of enhancing our cooperation with partner exchanges. Since September 2011, EPEX SPOT is taking steps towards a joint venture with the Nordic Power Exchange Nord Pool Spot. The goal of this joint venture is to create common trading platforms for the day-ahead and intraday market. In a second step, these platforms shall be operated together. Both EPEX SPOT and Nord Pool Spot will stay independent exchanges, responsible for their local markets.
Intraday Markets
The Intraday Markets of EPEX SPOT in France and Germany have seen a remarkable development in the last 12 months. During the year 2011, the Intraday Markets continued to display a particularly good result, which is partly due to the increasing share of power from renewable energies and the effects of the Flexible Intraday Trading Scheme (FITS), which allows seamless implicit cross-border trading between the two countries.
The total trading volume amounted to 17,592,479.1 MWh, including:
Areas |
Volume 2011 in MWh |
Volume 2010 in MWh |
DE |
15,897,934.6 |
10,244,153 |
FR |
1,694,544.5 |
1,027,315 |
Since the launch of FITS, introduced in December 2010, liquidity on the French Intraday Market has doubled. Over the year, cross-border trades accounted for 11.4 percent of traded volume on FITS.
To accommodate the growing impact of power from renewable energy sources in Germany, EPEX SPOT responded to market needs by introducing a highly flexible instrument, the 15-minute contracts. They allow to the members to balance their portfolios within the hour, 15 minutes sharp. By offering these contracts on the German Intraday market since 14 December 2011, EPEX SPOT contributes to facilitate the German energy transition.
Looking at 2012
The Czech, Slovakian and Hungarian power exchanges announced in May 2011 their cooperation to launch a trilateral market coupling in 2012 and chose EPEX SPOT as provider of price coupling services. These services will consist of implementing and operating the coupling solution, relying on the Price Coupling System, the current system developed and used by EPEX SPOT in CWE. “Servicing other exchanges has always been one of our ways to contribute to the integration of the European power market”, says Jean-François Conil-Lacoste, CEO of EPEX SPOT.
The creation of harmonised transnational trading platforms through Nord Pool Spot and EPEX SPOT will help to achieve the day-ahead and intraday target models of the European Commission. With the implementation of a market coupling solution in North West Europe (NWE) on the doorstep, the Single European Price Coupling becomes tangible. EPEX SPOT is fully committed to accomplish these goals in accordance with the ACER Roadmap. “This is a huge leap forward in the integration of the European power market. It will permit us to get to the 2014 goal as quickly and as efficiently as possible, in cooperation with all official stakeholders including partner exchanges and TSOs”, says Jean-François Conil-Lacoste, CEO of EPEX SPOT.
As an exchange at the heart of Europe, covering an area of 1200 TWh of yearly power consumption and 40 percent of the EU’s electricity market, EPEX SPOT is driving forward the integration of the European power market in many ways. We are dedicated to the goal to establish a European single market; a market in which consumers all over Europe can benefit from more efficient use of the power system, increased social welfare and higher security of supply at a competitive price.