2014 Power Trading Volumes Grow By 10.4% - Daily Volumes Exceed 1 TWh Per Day – Integrated Electricity Market Covers 75% Of Europe – 224 Exchange Members Trading On The European Power Exchange

Growing liquidity and an almost fully coupled European power market – these are the key contributions by the European Power Exchange in the past 12 months. In 2014, 382 TWh were traded on the Day-Ahead and Intraday power markets in Germany, France, Austria and Switzerland. That is yet again a new yearly record result and corresponds to an overall increase of 10.4% compared to 2013 (346 TWh).

“We focus on what is best for our customers and for the European power market”, says Jean-François Conil-Lacoste, Chairman of the Management Board of EPEX SPOT. “And in the past year, we have succeeded in doing so by bringing Price Coupling to most of Europe and extending our flexibility products such as the launch of the 15-minute Intraday call auction in Germany.”

Over the past year, six key achievements have stood out:
•    The introduction of Price Coupling in 17 European countries, stretching from Portugal to Finland, from Great Britain to Austria and based on the pan-European Price Coupling of Regions (PCR) solution;
•    The launch of the 15-minute call auction on the German Intraday market, to provide a reliable price signal on a 15-minute basis;
•    The deployment of the 4M Market Coupling (4M MC) as service provider on behalf of the local Exchanges. The 4M MC covers Czech Republic, Hungary, Romania and Slovakia and is also based on PCR;
•    The opening of the EPEX SPOT offices in Bern and Vienna, for a better dialogue with members, stakeholders and partners and a local rooting of our activities;
•    A surge of Day-Ahead trading volumes in France and Germany and on all Intraday markets, resulting in an average daily traded volume of over 1 terawatt hour through 224 members (+ 12 in 2014);
•    And the announcement of a new shareholder structure, effective since 1st January 2015, with major European Transmission System Operators (TSOs) becoming direct shareholders of the European Power Exchange for 36.7%.

Day-Ahead markets
Day-Ahead trading volumes in 2014 were totalling 351,208,092 MWh which corresponds to a surge by 7% (2013: 322,788,544 MWh) and can be broken down as follows:

The German/Austrian Day-Ahead market has seen a significant growth over the past year thanks to its increasing share of power from renewable energy sources. Its community of members has been the biggest in Europe for several years now, underlining its role as the European reference in terms of trading volumes, liquidity and price signal.

The French Day-Ahead market has seen a remarkable development in 2014. While having seen stable volumes in the years before, the French market starts to tap its full potential since summer 2014. Ongoing liberalization efforts and new market participants brought another positive momentum to the market.

On the Swiss Day-Ahead market, the surge in trading volumes led to another all-time high in 2014. Switzerland has become the second biggest EPEX SPOT market in terms of membership and share of traded volume in national power consumption. The trading volumes also reflect the strong interaction with neighbouring markets.

Enhancing Market Coupling

Market Coupling, a tool to manage congestion on the borders between national power spot markets, is a core service EPEX SPOT delivers together with European partners: Power Exchanges’ orders and available cross-border capacities received from the TSOs are auctioned simultaneously. Trading of power and allocation of capacity now happen at the same time, the best economic solution is automatically chosen. Prices are determined no longer on national, but on European level. This optimizes the use of existing infrastructure and increases the social welfare for all market participants and on all involved markets.

Since November 2010, the power markets Germany/Austria and France are successfully coupled in the framework of Central Western Europe, covering Germany/Austria, France and Benelux. In February 2014, the coupling was extended to the Nordics, Baltics and Great Britain using for the first time the PCR solution. PCR is an initiative by seven European Power Exchanges – amongst them EPEX SPOT – and provides systems and procedures for a pan-European coupling of power markets.

In May, Spain and Portugal joined this Multi-Regional Coupling (MRC) which now covers 17 countries. In November, EPEX SPOT extended its services in Eastern Europe and implemented the PCR solution for the 4M Market Coupling (4M MC) between Czech Republic, Hungary, Romania and Slovakia. Today, PCR covers 75% plus 5% of European power consumption through MRC and the 4M MC.
As a result of the coupling, prices between the German/Austrian and the French markets converged in 51% of the hours in 2014.

Intraday markets
In 2014, total trading volumes on the Intraday markets amounted to 30,766,546 MWh (2013: 23,054,242 MWh), including:

*including the 86,719 MWh of the 15-minute call auction on the German Intraday market 

Volumes on the Intraday markets of EPEX SPOT, covering Germany/Austria, France and Switzerland, have surged sensibly in 2014, by 33% year-on-year, underlining the relevance of Intraday trading. In the light of a European-wide transition towards renewable power sources, trading participants more and more ask for flexible short-term trading platforms.

ComXerv, the Intraday trading system used by EPEX SPOT, allows seamless cross-border trading. The launch of Intraday cross-border trading took place between France and Germany in December 2010. The Austrian Intraday market debuted in October 2012 and was instantly connected to Germany and France. Same applies for the Swiss market, which launched in June 2013.

All markets benefit from a spreading liquidity trough cross-border transactions. Over the year 2014, cross-border trades between all four markets accounted for 18.9% of traded volume on ComXerv, after 16.5% the year before.

New flexibility products to facilitate German energy transition

EPEX SPOT continuously looks out to facilitate the German energy transition. Since December 2011, 15-minute contracts can be traded on the German market. These contracts allow the members to balance their portfolios every 15 minutes. They were extended to Switzerland in June 2013.

In December 2014, EPEX SPOT launched a call auction for 15-minutes on the German Intraday market in order to provide a reliable price signal on a quarter hour basis. This auction at 3 pm provides at tool for balance responsible parties to fine-tune their portfolios on a 15-minute basis during production ramps and forecast deviations. In so doing, the price signal of 15-minute contracts contributes to the added value of flexibility and provides at the same time incentives for system stabilization.

In 2014, the traded volume from both German and Swiss 15-minute contracts amounted to 4,909,550 MWh, which is equivalent to an 87% increase compared to 2013 (2,625,136 MWh). This underlines the need for flexible tools in power trading which EPEX SPOT is willing to extend.

The European Power Exchange EPEX SPOT SE operates the power spot markets for Germany, France, Austria and Switzerland (Day-Ahead and Intraday). Together these countries account for more than one third of the European power consumption. EPEX SPOT also acts as market operating service provider for the Hungarian Power Exchange HUPX and operates the coupling between the Czech, the Slovak, the Hungarian and the Romanian markets on behalf of the local Exchanges. It is a European company (Societas Europaea) based in Paris with branches in Leipzig, Bern and Vienna. Over 220 companies from Europe are active on EPEX SPOT. 382 TWh have been traded on EPEX SPOT in 2014.