The seventh meeting of the EPEX Spot Exchange Council was held on March 8th, 2011 in Paris and chaired by Mr. Peter Heydecker, Managing Director AlpiqHolding AG. The main topics discussed were:
- The new Intraday Model : FITS – Flexible Intraday Trading Scheme
- Customer Satisfaction Survey at EPEX Spot
The new Intraday Model of EPEX Spot FITS – Flexible Intraday Trading Scheme gives access to liquid markets for a rising number of participants across Europe, with an average of more than 49 GWh/day traded in January and February 2011 and over 1,000 trades per day. The total traded volume in 2010 amounted to 11 TWh. On 14 December 2010, EPEX Spot successfully introduced the cross-border trading between Germany and France which allows the integration of both markets by using the cross-border capacity allocated by Amprion, EnBW TG and RTE. The Exchange Council welcomed this performance of the new intraday trading scheme which allows in parallel cross-border OTC trading and thus witnesses an efficient access for market participants to a flexible and liquid market place.
By separating the roles between the Transmission System Operators (TSO), which calculate and allocate the intraday cross-border capacity through a standard capacity platform on the one hand, and the Exchanges and Market Participants which request capacity from the capacity platform on the other hand, FITS minimizes the changes to the existing environment: no change in the governance structure, no cost borne by the TSOs and a healthy competition on the available capacity. The allocation of capacity and the cross-border trade are done instantaneously in an optimal way. The market thus benefits from a model that can easily be extended to other hubs.
In this context, the Exchange Council examined the main elements of the “Final draftFramework Guidelines on Capacity Allocation and Congestion Management for Electricity” published by ERGEG on 03/02/2011.
Praising the work of the Regulators toward a European harmonization of the capacityallocation which is a prerequisite for the Integrated Electricity Market, the Market Participants of the Exchange Council raised serious concerns about certain elements of the final draft:
- It goes beyond its objective to “ensure optimal use of the transmission networkcapacity” to set a prescriptive design on trading in a top-down approach for a marketwhich is constantly evolving and will continue to do so;
- By imposing, among other things, a central order book and a “unique matchingalgorithm for all bids”, the target model deprives the Exchange of its capacity tochoose, develop, maintain and constantly enhance the trading platforms which suitbest the needs of the market;
- In this centralistic approach, the existence of OTC cross-border trading as well asdomestic trading is quite unclear although both correspond to fundamental needs ofthe market participants and of the overall security of the system.
The market participants of the Exchange Council would like to make sure that the future target model, if it encompasses trading, respects the necessary elements of competition in a non-discriminative manner which will guarantee innovation and efficiency among the trading platforms to the benefit of market participants.
The Exchange Council also discussed the results of a Members Survey, covering among others questions about the satisfaction of the Exchange members with EPEX Spot, the CWE implementation, EPEX Trading System (ETS) implementation and the evolution of the EPEX Spot market model. The results testified to an overall satisfaction with products (satisfaction rate of 68%) and services of the trading platform (satisfaction rate of over 75%). The individual comments and suggestions on functional improvements made by members have been carefully taken into consideration and will lead to future implementations on the basis of feasibility studies.
The Exchange Council of EPEX Spot is an official body of the exchange. 16 members represent adequately the diversity of economic and corporate profiles that exists among the Exchange Members from various sectors: power trading companies, transmission system operators, regional suppliers, brokers and financial service providers, as well as commercial consumers and academics. The missions of the Exchange Council include in particular the adoption of the rules and regulations of the exchange and their amendments. Its task also comprises the appointment of the head of the Market Surveillance and the approval of the new trading systems.
EPEX Spot SE operates the power spot markets for France, Germany, Austria andSwitzerland (Day Ahead and Intraday). Together these countries account for more than one third of the European electricity consumption. EPEX Spot is a Paris-based company under European law (Societas Europaea) with a branch in Leipzig. In 2010, 279 TWh were traded on the EPEX Spot power markets.