European Power Exchange EPEX SPOT Prepares For Internal Energy Market - Steady Growth Of Trading Volumes – Extension Of Intraday Services To Switzerland – Price Coupling Of Regions Facilitates Implementation Of Day-Ahead Target Model

In the fifth year after its creation, trading volumes on the markets of the European Power Exchange EPEX SPOT continue to grow. In 2013, 346 TWh were traded on its Day-Ahead and Intraday power markets in Germany, France, Austria and Switzerland. That is the best result in EPEX SPOT’s existence and corresponds to an overall increase of 2% compared to 2012 (339 TWh), following 314 TWh in 2011 and 279 TWh in 2010. 

“The creation of EPEX SPOT – one common harmonized structure to accommodate and operate several national power markets – has led to a significant attraction of liquidity”, says Jean-François Conil-Lacoste, Chairman of the Management Board of EPEX SPOT. “The European Power Exchange has quickly become a key protagonist in the integration process of the European power market.”

Over the past year, six key developments are worth to be mentioned:

• An increase in 10 Exchange Members , to a total of now 212 companies active on the markets of EPEX SPOT. The new members come mainly from Germany, Italy and Poland;
• On the Day-Ahead, strong results on the German/Austrian market with two monthly records in October and December 2013;
• A less active price convergence between the German and French market, both coupled within the Central Western Europe (CWE) Market Coupling, due to diverging market fundamentals;
• On the Intraday , strong overall results and a year-on-year boost of 28.6% in trading volumes;
• The launch of the Swiss Intraday market on 26 June 2013 , followed by a strong take-off in terms of volumes and cross-border interaction with the Intraday markets in Germany, France and Austria. 91% of the volumes were traded cross-border, foreshadowing the benefit of Swiss market integration.
• An increase of trading volumes in 15-minute contracts by 104%, hitting 2.6 TWh in 2013. The outstanding result highlights the need for flexible tools in power trading.

Day-Ahead markets
Day-Ahead trading volumes in 2013 were totalling 322,788,544 MWh (2012: 321,228,968 MWh) and can be broken down as follows:

The German/Austrian Day-Ahead market contributed its stable share of volumes, supported by the biggest and most active community of trading participants over all European markets. Renewables have become a generic part of spot trading in Germany. The German/Austrian Day-Ahead market stands as the European reference in terms of trading volumes, liquidity and price signal.

The French Day-Ahead market displays stable results in a difficult regulatory framework. The results are proof of confidence amongst market participants into the force of the free market.

On the Swiss Day-Ahead market, the healthy increase in trading volumes continues. Reasons can be found in the new members on the Swiss market: After Germany and before Italy, Switzerland is now the second biggest EPEX SPOT market in terms of membership. Increased cross-border arbitration possibilities and ongoing liberalization over the past few years also had an impact.

Market Coupling, a tool to manage capacity 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 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 on all involved markets.

Since 9 November 2010, the power markets of CWE, including Germany, France and the Benelux countries, are successfully coupled. As a result, price convergence between the German and the French market was observed in 48% of the hours in 2013.

The next step of European market integration, the launch of the North-Western European (NWE) Price Coupling, will take place on 4 February 2014. NWE adds Denmark, Finland, Great Britain, Norway, Sweden, and the Baltic countries to the CWE region and covers 75% of European consumption. 17 partners from 12 countries have cooperated for two years to bring NWE into existence. The launch is a significant step towards an integrated European power market and towards the implementation of the European Target Model for Day-Ahead markets.

NWE will also be the first implementation of the Price Coupling of Regions (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. It will be the engine for several regional market coupling initiatives to come into effect during 2014 and beyond.

Intraday markets

In 2013, total trading volumes on the Intraday markets amounted to 23,054,242 MWh (2012: 17,924,234 MWh), including:

Volumes on the Intraday markets of EPEX SPOT, covering Germany/Austria, France and Switzerland, continue to climb. Overall Intraday volumes increased sensibly by 28.6% year-on-year, underlining the relevance of Intraday trading. In the light of a European-wide transition towards renewable and therefore often intermittent 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 on 14 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 on 26 June 2013.

In so doing, the Swiss Intraday market benefits from the tight integration with the French, German and Austrian market. Over the year 2013, cross-border trades between all four markets accounted for 16.5 % of traded volume on ComXerv, after 13.5% the year before.

EPEX SPOT contributes to facilitate the German energy transition. Since 14 December 2011, flexible 15-minute contracts can be traded on the German market. They allow the members to balance their portfolios every 15 minutes. With the launch of the Swiss Intraday market, 15-minute contracts were extended to Switzerland – with the possibility to trade them cross-border with Germany.

In 2013, the traded volume from both German and Swiss 15-minute contracts amounted to 2,625,136 MWh, which is equivalent to a 104% increase compared to 2012 (1,288,883 MWh). This underlines the need for flexible tools in power trading which EPEX SPOT is willing to extend.

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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 is a European company (Societas Europaea) based in Paris with branches in Leipzig and Vienna. In 2013, 346 TWh were traded on EPEX SPOT’s markets.