Exchange Council Approves 15-Minute Auction - REMIT Implementation: EPEX SPOT Is Willing To Report On Behalf Of Members

Transparency and flexibility: These were the key topics discussed during the first 2014 session of EPEX SPOT’s Exchange Council. The Council, composed of representatives of the Exchange’s trading participants, deliberated on several updates by the European Power Exchange EPEX SPOT.

15-minute contracts have gained in importance since they were first launched on the German Intraday market in December 2011: With more than 4.5 TWh of traded volume, 15-minute contracts have become a considerable component in the integration of renewable energies. In 2013, these contracts represented 14% of the total Intraday volume in Germany.

EPEX SPOT has identified a specific need for small and mid-size German market participants who need to be balanced on a 15-minute basis and who do not necessary have access to the 24/7 continuous market. In order to facilitate the management of ramping needs for market participants and to bundle liquidity at the same time, EPEX SPOT suggests launching an auction for 15-minute contracts. This auction could take place in the afternoon of the previous day, around the opening of the Intraday market. The members of the Exchange Council welcomed the idea. They support the introduction of a 15-minute Intraday auction. “We are devoted to respond to market needs and to further improve flexibility of trading for our members”, says Jean-François Conil-Lacoste, Chairman of the Management Board of the European Power Exchange. EPEX SPOT will now conduct a study to specify the design of the segment.

REMIT is one of the overarching topics in 2014. According to the planning to be adopted by each national regulator, members will be required to obtain a registration code from the Agency for the Cooperation of Energy Regulators (ACER). They will have to provide EPEX SPOT with this code before the entry into force of the reporting part of REMIT foreseen for December 2014. From this moment on, members will be required to report to ACER the totality of their orders and transactions on wholesale energy markets located within the European Union. In order to facilitate this implementation, EPEX SPOT is willing to report to ACER on behalf of its members the orders and transactions concluded on its markets. The procedures will be detailed as soon as the Implementing Acts are published. “Data reporting via the Exchange would be a useful support for trading participants”, says Peter Heydecker, President of the Exchange Council. “It would increase transparency while holding complexity for Exchange members down.”

ComXerv, the trading system used by EPEX SPOT for its Intraday markets, has seen its availability reduced over the last couple of months. Together with the concerned parties, EPEX SPOT is working hard on securing the Intraday trading chain. The improvements are substantial: The whole trading chain from computation to nomination is entirely reviewed in order to maximize stability, reliability and robustness. The changes imply the development of a central data transfer tool which double-checks all communication between trading and clearing interfaces. Thierry Morello, Chief Operating Officer of EPEX SPOT, underlines: “This topic is of highest priority for us, since it is our commitment to provide reliable trading solutions to our clients, in a context of growing domestic and cross-border activity.”

The first meeting of the Exchange Council in 2014 was held in Geneva on 17 March 2014 and was chaired by Peter Heydecker, Head of Origination Gas & Power at Vitol.

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The Exchange Council of EPEX SPOT is an official body of the Exchange. 16 members and 7 permanent guests represent adequately the diversity of economic and corporate profiles that exists among the Exchange Members from various sectors: producers, power trading companies, transmission system operators, regional suppliers and financial service providers, as well as commercial consumers and academics. Its missions include in particular the adoption of the Exchange Rules and the Code of Conduct of EPEX SPOT and their amendments. The Exchange Council approves new trading systems as well as new contracts or market areas and approves the appointment of the Head of the Market Surveillance Office. It meets up quarterly.

The European Power Exchange EPEX SPOT SE operates the power spot markets for France, Germany, 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, Bern and Vienna. In 2013, 346 TWh were traded on EPEX SPOT’s markets.