MEFF Manages The 6th Auction For Power VPP Options

On Tuesday, September 23rd MEFF, a BME subsidiary, managed the Sixth Auction for Power Primary Auction (also known as VPP options) in collaboration with IBM.

The Royal Decree 324/2008 establishes that Endesa and Iberdrola must sell energy products on a wholesale basis. In 2007 and 2008 five similar auctions were held. The sixth and seventh auctions will be managed by MEFF, following its appointment by the Spanish power sector watchdog, the Comisión Nacional de Energía (CNE).

In the sixth auction, bidders will be allowed to buy 2,230 six-month equivalent MW, comprising 1,700 six-month base product equivalent MW and 530 six-month peak product equivalent MW. The energy linked to both products will be delivered as from 1 October 2008 with settlement being financial rather than physical.

The strike prices for the auction, fixed by the Ministry of Industry’s Directorate General for Energy Policy and Mining, were as follows: 42 €/MWh for the base product and 60 €/MWh for the peak.

The auction was carried out on an ascending clock and multi-round basis, with a simultaneous auction of 4 products classified in two groups. The auction was completed in the eleventh round. The auction was entirely carried out on the Internet with bidders participating form a number of EU countries.

The resulting volumes and prices, in €/MW/month, are as follows:

On aggregate, 1,910 six-month equivalent MW were allocated, almost double the 1,107 allocated in the previous auction.

In the sixth auction there were 22 participants, of which 12 received the allocations. The CNE has verified the auction process has taken place on an objective, competitive and non-discriminatory basis.

Companies interested in future auctions can register on http://www.subasta-epe.com/ in order to receive more information.