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The European Energy Exchange (EEX) and the European Power Exchange EPEX SPOT have today discussed the Power Market Bill with a panel of business and political experts as part of the ‘E-world energy & water’ industry trade fair, currently taking place in Essen.
In its bill, the federal government advocates for better optimisation and further development of a “Power Market 2.0”. In addition to this, a reference price established on the market –primarily on exchanges – should continue to form the centre of the power market. The bill includes the commitment to free market pricing and a self-imposed restriction against political interventions in the event of very high prices.
This clear commitment to market mechanisms, competition and stronger European cooperation forms the key to the power market for the future. Dr. Wolfram Vogel, Director Public & Regulatory Affairs of EPEX SPOT, explains: “The bill illustrates the trust which the political sector places in the functioning and innovative capacity of the market in order to achieve the best possible solutions for the energy turnaround in the competition.” Dr. Tobias Paulun, Director Strategy of EEX, adds: “The reference price of the exchanges is the most important element of a functioning power market and forms the basis for all decisions taken by the market players, both in the short term for controlling production and generation and in the long term for investments.”
EEX and EPEX SPOT have already developed specific solutions for a power market of the future in close coordination with the market participants. This includes, in particular, strengthening of the short-term intraday markets of EPEX SPOT through the expansion of trading, with 15-minute products and the reduction of the lead times as well as the introduction of the Cap Futures on the EEX Derivatives Market. Further products, such as the Wind Power Future, are in the planning stage and will be launched in the spring of 2016.
A forward-thinking power market must also include the consideration of the energy market design at a European level. In this context, EEX and EPEX SPOT advocate a European approach as this offers significantly more options regarding the integration of renewables, the “flexibilisation” of the market and, ultimately, for the security of supply. Border-crossing trading between Germany and Austria in a joint price zone constitutes one example of this. Such a border-crossing market area provides the necessary liquidity and the meaningful price signal required to ensure efficient protection for all trading participants, even in the event of a high share of renewable energies. “In developing the power market 2.0, our aim must be to further integrate and expand the energy markets instead of splitting them up”, summarises Dr. Paulun.
