EPEX SPOT Successfully Launches First Auction Of French Capacity Market - Capacity Guarantees Were Traded For 999,98 Euros On 15 December 2016

The first auction of French capacity guarantees has successfully taken place on the European Power Exchange EPEX SPOT. 29 members traded a total of 226 358 capacity guarantees corresponding to 22 635,8 MW (22,6 GW). A reference price of 999,98 Euros per capacity guarantee was determined for the contract 2017.

The capacity guarantee is valid for an underlying year only and recorded in the registry of the French Transmission System Operator RTE. One capacity guarantee represents 0.1 MW of certified capacity and the auctions minimum and maximum price are respectively 0 and 2 000 Euro per capacity guarantee for 2017 contracts.

In order to ensure generation adequacy and security of supply, the French Parliament has voted for the introduction of a capacity market through the so-called NOME law in December 2010. According to this mechanism, electricity producers and demand-response operators receive capacity certificates issued by RTE. Suppliers have to contribute to security of supply by holding sufficient capacity certificates for each underlying year.

ECC manages the clearing services for the capacity market auction. EPEX SPOT has planned to organize between one and six capacity guarantee auctions per year, depending on guarantees certification and expected liquidity.

In 2017, one auction will allow to trade capacity guarantees for 2017 contracts. Capacity guarantees for 2018 and 2019 contracts will also be tradable during two other auctions. The final calendar of auctions in 2017 will be released before the end of 2016.

The organization of an auction provides significant advantages over bilateral trading. Since liquidity in the market is pooled, a single reference price can be determined and trading is anonymous and secure.