.jpg)
Splitting the successfully integrated German/Austrian Day-Ahead price zone would put at stake liquidity and competition on the wholesale market and might reduce the incentive for crucial investments into the German transmission grid. These are the key results of the second meeting of EPEX SPOT’s Exchange Council in 2013. Following a presentation by the German regulator, Federal Network Agency (Bundesnetzagentur), the members of the Council expressed their strong support to maintain the common German/Austrian Day-Ahead market as it is shaped today.
“The idea of splitting this highly liquid and developed Day-Ahead market is conflicting with the goal of integrating power markets across Europe”, says Peter Heydecker, Chairman of the Exchange Council. Liquidity on the market would be spread to the new price zones but become less dynamic as in those new price zones the concentration of market power of some utilities would increase. Smaller price zones would hence have a severe impact on Day-Ahead price formation. “As the German/Austrian price zone is the leading European reference market in terms of maturity and liquidity, market participants require the reference price emerging from this integrated market area. Europe’s power markets put their trust in the signal from Germany/Austria”, concludes Jean-François Conil-Lacoste, Chairman of the Management Board of EPEX SPOT.
Furthermore, the Exchange Council discussed several developments to improve Intraday trading on EPEX SPOT markets:
- First of all, the Council was informed about the launch of the Swiss Intraday market, scheduled for 26 June 2013. It will be integrated with the existing Austrian, French and German Intraday markets of EPEX SPOT from the start via the mechanism for Intraday cross-border capacity allocation already used by eight European transmission system operators (TSOs) on key continental borders. In so doing, the Swiss Intraday market will immediately benefit from the liquidity of the neighboring markets. The launch of an integrated Swiss Intraday market marks another milestone for Intraday power trading in Europe and facilitates implementing the European Intraday Target Model faster.
- To guarantee compatibility with the European Intraday Target Model, EPEX SPOT will switch volume ticks on the Intraday market from 1 MW to 0.1 MW.
- Moreover, EPEX SPOT is working together with the concerned TSOs and the clearing house ECC on reducing local and cross-border lead-time on the Austrian and the Swiss Intraday markets. The same applies for 15-minute contracts which today are available exclusively on the German Intraday market. They will be available for trading in Switzerland by 26 June 2013 and will also be expanded to Austria during the next months.
The members of the Exchange Council welcomed these steps and support EPEX SPOT’s work on the Intraday markets. “Power markets are facing an increasing amount of power from renewables difficult to forecast, and the harmonization of Intraday trading across Europe is underway. The solutions we offer will help market participants to cope with the challenges ahead”, says Jean-François Conil-Lacoste.
The second meeting of the Exchange Council in 2013 was held in Leipzig on 5 June 2013 and chaired by Peter Heydecker, Head of Origination Gas & Power at Vitol.
