Exchange Council backs tender for pan-European intraday system

Source: Exchange Council

The Exchange Council of the European Power Exchange Epex Spot supports the upcoming tender for the selection of the system providing the integrated pan-European Intraday solution.

The tender is considered as an effective way to cope with the concerns raised at the last Exchange Council meeting held on 20 June 2012.

In 2011, the Association of European energy Exchanges, Europex, proposed an Elbas-like system as a solution to operate the pan-European Intraday Target Model, in which a Congestion Management Module is linked to a Shared Order Book. In order to choose the best available system in the most transparent way, the Agency for Cooperation of Energy Regulators (ACER) has recently backed the common proposal by the Power Exchanges of Europex to organize a tender for the selection of the system provider of the Intraday Target Model. "The tender is the best way to fulfill the determined standards while taking into account the needs of the market", said Peter Heydecker, Chairman of the Exchange Council. ACER and the European association of transmission system operators (ENTSO-E) will be constantly informed during the tendering process.

Moreover, the Exchange Council discussed the Capacity Allocation and Congestion Management (CACM) Network Code draft. The Council appreciated the extensive work by ENTSO-E on the basis of the CACM Framework Guidelines issued by ACER. The CACM Network Code is a fundamental contribution to the harmonization of the European power system.

Along with the presentation of the Code, the Exchange Council took note of the suggestions for improvement made by Europex. In some aspects, the Network Code may hinder the integration of the European power market. For instance, the Code makes the authorization of the matching algorithm contingent on another round of approval, putting at risk the timely implementation of Market Coupling. Another example is the harmonization and simplification of cross-border nomination rules which have not been included in the CACM Code, although it is a crucial element to facilitate Market Coupling. At the same time, the Council underlined the importance not to split up the existing integrated German-Austrian price zone to safeguard high liquidity and low transaction costs.

"We are convinced that Europex, ENTSO-E and ACER will work hand in hand to ensure a smooth implementation of Market Coupling initiatives such as the Price Coupling of Regions and to foster the road to the 2014 European Price Coupling", said Jean-François Conil-Lacoste, Chairman of the Management Board of EPEX SPOT. The draft Network Code will be submitted to ACER by the end of September 2012. Europex has laid down its position and submitted its amendment proposals.

Furthermore, the European Power Exchange envisages several enhancements of its 15-minute product. On the German Intraday market, 15-minute contracts will be opened one day in advance for a test period of six months. In parallel, EPEX SPOT will evaluate further improvements which will be presented at the Exchange Council in March 2013. EPEX SPOT also assesses the call of the German regulator, Bundesnetzagentur, for 15-minute contracts on the German Day-Ahead market, which could further help market integration of renewables. However, the question of compatibility with market coupling initiatives remains, as cross-border nominations must occur in full hours. The Exchange Council continues to accompany the Exchange's efforts to respond to market needs and to constantly improve the market design in order to facilitate the German energy transition.

The Council also welcomed the launch of the Austrian Intraday market next month and encouraged the Exchange and its partners to further harmonize as soon as possible the Intraday delivery conditions in Austria with those already available in Germany.

The third Exchange Council in 2012 was held in Paris on 18 September 2012 and chaired by Peter Heydecker, Head of Origination Gas & Power at Vitol. 

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