1 epex overview

8/2/2019 1 Epex Overview

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Information

The objectives of this module are to understand thefunctioning of the power exchange and the principles

governing trading on EPEX Spot

Version of 1 December 2011


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Liberalization of European power market

1998 : Transcription of the Directive in German and Austrian law 1996 : European directive on energy market liberalization

2000: Transcription the Directive in French law

: s a s men o owernex

2002 : Merger of the former Leipzig Power Exchange LPX andthe EEX, Frankfurt, to the European Energy Exchange

17 September 2008: Creation of EPEX Spot SE, owned

50/50 by Powernext SA and EEX AG

01 January 2009: Transfer of Powernextpower spot into EPEX Spot SE

01 September 2009: merger of EEX Power

Spot into EPEX Spot SE



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Presentation and fundamentals of EPEX

Spot

EPEX Spot is an organized market :

Optional and anonymous

accessible to all participants satisfying admission requirements

EPEX Spot objectives are

To ensure a transparent and reliable wholesale price formation mechanism

To standardize and harmonize trading and clearing processes

To be a leader in the European power market integration and

To facilitate a more effective governance and implementation of market couplingprojects



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Organisation and Supervision

SupervisoryAuthorities

ExchangeCouncil

RepresentsExchange members Cooperates and

exchangeinformation

ExchangeCouncil

Board of DirectorsDr. Hans-Bernd Menzel, ChairmanJean-Franois Conil-Lacoste, CEO

Iris Weidinger, EEX CFOThierry Morello, COO

MarketSurveillance

Office

Manages the exchange

Monitors transactions Reports to the Board

Organizes trading Admits new members Elaborates market rules Defines products specifications



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The composition of the Exchange Council reflects the diversity of exchangemembers profiles.

The members of the Exchange Council are elected for a three-year period.The first Exchange Council was nominated by the Board.

Focus on the Exchange Council

The Exchange Council: decides on changes to the rules upon proposal by EPEX Spot;

gives approval on the introduction of new trading systems;

gives approval on the introduction of new contracts

may ask EPEX Spot SE to report on market environment and activity, projects,

changes to markets and products and market surveillance activities (on ananonymous basis).



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Focus on the Exchange Council

16 members

7 utilities and energy trading companies 2 municipals and regional suppliers 2 TSOs 2 banks and financial service provider

and 1 clearing member 1 other concerned party



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Focus on Market Surveillance

Market Surveillance Office is an independent body within EPEX Spot whose dutiesare:

Permanent monitoring of trading on the exchange and settlement of exchangetransactions

S stematic and com lete recordin of data from tradin on the exchan e and

settlement of exchange transactions

Relevant investigations

Notification of the Board in case of suspected violations of market rules and othergrievances affecting proper trading and settlement



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Market Surveillance is not authorized to give sanctions.

Market Surveillance may request of market participants : Disclosure of information and documents; Inspections; Disclosure of the economic beneficiary of any transaction.

Focus on Market Surveillance

Market Surveillance may transmit trading data to supervision authorities providedthat they are bound by an obligation of confidentiality.



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Exchange Structure

EXCHANGEMEMBER

Trading

Sendingof trades

Settlement

TSOs Scheduling

Member

Settlement



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EPEX Spot power markets

4 market areas: Germany/Austria

Germany France

Switzerland

5 market segments: German/Austrian Auction

French Auction

Swiss Auction

German Intraday French Intraday



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Market Areas

EPEX Spot covers four market areas

French Market Area, delivery on the grid managed by RTE

German/Austrian Market Area, delivery on either of the following TSOs zones: Amprion Tennet

ENBW Transportnetz Austrian Power Grid.

German Market Area, delivery on either of the following TSOs zones: Amprion Tennet 50Hertz ENBW Transportnetz

Swiss Market Area: delivery on the grid managed by Swissgrid.



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Delivery: Main Principles

Transactions are nominated by ECC to the relevant TSO on the balanceresponsible perimeter designated by the member.

Double-sided nominations on the German/Austrian and Swiss market areas

Single-sided nominations on the French market area

The TSOs manage and guarantee delivery for their respective zone.

Real-time balancing mechanism managed by TSOs maintains grid balance ontheir respective zone in the event of delivery failures.



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ECC, the Clearing House

ECC has been the clearing house of:

EEX AG since 2006,

Powernext natural gas market,

All EPEX Spot market segments,

EEX Power Derivatives AG.

ECC ensures financial security for all transactions:

By acting as a central counterparty between buyer and seller

By setting up guarantee mechanisms such as security

requirements

Clearing rules are described in ECC Clearing Conditions.



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Market Segments and Trading Systems

EPEX Spot Day-Ahead Auction

Lists standardized hourly and block contracts

Uses EPEX Spot Trading System for the French Auction, for theGerman/Austrian and Swiss Auction

electronic platform accessible via the Internet

EPEX Spot Day-Ahead Auction France and Germany/Austria are price-coupled with Belpex and APX within CWE Market Coupling.

Available capacities between the CWE and the Nordic regions are allocatedvia volume-coupling (Interim Tight Volume Coupling - ITVC).



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EPEX Spot Intraday

Lists hourly and block contracts

Allows trading until 45 minutes before delivery

Market Segments and Trading Systems

Allows cross-border trading between France and Germany thanks to aconnection between the trading system and the intraday capacity platformmanaged by Transmission System Operators.


1 epex overview

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