<<

Nord Pool Europe’s Leading Power Market

Tallinn, 15 märts 2016 Europe’s leading power market

FINLAND

Nordic/Baltic and UK – day-ahead and intraday

German market – intraday

ESTONIA Serviced markets

DENMARK

UK

GERMANY

CROATIA BULGARIA

17 March 2016 Europe’s leading power market

FINLAND

Appointed NEMO SWEDEN

Awaiting NEMO appointment NORWAY Serviced markets LATVIA

Norway not part of EU LITHUANIA (Nord Pool operate on a Licence from The Norwegian

Water Resources and Energy Directorate) UK POLAND NETHER- LAND

FRANCE

CROATIA BULGARIA

17 March 2016 Volume growth from 1996 A total of 489 TWh traded in 2015 - Day-ahead market Nordic/Baltic 374 TWh - Day-ahead market UK 110 TWh 600 - Intraday market Nordic/Baltic/Germany 5 TWh

500

400

300

200

100

0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Volume traded in TWh

17 March 2016 CEO

Mikael Lundin

Corporate Business Business Operations Business Development Marie Thuestad Hans Randen

IT Development Finance/HR/Administration functions Chris Whellams Erling Thiis functions

Markets Legal/ Market Surveillance/ Compliance Marianne W Jenssen Camilla Berg

Communications Business Units Stina Johansen

Central European Market Coupling Consulting Nordic & Baltic UK & Ireland Markets Serviced Markets Services Sami Oksanen Richard Sarti Lina Masiuliene Hans-Arild Act Hans Randen Jan Rönnback Bredesen

17 March 2016 Our history

1991 1993 1996 1998 1999 2000 2002 2008 2010 2010 2012 2013 2014 2014 2014 2015 2016

17 March 2016 Stakeholders

 Owned by Nordic and Baltic transmission system operators

 Regulated in Norway by Norwegian Water Resources and Energy Directorate (NVE) – Norway – 28.2% – Estonia – 2%

Svenska Kraftnät – Sweden –  Nominated NEMO in Austria, Denmark, 28.2% Ligrid – Lithuania – 2% Estonia, Finland, , Germany, Great Britain, Latvia, Lithuania, the and Sweden .dk – Denmark – 18.8% AST – Latvia – 2%

Fingrid – Finland – 18.8%

17 March 2016 Our focus and established expertise is in efficient power trading Our role

 To provide liquid, efficient and secure power markets to our customers

 To provide accurate information to the whole market, ensuring transparency

 To provide equal access to market for everyone wanting to trade power

 To be the counterparty for all trades; guaranteeing settlement and delivery

17 March 2016 Our customers

 380 customers from 20 countries trade in our markets

 Our customers are typically power producers, suppliers and traders

 Large end-users also trade on the markets and buy power directly through Nord Pool rather than a supplier

17 March 2016 The day-ahead market

 An auction of power for delivery the following day Price (EUR/MWh)

 Prices are calculated based on supply, demand and transmission capacity (how much power can be moved from one area to another)

 Liquidity is key: A market with a lot of power Market traded in and out leads to depth in the market price and reliable index prices

Turnover Volume (MWh)

17 March 2016 The intraday market

 The intraday market is continuous, and power trading takes place until 30 minutes before the power is delivered

 The intraday market offers customers opportunities for risk reduction as well as increased profit

 TSOs publish their power transmission capacity to the intraday market – if transmission capacity is available, neighbouring countries can trade

 Members ‘offer’ how much power they want to sell and buy and at what price. Trading is then set based on a first-come, first-served basis between a seller and a buyer

17 March 2016 How the markets work

“The day-ahead and intraday supplement each other, with the intraday market acting as a balancing market to the day- ahead”

17 March 2016 The Baltic market

10 Years 36 Hours Financial market (Nasdaq OMX) Day-ahead Used for managing risks. The system price is used as reference price. EPAD , EPAD Riga (Elering; AST) PTR-limited auctions on EE-LV border Reference price Adjustment of trades for financial in intraday market Day-ahead market (Nord Pool Spot) market

Day-ahead auction of power for delivery the next day. Intraday market Nord Pool Spot calculates power area prices based on supply and demand for every hour the following day.

Intraday market (Nord Pool Spot) Continuous cross area and cross border trading up to 30 Balancing minutes before delivery to adjust power production or consumption plans.

Balancing market (TSOs) Operated by the respective transmission system operators. Based on bilateral trade, MO is done based Physical delivery on the lowest price of power

17 March 2016 Towards a common European power market A common European market

 The concept of market coupling was originally developed by Nord Pool and has been successfully implemented in the Nordic & Baltic market over the last 20 years

 Efficient use of transmission capacity by trading energy across borders

 Close cooperation between TSOs, Power Exchanges and National Regulators across Europe

17 March 2016 A common European market (end Q1 2016)

FINLAND

Multi Regional Coupling – Price Coupling of Regions SWEDEN

4 MMC NORWAY Independent ESTONIA LATVIA

DENMARK LITHUANIA A fair and transparent determination of day-ahead power prices is a key UK POLAND NETHER- factor for the success of the integration LAND GERMANY BELGIUM

of the European power market. CZECH REPUBLIC SLOVAKIA

FRANCE AUSTRIA HUNGARY SWITZERLAND ROMANIA SLOVENIA

CROATIA BULGARIA ITALY

SPAIN PORTUGAL

17 March 2016 Price Coupling of Regions (PCR)

Price Coupling of Regions (PCR); Seven Power Exchanges cooperates since 2010 in order to achieve a common European day-ahead price calculation covering

 Common algorithm (Euphemia) used to calculate power prices

 Common system design (PMB) ensuring robust price coupling operations within and between power exchanges and towards TSOs

 Each power exchange responsible for own operations, including market (customer) interfaces and pre-post processes, ex. bidding, result distribution, clearing/settlement

 Open for all European PXs based on contracts and different alternatives

17 March 2016 System price and area prices

Elspot prices 60

50

40

30

20

10

0 15 - Jan 15 - Feb 15 - Mar 15 - Apr 15 - May 15 - Jun 15 - Jul 15 - Aug 15 - Sep 15 - Oct 15 - Nov 15 - Dec 16 - Jan 16 - Feb SYS SE4 FI EE LV LT

17 March 2016 Price and võlume dynamics

70 1200

60 1000

50 800

40 600 30

400 20

200 10

0 0 13 - 13 - 13 - 13 - 13 - 13 - 13 - 13 - 14 - 14 - 14 - 14 - 14 - 14 - 14 - 14 - 14 - 14 - 14 - 14 - 15 - 15 - 15 - 15 - May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

EE Buy LV Buy LT Buy Elspot prices in EUR/MWh EE Elspot prices in EUR/MWh LV Elspot prices in EUR/MWh LT Linear (LV Buy) Linear (LT Buy) Linear (Elspot prices in EUR/MWh EE) Linear (Elspot prices in EUR/MWh LT)

17 March 2016 Weekly Day-ahead prices

Weekly DA prices 70

60

50

40

30

20

10

0 48 - 15 49 - 15 50 - 15 51 - 15 52 - 15 53 - 15 01 - 16 02 - 16 03 - 16 04 - 16 05 - 16 06 - 16 07 - 16 08 - 16 09 - 16 10 - 16 SE4 FI EE LV LT

17 March 2016 nordpoolgroup.com

Ingrid Arus [email protected] Tel: +372 5341 2159