Upload
erik-hicks
View
217
Download
2
Embed Size (px)
Citation preview
APEx Conference – 11-13 Oct. 2004 1
Powernext SA, the French Power Exchange: Three Years Later…
Jean-François Conil-LacosteChief Executive Officer
Leipzig, 11 October 2004
APEx Conference – 11-13 Oct. 2004 2
Overview
Part 1. Goals and implementation of the liberalization process
Part 2. Overview of the wholesale electricity markets
Part 3. The structure of the French power market
Part 4. Powernext SA : Products and results
Powernext organisation
Powernext Day-Ahead™
Powernext Futures™
Part 5. Major challenges for the future
APEx Conference – 11-13 Oct. 2004 3
Part 1. Goals and implementation of the liberalization process
ACCOUNTABILITYACCOUNTABILITY[[actors]actors]
REGULATION REGULATION [[marketmarket]]
LIBERALISATIONLIBERALISATION(supplies)(supplies)
DEREGULATIONDEREGULATION
SERVICESERVICE[public][public]
APEx Conference – 11-13 Oct. 2004 4
Key dates in France
February 2000: French electricity law, transposition of the 1996 electricity directive
April 2000: creation of CRE, Commission de Régulation de l’Energie
July 2000: creation of RTE, the French grid operator
July 2001: creation of Powernext SA, the French power exchange
November 2001: launch of Powernext Day-ahead
January 2003: modification of the French electricity law, last obstacle to trading are waived
July 2004: opening to non household customers
Part 1. Goals and implementation of the liberalization process
APEx Conference – 11-13 Oct. 2004 5
Part 2. Overview of the wholesale electricity markets
The power value chain in a deregulated environment
Wholesale market
TSO
RTEDistributionEDF + 170
distributors
Final saleretail
Powernext and brokers
TradingTrading
Domesticclients (30 millions, 300TWh)
Eligiblecustomers (3 millions)
Eligiblecustomers (3 millions)
Final saleindustryFinal saleindustry
Integratedproduction
EDF
IndependentproductionIndependentproduction
Deregulation introduces new economic functions and the structuring of organized and bilateral wholesale markets
CNR : 3000 MWSNET : 2500 MWVPP : 6000 MWShem : 770 MW
APEx Conference – 11-13 Oct. 2004 6
Part 2. Overview of the wholesale electricity markets
Size of the
physical market (TWh)
Legal market opening
(%)
Switching estimates for the calendar
year 2002 (large industrial users)
Size of the wholesale
market (estimation, in
TWh)
Scandinavia
390 100% More than 50% 1900
Germany 490 100% 20% 2500
France 440 68% 15% 250 to 500
UK 335 100% 15% 2000
Netherlands
105 100% 20% 300
Spain 205 100% 20% 150 to 200
Italy 300 78% 15% na
Source : European Commission
APEx Conference – 11-13 Oct. 2004 7
Over the counter direct wholesale market
ProducersTraders
…
Part 2. Overview of the wholesale electricity markets
Organised wholesale markets
Eligible customers
Retail market
Suppliers Producers Traders
Over the counter intermediated wholesale market
Brokers
…
APEx Conference – 11-13 Oct. 2004 8
Part 3. Structure of the French power market
D-x D-1 D=delivery
« Day-ahead »: exchange and bilateral market
Powernext Day-Ahead™ Launched on 26 Nov. 2001
Forwards, futures, options, and swaps:exchange and bilateral market
Powernext Futures™ Launched on 18 June 2004
Hour-ahead : Intraday (3-hour delivery)
Balancing market (real time) : exchange and bilateral market
Delivery on RTE gridfor both Powernext Day-ahead and Powernext Futures
APEx Conference – 11-13 Oct. 2004 9
Powernext is a non obligatory exchange which results of a private initiative
Powernext is a financial institution
stable and neutral shareholding with a capital of 10 M€
solid market model and IT systems
Powernext brings a price reference
Short-term: adjustment and/or volume risk management - Powernext Day-AheadTM
Long-term: price risk management – Powernext FuturesTM
Part 4. Powernext: corporate organisation and objectives
7,80%
7,80%
7,80%
7,80%
5,00% 5,00%
17,00%
34,00%
7,80%
51,0 %
24,5 %
24,5 %
HGRT
APEx Conference – 11-13 Oct. 2004 10
Powernext manages a market
centralized and transparent insuring liquidity and non-discriminatory access
supervised by a structuring regulation resting on market rules and a strong presence of regulation authorities (AMF, CRE)
and insures the safety of transactions.
LCH.Clearnet guarantees the financial commitments and systematic risks
RTE (French TSO) insures physical engagements
Part 4. Powernext: market model
Law Sphere of activity
Regulatory Bodies
Financial Law
• Trading• Clearing• Product specifications
CECEI: Comité des Etablissements de Crédit et des Entreprises d'InvestissementAMF: Autorité des Marchés Financiers
French Electricity Law
(2000 and 2003)
• Membership• Delivery
CRE: Commission de Régulation de l'Energie DIDEME: Direction de la Demande et des Marchés Energétiques
APEx Conference – 11-13 Oct. 2004 11
Powernext® counts 47 members among producers, suppliers, industrials, distributors and traders. However, the individual market share of the most active member stays below 11%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
07/0
1/03
06/0
2/03
08/0
3/03
07/0
4/03
07/0
5/03
06/0
6/03
06/0
7/03
05/0
8/03
04/0
9/03
04/1
0/03
03/1
1/0
3
03/1
2/03
02/0
1/04
01/0
2/04
02/0
3/04
01/0
4/04
01/0
5/04
31/0
5/04
Mar
ket s
hare
20
25
30
35
40
Num
ber
of m
embe
rs
Cumulated market share of the 5 most active members per week
Average market share of the 3 most active members per week
Number of members
Part 4. Powernext Day-AheadTM : members
APEx Conference – 11-13 Oct. 2004 12
More than 9 000 000 MWh in 2004 (already higher than 2003 volumes)
Part 4. Powernext Day-AheadTM: volumes
Powernext Day-Ahead™ - Monthly Volume in MWh
0
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
900 000
1 000 000
1 100 000
1 200 000
1 300 000
1 400 000
APEx Conference – 11-13 Oct. 2004 13
900000
1000000
1100000
1200000
1300000
1400000
1500000
01/05/04
05/05/04
09/05/04
13/05/04
17/05/04
21/05/04
25/05/04
29/05/04
02/06/04
06/06/04
10/06/04
14/06/04
18/06/04
22/06/04
26/06/04
30/06/04
04/07/04
08/07/04
12/07/04
16/07/04
20/07/04
24/07/04
28/07/04
MW
h
5
10
15
20
25
30
35
40
€/M
Wh
Daily Consumption Pow ernext Day-Ahead™ Baseload Price
Part 4. Powernext Day-AheadTM: a reference
Outside and unpredictable factors create a need for adjustment the following day amounting to 10% of the total consumption. Powernext Day-Ahead™ is a tool to manage this risk.
Powernext Day-Ahead™ is considered as a short-term reference in France with :
a strong correlation between Powernext prices and power consumption on the French hub
APEx Conference – 11-13 Oct. 2004 14
a strong correlation between Powernext prices and the weather
NextWeather France indice and average prices on Powernext(moving average 7 days)
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
01/02/04
11/02/04
21/02/04
02/03/04
12/03/04
22/03/04
01/04/04
11/04/04
21/04/04
01/05/04
11/05/04
21/05/04
31/05/04
10/06/04
20/06/04
30/06/04
10/07/04
20/07/04
30/07/04
09/08/04
19/08/04
29/08/04
° C
18
20
22
24
26
28
30
32
34
36
38
€ / M
Wh
Spread betw een the daily NextWeather France average and its 25-year average Average price on Pow ernext Day-Ahead™
Part 4. Powernext Day-AheadTM : prices
APEx Conference – 11-13 Oct. 2004 15
Part 4. Powernext Day-AheadTM: market resilience
Price variations resulting from additionnal purchase and sale orders
0,0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
21 22 23 24 25 26 27 28 29 30 31 32 33 34 35Week
€/M
Wh
Aditionnal 100 MW purchase and sale order Aditionnal 50 MW purchase and sale order
APEx Conference – 11-13 Oct. 2004 16
A future contract is a standardized agreement to sell or buy on an exchange a specific amount of electricity at a particular price on a stipulated period
The aims of Powernext Futures™ are the following :
Proposing to members the appropriate contracts to manage their risk exposure to French electricity price fluctuations.
Creating indisputable reference prices on the forward curve
Part 4. Powernext FuturesTM: overview
Powernext offers the following futures with physical delivery :
3 monthly contracts
4 quarterly contracts
2 yearly contracts
APEx Conference – 11-13 Oct. 2004 17
300
400
500
200
100
Time
Consumption
600
Consumption forecast
J F M A M J J A S O N D
Visibility:purchaseCalendar
2004
Flexibility:purchase
monthly and quarterly contracts
Daily balancing
Part 4. Powernext FuturesTM : dynamic management of the consumption
APEx Conference – 11-13 Oct. 2004 18
Part 4. Powernext FuturesTM : market model
NOMINATION
TRADING
NOVATIONTRANSFORMATION
POSTING
POSITION MANAGEMENT
CLEARER
BALANCE RESPONSIBLE
TRADING MEMBER
DELIVERY
Continuous trading
Internet access: Trayport system
LCH.Clearnet is the CCP (central counter-party) of all trades
Secures the market through a system of margins and deposits
Delivery in compliance with RTE requirements
APEx Conference – 11-13 Oct. 2004 19
Part 5. Major challenges for the future
Consolidate the launch of Powernext Futures™ market with physical delivery (potential transition towards a cash settlement market)
Contribute to the market opening to all professionals in July 2004 making them more price-sensitive will make Powernext’s role as generator of short, medium and long term reference indexes even more crucial
Interconnections: a crucial first step towards a single market
Feasibility study for the implementation of market-based mechanisms in order to manage congestions on the Belgian, Spanish and Italian borders in close coordination with national TSOs and regulators
Other energies and products are considered such as natural gas, greenhouse gas emissions and weather derivatives
APEx Conference – 11-13 Oct. 2004 20
Contacts
Website : www.powernext.fr
Telephone : +33 1 73 03 96 00
Fax : +33 1 73 03 96 01
E-mail : [email protected]