New balancing products at PEGAS

Technical background, product setup, readiness procedure and customer benefits

GASPOOL Shipper forum, Hamburg, 10. November 2015

2

PEGAS – A European success story

� Since 1. January 2015 all PEGAS activities are bundled at Powernext

� For external purposes (e.g. customer relation) only the brand “PEGAS” is used

78%

3

Balancing trading at PEGAS – Roundup

Introduction of new balancing products

How to become member in new balancing products?

Agenda

4

PEGAS – On the way to EU’s leading balancing platform

Balancing products

Launch VTP Physical Locational Hourly

Apr. 07 PEG’s

Jul. 07 GPL

Oct. 07 NCG

May 11 TTF

Jan. 12 TIGF

Sep. 13 GPL, NCG

Mar. 15 NBP

Jul. 14 ZTP

Apr. 15 ZEE

Nov. 15 GPL, PEG-N, TRS

Mar. 16 NCG GPL, NCG, TTF

PEGAS enables balancing for

market participants

GPL

NCGPEG-N

TRS

NBP

ZEE

ZTP

TTF

AOC

PSV

CEGH

VOB

GPN

PEGAS is approved as trading platform for TSO/MAM

and enables balancing for market participants*

* For the TTF gas market, PEGAS received the approval to act as trading platform for MAM NCG from German regulator BNetzA

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Control energy levy and conversion fee

Control energy levy account (Sep 2015): NCG + 232 Mio. €; GASPOOL + 200 Mio. €

Conversion fee account: NCG - 9,2 Mio. € (Jul. 15); GASPOOL + 1,4 Mio. € (Jun. 15)

0,453 0,453

0,906 0,906

0,000

0,441 0,441

0,882 0,882

0,000

Legally possible upper limit Legally possible upper limit

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me

tho

do

logy

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6

Balancing trading at PEGAS – Roundup

Introduction of new balancing products

How to become member in new balancing products?

Agenda

7

New zonal balancing products

� Needed by Market Area Managers for zonal balancing purposes in additionto existing gas balancing products at the VTP’s of GPL, NCG and TTF

� Following balancing zones are planned for introduction:

� GASPOOL – first markets will start on 17th of November

� H-Gas Zones: Ontras, Gasunie Deutschland, Gascade

� L-Gas Zones: Gasunie Deutschland, Gastransport Nord, Nowega

� NetConnect Germany – start on 1st March 2016

� H-Gas zones: NCG H Nord, NCG H Mid, NCG H South

� L-Gas zones: NCG L West, NCG L East

� Design, trading and settlement in line with existing PEGAS spot products

� Physical delivery (nomination) has to be taken place on dedicated points inside a

zone to cause a physical effect in the market area in the gas quality to which the

trade relates � amendments therefore already made in new KoV VIII for GY 15

Zonal balancing products for the usage by Market Area Manager

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GASPOOL H-Gas

Delivery zone Gascade GUD Ontras

Storage points

• Sp. Rehden• Jemgum I• Jemgum III• Nüttermoor

• Etzel Gas Lager SAL• Etzel EGL• Etzel EKB• Etzel ESE• UGS Etzel• UGS Etzel ESE• UGS Harsefeld• UGS Jemgum EWE• UGS Nüttermoor• UGS Ülsen

• UGS Bad Lauchstädt• UGS Bernburg• UGS Katharina• UGS Kirchheiligen• UGS Kraak• UGS Staßfurt

National cross border points between German market areas

• Kienbaum• Gernsheim• Lampertheim I• Lampertheim IV• Broichweiden Süd• Reckrod I

• Etzel OGE• Bunder-Tief• Emsbüren-Berge• Wardenburg

International cross border points with neighbouring countries

• Mallnow• Brandov-STEGAL• Bunde• Eynatten• Olbernhau II• GREIFSWALD• Greifswald-NEL• Greifswald-OPAL• Brandov-REGULIERT• Greifswald - Entry

• Dornum• Dornum• Ellund• Emden-EPT1• Emden-NPT• Oude Statenzijl H

• Deutschneudorf• Lasow

Production points

GPL – Delivery points locational products 1/2

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GASPOOL L-Gas

Delivery zone GTG GUD Nowega

Storage points • Zone UGS EWE L-Gas • UGS Lesum • Empelde

National cross border points between German market areas

• Zone OGE (L)• Ahlten (Reverse)• Ahlten

International cross border points with neighbouring countries

• Oude Statenzijl • Oude Statenzijl L

Production points • EZONE-SDS• Zone_Produktion• Schneeren• Gr. Giesen HHW

GPL – Delivery points locational products 2/2

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Description of new zonal products

Description Delivery of Natural Gas for the respective delivery period

Delivery zones For Market Area GASPOOL� Ontras H-Gas, GuD H-Gas, GuD L-Gas, Gascade H-Gas,

GTG Nord L-Gas, Nowega L-GasFor Market Area NetConnect Germany

� NCG H Nord, NCG H Mid, NCG H South, NCG L West, NCG L East

Trading platform Continuous trading within the trading system Trayport® ETSSM

Trading hours Nonstop, 24/7, Monday to Sunday

Order books New order books are merged inside one per market area� One locational order book GASPOOL (covers 6 zones)� One locational order book NCG (covers 5 zones)

Delivery periods Within-Day, Day-Ahead, Weekend, Saturday, Sunday, Individual Days

Price ticks EUR 0.025 per MWh with three decimal digits

Volume ticks 1 MW

Contract size 1 MW x number of delivery hours inside contract

Min. lot size 1 MW

Zonal products

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Setup of zonal products in Gas Direct Screen

Dynamic setup in order books for best visibility and easy trading

Further comments:

� Inside Gas Direct Screen zonal products of

one market area will become tradable in an

own order book

� Only products with an active order are

shown and are executable in the order book

� Products without order entry will be hidden

until order is entered as illustrated below

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New hourly balancing products

� Supportive also for gas & power asset manager and gas shipper

� Minimize costs/penalties for shipper in balancing regimes with hourly incentives

� Hedging/trading of volatilities resulting from renewables (wind, solar)

� Increase flexibility/profitability for gas storage management according price signals

� Hourly products on VTP GASPOOL, NCG and TTF are planned for 01.03.2016

Hourly products simplifies hourly based asset management

Source: NCG information event for BGM, 28.01.2015 – Within-Day obligations (WDO’s) for RLMmT

Hourly imbalances !!!� Will be penalized starting on

the 1st of October 2016, if MAM

buy and sells control energy for

the same delivery day

� Penalty = Within-day flexibility

charge x Σ hourly imbalances

� Hedging with hourly products avoids any risk of imbalances

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Description of new hourly products

Description Delivery of Natural Gas for each delivery hour

Delivery zones Virtual trading point� TTF, GPL, GPL L, NCG, NCG L

Locational points in NCG-L� Elten, Vreden

Trading platform Continuous trading within the trading system Trayport® ETSSM

Trading hours Nonstop, 24/7, Monday to Sunday

Order books TTF, GPL, GPL L, NCG, NCG L, Elten and Vreden

Delivery periods 12 individual hours from the next full hour after consideration of a lead time of 3 hours

Price ticks EUR 0.025 per MWh with three decimal digits

Volume ticks 1 MW

Contract size 1 MW x 1 delivery hours = 1 MWh

Min. lot size 1 MW

Hourly products

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Trading and clearing of hourly products

Tradability and delivery of individual hours at PEGAS

Trading of delivery hour 6-7

for 15th of June (tradable on 12 hours in advance)

Minimum lead time

Delivery ECC

1 hours

TSO/MAM

2 hours

6.0015.00 3.00 4.00 6.00 7.00 15.00 16.00 18.00 23.00 0.00 5.0019.000.00

14 June | 15 June ���� 15 June | 16 June ����

� Figure above illustrates the area of use for hourly products at PEGAS

� Each delivery hour is for 12 hours in advance tradable, under consideration of a

lead time of 3 hours

� Lead time of 3 hours, due to existing standards inside internal processing time for (re-) nomination on VTP and physical points:

� ECC: 1 hour lead time

� TSO/MAM: 2 hours lead time

Delivery hour is for a time period of

12 hours in advance tradable

12 hours

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Setup of hourly products in Gas Direct Screen

Innovative setup in order book to simplify usage

Help desk : +49 341 2156-222 Local time (CET):

Wednesday 29 July 2015 10:25

NCG+

GPL+

REAL TIME INFO REAL TIME INFO

Day Qty Bid Ask Qty Last Qty Bid Ask Qty Last Dir Move TQty

29 July

Hour+3 33 18,000 19,000 40 18,775 18,775 � Paid 123

Hour+4 33 18,000 19,000 40 18,775 18,775 � Paid 123

Hour+5 100 18,000 19,000 40 19,000 19,000 � Given 124

…

Hour+14 100 18,000 19,000 40 19,000 19,000 � Given 124

Hour+15 80 17,000 20,000 50 24,700 24,700 � Given 125

Elten+

REAL TIME INFO

Qty Bid Ask Qty Last

18,775

18,775

19,000

19,000

24,700

Further comments:

� Inside Gas Direct Screen hourly products will become tradable in an own workbook

� Start of delivery: next full hour + number of hours named in the product

� Hour+3: 11.00 a.m. + 3.00 hours = 14:00 � delivery hour from 14.00 to 15.00 hour

� Hour+12: 11.00 a.m. + 12.00 hours = 23:00 � delivery hour from 23.00 to 24.00 hour

Time: 10:25 a.m.

16

Balancing trading at PEGAS – Roundup

Introduction of new balancing products

How to become member in new balancing products?

Agenda

17

Member readiness – legal aspects

a. Existing member in quality-specific gas products (H-Gas, L-Gas)� New balancing products becomes automatically tradable without signing any form

� ECC will use existing members balancing agreement for nomination of new balancing products

� For hourly products on locational points, ECC uses two new ECC shipper codes

b. Existing member, but new in quality-specific gas products (H-Gas, L-Gas)

� Have to sign ECC form TP_PWX_01... for trading new balancing products� Once TP form is signed and approved, zonal, local & all hourly products are tradable

� Precondition: Existing H-Gas or L-Gas balancing agreement with NCG or GASPOOL

c. New PEGAS member

� Need of H-Gas or L-Gas balancing agreement with GPL, NCG and TSO (TTF)

� Have to sign ECC form TP_PWX_01… for trading quality-specific products

� Have to apply for PEGAS membership under membership@powernext.com

Smooth setup of new products for existing and new PEGAS member

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Member readiness – clearing aspects

� ECC will use the same nomination procedures/processes as today

� Single sided nomination on behalf of the customer with established procedures

� For nomination of new zonal products for GASPOOL and NCG

� ECC will use already existing shipper codes of members for quality-specific gas products

� Common nomination of new zonal products with existing quality-specific products by usage of one ECC shipper code

� No separation of quality-specific deals from zonal or local deals inside ECC clearing files and ECC reports – those information are available inside PEGAS trading system and PEGAS back office tool, accessible via web browser

� Nomination of hourly products as for Within-Day trading, but reduction of delivery

period to number of traded hours

� Nomination of new hourly products on the VTP’s but also Elten and Vreden – ECC will use already existing shipper codes of members for global and low-calorific gas products

� Common nomination of new hourly products on the VTP’s with existing global and quality-specific products by usage of one ECC shipper code

� Nomination of new local quality-specific hourly products at Elten and Vreden with two extra ECC shipper codes

Clearing, settlement and delivery for new balancing products

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Member readiness – technical aspects

� Impact for Members using direct connection to Trayport Global Vision� New products are already displayed in the existing workbook

� Users will need to disconnect and reconnect once to load the new workbook

� Impact for Members using Trayport Trading Gateway� All new balancing products will have to be mapped prior to launch date

(mapping file was already sent as part of a customer information)

� These products are included in the Gold Mapping service provided by Trayport

� Simulation for new balancing products is possible since September 15 and instructions therefore were given in the last Customer Information

� Questions – Do not hesitate to contact the PEGAS Sales team:� Phone Leipzig +49 341 2156555; Email sales@eex.com

� Phone London +44 207 8627555; Email sales@eex.com

� Phone Paris +33 1 73 03 76 09; Email sales@powernext.com

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How easy is it to trade these new products?

Contact your PEGAS sales manager

If needed, complete ECC forms for balancing

products

TP PWX 01a

If needed, request setup of new PEGAS trader

You’re ready!

Any more questions?

More information available under www.pegas-trading.com

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Delivery points for local/hourly products to cause a physical effect in the gas grid

Elten

Vreden

VTPTTF

VTPTTF

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New: Average Price of Delivery Day (APDD)

� Daily Reference Price (DRP) for GPL, NCG and TTF with 01st of October

2015 no longer valid for charging imbalances between MAM and shipper

� Considers no Within-Day trades and therefore no longer suited for MAM/TSO

� New Average Price of Delivery Day (APDD) covers all regulatory demands

� Volume weighted average price for PEGAS trades per delivery day, considers

� Hourly, Within-Day, Day-Ahead and Individual Day products traded on the VTP as long as they refer to the same delivery day

� Weekend contracts, which cascade into several delivery days and therefore affect the respective delivery day (e.g. Saturday, Sunday but also sometimes Monday or Friday)

� Multiple day products (e.g. Christmas), which cascade into several delivery days and therefore affect the respective delivery day

� Global and quality-specific gas trades done by all member (not only by GPL and NCG)

� Will be calculated and published separately as:

� APDD GPL, APDD NCG, APDD TTF

GABi Gas 2.0 and NC Balancing requires new reference price

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Balancing zones inside market area NCG

Source: NCG

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Contact list

Sales team Leipzig – Support in English and German

Tobias Lucht

Tobias.lucht@eex.com

+49 341 2156 215

Roman Zyuzev

Roman.zyuzev@eex.com

+49 341 2156 211

Sales team London – Support in English

Ling-Lyn Thakker

Ling-lyn.thakker@eex.com

+44 207 862 7554

Sales team Paris – Support in English and French

Richard Katzr.katz@powernext.com+33 (0)1 73 03 96 02

Sophie Asseo Mouquets.asseo@powernext.com+33 (0)1 73 03 76 04

Jamel Hadaouij.hadaoui@powernext.com+33 (0)1 73 03 76 09

Ruben Mamour.mamou@powernext.com+33 (0)1 73 03 76 06

Membership – Support in German, English and French

Alexandra Philippe

+33 (0)1 73 03 76 88

Olatz Garcia

+33 (0)1 73 03 76 70

Susanne Döbel

+33 (0)1 73 03 76 71

Adrien Calvez

+33 (0)1 73 03 76 69

Clearing – Support in German and English

ECC is available for all clearing questions. Contact details can be found on www.ecc.de

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NCG H-Gas

Delivery zone NCG H Nord

Storage points

• Friedeburg-Etzel, Bitzenlander Weg 4• Friedeburg-Etzel, Bitzenlander Weg 2• Friedeburg-Etzel, Bitzenlander Weg 3,

Speicher• Friedeburg-Etzel, Schienenstrang, EGL• Speicher Epe H• Speicher Gronau-Epe H1• Speicher Krummhörn• Emlichheim - Kalle - 1 (UGS-E)

• Epe - (UGS-A) II• Epe - (UGS-E) I• Epe - III (UGS-E)• Epe - IV (UGS-A)• Gronau - Epe - 11 (UGS-E)• Gronau - Epe - 13 (UGS-E)• Kalle (UGS-A)

• Leer - Mooräcker - 1 (700096 Nüttermoor H UGS-E)

• Leer - Mooräcker - 2 (700096 Nüttermoor H UGS-A)

• Leer - Mooräcker - 3 (700096 Jemgum I UGS-E)

• Leer - Mooräcker - 4 (700096 Jemgum I UGS-A)

• Xanten - 1 (UGS-A)• Xanten - 1 (UGS-E)

National cross border points between German market areas

• Bunder Tief• Kienbaum• Quarnstedt

• Steinitz• Wardenburg• Emsbüren

International cross border points with neighbouring countries

• Dornum• Ellund• Emden EPT• Emden NPT

• Oude Statenzijl• Emden EMS/ EPT• Emden PPC/ NPT

Production points• Engerhafe• Leybucht• Rull

NCG – Delivery points locational products 1/3

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NCG H-Gas

Delivery zone NCG H Mid NCG H South

Storage points• Speicher Hähnlein• Speicher Stockstadt

• Haiming 2-7F• USP Haidach• Inzenham-West USP• Wolfersberg/USP• Haiming 2 7F

• Speicher Bierwang• Speicher Breitbrunn• Speicher Eschenfelden• Fronhofen 1• RC Speicher Fronhofen

National cross border points between German market areas

• Lampertheim I• Reckrod I• Broichweiden Süd

• Gernsheim• Lampertheim IV

International cross border points with neighbouring countries

• Bocholtz• Eynatten• Bocholtz• Eynatten-Raeren• Bocholtz - Vetschau• Lichtenbusch

• Überackern 2• Überackern• Wallbach• Medelsheim• Oberkappel• Waidhaus• Kiefersfelden-Kufstein• Medelsheim

• Oberkappel• Remich• Überackern• Waidhaus• Wallbach• RC Basel• RC Lindau• RC Thayngen-Fallentor

Production points

NCG – Delivery points locational products 2/3

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NCG L-Gas

Delivery zone NCG L West NCG L East

Storage points• Speicher Epe L• Speicher Gronau-Epe L1• Speicher Gronau-Epe

National cross border points between German market areas

• Ahlten• Zone GUD (L)

International cross border points with neighbouring countries

• Elten• Tegelen• Haanrade• Zevenaar

• Vreden

Production points• Bad Bentheim, Deilmannstraße 2• Steinbrink Produktion

NCG – Delivery points locational products 3/3