power exchange prerequisites, planning and key price drivers - - PowerPoint PPT Presentation

En.trading 016 - Tirana

 IBEX perspective on setting up a

power exchange – prerequisites, planning and key price drivers

En.trading 016 - Tirana

Компенсиране на изоставането Стратегическо партньорство за БЕХ ЕАД

Prerequisites for PX establishment

What everything was based on. Legal and organizational environment on the Bulgarian power market.

The IBEX project scope

What we have had to do? Concept and preliminary decisions.

Project launch

Milestones, goals and strategic decision taken.

Project accomplishment and Go-live

Customer acquisition process, Dry run, statistic results and price drivers.

IBEX in development

PX development, new market segments and the integration process.

IBEX

and the regional power markets

Political support, competent personnel and plenty of enthusiasm. Further process of deregulation and market liberalization resulting in reduction of the regulated market share up to 40% of the total consumption (end of 2015). Cross border explicit allocation of the available capacities, where there is a common rules for allocation on the Serbian, Romanian and Greek borders and 50/50 allocation on the Turkish and Macedonian borders. Functioning balancing market administered by the TSO, with hourly prices for surplus and deficit. Functioning bilateral contracts market, administered by the TSO (hourly nominations), with more than 50 active licensed energy traders and 10 generators, as well as more than 3000 industrial consumers (end of 2014) on the free market, all organized in the Balance Groups. Electricity Market Rules defines all the framework for the electricity market organizations, the activities of the PX Operator, the balancing market, the balancing groups organization and all the contractual relations between the market participants. Energy law provisions defining the license for the “organized power exchange market” and referring all the market organization to the Electricity Market rules.

En.trading 016 - Tirana

Prerequisites for PX establishment

What everything was based on. Preconditions.

En.trading 016 - Tirana

The IBEX project scope (1)

What we have had to do

Day Ahead market Intraday market

Balancing market

IBEX EAD – DAM, ID and part of the BC on the OMP (organized market place) Balancing of the PS ESO EAD

Years, months, weeks Day Ahead Hours, minutes Real time

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The IBEX project scope (2)

IBEX role on the energy market

Power exchange market

Organized electricity market

• n which trading is

done day ahead (D-1) Minimal risk

• f acts of

market power Conditions for a greater transparency

• f the market

Options for

• ptimization
• f the TP

portfolio Encouraging entry of new market participants Conditions for a competitive and transparent market environment Setting a clearing price for the market area

En.trading 016 - Tirana

The IBEX project scope (3)

The power exchange operator is a counterparty to all transactions concluded on the day ahead market(CCP) The power exchange operator organizes a market for electricity, on which a reference price is formed for each delivery hour The power exchange operator monitors the market and notifies in case of market abuse or acts of market power The power exchange operator bears all the risk stemming from the financial relationships between TP

TRADERS CONSUMERS GENERATORS

The market concept

En.trading 016 - Tirana Strategic decisions to be taken

IBEX

Service Provider

&

Partnership ???

A

Potential benefits

A

Experience in operating the power exchange and a leader in the integration processes Experience in setting a PX markets in partnership with other

• perators,

consultancy expertise Own platforms, IT infrastructure, PCR compatible Relatively low price of the market operating service

Requirements

B C D B C D

Reliability of the solution, minimum risk Following the proven experience in implementation

• f power

exchanges Flexibility and security in adapting the systems Relatively low financial burden for market participants and accumulation of investment capital

The IBEX project scope (4)

En.trading 016 - Tirana Organizational concept of the PX

Processing the offers (MCP, MCV, EUPHEMIA) Technical Market Support “First line” support of the market participants Settlement, risk management and invoicing Customer acquisition activities Market Development Market Surveillance

Responsibilities of IBEX Responsibilities of the Service Provider

The IBEX project scope (4)

En.trading 016 - Tirana Development milestones of the Power Exchange

10.01.2014г.

Incorporation of the “Independent Bulgarian Power Exchange” EAD as a 100% owned by BEH EAD subsidiary.

01.06.2014

Launch of the selection process for the vendor

• f the service for
• peration of a power

exchange market.

18.05.2015

Launching the process

• f association of IBEX

to the European

• rganizations governing

the integration process

• PCR, MRC

31.03.2014

Obtaining the license for “Organizing the power exchange market” from the EWRC.

21.04.2015

Finalization of the selection and negotiation

• processes. Service

agreement signing with NORDPOOL AS.

19.01.2016

Go - live of the Bulgarian Power Exchange IBEX become full member of MRC, associated member of PCR and NEMO Jan.

2016

May

2015

April

2015

June

2014

March

2014

January

2014

Project launch and key milestones (1)

En.trading 016 - Tirana Regulations, rules

Settlement Rules Electricity Market Rules Energy Law Operational Rules for Organized Power Exchange Market Conduct Rules

Project launch and key milestones (2)

En.trading 016 - Tirana Primary goal – higher liquidity. Strategic decisions

Компенсиране на изоставането Стратегическо партньорство за БЕХ ЕАД

 Accelerating integration with neighbor market zones based on the MRC and PCR compatibility.  Regulatory initiatives and steps towards TSO, DSOs (losses) and RES inclusion on the PX.  Arraignments for liquidity provision supporting the initial phase.  Low participation fees with two different structures, flexible policy on risk management - "One stop shop" conception.

Liquidity = Reference price = Attractive Market

 New market segments and services – ID (Intraday) market, centralized market for bilateral contracts and REMIT reporting service.

Project launch and key milestones (3)

En.trading 016 - Tirana Organization of the trading and settlement processes

12:55 CET

D-14

12:00 CET

Bidding

The ETS allows

• ffering up to 2

weeks prior to D day

Market results

MCP publication and portfolio allocation (PCR)

Collateral call

Deadline for reporting a collateral calls

Collateral adjustment

Collateral adjustment according to the collateral call

GCT

Bidding process gate closure time and auctioning (MRC timing)

Invoicing

Invoices issuing towards the net buyers

Net buyers payment

Deadline for payment for the net buyers

Net seller obligation settlement

Deadline for payments towards the net sellers.

D - 1 D

15:00 CET 16:00 CET

D + 1

10:30 CET 10:30 CET 13:00 CET

Project launch and key milestones (4)

14:30 CET

Nomination

Nomination of the trades toward the TSO

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Project accomplishment and Go-live (1)

Customer acquisition process and Dry run

Technical readiness

ETS ready Settlement ready Internal testing

PX Rules

Rules readiness Agreements Training materials Tariff structure

Dry Run

Life session Contract signing Ongoing training

Fees and collaterals

Collaterals posting Fees collection First line support

Go Live

19 active members NPS presence MCPs published

A B C D E

October 2015 11th of December 2015 November 2015 19th of January 2016 January 2016

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Project accomplishment and Go-live (2)

Members structure at Go-live vs. current and success factors

16% 68% 16%

Structure at 19.1.2016

Generators Local traders International traders

8% 8% 54% 30%

Structure at 16.4.2016

Generators Consumers Local traders International traders

Total number of members - 19  Flexible and competitive tariff structure with low entry barriers, based on two tariff options – with annual fee and lower volume based fee and NO annual fee with higher volume based fee;  Incentives for the Founding members (become members before Go-live);  Reliable partner and transparency due to the PCR assets utilization for the price calculation;  Credibility on the organization and competences of IBEX;  Developed crossborder and internal trade with high level of liberalization;  Customer oriented approach of the first line support. Total number of members - 37

En.trading 016 - Tirana

Project accomplishment and Go-live (3)

Statistics and price drivers

• The total traded volume for January – 77 371 MWh
• The total traded volume for February – 139 122 MWh
• The total traded volume for March - 196 316 MWh

 Maximum of the traded volume on the Day Ahead Market (delivery day 07th of March 2016) – 9 144MWh with average power of 381MW.  Number of market participants – 37  Average MCP for January – 32,89 EUR/MWh  Average MPC for February – 22,08 EUR/MWh  Average MCP for March – 26,09 EUR/MWh

En.trading 016 - Tirana

0,00 10,00 20,00 30,00 40,00 50,00 60,00 70,00 80,00

Regional PXs Base prices comparison in EUR/MWh

IBEX OPCOM HUPX EPIAS CROPEX SEEPEX

Project accomplishment and Go-live (4)

Statistics and price drivers

Planned activities – short term:



Liquidity measures from demand and supply side (Grid losses, RES energy more industrial consumers);



CAB (Customer Advisory Board) establishment;



Implementation of centralized market for bilateral contracts;

Planned activities – mid to long term:



Coupling with neighbouring market zones (Romania/Greece);



Implementation of an ID (intraday market) in compliance with the XBID solution for ID coupling; En.trading 016 - Tirana

IBEX in development (1)

PX development and new market segments

En.trading 016 - Tirana

IBEX in development (2)

EU Integration process (DAM market) – governed by the CACM provisions

Others 4MMC members Full MRC members

IBEX EAD www.ibex.bg E-mail: office@ibex.bg