the leading power market - International Energy Agency

May 29th 2013
THE LEADING
POWER MARKET
Special Thanks
 Author of main presentation: Hans Randen, Director
European Integration, Nord Pool Spot
 Presented by David Elzinga, Analyst, IEA
 Contributors:
– Lars Audun Fodstad, SvP at Statkraft Energy AS
– Stig Goethe, President, Power Circle
 Publications and resources :
– Cross-border Trade In Electricity And The Development Of
Renewables Based Electric Power: Lessons From Europe, OECD
– Nordic Market report 2012, NordREG, Nordic Energy Regulators
/
Nordic Interconnections
 One synchronous
market covers most of
the region (except
western Denmark is
synchronous with
continental Europe)
 Additional links are
being added.
 Physical connections
combined with a
market structure
/
Main participants annual
production
Figure Source: Cross-border Trade In Electricity And The Development Of Renewables Based Electric Power: Lessons From
Europe, OECD
/
Main participants installed capacity
Figure source: Nordic Market Report 2012, NordREG
/
About Nord Pool Spot
 Europe’s leading energy exchange since 1996
 Run the Elspot day-ahead and the Elbas intraday markets in the
Nordic and Baltic regions
 The N2EX market in the UK
 Covers 77 % of the consumption in the Nordic region
 370 companies from 20 countries trade on Nord Pool Spot’s
markets
 In 2012 Nord Pool Spot had a turnover of 432 TWh, including the
N2EX day-ahead auction volume in the UK
6 / Nord Pool Spot company presentation
History
1991: The Norwegian power market is deregulated
1993: Nord Pool Spot is established by the Norwegian TSO under the name ‘Statnett – Marked’
1996: Rebranded to Nord Pool when Sweden joins; the world’s first international power exchange is created
1998: Finland joins the Nord Pool market and Elbas becomes the world’s first international intraday market
2002: Nord Pool Spot is established as a separate company for the short term trading of physical power
2005: Nord Pool Spot opens the Kontek bidding area in Germany for both day-ahead and intraday
2008: The financial part of Nord Pool is sold by the TSOs to NASDAQ OMX Commodities
2009: Market coupling of 11 European countries is launched through EMCC by Nord Pool Spot and EPEX
2010: N2EX, the UK power market, is successfully launched by Nord Pool Spot and NASDAQ OMX Commodities
Nord Pool Spot opens a bidding area in Estonia and delivers the technical solution for a
new Lithuanian power market. Price coupling established between PolPx and NPS on SwePol-link
2011: Elbas is licenced to APX-Belpex as the new intraday market in both Belgium and the Netherlands.
Nord Pool Spot and EPEX SPOT sign a letter of intent to create a joint venture. The goal is to develop an
optimal joint system platform for both day-ahead and intraday trading to meet customers’ expectations
2012 : Elbas opened on NorNed with SOB/CMM together with APX-Belpex
Opening of Lithuanian bidding area 18th June 2012
7 / Nord Pool Spot company presentation
Ownership

Nord Pool Spot is owned by the Nordic and Baltic transmission system operators
Elering (Estonia)
2%
Statnett
(Norway)
28.2%
Svenska Kraftnät
(Sweden)
28.2%
Fingrid
(Finland)
18.8%
Energinet.dk
(Denmark)
18.8%
Nord Pool Spot AS

Regulated by the Norwegian Water Resources and Energy Directorate
(NVE)

Regulatory Council: representatives from regulators in the Nord Pool Spot
area and Nord Pool Spot executive management
8 / Nord Pool Spot company presentation
*) Latvian TSO has an agreement in place to acquire 2% of Nord Pool Spot
once the Latvian market is opened for trading.
Litgrid (Lithuania)
2%
AST (Latvia) *)
2%
High degree of transparency – one of the keys
to the Nordic success
 Nord Pool Spot has historically been at the forefront when it comes to
publishing relevant information that the market participants need.
 A prerequisite for a well functioning, competitive and efficient market is
that all players have access to relevant and equal information.
 NPS ensures high degree of market transparency through
rules, regulations and agreements connected to operation the exchange.
9 / Presentation footer
The Nordic power exchange concept
Elspot market
Day-ahead auction for all price areas.
Equilibrium between supply and demand is
established for delivery the following day.
Average price - System price.
Elbas market
Intraday market with continuous trading up to
one hour before delivery. Approximately 34
hours.
Time
6 Years
24 Hours
Reference price
Financial market
Elspot market
Elbas market
Balancing market
Operated by the respective TSOs where final
adjustments are made to achieve balance
between supply and demand. Price set after
delivery by TSO, participant is price taker.
Financial market
Cash settled futures, forwards and options.
Clearing services.
10 / Nord Pool Spot company presentation
Balancing market
Cash settled
Physical delivery
0
The Elspot market
 The spot market for electrical energy –
and the cornerstone of Nordic trading
 Auction-based market for trading of
electrical energy for delivery the next
day
 Prices calculated based on
supply, demand and transmission
capacity (how much power can be
moved from one area to another)
 Covers
Norway, Sweden, Finland, Denmark, Est
onia and Lithuania
 77 per cent of the total consumption of
electrical energy in the Nordic countries
is traded on the Elspot-market
 Elspot is Europe’s most
liquid day-ahead market, producing a
robust and credible reference price
11 / Nord Pool Spot company presentation
Elspot bidding areas in the Nordic and Baltic regions
Interconnectors to adjoining markets
NPS and Market Coupling
 Using the Day Ahead market to have an efficient use of
the main grid has been a corner stone since the Nord
Pool market started up in 1993
 Today the Nordic/Baltic market is covering







Norway
Sweden
Denmark
Finland
Estonia
Lithuania
Latvia
5 areas
4 areas
2 areas
1 area
1 area
1 area
1 area
12 / Nord Pool Spot company presentation
European power exchanges
Yearly turnover in TWh
Day Ahead Auction Volumes
350
EPEX FRA
EPEX GER-AUT
Nord Pool Spot
APX NL
N2EX
300
250
200
150
100
50
0
2000
2001
13 / Nord Pool Spot company presentation
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
The Elbas market
 Elbas is a continuous market where power
trading takes place until one hour before the
power is delivered
 Members can adjust their power production or
consumption plans close to delivery
 Every day, transmission system operators
publish their power transmission capacity to
Elbas
 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
 If transmission capacity is
available, neighbouring countries can trade
on the Elbas market
Elbas areas, including licenced areas
Additional countries with Elbas members
14 / Nord Pool Spot company presentation
May 29th 2012
Thank you for
your attention!