EPEX SPOT and EEX advocate a market-based, European and holistic power market design
Paris/Leipzig, 12 July 2012. EPEX SPOT SE and the European Energy Exchange AG (EEX) intensively participate in the debate on the European market design and on the implementation of the energy turnaround in Germany – most recently in the framework of their comment on the expert report entitled “Studies regarding a future-oriented market design” prepared by the Institute of Energy Economics at the University of Cologne (EWI) on behalf of the German federal government.
In the autumn of last year, the German federal government commissioned EWI to prepare a study on the future power market design. The results of the expert report were presented in March of this year and the market participants were given an opportunity to comment on the study. EPEX SPOT and EEX have now submitted a joint statement to the Federal Ministry of Economics.
The question of the further development of the power market design is decisive for the future of the energy exchanges. “A competitive power market which is organised at the European level can provide the incentives which are necessary for investments provided its potentials are fully utilised”, emphasises Jean-François Conil-Lacoste, Chief Executive Officer of EPEX SPOT. This includes that the generation of energy from renewable sources should be based on market prices and, as a result, on the actual demand. These market prices then also provide incentives for the elasticity of demand (so-called “demand side management”) and the further development of storage technologies. For example, 15-minute products, such as those that have been launched on EPEX SPOT, can contribute to this.
The exchanges are particularly concerned that the reality of largely integrated European energy markets is not sufficiently taken into account. “We wish for a clear political commitment to market and competition and advocate a European instead of a national debate on the further development of the power market design. This is the only way to find solutions which set long-term investment signals on which the energy industry can rely”, says Peter Reitz, Chief Executive Officer of EEX, and adds: “Otherwise, market distortions and different national investment conditions might arise which are not compatible with the aim of a European energy market.”
In summary, the exchanges advocate a change of perspective. The question of how the market can be further expanded on the basis of its current functions should now take centre-stage. Further developments should not be made sporadically but should consider the market and its preconditions from a holistic perspective.
***
EPEX SPOT SE operates the power spot markets for France, Germany, Austria and Switzerland (Day-Ahead and Intraday). Together these countries account for more than one third of the European electricity consumption. EPEX SPOT SE is a European company (Societas Europaea) based in Paris with a branch in Leipzig. 169.7 TWh have been traded in the first six months of 2012 on EPEX SPOT’s power markets. EPEX SPOT has currently 199 Exchange Members.
European Energy Exchange (EEX) is the leading energy exchange in Europe. It develops, operates and connects secure, liquid and transparent markets for energy and related products on which power, natural gas, CO2 emission allowances and coal are traded. Clearing and settlement of all trading transactions are provided by the clearing house European Commodity Clearing AG (ECC). EEX is a member of Eurex Group.