apex conference 2004 october 11 th - 12 th 2004. leipzig
DESCRIPTION
APEX CONFERENCE 2004 October 11 th - 12 th 2004. Leipzig. Session 1. Market Evolution. Main issues in Europe. Main issues in the Spanish market and cooperation with neighbouring market operators. Mª Luisa Huidobro President & CEO of OMEL. CONTENT. - PowerPoint PPT PresentationTRANSCRIPT
APEX CONFERENCE 2004
October 11th - 12th 2004. Leipzig
Session 1. Market Evolution. Main issues in Europe.
Main issues in the Spanish market and cooperation with neighbouring market operators.
Mª Luisa Huidobro
President & CEO of OMEL
CONTENT
1. Recent evolution of the Spanish energy market.
2. Spanish price convergence with other European organized markets.
3. Main factors influencing market prices.
4. Explicit auctions, market splitting and market coupling.
5. Improving the market structure and security of supply in electric systems.
6. The Iberian Market.
1. RECENT EVOLUTION OF THE SPANISH ENERGY MARKET.
Daily market started operations on January 1998. Intraday market started operations in April 1998.
Settlements of all markets and processes started on January 1998.
Economic volume traded in 2003: 8,185 million euros.
Energy traded: 228,571 GWh.
Installed generation in the market 56,333 MW.
5,769,532 transactions where done last year.
92 companies act as purchasing agents on the market, 12 of them are external agents and 78 are independent resellers.
86 companies act as producers, 12 of them are external agents.
Domestic technical constraints are very reduced, around 2,2% of the daily energy.
The market price is a reference for many commercial transactions.
MAIN FIGURES OF THE SPANISH MARKET
MARKET AGENTS
CANTABRICO IBERDROLA CANTABRICO IBERDROLA ENERGIA ELECTRICA DEL EBROELCOGAS ENDESA ELCOGAS ENDESA ELEC. CONQUENSE GENERACIÓNUNION FENOSA UNION FENOSA VIESGO GENERACION COGENERACIÓN LA LLORAL
SNIACE COGENERACION GAS NATURAL SDG STORA ENSOCOGENERACION PRAT SERVEIS AUX. SOT DE RUBIO NUEVA GENERADORA DEL SUR
ECOCARBURANTES ESPAÑOLES ENERNOVA AYAMONTE GEPESA
PUERTO REAL COGENERACION ENDESA CICLOS COMBINADOS ELECTRICA RIBERA EBRO
NUCLENOR REPSOL PETROLEO CERANOR
REPSOL QUIMICA GENFIBRE AZULIBER
SAICA COGENERACIÓN DE NAVIA FORSEAN
COGENERACIÓN DEL NOROESTE BAHÍA DE BIZCAIA CELULOSA DE ENERGÍA
INEUROPA SOLAL COGENERACIÓN A. I. E. FORANETO
ENERGÉTICA DE ROSELLÓ A.I.E. FUERZAS ELÉCTRICAS DE NAVARRA TORTOSA ENERGÍA
ERCROS INDUSTRIAL RUBIERA G. ENERGIA DE GUARARRANQUE
ENERGIA TERMOELECTRICA GARONA VERDA TRUCHAS DEL CINCA
COGENERADORA BURGALESA GENERACIÓN MAZAGÓN FORESTAL DEL ATLÁNTICO
INDUSTRIAS DEL TABLERO UNIÓN DE EMPRESAS MADERERAS CAILA Y PARES
BIOETANOL GALICIA INDUSTRIAS DEL ACETATO DE CELULOSA TARRAGONA POWER
ZABALGARBI ENERGY WORKS CARTAGENA ENERGÍA DEL XERTA
MOLINOS DEL EBRO EASA II SOGAMA
AVICU UTISA TABLEROS DEL MEDITERRANEO INCOGEN
CLP ENVIROGAS IDAE ECYR
SMURFIT NAVARRA ENCE F.M.C. FORET
U.F. ENERGIAS ESPECIALES TEC 94 IRISCROM ENERGIA
SALTOS DEL NANSA MADERAS MANUEL VILLAMOR HIDROELECTRICA DEL TRASVASE
SISTEMAS ENERGETICOS LA PLANA SIDERGAS ENERGIA MATEOS
BIOCULTIVOS NAVARRA
CANTABRICO ENDESA DISTRIBUCION VIESGO 1 CANTABRICOENDESA ENERGIAS DE ARAGON UNION FENOSA F. ELÉCTRICAS DE VALENCIAIBERDROLA IBERDROLA SAN FRANCISCO DE ASISUNION FENOSA ELEC. CONQUENSE DISTRIBUCION HIDROELECTRICA DEL GUADIELA
CANTABRICO AGRI ENERGIA COM. DE ELÉCTRICAS OVIEDO BP AMOCO GASENDESA ENERGIA ASTURALTER BASSOLS ENERGIA ELECTRA NORTE ENRON LERSA ELECTRA ENERGIA ENDESA ENERGIAIBERDROLA ELECTRABEL ESPAÑA ELYO GYMSA IBERICA ELECTRA DEL CARDENERSKS FACTOR ENERGIA GAS NATURAL C. GAS NATURAL ELECTRICIDADUNION FENOSA ESTABANELL Y PAHISA CANTABRICO ENERGIA H. DEL VALIRA GAS NATURAL SERVICIOS IBERDROLA NAVARRO GENERACION
HISPAELEC ENERGIA SALTEA COMERCIAL SEMPRA ENERGYRWE TRAIDING U. FENOSA GENERACION U. FENOSA MULTISERVICIOSSHELL ESPAÑA ELECTRICA DE CADIZ H. DEL CABRERAADURIZ ENERGIA CANAL ENERGIA COMERCIALIZACION NATURGASELECTRICA SOLLERENSE ENERCO CUELLAR ENERGIA ELECTRICA DEL EBROUNION ELECTRO INDUSTRIAL ELECTRA CALDENSE E. CE ENERGIANEXUS ENERGIA ANSELMO LEON EOSA ENERGIAGLOBAL TRES ENERGÍA ELÉCTRICA SEROSENSE ELEC. CONQUENSE COMERC.ELECTRICA VAQUER ICASA CEPSA GAS COMERCIALIZADORAEL PROGRESO ENERGIA EPRESA ENERGÍA SOREAVIESGO COMERCIALIZACIÓN EDP ENERGÍA IBÉRICA CYD ENERGIACANTABRICO GENERACION SNIACE ENERGÍA ELECTRICA CALLOSINAE. ALTO MIÑO COM. DE ENERGÍA EGL ESPAÑA COMERCIALIZADORA DEL CEGAROMERO ABREU HERMANOS CENTRICA ENERGIA DETISAE-COGENIA DITELCOM ENERGY VIESGO ENERGÍADIVERTA COMUNICACIONES Y TELEFONIA
ONE (Marruecos) AARE-TESSIN (Suiza) ELECTRABEL (Bélgica) EDF (Francia)ELECTRABEL (Bélgica) ENBW (Alemania) EDP (Portugal) ONE (Marruecos)REN (Portugal) REN (Portugal) ENEL (Italia) SONELGAZ (Argelia)
EGL (Suiza) E.ON (Alemania) ENEL TRADE S.P.A. (Italia)EDP GESTAO DA PRODUÇAO DE ENERGIA (Portugal) BARCLAYS BANK PLC (Reino Unido)
CELSA PRAXAIR PRODUCCIÓN ESPAÑA EL YATE SOC. COOP. ANDALUZA DURANGLOBAL STEEL WIRE JAMONES PESON JUAN JOSÉ MARTÍNEZ LÓPEZ FUNDICIONES MIGUEL ROS
TORTOSA ENERGÍA
03/10/2004
MARCH 1999 OCTOBER 2004PRODUCERS
RETAILERS
EXTERNAL AGENTS
QUALIFIED CONSUMMERS
PRODUCERS
DISTRIBUTION
RETAILERS
EXTERNAL AGENTS
QUALIFIED CONSUMMERS
DISTRIBUTION
INVESTMENT PROCESS
Planning 2002-2011 (MW)
Currently (MW) % In Market (%)
CCGT 14.800 7.289 49,25% 100%
COGENERATION 7.100 5.781 81,42% 29%
WIND ENERGY 13.000 6.400 49,23% 3%
PLANNING EVOLUTION
MARKET ENERGY OF POWER STATIONS UNDER SPECIAL REGIMEAND POWER STATIONS UNDER ORDINARY REGIME WITH INCENTIVES
-200
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2.000
2.200
2.40010
/09/
2002
11/1
0/20
02
11/1
1/20
02
12/1
2/20
02
12/0
1/20
03
13/0
2/20
03
16/0
3/20
03
16/0
4/20
03
18/0
5/20
03
18/0
6/20
03
19/0
7/20
03
19/0
8/20
03
20/0
9/20
03
21/1
0/20
03
21/1
1/20
03
22/1
2/20
03
22/0
1/20
04
23/0
2/20
04
25/0
3/20
04
25/0
4/20
04
27/0
5/20
04
27/0
6/20
04
28/0
7/20
04
28/0
8/20
04
29/0
9/20
04
Date
EN
ER
GY
(M
Wh
)
-200
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2.000
2.200
2.400
PO
WE
R (
MW
)
Daily market (with technical constraints) Intraday market Installed power
0
300
600
900
1200
1500
1800
2100
2400
11/
01/
98
29/
03/
98
14/
06/
98
30/
08/
98
15/
11/
98
31/
01/
99
18/
04/
99
04/
07/
99
19/
09/
99
05/
12/
99
20/
02/
00
07/
05/
00
23/
07/
00
08/
10/
00
24/
12/
00
11/
03/
01
27/
05/
01
12/
08/
01
28/
10/
01
13/
01/
02
31/
03/
02
16/
06/
02
01/
09/
02
17/
11/
02
02/
02/
03
20/
04/
03
06/
07/
03
21/
09/
03
07/
12/
03
22/
02/
04
09/
05/
04
25/
07/
04
GWh/week
PURCHASES BY RESELLERS, QUALIFIED CONSUMERS AND EXTERNAL AGENTS
Period from 01/01/1998 to 03/10/2004
Energy at free prices (period): 344.216,6
GWhTotal energy purchased (period)(*): 1.199.584,8 GWh
Energy at free prices (last week): 1.781,5 GWh (44,04 %)Total energy purchased (last week): 4.045,5 GWh
* Excluding pumpig and self-producers Daily Intraday
1998 1999 2000 2001 2002 2003 2004 44,04 %
SPANISH DAILY MARKET RESULTS
January 1998 - 3 October 2004
0
2
4
6
8
10
12
14
16
18
20
22
24
26
28
01/0
1/98
01/0
4/98
01/0
7/98
01/1
0/98
01/0
1/99
01/0
4/99
01/0
7/99
01/1
0/99
01/0
1/00
01/0
4/00
01/0
7/00
01/1
0/00
01/0
1/01
01/0
4/01
01/0
7/01
01/1
0/01
01/0
1/02
01/0
4/02
01/0
7/02
01/1
0/02
01/0
1/03
01/0
4/03
01/0
7/03
01/1
0/03
01/0
1/04
01/0
4/04
01/0
7/04
01/1
0/04
Date
cEur/kWh
0
100.000
200.000
300.000
400.000
500.000
600.000
700.000
800.000
900.000
MWh
Maximum hourly price Weighted average price Minimum hourly price Daily energy
Weighted average price in the daily market Period Price 01/01/1998 03/10/2004 3,055 cEur/kWh
FINAL PRICE
0,0
1,0
2,0
3,0
4,0
5,0
6,0
1-10-03 1-11-03 1-12-03 1-1-04 1-2-04 1-3-04 1-4-04 1-5-04 1-6-04 1-7-04 1-8-04 1-9-04 1-10-04
Daily Market Price (DMP) Weighted Average Final Price (WAFP) Differences (WAFP - DMP)
cEur/kWh
DIFFERENCES BETWEEN WEIHGTED AVERAGE FINAL PRICEAND DAILY MARKET PRICE
OCTOBER 2003 - 3 OCTOBER 2004
CapacityPayment
ENERGY BY PRODUCTION TECHNOLOGY
Daily energy grouped by production technologyJanuary 1998 to 3 October 2004
0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
750
800
850
01/0
1/98
01/0
4/98
01/0
7/98
01/1
0/98
01/0
1/99
01/0
4/99
01/0
7/99
01/1
0/99
01/0
1/00
01/0
4/00
01/0
7/00
01/1
0/00
01/0
1/01
01/0
4/01
01/0
7/01
01/1
0/01
01/0
1/02
01/0
4/02
01/0
7/02
01/1
0/02
01/0
1/03
01/0
4/03
01/0
7/03
01/1
0/03
01/0
1/04
01/0
4/04
01/0
7/04
01/1
0/04
Date
EN
ER
GY
(G
Wh
)
Special Regime to Distribution Special Regime to Market Nuclear
Imports Hydro Coal
Combined Cycle Fuel-Gas
MARKET PRICES AND GENERATION RESERVE (HYPOTHESIS 1)OCTOBER 2003 - OCTOBER 2004
0
2
4
6
8
10
12
14
16
18
20
01/1
0/03
13/1
0/03
25/1
0/03
06/1
1/03
19/1
1/03
01/1
2/03
13/1
2/03
26/1
2/03
07/0
1/04
19/0
1/04
01/0
2/04
13/0
2/04
25/0
2/04
09/0
3/04
21/0
3/04
03/0
4/04
15/0
4/04
27/0
4/04
10/0
5/04
22/0
5/04
03/0
6/04
16/0
6/04
28/0
6/04
10/0
7/04
23/0
7/04
04/0
8/04
16/0
8/04
29/0
8/04
10/0
9/04
22/0
9/04
Date
-25.000
-20.000
-15.000
-10.000
-5.000
0
5.000
10.000
15.000
20.000
25.000
Market price Generation reserve
Market price trend line Generation reserve trend line
Pri
ce (
cEu
ro/k
Wh
)
Ho
url
y E
ner
gy
(MW
h)
MARKET PRICES AND GENERATION RESERVE (HYPOTHESIS 2)OCTOBER 2003 - OCTOBER 2004
0
2
4
6
8
10
12
14
16
18
20
01/1
0/03
13/1
0/03
25/1
0/03
06/1
1/03
19/1
1/03
01/1
2/03
13/1
2/03
26/1
2/03
07/0
1/04
19/0
1/04
01/0
2/04
13/0
2/04
25/0
2/04
09/0
3/04
21/0
3/04
03/0
4/04
15/0
4/04
27/0
4/04
10/0
5/04
22/0
5/04
03/0
6/04
16/0
6/04
28/0
6/04
10/0
7/04
23/0
7/04
04/0
8/04
16/0
8/04
29/0
8/04
10/0
9/04
22/0
9/04
Date
-25.000
-20.000
-15.000
-10.000
-5.000
0
5.000
10.000
15.000
20.000
25.000
Market price Generation reserve
Market price trend line Generation reserve trend line
Pri
ce (
cEu
ro/k
Wh
)
Ho
url
y E
ner
gy
(MW
h)
MARKET PRICES AND GENERATION RESERVE (HYPOTHESIS 3)OCTOBER 2003 - OCTOBER 2004
0
2
4
6
8
10
12
14
16
18
20
01/1
0/03
13/1
0/03
25/1
0/03
06/1
1/03
19/1
1/03
01/1
2/03
13/1
2/03
26/1
2/03
07/0
1/04
19/0
1/04
01/0
2/04
13/0
2/04
25/0
2/04
09/0
3/04
21/0
3/04
03/0
4/04
15/0
4/04
27/0
4/04
10/0
5/04
22/0
5/04
03/0
6/04
16/0
6/04
28/0
6/04
10/0
7/04
23/0
7/04
04/0
8/04
16/0
8/04
29/0
8/04
10/0
9/04
22/0
9/04
Date
-25.000
-20.000
-15.000
-10.000
-5.000
0
5.000
10.000
15.000
20.000
25.000
Market price Generation reserve
Market price trend line Generation reserve trend line
Pri
ce (
cEu
ro/k
Wh
)
Ho
url
y E
ner
gy
(MW
h)
2. SPANISH PRICE CONVERGENCE WITH OTHER EUROPEAN ORGANIZED MARKETS.
COMMERCIAL CAPACITY
Source: REEJuly 2004
EUROPEX AVERAGE PRICES01/01/03 - 03/10/04
0
20
40
60
80
100
120
140
160
180
200
1-Jan 8-Feb 18-Mar 25-Apr 2-Jun 10-Jul 17-Aug 24-Sep 1-Nov 9-Dec 16-Jan 23-Feb 1-Apr 9-May 16-Jun 24-Jul 31-Aug
Date
Eur/MWh
APX NORDPOOL EEX POWERNEXT OMEL GME
APX: 660,3 368,8 637,4
POWERNEXT: 310,4
APX: 216,6 APX: 215
EUROPEX QUARTER AVERAGE PRICES01/01/00 - 5/10/04
0
10
20
30
40
50
60
70
80
1º Q
uar
ter
2º Q
uar
ter
3º Q
uar
ter
4º Q
uar
ter
1º Q
uar
ter
2º Q
uar
ter
3º Q
uar
ter
4º Q
uar
ter
1º Q
uar
ter
2º Q
uar
ter
3º Q
uar
ter
4º Q
uar
ter
1º Q
uar
ter
2º Q
uar
ter
3º Q
uar
ter
4º Q
uar
ter
1º Q
uar
ter
2º Q
uar
ter
3º Q
uar
ter
4º Q
uar
ter
Date
Eur/MWh
APX NORDPOOL EEX POWERNEXT OMEL GME
Year 2000 Year 2001 Year 2002 Year 2003 Year 2004
PRECIOS MEDIOS TRIMESTRALES EUROPEX01/10/03 - 5/10/04
0
10
20
30
40
50
60
70
80
4º T
rim
estr
e
1º T
rim
estr
e
2º T
rim
estr
e
3º T
rim
estr
e
4º T
rim
estr
e
Fecha
Eur/MWh
APX NORDPOOL EEX POWERNEXT OMEL GME
IMPORTS FROM PORTUGAL
IMPORTS FROM PORTUGALPERIOD FROM JANUARY 1998 TO SEPTEMBER 2004 (GWh)
0
50
100
150
200
250
300
350
400
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
Organized market Bilaterals
Year 1998 Year 2000Year 1999 Year 2001 Year 2002 Year 2003 Year 2004
EXPORTS TO PORTUGAL
EXPORTS TO PORTUGAL FROM JANUARY 1998 TO SEPTEMBER 2004 (GWh)
0
100
200
300
400
500
600
700
800
900
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
Organized Market Bilaterals
Year 1998 Year 2000Year 1999 Year 2001 Year 2002 Year 2003 Year 2004
IMPORTS FROM FRANCE
IMPORTS FROM FRANCEPERIOD FROM JANUARY 1998 TO SEPTEMBER 2004 (GWh)
0
100
200
300
400
500
600
700
800
900
1.000
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
Organized market Bilaterals
Year 1998 Year 2000Year 1999 Year 2001 Year 2002 Year 2003 Year 2004
EXPORTS TO FRANCE
EXPORTS TO FRANCE FROM JANUARY 1998 TO SEPTEMBER 2004 (GWh)
0
50
100
150
200
250
300
350
400
450
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
nov
ene
mar
may ju
l
sep
Organized Market Bilaterals
Year 1998 Year 2000Year 1999 Year 2001 Year 2002 Year 2003 Year 2004
COMMERCIAL CAPACITY AND ENERGY TRADED
NTERCHANGE CAPACITY WITH PORTUGAL AND ENERGY MATCHED IN THE
MARKETS AND EXECUTED IN BILATEAL CONTRACTS
Period from September 2003 to 3 October 2004
-2000
-1500
-1000
-500
0
500
1000
1500
2000
01/0
9/20
0308
/09/
2003
15/0
9/20
0322
/09/
2003
29/0
9/20
0306
/10/
2003
13/1
0/20
0320
/10/
2003
26/1
0/20
0302
/11/
2003
09/1
1/20
0316
/11/
2003
23/1
1/20
0330
/11/
2003
07/1
2/20
0314
/12/
2003
21/1
2/20
0328
/12/
2003
04/0
1/20
0411
/01/
2004
18/0
1/20
0425
/01/
2004
01/0
2/20
0408
/02/
2004
15/0
2/20
0422
/02/
2004
29/0
2/20
0407
/03/
2004
14/0
3/20
0421
/03/
2004
29/0
3/20
0405
/04/
2004
12/0
4/20
0419
/04/
2004
26/0
4/20
0403
/05/
2004
10/0
5/20
0417
/05/
2004
24/0
5/20
0431
/05/
2004
07/0
6/20
0414
/06/
2004
21/0
6/20
0428
/06/
2004
05/0
7/20
0412
/07/
2004
19/0
7/20
0426
/07/
2004
02/0
8/20
0409
/08/
2004
16/0
8/20
0423
/08/
2004
30/0
8/20
0406
/09/
2004
13/0
9/20
0420
/09/
2004
27/0
9/20
04
Días
MW
h
Import capacity not used Export capacity not used Import Export
EXPORT
IMPORT
COMMERCIAL CAPACITY AND ENERGY TRADED
INTERCHANGE CAPACITY WITH PORTUGAL AND ENERGY MATCHED IN THE
MARKETS AND EXECUTED IN BILATEAL CONTRACTS
Period from September 2004 to 3 October 2004
-2000
-1500
-1000
-500
0
500
1000
1500
2000
01/0
9/20
04
08/0
9/20
04
15/0
9/20
04
22/0
9/20
04
29/0
9/20
04
Días
MW
h
Import capacity not used Export capacity not used Import Export
EXPORT
IMPORT
COMMERCIAL CAPACITY AND ENERGY TRADED
INTERCHANGE CAPACITY WITH FRANCE AND ENERGY MATCHED IN THE
MARKETS AND EXECUTED IN BILATEAL CONTRACTS
Period from September 2003 to 3 October 2004
-2000
-1500
-1000
-500
0
500
1000
1500
2000
01/0
9/20
0308
/09/
2003
15/0
9/20
0322
/09/
2003
29/0
9/20
0306
/10/
2003
13/1
0/20
0320
/10/
2003
26/1
0/20
0302
/11/
2003
09/1
1/20
0316
/11/
2003
23/1
1/20
0330
/11/
2003
07/1
2/20
0314
/12/
2003
21/1
2/20
0328
/12/
2003
04/0
1/20
0411
/01/
2004
18/0
1/20
0425
/01/
2004
01/0
2/20
0408
/02/
2004
15/0
2/20
0422
/02/
2004
29/0
2/20
0407
/03/
2004
14/0
3/20
0421
/03/
2004
29/0
3/20
0405
/04/
2004
12/0
4/20
0419
/04/
2004
26/0
4/20
0403
/05/
2004
10/0
5/20
0417
/05/
2004
24/0
5/20
0431
/05/
2004
07/0
6/20
0414
/06/
2004
21/0
6/20
0428
/06/
2004
05/0
7/20
0412
/07/
2004
19/0
7/20
0426
/07/
2004
02/0
8/20
0409
/08/
2004
16/0
8/20
0423
/08/
2004
30/0
8/20
0406
/09/
2004
13/0
9/20
0420
/09/
2004
27/0
9/20
04
Días
MW
h
Import capacity not used Export capacity not used Import Export
EXPORT
IMPORT
COMMERCIAL CAPACITY AND ENERGY TRADED
INTERCHANGE CAPACITY WITH FRANCE AND ENERGY MATCHED IN THE
MARKETS AND EXECUTED IN BILATEAL CONTRACTS
Period from September 2004 to 3 October 2004
-1500
-1000
-500
0
500
1000
1500
01/0
9/20
04
08/0
9/20
04
15/0
9/20
04
22/0
9/20
04
29/0
9/20
04
Días
MW
h
Import capacity not used Export capacity not used Import Export
EXPORT
IMPORT
CAPACITY GENERATION RESERVE AND MARKET PRICES
In the Spanish Market it exists a high inverse correlation between market price evolution any generation capacity reserve evolution.
Organised market prices strongly depends on the relative scarcity of the commodity.
Demand for electricity also influences market prices.
Fuel prices have had a lower influence on electricity prices.
Looking at the evolution of the organised Market European prices, it seems that the capacity generation reserve has a greater influence on price levels and on price volatility than fuel prices.
RECENT EVOLUTION OF THE ELECTRICITY PRICES IN SPAIN
Debate about the recent level and evolution of the Spanish electricity prices in the organized market. Daily market prices have followed an stable path despite of the increase of fuels prices (gas and coal).
Demand for electricity would have been higher if: Export commercial capacity have not been limited to 250 MW since April
and
Lower prices under the above mentioned circumstances would not have been different, because:
Capacity generation reserve is high because of the new combined cycle gas plants.
Spanish prices are in line with the prices of the European organized markets. If the Spanish prices would have been higher, import would have increase and if they have been lower, exports would have been higher.
INTERCONNECTION CAPACITY IN 2005 AACORDING TO THE 2003-2011 PLANNING
INTERCONNECTION FUTURE WINTER COMMERCIAL CAPACITY (MW)
With France 3,000 (Delayed)
With Portugal 1,200
With Morocco 900
Total 5,100
Source: Spanish 2003-2011 Electricity and Gas network planning
3. MAIN FACTORS INFLUENCING MARKET PRICES.
MAIN FACTORS INFLUENCING INTERNATIONAL TRADE (I)
Driven by relative price difference between organised markets. Available commercial capacity
Always occupied in the right direction if the congestions are solved by implicit auctions or market coupling/splitting.
Non used when the price difference remains under other methods to solve congestions.
Level of other generation components of the final electricity price. Deviation prices. Capacity payments. Ancillary services. Charges derived from explicit auctions when they exist.
Barriers from regulation. The principle “use it or loose it” alone is difficult to be applied in
practice. Characteristics and timing existing in the procedures to communicate
transactions to the TSOs. Level of charges derived from the tariffs for the use of the
distribution and transport networks.
MARKET POWER AND CONGESTIONS.
Market power can be exercised easier when explicit auctions of the capacity are used. The value of the non used commercial capacity is higher than its value when it is totally used form the point of view of a significant number of market participants.
Implementing counter trading in the daily market. A generator with several units can get an extra payment for creating the congestion and for solving it.
Not applying or considering final electricity prices, which include ancillary services up to meter readings, could facilitate market power abuse at the side of the congested border where they are higher.
Implementing a unit commitment optimization method to solve domestic constraints.
Fixing reference costs caps for generation plants regarding technical constraints procedure instead of solving the problem will aggravate it, since it will only establish a set of minimum prices.
Virtual power plant auctions can maintain the market power of the owner of the physical generation plants and distort market prices (the minimum auction price will be the minimum price).
STATEMENT INCLUDED IN THE LAST FLORENCE FORUM CONCLUSIONS
“Director-General Lamoureux, whilst underlining the progress that proper implementation of the new package could potentially bring, pointed out the currently persisting limitations of the electricity market: transposition of the new directives in Member States is insufficient; market opening in Member States remain at the moment still rather asymmetrical; since the market opening process started the degree of concentration in the industry has consistently increased and there is a clear risk that the public will assimilate recent price increases in electricity with this ongoing concentration process; infrastructure development is still not satisfactory, despite the political objective of the European Council, agreed in Barcelona in 2002, to have in each Member State an interconnection capacity of at least 10% of the generation capacity. In this context, the Commission envisages to make the integration of an electricity cable in railway or road tunnels a condition for co financing of projects comprising such tunnels under the transeuropean networks programme for transport.”
www.europa.eu.int
4. EXPLICIT AUCTIONS, MARKET SPLITTING AND MARKET COUPLING
COMPARISON BETWEEN EXPLICIT AUCTIONS AND A FINANCIAL MARKET TO HEDGE THE PRICE DIFFERENCE (I)
If there is a liquid spot energy market in the countries of origin and destination of an international physical bilateral contract, the international physical energy contract is just a price difference hedging.
If there are no liquid spot energy markets at either end, since the electricity can not be stored, and taking into account the structure of the present electricity business on the EU states, the liberalization progress will be very complicated
Explicitly auctioning the rights over an interconnection is equivalent to a financial hedge over the price difference between the two spot markets at both sides of the interconnection
COMPARISON BETWEEN EXPLICIT AUCTIONS AND A FINANCIAL MARKET TO HEDGE THE PRICE DIFFERENCE (II)
If the prerequisite of the existence of a liquid spot market at each side of the interconnection is not in place, assigning to an individual party the rights to use the interconnection will aggravate any existing market structure/power problem that prevented the liquid spot market price to be formed
ROLE OF THE REGIONAL MARKETS (I)
The Document of strategy of the European Commission presented in the Florence Forum
Emphasizes, in the first place, the role that can play the following regional markets:
Iberian Peninsula, United Kingdom and Ireland, Northern countries, Italy, Western Europe, East Europe, Southeast Europe and Baltic Sea, as well as the importance that these market will be developed as a necessary step in the integration process.
Development of the international interchanges.
Improvement of the interconnections and reduction of the market concentration.
To facilitate the consumers choice and to obtain a universal service.
COOPERATION BETWEEN ORGANIZED MARKETS
Why a methodology of cooperation between interconnected organized market ? Maximum price convergence between all cooperating markets in case of
congestions The energy flows from the low price area to the high price area
Maximum use of the bottleneck capacity
Equal price if there are no congestions
Enlarge the relevant market and therefore decreases the market power of the regional participants
Is the only way to apply the “use it or lose it rule” of the physical rights over the interconnection capacities
Allows market bids and bilateral trades to compete under the same conditions
Makes clear that, when liquid markets exist, explicit auctions of the capacity are pure financial hedging tools.
5. IMPROVING THE MARKET STRUCTURE AND SECURITY OF SUPPLY IN ELECTRIC SYSTEMS
FACTORS THAT IMPROVE THE MARKET STRUCTURE FROM THE DEMAND SIDE
Demand flexibility and efficient response to prices by consumers.
The procedures for consumer protection regarding information and guarantee to the exercise of a right to change supplier.
A link must be created between wholesale transactions and retail transactions. It requires: The existence of prices formed on liquid public organised markets The accessibility to all forms of contracting to all consumers, even
to the organized market (since it avoids the practice of excessive retails margins in commercialization).
Effective conditions for non-discrimination to any type of suppliers or retailers in the market including the access to the international trades.
Total guarantee of access to the transportation and distribution networks and effective right to change of supplier for consumers.
FACTORS THAT IMPROVE THE MARKET STRUCTURE FROM THE PRODUCTION SIDE
The elimination of entrance barriers for the access to the production activity: Administrative or similar authorizations.
Access to the networks.
Existence of organized markets liquid and open to the participation of any producer.
Progressively that the producer faces a flexible demand.
The competition from the international trade: Imports prevent excessive prices.
The possibility of exporting at a competitive market price stimulates the investment process in the mid term.
A forward market accessible to any type of producer can facilitate the entry to the market of these agents.
6. THE IBERIAN MARKET.
TOWARDS THE IBERIAN MARKET (I)
Memorandum of understanding for the electricity between Spain and Portugal (July 1998).
Removed of obstacles to electricity trade REN become external agent of the Spanish market Spanish electricity companies can sell electricity in Portugal Coordination between REE and REN as system operators In march 1999 a joined document is released
The Iberian market protocol (November 2001). Guarantee of access to the OMI and to the interconnections in conditions of
equality and freedom of contracting.• The OMI must open its capital to the participation of Spanish and Portuguese
companies.• Performances of the OMI of strict impartiality. Amplification of the interconnections.
• Line Alqueba-Balboa (2004).• Line Cartelle-Lindoso (2006). • Reinforcement of the interconnection of the Douro.• Increase of the transit capacity of the line Cedillo-Oriol.
Harmonized technical procedures to operate the system.
TOWARDS THE IBERIAN MARKET (II)
Conclusions of the Valencia Summit (April 2002) Spot market in Spain. Forward market in Portugal.
Memorandum of Understanding signed in the Figueira da Foz Summit (November 2003).
Principles for the Iberian Markets. International agreements to be subscribed on January 2004. Shareholding exchange between OMEL and OMIP of 10% of this
respective social capital.
International Agreement on the Iberian Market (January 2004) revised in October 2004
First step: Spot Market in Spain and Forward in Portugal (July 2005) Both markets are integrated in 2007 Regulation harmonization including tariffs structure