The Elbas Market
How does it work?
How could it work in Iceland?
Facts and examples based on NPS current market
in Fin, Swe, Den and Ger (& Nor ’08)
Agenda
General
Trading on the Elbas market
Settlement & Clearing of Elbas trades
Crossborder trades and managing the capacity
between the different trading areas
Technology behind the Elbas trading system
Summary
Elbas market at Nord Pool Spot today
• Adjustment market after Elspot
• Trading intra-day and after Elspot is closed (confirmed) also day-ahead
• Market areas:Finland, Sweden, East and West Denmark and Germany (KONTEK) • Continuous trading
• Open around the clock all days of a year • Hourly contracts can be traded until one
hour before delivery hour • Trading is anonymous • Trading currency is Euro
• Settlement and clearing is combined with the Elspot Market at NPS
• Common Rulebook with Elspot (separate details in appendices/agreements)
• Automated control of grid capacity
• Communication in public network with SSL-encryption
• Market makers 24 hours per day • Number of customers: 55
Why do companies trade on the Elbas market?
Many arguments can also be valid in Iceland
An effective and economical way to manage electricity procurement and sales near the time of delivery
• To sell production or cover consumption or trade for single hours today and tomorrow
• Handling of unexpected changes in electricity production, procurement or consumption in your electricity balance
• React to unexpected changes in the market price and need for power
-> You can hedge the price you have to pay for imbalances
-> You can reduce the volume exposed for imbalances
-> You can increase the efficiency of daily management of your electricity portfolio You are not dependent on one volume, price or counterpart
Increases transparency of day-ahead and intraday trading prices Trading made easy and fast:
• Web based trading system
• The market is ALWAYS open
• Market making 24 hours per day
• Automated and simple functionalities
• Automatic clearing, and one settlement account for Elbas*
• Netting of Elbas collaterals*
Elbas trading system – user friendly
Simple to use
•
No end user software installations needed
•
No dedicated data connection needed
•
Clear trading and back office functions
•
Automatic reporting
•
Automated Market Splitting
Bid types
•
Hourly bids of type ”fill”
Next days delivery hours opened at:
TSO:s real time
market
C o n t i n u o u s t r a d i n g
until 1 hour before delivery 14:00
in SE, FI and DK2
Delivery hour
• At 14:00 in SE, FI & DK2 the hour series for the next day are
opened (the hours 01-24)
• At 08:00 in GER and at 17:00 in DK1
The Elbas timeline
Sweden 9 participants Fortum Generation AB Jämtkraft AB Mälarenergi AB Skellefteå Kraft AB Statkraft Energi AS
E.ON Energihandel Nordic AB (MM) TelgeKraft
Vattenfall AB (MM)
Öresundskraft Energy Trading Fortum Espoo Oyj
EGL Nordic AS Energiameklarit Oy Fingrid Oyj
Fortum Power and Heat Oy Kainuun Energia Oy Helsingin Energia Kaakon Energia Oy Kuopion Energia Kymppivoima Hankinta Oy Lahti Energia M-real Oyj Outokumpu Oyj PVO-Pool Oy Statkraft Energi AS Stora Enso Oyj
Tampereen Sähkölaitos Turku Energia Oy UPM Kymmene Oyj Vantaan Energia Oy
Vattenfall Sähköntuotanto Oy Finland
21 participants
The participants on the Elbas
The participants on the Elbas
market at NPS
market at NPS
Eastern Denmark 3 participants Energi E2 A/SE.ON Energihandel Nordic AB Vattenfall Danmark AS
Germany
10 participants
ATEL Aare-Tessin für Elektrizität AG
EGL – Elektrizitäts-Gesellschaft Laufenburg AG Electrabel S.A.
Merrill Lynch Commodities (Europe) Limited OstElektra GmbH
RWE Trading GmbH
Stadtwerke Flensburg GmbH Statkraft Markets GmbH
Vattenfall Trading Services GmbH E.ON Sales and Trading GmbH
Trading on the
Elbas market
Bid = Buy
Bid = Buy
Ask =Sell
“Back office”
The menus of the trading
system
The priority of the bid:
1. The price
2. The time when the bid was registered in the trading system
A bid consists of
- the delivery hour - the volume
- the price
A bid is binding until:
- a trade, change of the bid or an cancellation of the bid
- in other words a bid may be
annulled or changed until the bid has resulted in a trade
The bid
• The minimum price difference is
0,1 € (=tick size)
• The minimum volume is 1 MWh
PH(hh)(yy)(mm)(dd
PH(hh)(yy)(mm)(dd) )
• Trading currency is Euro 7.6.2002 10:00
Block bids,
”all or none” bids
It is free to define the block’s start and stop hours
A block bid can consist of all hours open for trading; hence a block bid can at the maximum be up to 32 hours.
The shortest length of a block bid with the ‘all or none’ condition is one hour.
The block bids are of type “all or nothing” meaning that the
following criteria must be filled for two opposite block bids to match:
• the length of the block • the price and
Order depth window –
for seeing all bids per hour in the
market
Common information:
¾ price
¾ volume
¾ order
¾ time of trade
¾ information on cancellation of trade
Individual party information is not public
information!
Tradings system: Trade History
• By clicking on the right button on your mouse you may also save the
information in xls –format. • In the Trade History window you may search
information about your trades, either according to delivery time or trade time.
• You may copy
information for example to Excel with the copy-paste functions.
1. The participant whose bid has been matched hears a
”pling” –sound from the computer and the trade may
be seen in the ticker window, with its timestamp,
volume and price.
2. Immediatly after the matching the trade may also be
seen in the Trading system (ex. Trade History).
3. If the participant has ordered the trade inforamtion
service via FTP-protocol to their Energy Management
Systems the message will be sent within minutes
from the trade.
All trades go automatically to clearing
All trades go automatically to clearing
at Nord Pool Spot AS
at Nord Pool Spot AS
Delivery
Delivery
NPF informs the TSO once per hour (a few
NPF informs the TSO once per hour (a few
minutes after change of hour) the
minutes after change of hour) the ElbasElbas trades
trades netpositionnetposition for every hour open for for every hour open for trade
trade
Money transactions
Money transactions
Invoicing every
Invoicing every bankdaybankday
Collateral Call
Collateral Call
7 days net bought (netted with the
7 days net bought (netted with the
Elspot collateral call)
Elspot collateral call)
The
The
consequence
consequence
s of a trade
s of a trade
Buy 10 MWh PH12 21,2 € Sell 6 MWh PH12 21,2 € Trade 6 MWh PH12 21,2 €
Scheduling report to the TSOs
Hourly net trades per participant in the TSOs area
The report is sent once an hour
The report includes the hourly values for today and after
noon also the values for tomorrow
Participant must also send their hourly Elbas trade
schedules to the TSO
Notes:
- Naturally the conditions that would be set by Landsnet may
be different in Iceland
– likewise may apply for the economic settlement cycle (for
ex. daily or weekly) and needs for collateral (security)
Delivery of Elbas trades: -1 day Delivery of Elspot trades: +1 day Settlement day (Invoice/Credit Note per email)
Debiting: +1 banking day Crediting: +3 banking days
Settlement on Nord Pool
Spot’s physical markets
Daily settlement
The settlement system relies on electronic bank communications
and funds transfers
-> All participants are obliged to have a pledged account in one
of Nord Pool Spot AS settlement banks
SVK ELKRAFT Participant Participant BB Sell (10 MW) Buy (10 MW) Participant Participant AA FG Participant Participant DD Buyl (4 MW) Participant Participant CC Sell (4 MW)
10 MWh
10 MWh
6 MWh
6 MWh
• Capacities are updated
automatically by the trading system
• Automated Market Splitting divides
areas dynamically when bottlenecks occur
Direction
Direction Capacity Capacity
to Elbas to Elbas Capacity Capacity after after Elbas Elbas trade 1 trade 1 Capacity Capacity after after Elbas Elbas trade 2 trade 2 FI FI--SESE 2300 2300 2310 2310 2310 2310 SE SE--FIFI 1100 1100 1090 1090 1090 1090 DK2 DK2--SESE 2000 2000 1990 1990 19941994 SE SE--DK2DK2 0 0 10 10 66
The trading system automatically
Technology behind the Elbas
trading system
Technological goals
Technological goals
•No end user software installations
needed
•No dedicated data connection needed
•Required response time < 1 sec
•Usability more than 99,5 %
System requirements for
System requirements for
end
end
user
user
Minimum requirements for hardware, system software and
data communications lines:
- Web browser: Microsoft Internet Explorer 5.0 or later or Netscape 6.0 or later, Opera
- Computer: Processor minimum Pentium II 128 MB RAM,
recommended 256 MB - Data communications
link to ISP service: Recommended 2 Mbit/s
The Hardware and
The Hardware and
Software
Software
Hardware
- 4 +1 Sun Solaris 220R
- Sun Clustering
- Cisco Pix Firewall
Software
- Oracle 8i Database
- BeaWebLogic 5.1
- Apache Web Server
High security level is a key element of the system design
USER AUTHENTICATION: DIGIPASS
•Continuously changing passwords
•Easy to use: only enter pin code and receive a new
password
•Very high protection: Impossible to break the password
counting system
DATA COMMUNICATION
•Encrypted source code by Key Partners
•SSL-128bit encryption protocol by F-Secure
•Verisign Website trust service
•SSH tunneling service
•Cisco Pix firewall
Technological solutions:
SECURITY
User Interface design
System includes at least following features: • Real-time updating in trade windows
• Market overview, transaction tracking and order entry on one screen
• Special interest in design for simple usability and outlook
• Simple outlook • Save desktop • Scaling
• Different pop-up menus on the windows
• Copy/Paste functionalities in needed windows • Own trades and orders with different color
• Color of some cells follows the market direction • User defined configuration of the graphic user interface