Products-a

Intraday Cross BorderThe Netherlands-Belgium

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Content

1. Overall design1. Process description2. Capacity calculation3. Elbas trading platform4. Tradable products5. Timeline & Nominations

2. Contractual impacts3. Price boundaries4. Transparency

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Content



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Intraday Market Coupling

Until 16/02/2011 :

• Continuous trading of hourly and multi-hour products• BE: until 5 min before delivery• NL: until 1h30 before delivery

• Two steps required for cross border ID deal• Secure cross border capacity via explicit pro-rata allocation

mechanism• Trade the commodity

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Intraday Market Coupling

After implementation of implicit cross border capacityallocation:

• Continuous trading of hourly and block products• BE: until 5 min before delivery• NL: until 1h30 before delivery

• Orders become available for trading in other market• BE orders in NL; NL orders in BE• between 21h00 D-1 and 1h30 to 2h30 before delivery• if cross border capacity is available

Only one step required for cross border ID deal!

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NL-BE solution

Shared Order Book

Matching Algorithm

APX-ENDEXNL market

Clearing/Notification

Systems

Elia, TenneT operators

Capacity Matrix

BelpexBE market

Clearing/Notification

Systems

Elbas system• Hosted by NPS• Local operations by APX/Belpex• Separate from NPS Elbas market

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NL-BE solution: High Level Architecture

ELBas

Trader

Trading XBApplication

EuroLight

EliaNominations

TenneTNominations

ShipperHub / XBNominations

ShipperHub / XBNominations

EliaCapacity

TenneTCapacity

EliaOperator

ATCSubmission

APX-ENDEXOperator

Market Surveillance /ATC Maintenance

Monitoring HubNominations

Settlement

SFTPService

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Interim solution

• Interim solution, as much as possible based on existingsystems

• Elbas as–is• Clearing and settlement as–is (via Eurolight)• Minimal impact TSO systems• XBID application to be built by the PXs

– connect Elbas to Eurolight and new functionality of crossborder nominations

– taking into account the existing infrastructure.

• Important improvement of today’s allocation mechanism• Continuous implicit allocation, coupling of existing ID markets• Initial Scope: NL-BE• Potential: NL-DE and NL-NO targeted, FR-BE can be investigated

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Interim solution

• Facilitates development of an enduring solution• Refinement of target requirements, based on learning experience• Governance framework can be re-used for enduring solution,

although not a necessity• Strong commitment of APX-Endex, Belpex and Nord Pool to

support establishing the enduring Target Solution, in part given byshared views and secured by similarities in shareholder structures

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Advantages of Intraday Market Coupling

• Removes unnecessary risks oftrading separately short-termtransmission capacity and energy

• Guarantees the optimal utilizationof cross-border capacity

• More efficient generation capacityutilization

• Less prone to market abuse (nocapacity hoarding)

• All market participants benefit fromcross-border capacity

• Encourages liquid, robust spotmarkets

• Optimal use ofcapacity

• Single market

• Efficient market

1 further steptowardsEuropeanInternal EnergyMarket

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Market ASell

Market BBuy SellBuy

S:50MW@75€

S:25MW@70€

P:30MW@60€

P:25MW@65€

P:45MW@60€

S:20MW@80€

P:25MW@65€

S:25MW@70€ P:50MW@70€

Continuous implicit capacity allocation

No capacity (comparable to today’s situation)

S:20MW@80€

Market A: Liquid / low spread Market B: few sell / high spread

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Market A Market B

60S:50MW@75€

S:25MW@70€

P:25MW@65€

S:25MW@70€ S:25MW@70€

S:35MW@75€

P:50MW@70€

P:45MW@60€

ATC

ATC A->B = 60 MW

P:50MW@70€

P:10MW@65€ P:25MW@65€

S:20MW@80€

P:30MW@60€

S:20MW@80€

• With 60 MW capacity from A to B

• 60 MW cheapest sell orders in A are shown in B

• 60 MW most expensive buy orders in B are shown in A

SellBuy Buy Sell


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Market A Market B

60

S:20MW@80€

S:50MW@75€

S:25MW@70€

P:25MW@65€

S:25MW@70€ S:25MW@70€

S:35MW@75€

P:50MW@70€

P:45MW@60€

ATC

ATC B->A = 30 MW

30

P:50MW@70€

P:10MW@65€ P:25MW@65€P:25MW@65€

P:30MW@60€

S:20MW@80€S:20MW@80€

• With 30 MW capacity from B to A

• 30 MW most expensive buy orders in A are shown in B

• 30 MW cheapest sell orders in B are shown in A (but only 20 MW available)

SellBuy Buy Sell


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Market A Market B

60

S:20MW@80€

S:50MW@75€

S:25MW@70€

P:25MW@65€

S:25MW@70€ S:25MW@70€

S:35MW@75€

P:50MW@70€

P:45MW@60€

ATC

Matching

P:50MW@70€

P:10MW@65€ P:25MW@65€P:25MW@65€

30P:30MW@60€

S:20MW@80€S:20MW@80€

• A sell order of 25 MW in market A can match a buy order in market B

SellBuy Buy Sell


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Market A Market B

S:50MW@75€

P:25MW@65€

S:35MW@75€

P:45MW@60€

P:25MW@70€

Netting

35

ATC

P:25MW@65€

P:25MW@70€

S:20MW@80€

55P:30MW@60€

P:10MW@65€ P:25MW@65€ P:25MW@65€

S:20MW@80€S:20MW@80€

• 25 MW of capacity used in the direction A -> B (ATC A->B = 60 – 25 = 35)

• 25 MW can be netted in the direction B -> A (ATC B->A = 30 + 25 = 55)

• Orderbooks are updated accordingly

SellBuy Buy Sell

Continuous implicit capacity allocationmakes intraday markets more efficient and creates more

opportunities for market players


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Content



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Calculation of NTC ID - general

NTC ID calculatedby Elia

NTC ID calculatedby TenneT

Minimum NTC ID iscalculated

ATC ID (inclusivenetting) is calculated

and published

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Calculation method at Elia – NTC DA

• A NTC for a day D is calculated on W-1 :– DACF file of a historical day– Coordination within CWE– Taken into account : grid topology, generation data, overall

load, import/export per area, weather conditions ...

• on D-2 :– reevalution of NTC calculated in W-1– Taken into account new information of parameters regarding

grid topology, generation data, weather conditions ...– Coordination in CWE

• Finalised on D-1 in the morning

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Calculation method at Elia – NTC ID

• D-1 @ 15h00 : start of grid security analysis• D-1 @ 18h00 : deadline to announce to ARPs modifications

to nominations of generation units + start of "IDproduction" procedure

• D-1 @ 18h00 : DACF file of each hub must be available forday D

• D-1 @ 18h00 : CORESO calculates "combined DACF file"• D-1 @ 19h00 : Elia starts calculation of NTC ID based upon

"combined DACF file" and coordinates with TenneT onminimum value + computation of ID ATC (taking intoaccount Y-M-D nominations, inclusive netting)

• D-1 @ 20h30 : ATC ID publication

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Calculation method at Elia – NTC ID

• Special tool calculates NTC ID on both BE-NL & BE-FRborders (linear optimisation algorithm)

• Calculation of flows to obtain maximal NTCs on bothborders in both directions, based upon :

• Base Case (="Combined DACF file"), including last update of– Generation– Grid topology– Import/export of each hub– Already allocated capacity Y+M+D– Weather conditions

• in CWE and neigbouring regions.

• Elia values of NTC ID are sent to TenneT

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Calculation method at TenneT – NTC ID

• The calculation method is very similar to the one from Elia:

– Based on the NTC determined for day-ahead market

– Reductions may be applied due to the results of the NetSecure Analysis, starting at 19:00, which is based on

• the "combined DACF-file"• Most recent load info is taken into account

– Taking into account maximum values for import/export onDutch borders

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Submission of ATC values to Elbas

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Content



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Elbas today

• The only cross borderintraday market in Europe

• Continuous 24/7 trading– Individual hours– Blocks bids

• A tool to adjust trades madein the day-ahead marketbefore hour of delivery

• Fast developing liquidity:– 1.8 TWh in 2008– 2.3 TWh in 2009

• Real-time• Reliable• Proven

Sweden

FinlandNorway

Denmark

Germany

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The Elbas model as-is

• Developed during the nineties– Customer need for adjustment of day-ahead schedules before

hour of delivery– Risk and uncertainty due to expensive and unpredictable

balancing market– Need for a more efficient use of the remaining cross border

capacity after day-ahead trading– Potential for a better use of production flexibility across

borders

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Sweden

FinlandNorway

Denmark

Germany

Netherlands

Belgium

Elbas ad-interim

• Implicit cross border tradingmakes better use of gridcapacity: Immediateimprovement of currentsituation NL-BE

• Potential to link NL-BE to NOand GE:

– Access to counterparts withdifferent product mix

– Access to counterparts withdifferent weather conditions

– Access to counterparts withdifferent marginal costs

– Increases the potential forflexible producers (i.e. hydro)

– Reduces the risk of thebalancing market

– Reduces the risk of pricesbelow marginal cost

– Learning experience to helpdevelop enduring TargetSolution

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•Only bids for which its possiblefor you to enter as counterparty,limited by the ATC to/from thearea you are located

Information on prices and volumes for series that are open fortrade.

• All functionalities can beaccessed from the menus (upperpart)

•Important functions also via leftmouse-button. E.g., by clickingthe best buy- or sell bid contractscan be sold or bought.

The Price Information window

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Priority order of bids:1. price2. arrival of the bid to the bid register

A bid consists of:- the product, i.e. the series- the volume- the price

The bid is binding until:- a trade happens, the bid is changed orcancelled- i.e. a bid can be changed or cancelleduntil a bid finds counterparty in themarket

PH(hh)(yy)(mm)(ddPH(hh)(yy)(mm)(dd))

The bid

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•Valid bid,”State”-column is ”Active”•Bid on hold, ”State”-column is”Inactive”•Cancel bids by selecting them andclicking ”Cancel Order”• Change bids by selecting them andclicking ”Change Order”• (In)Activate by selecting the bidsand clicking ”Activate” or ”Inactivate”• (In)Activate all bids simultaneouslyby selecting ”Activate All” or”Inactivate All”.

Monitor and change your own bids

The Order Book

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Content



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Tradable products

• Two type of products

– Hourly limit orders• Can be filled partly

– Block orders• P & V same for all hours• Block orders can only match with other (identical) block orders• All or none

• Minimum tick sizes: 0.1 € and 1.0 MW

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Content



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Short overview explicit allocation

Market participant nominates cross border and both hubs

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Short overview implicit allocation

A P X X B S H IP A P X C C P

A P X X B S H IP B e lp e x M a rk e t P a r t i c ip a n t s

N L - T E N N E TN e t p o s i t io n : + 2 5 M W

B E - E l i aN e t p o s i t io n : -2 5 M W

M a rk e t P a r t i c ip a n t s

2 5 M W

2 5 M W

2 5 M W

C r o ss b o r d e r n o m i n a t i o n sH u b n o m i n a t i o n s r e l a te d to X B I D c r o ss b o r d e r f l o w sH u b n o m i n a t i o n s w i th m a r k e t p a r t i c i p a n ts

Market participant does one hub nomination

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Impact nominations for market participants

• Changes are as limited as possible

• When doing a trade on the market-screen

– Nominate local hub, according to the local hub nominationscriteria (counterparty PX)

– Cross border nominations will be handled by PX

– No difference (nor additional information) compared to dealswithin the country

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Impact nominations for PX

• Additional nominations are to be handled

• When parties do a cross border transaction

– Deal is split up between the hubs

– Shipping (cross border) is nominated by separate BRP (APX)

– There will be additional nominations between PX and Shipper

– 1 cross border deal results in 5 nominations by 5 BRPs• All nominations need to be consistent

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Impact nominations for TSO

• Changes are as limited as possible

• When doing a trade this results for the TSO in

– One shipping entity to provide all the cross border nominations(intraday)

– Only local hub nominations from (local) market participants

– Gates are only used for TSO-TSO matching of Import andExport nomination by market participants

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Deadlines trading overview

• Cross border trading on Elbas– based on the confirmed ATCs– continuously possible until the deadline for the nomination

gate

• Deadlines- Cross border trading is possible until 1h30 or 2h30 before the

beginning of the delivery period.- Trading on the Belgian hub is possible until 5 minutes before

the beginning of the delivery period.- Trading on the Dutch hub is possible until 1h30 before the

beginning of the delivery period.

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Deadlines nominations overview

• Nominations to the TSOs

- Cross border nominations by APX cross border shipping agent:TSOs must receive nominations following the gate system inplace (ex-ante)

- Hub nominations in Belgium by Belgian market participants:ELIA must receive nominations before 14h00 D+1 (ex-post)

- Hub nominations in the Netherlands by Dutch marketparticipants: TenneT must receive nominations 1 hour beforethe delivery period (ex-ante)

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Gates overview

• Cross border trading continuously possible• Until 1h30 (odd hours) or 2h30 (even hours) before the start of the delivery period

Gate

Hour ("H")

Door

Opened at

Door

Closed at

Scope of the gate

21 21h00 22h00 next day (00h -> 24h)

23 23h00 00h00 next day (01h -> 24h)

01 01h00 02h00 current day (03h -> 24h)

03 03h00 04h00 current day (05h -> 24h)

05 05h00 06h00 current day (07h -> 24h)

07 07h00 08h00 current day (09h-> 24h)

09 09h00 10h00 current day (11h -> 24h)

11 11h00 12h00 current day (13h -> 24h)

13 13h00 14h00 current day (15h -> 24h)

15 15h00 16h00 current day (17h -> 24h)

17 17h00 18h00 current day (19h -> 24h)

19 19h00 20h00 current day (21h -> 24h)

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Example for Gate 05 (scope 7h00 till 24h00)

Nominations:• Trade concluded (e.g 5MW for 7h00-9h00) after closing G03, cross bordernominations to the TSOs at the latest at G05

• = 06h00 at the latest• The PX system will send the netted cross border nominations to TenneT andELIA respectively• The market participants nominate the deal on internal local hub nomination

• TenneT before 06h00, Elia before 14h00 D+1

Trading scheme:• Belpex local trading closes 5 minutes before the delivery period (06h55)• APX-ENDEX local trading closes 1h30 before the delivery period (04h30)• Cross border closes 1h30 or 2h30 before gate closure (04h30)

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Deadlines trading/nominations overview

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Content



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APX-ENDEX Market Rules

• No changes will be made to market rules & fees

• Product specification will be available via website

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Belpex Market Rules & Procedures

• Market Rules

– Ministerial Decree

– October 2010: updated for XBID NL-BE– Volumes to be expressed in a multiple of MWh– Prices to be expressed with a maximum of one decimal– Removal CoDAM– Entered into force 9 Nov 2010

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Belpex Market Rules & Procedures

• Market Procedures

– More detailed, within framework set out by MR– Alignment with MR: 9 Nov 2010

– Limited impact, apart from CoDAM– Communication at the latest two weeks before (// CWE

updates)

– Updates with concrete info for XBID NL-BE:– Contents

» Trading phases» Updates w.r.t. ELBas» ...

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ARP Contract Elia

• Annex 2– Reference to explicit allocation updated to implicit allocation

• Annex 5– No more cross border nominations by ARPs for intraday on BE-

NL border

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PV Contract TenneT

• Grid code– approval awaited by EnergieKamer by 15 February 2011

• INB rules– Agreement for INB will be ended at the launch of the new

intraday cross border NL – BE mechanism

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Content



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Price boundaries

• Negative prices will be available

• System has technical limit– -99 999.99 €/MWh– Generic setting for all Elbas markets

• Harmonization between markets required– Actual price boundaries will be communicated in a later stage

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Current price boundaries

• APX-ENDEX– Negative prices possible– [-3000 €/MWh, 3000 €/MWh]

• Belpex– Since CWE MC launch, negative prices are implemented– [-3000 €/MWh, 3000 €/MWh]

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Content



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Capacity & market data

• Transmission capacities and market data (anonymous) onwebsite Nord Pool Spot, Elia & TenneT

• Customer reports (own orders and trades) and detailedanonymous market information via Elbas– Price information and market depth– Transmission capacities– Trade ticker– Real-time

• All individual trade data accessible by participant viaexisting APX-ENDEX / Belpex facilities and protocols

• Anonymous statistics on Belpex website and APX-ENDEX ftpserver

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Transmission capacities (public website)

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Elbas price information window

Documents

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