Successful first interventions:
The first GRTgaz interventions on Powernext Gas were successful with a total volume of 9 000 MWh traded in 8 transactions on 4 products. “As of today 100% of the volume expected by GRTgaz was traded on the Exchange, thanks to the active participation of the market members who put on the screen, depending on the product, between 3 750 and 9 000 MWh on each side of the order book” comments Richard Katz, Powernext’s Sales & Communication Director.
The implementation of this mechanism is a new step forward for the balancing of the GRTgaz network. The resulting price references will be more transparent and more representative of the market as the transactions will be executed through an anonymous and multilateral platform, not through blind auctions as it was the case previously. The participation to the prices determinations will also be extended as the Exchange already counts 23 members, one year after its launch, compared to 16 on the Powernext-Balancing GRTgaz platform.
“By becoming a Powernext Gas Spot member to source a part of its balancing needs, GRTgaz confirms its will to make the transmission network balancing mechanism evolve in order to support the development of the French market. We will directly use the price of our transactions as balancing reference price, which should also encourage the market to participate in these interventions” says Philippe Garnier, GRTgaz’s Chief Strategy & Marketing Officer.
This mechanism was designed by shippers in the framework of the “Concertation Gaz” (Gas Concertation) led by GRTgaz from January to June 2009, with the participation of CRE (Commission de Regulation de l’Energie, the French energy regulatory commission) and Powernext. This mechanism will continue to evolve, especially taking into account the performance evaluation which will be made early 2010. Moreover, the “Concertation Gaz” will continue the discussions to design the target balancing model for the transmission network.
The interventions on the Exchange use an advanced technology of algorithmic trading. They will be automatically performed, combining random factors for non-predictability along with a set of decision criteria.
“Trayport Trader Systems is delighted Trading Gateway has been used to develop this innovative solution in Europe for the specific needs of a TSO traditionally far removed from trading negotiations” says Nathan Amery, Trayport’s Head of Sales - Trader Systems.
Powernext’s CEO Jean-Francois Conil-Lacoste comments: “This event occurs almost exactly one year after the launch of Powernext Gas. We wish that this new mechanism will facilitate the activity of market players in France and participate in the development of the French gas market. These first results are already very encouraging and will undoubtedly prompt more market participants to join the Exchange.”
Powernext SA, incorporated in 2001, manages several complementary, transparent and anonymous energy markets: Powernext Gas Spot and Powernext Gas Futures were launched on November 26, 2008 in order to hedge volume and price risks for natural gas in France from Within-Day to the next three gas seasons. This platform also allows the Transmission System Operator GRTgaz to progressively cover its daily balancing needs through a market based mechanism. EPEX Spot, based in Paris and owned equally by Powernext and by EEX, the German energy organized market, was launched on January 1st 2009 and facilitates, 365 days a year, the hourly balancing of physical power delivered the following day on the French, German/Austrian and Swiss hubs. In April 2009, Powernext contributed the French power derivatives to EEX Power Derivatives, a company dedicated to European power derivatives, based in Leipzig, against a 20 percent equity stake in this company.