On 1st July 2011, GRTgaz and Powernext launched a market coupling service between GRTgaz’s PEG North and PEG South. This initiative represents a premiere in the European gas sector and, three weeks after its launch, the assessment is very positive.
A capacity of 10 GWh is made available on a daily basis by GRTgaz between the PEG South and the PEG North in both directions. A daily average volume of 6.5 GWh has been allocated at an average price of 5 cents Euros/MWh on Powernext’s PEG Sud/PEG Nord Spread product. This average price reflects the difference observed between the prices on the two PEGs. With a North/South spread close to zero, the traffic between the two zones has mostly been uncongested since the launch. Under these market conditions, the capacity made available by GRTgaz has brought the order books and the prices even closer with the active support of Powernext’s members.
“This successful launch shows that market coupling, adapted to the specificities of the gas market, is becoming a winning initiative. Similarly to the market coupling service in the electricity sector, this French premiere can serve as an example at the European level”, adds Jean-François Conil-Lacoste, Powernext’s CEO.
“The market coupling represents an original complement to the sale of transportation capacity on dedicated platforms. Through the coupling, the capacity is simultaneously available where the market participants buy and sell gas, i.e. the organised market. We hope that this experimentation will confirm its success over the next few months and, why not, that it will be an useful contribution to the current works towards an integrated European gas market!” concluded Guy Fasanino, GRTgaz’s Director of Sales.
GRTgaz builds, operates and expands France’s high-pressure natural gas transmission network which covers most of the country. GRTgaz delivers the natural gas provided by its customers to consumption points directly connected to the transmission system: the public distribution networks to supply households, public authorities and companies, large industrial consumers and power stations that use the natural gas to produce electricity. With over 32,000 km of gas pipelines and 25 compressor stations, GRTgaz is constantly investing to transport natural gas under the best safety and fluidity conditions, and to improve security of supply by providing access to ever more diversified sources.
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. Since 1st December 2009, Powernext Gas Spot also allows the Transmission System Operator GRTgaz to progressively cover parts of its daily balancing needs on the market. Spread PEG Sud / PEG Nord products were launched on Powernext Gas Spot in May 2011. On 1st July 2011, GRTgaz and Powernext atrated the first gas market coupling initiative in Europe between GRTgaz’s PEGs Nord and Sud. An OTC Clearing service was launched in November 2010 to allow bilateral and OTC trades to be registered on the Exchange. 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.