EPEX SPOT Annual Market Review 2021

    Dynamic year for European power markets

    New trading products and markets successfully launched in a year marked by extreme energy prices

    • Successful launch of Polish Day-Ahead market
    • Larger geographic scope for European Day-Ahead and Intraday Coupling
    • Intraday volume reaches all-time high
    • Upcoming Local Flexibility Markets and Spot Auction for Guarantees of Origin

    Amsterdam / Berlin / Bern / Brussels / London / Paris / Vienna, 19 January 2022

    A total of 621.5*TWh was traded on EPEX SPOT in 2021 (2020: 614.8 TWh). This represents a new all-time high, breaking the record of the previous year. 498.2 TWh were traded on the Day-Ahead segment and 123.3 TWh on the EPEX Intraday, the latter being, for the second consecutive year, an all-time record (2020: 111.2 TWh).

    During the last months of 2021, power markets across Europe were hit by unprecedented price movements. Lasting periods of very high prices point to a tense structural situation in the energy system, with a need for investment into more generation capacities and technologies. Volatile prices suggest moreover the need for more flexibility in the energy system.

    As Europe transitions from fossil fuel dependency to higher shares of renewables, the need for flexibility in the power system will only become more important and pressing. EPEX SPOT already offers various trading solutions that increase flexibility in the market, and in the past year the foundation has been laid to build further initiatives in this respect. “Market participants and end-consumers are currently living a period of extreme pressure, and we renew our mission to be their trusted partner in these turbulent times. Market actors can rely on our robust price reference in their decision-making process” states Ralph Danielski, Chief Executive Officer of EPEX SPOT. The Exchange calls on policy makers to preserve the efficient functioning of the Internal Energy Market. Especially in a time of transition, a reliable wholesale price is indispensable to guide investments towards a decarbonized future.

    Projects and New Products

    In February 2021, EPEX SPOT and its clearing house European Commodity Clearing (ECC) extended their offering in Central Europe and launched Day-Ahead products in Poland. In terms of electricity consumption, Poland is one of Europe’s largest markets. “This launch brought the robust systems and interfaces deployed by EPEX SPOT in Central Western Europe and the Nordic region to our members in Poland” says Jonas Törnquist, Chief Operating Officer of EPEX SPOT. “Liquidity has been developing well in this segment, and nearly 1.4 TWh have been traded since the launch” he adds. Market participants now look forward to the Intraday launch in Poland, planned for early 2022. In addition to this, EPEX SPOT and ECC introduced After-Market products in Belgium and the Netherlands end of January 2021. These products enable market participants to trade local hourly and 15-minute contracts even after delivery, in order to reduce imbalance costs.

    During 2021, the European Power Exchange also laid the foundation to bringing further innovations to market participants while driving forward the energy transition: The acquisition of a Local Energy Market (LEM) platform from Centrica will allow EPEX SPOT to extend its Localflex offering. Local flexibility markets allow Transmission System Operators as well as Distribution System Operators to manage grid congestions by using flexible assets. The new LEM platform has been built specifically for use cases related to flexibility procurement and will set a new standard for market-based congestion management. Furthermore, EPEX SPOT announced plans to launch a brand new segment in Q2 2022: The first spot auctions for Guarantees of Origin (GOs). Guarantees of Origin are a tracking instrument that confirms the origin of electricity and determines the quantity stemming from renewable production. This market will be launched jointly with European Energy Exchange (EEX) and ECC. In the context of the energy transition, a well-functioning and exchange-based GO market brings transparency on the traded products and the technologies that are most demanded on the market.

    These initiatives are part of EPEX SPOT’s efforts to accompany and facilitate the energy transition through market-based solutions. All new products are developed and implemented in close cooperation with the Exchange’s members. Central to this cooperation is the Exchange Council, whose members make sure that services and products of the Exchange correspond to the needs of the market. A new Exchange Council was elected in 2021, with members representing all sectors of the market place.

    Together with its numerous project partners, EPEX SPOT also contributed to major achievements in various pan-European Coupling projects: The Bulgarian-Romanian border was included in the Single Day-Ahead Coupling (SDAC), Italy joined the Single Intraday Coupling and the Interim Coupling went live, connecting six new borders with the SDAC.

    Market Volumes

    A total of 621,521.0GWh was traded on EPEX SPOT in 2021 (2020: 614,824.3GWh). This represents a new all-time record on EPEX SPOT markets, driven by a strong performance of the Intraday markets. Intraday trading reached 123,298.1GWh (2020: 111,173.5GWh), a new record with a 10.9% growth year on year. Intraday has gained in popularity among market participants due to increased development of renewable generation and automated trading strategies. The highly performant M7 trading system and state-of-the-art services for Application Programming Interface (API) users and Software Vendors (ISVs) enable this trend. The Day-Ahead segment maintains a healthy activity, reaching 498,222.9 GWh in 2021.

    The Austrian Day-Ahead market registered a volume of 21,779.6 GWh traded with an average price of 106.85 €/MWh. The Intraday market reached 4,282.9 GWh. This includes both continuous trading and the Intraday auction and represents a new record.

    The Belgian Day-Ahead market continued the growth path of the previous year and reached 20,932.0 GWh (2020: 19,755.7 GWh), with an average Index of 104.12 €/MWh. The Intraday market registered a volume of 2,709.9 GWh, including both continuous and auction trading.

    In France, power trading volumes reached a new all-time high on the Day-Ahead segment in 2021, which rose to 123,411.4 GWh (2020: 121,998.6 GWh). Contracts traded at an average of 109.17 €/MWh. Intraday trading registered 10,460.3 GWh. This includes both continuous and auction trading.

    The GB power spot market registered a record on the Intraday auctions coupled with Ireland: The traded volume on this segment more than tripled on-year and reached a combined 5,531.5 GWh (2020: 1,624.8 GWh). The total spot volume, meaning the Day-Ahead and Intraday segment combined, reached 63,389.4 GWh despite the Brexit effect and the consecutive discontinuation of the market coupling mechanism between Great Britain and Continental Europe. The annual average index was 117.84 £/MWh.

    The German/Luxemburg Intraday market saw a major boost in 2021 and reached 69,933.1 GWh, beating the record of the previous year (2020: 63,627.0 GWh). The Day-Ahead market reached 195,542.0 GWh at an annual average of 96.85 €/MWh.

    The short-term power market in the Netherlands has seen a rise of +8.9% on the Day-Ahead segment, which reached 31,077.4 GWh. The average price came out at 102.96 €/MWh. The Dutch Intraday market reached a new annual record of 5,812.0 GWh, beating the record of the previous year (2020: 4,298.8 GWh). This covers both Intraday auctions and continuous trading.

    The Nordic Day-Ahead and Intraday markets, covering Denmark, Finland, Norway, and Sweden, displayed a strong growth since their launch in 2020. In 2021, the Day-Ahead markets reached a combined 43,700.7 GWh (2020: 12,387.1 GWh) and 3,260.9 GWh have been traded on the Nordic Intraday markets (2020: 1,679.0 GWh).

    The Day-Ahead market in Poland was successfully launched on 9 February 2021, with 1,369.6 GWh being traded in 2021, and the average price came out at 90.95 €/MWh for this period.

    In Switzerland, the volume on the Intraday continuous market has been recovering since the decoupling of its neighbour countries in 2018 and reached 578.3 GWh in 2021. Traded volume remains well below the record of 2,077.5 GWh in 2017 but has still grown by 61.3% year on year in 2021. The Swiss Intraday auctions reached a combined 713.5 GWh and the volume traded on the Swiss Day-Ahead was 22,568.1 GWh. The annual average index was 114.94 €/MWh.

    More details on volumes and prices can be found in the attached market report at the end of this PDF document.

    Membership

    308 members were active on the Exchange in 2021, with 28 new members registered, which is a record number of newly admitted companies in one year. This dynamic membership development also reflects the diversity of the power spot market. In addition, 23 ISVs have worked in partnership with EPEX SPOT as of December 2021 – ISVs develop software solutions compatible to the EPEX SPOT trading systems, facilitating in particular automated trading.

    The European Power Exchange EPEX SPOT SE and its affiliates operate physical short-term electricity markets in 13 countries: in Central Western Europe, the United Kingdom, in Switzerland, the Nordics and in Poland. As part of EEX Group, a group of companies serving international commodity markets, EPEX SPOT is committed to the creation of a pan-European power market. Over 300 members trade electricity on EPEX SPOT. 49% of its equity is held by HGRT, a holding of transmission system operators. For more information, please visit www.epexspot.com.

     

    Contact

    EPEX SPOT SE / 5 boulevard Montmartre / 75002 Paris (France)
    E-mail press@epexspot.com / Tel +33 (0) 1 73 03 61 33