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UK electricity market agrees on 1 November cooordinated calendar switch

20 Jun 2013 18:21:42 | edem


The UK electricity market will undergo a "coordinated cutover" of liquidity from the EFA calendar system to the Gregorian calendar on Friday 1 November, the power trading committee (PTC) confirmed on Thursday.

Winter '14 will be the first contract to deliver under the Gregorian calendar system, with all contracts further down the curve subject to the liquidity switch.

The PTC has opted for a coordinated switch on the over-the-counter (OTC) market, as opposed to parallel trading of both calendars as was previously considered (see EDEM 11 February 2013), to avoid "a fragmentation of liquidity" between the two calendars, the PTC said.

The market is pushing for a clean cutover to Gregorian products and consequently is discouraging any Gregorian trades for periods that deliver before Winter 2014.

The details have been hammered out with stakeholders across the market and agreed by the power trading forum (PTF), which is managed by the PTC.

Live testing periods of one to two hours will take place each Wednesday in the four to six weeks before the changeover, to ensure a smooth switch. These testing periods will take place both within a live environment and a testing environment, to allow all market participants to take part.

Gap products covering any misalignment between the start- and end-dates of the EFA and Gregorian seasons will be available on Trayport, the PTC said, and "efforts will be made to ensure there is sufficient liquidity in these products".

Widespread support

The switch "follows extensive dialogue with the market on the most effective process for the transfer and is seen as an important step in removing a key barrier to the development of the UK power market," the PTC said.

And the switch has garnered support from across the market.

E.ON said on Thursday the company was "fully committed to and ready for the switch-over".

EDF head of commercial operations and vice-chair of the power trading committee Chris Regan told ICIS: "EDF are committed to the switchover from the EFA to the Gregorian calendar - we think it'll be good for market liquidity."

GM&T director of global trading Shaun Stacey agreed. "GM&T have been active in their support for the EFA to Gregorian calendar project and see it as a positive step that will help bring UK power into line with the gas and European power markets."


The first OTC bilateral UK electricity trade under the Gregorian calendar, which took place as recently as April, was between France-headquartered utility GDF SUEZ trading as IPM Energy Trading, and financial services giant Morgan Stanley. It was voice-brokered by ICAP (see EDEM 24 April 2013).

The PTC first revealed its intention to make the switch in late 2011 (see EDEM 4 November 2011).

A number of market participants have suggested that a change to Gregorian calendar-dated contracts will partly address the liquidity problem in the UK, because it will pull contracts in line with continental European markets and the NBP natural gas hub.

PTC chairman Steve Harris, GDF SUEZ head of term portfolio management, said: "The alignment with UK gas and European power contracts is positive for the UK power market.

"The change removes a barrier to new entrants and so could help attract more market participants which in turn could improve liquidity." Jamie Stewart and Zoe Double

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