CEE traders against time change for electricity market coupling
Traders in central and eastern Europe have told ICIS that moving forward the market coupling gate closure time, as suggested by Polish power exchange POLPX, would allow them fewer opportunities to optimise their positions or fix mistakes.
Earlier this month, POLPX indicated that the exchanges' gate closure time for the Hungarian, Slovak and Czech market coupling project should be reset to 12:00 hours, in line with schemes elsewhere in Europe, or Poland would not join the scheme (see EDEM 10 July 2013).
But some market participants fear that changes could limit traders' opportunities between the central and eastern Europe (CEE) region and central west Europe (CWE), which includes Germany, France, the Netherlands and Belgium.
"I am pretty sure that all traders, at least those of a more speculative nature, would prefer the old time frame, as it's a good trading opportunity - it's always good to have a lag between CEE and CWE fixings, as you can [optimise] more," said one Hungarian trader. "I think a lot of people are using it for higher bids or lower offers than Germany, and with the 12:00 [local time] fixing time, this is possible."
Another trader active in the region agreed: "I don't think moving the gate closure one hour later will be a good idea, because thanks to different times, if we make a mistake we have an opportunity to fix it before the German exchange closes at 12:00."
He also said that since market coupling between the countries was launched in September last year, the time that results were published after the 11:00 hours gate closure had already been pushed from "only 10 minutes after 11:00 to 11:30, [which] leaves traders less time to forecast before the German exchange deadline.... If we are to change this settlement time, we might as well just create one single exchange," he said.
The Czech Republic exchange OTE is well aware how important the mutual settlement time is.
"The gate closure time is one of the most important issues to be discussed," an OTE spokesman said. "Because we understood that this proposal was introduced by the Polish exchange market, the opinion on the issue from market participants in the Czech Republic, Hungary and Slovakia is important, too. If there will be substantial objections from the market, we are open to discuss it.
"But at the moment we are not planning to change the gate closure time between the Czech, Slovak and Hungarian markets, nor has this been requested by Poland," he added.
Hungarian power exchange HUPX declined to comment on this issue.
One trader active in the region questioned the effect of Poland joining the market coupling, suggesting that changes would be only "marginal". "The market coupling is a good thing and if POLPX joins, that's even better, but I will not worry if they don't," he said.
But another trader believed that POLPX would greatly improve the efficiency between the markets, as well as boost liquidity. "I think it's funny that the three members of the club would have to change for the newcomer, but POLPX is bigger than all the other coupled markets together," he said. POLPX's daily average volume traded in 2013 so far has been 58,230MWh, the exchange said, compared with OTE's daily average volumes of 34,058MWh. Karolina Zagrodna
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