EFET calls for urgent reform of Iberian intra-day power trading system

The European Federation of Energy Traders (EFET) has urged Spain and Portugal to immediately move towards what is termed a portfolio-based bidding process in line with the other initial members of the XBID continuous intraday electricity market

The XBID market is due to launch in the first quarter of 2018.

Instead of portfolio trading, Iberia plans to retain its existing single-unit-based bidding structure. This will mean Spain and Portugal are the only countries participating in XBID to maintain such a system.

EFET’s favoured portfolio-based process means companies can pool their bids and offers from of a number of their generation or consumption units on the platform in a single bid or offer. They can then allocate the actual volume to a specific unit later in the scheduling process when the grid operator has to be notified on a unit-by-unit basis.

A single unit structure, as the name suggests, means companies place individual bids and offers for all units. EFET said in a statement on Monday the approach would be would be “highly unfeasible in a continuous trading environment” due to a number of inefficiencies.

The XBID project is intended to develop into a liquid continuous implicit intraday power market. The platform introduces a single cross-zonal intra-day market across Europe and will include local trading systems, which are already operated by power exchanges, with available cross-zonal transmission capacity provided by grid operators.

Germany, France, Switzerland, Belgium, the Netherlands, the Nordic countries and the Baltic states all have portfolio bidding in place. Additionally, Italy plans to move to portfolio bidding for the intraday – and possibly day-ahead – markets in preparation for its planned entry into XBID in the first quarter of 2019.

Alone

This would leave Iberia alone among the XBID members in using a different system, which will challenge the performance of XBID, according to EFET.

“Harmonising bidding terms in interconnected markets is a pre-condition for an effective functioning of Iberian intraday markets at the go-live of the cross-border intraday platform [XBID],” said EFET task force Iberia chairman Antonio Canoyra on Monday.

However Spain and Portugal’s electricity regulators CNMC and ERSE, as well as the Iberian power exchange OMIE, have defended their current system, EFET added.

In a recent consultation looking at the intra-day market, the two regulators said the Iberian market “has been designed from the beginning as a physical market, and not as a market based on trading portfolio”. jon.stibbs@icis.com