Hellenic Energy Markets: Moving Ahead

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1 Hellenic Energy Markets: Moving Ahead Friday December 23 rd IENE 23rd National Energy Conference Michael Philippou: CEO, Hellenic Energy Exchange

2 The Energy Exchange Group GROUP CORPORATE STRUCTURE

3 The EnEx Group EnEx Group (Energy Exchange Group) HEnEx () Private company operating Spot & Derivatives energy markets 100% EnEx Clear (EnEx Clearing House S.A.) 100% owned by HEnEx Private company clearing spot energy markets Derivative energy markets cleared by ATHEX Clear (company of ATHEX Group)

4 HEnEx shareholders Public sector Private sector 22% 21% 20% 20% 7% 10% 49% 51%

5 EnEx group target markets Electricity Gas Environmental Spot Day Ahead Market Intraday Market Spot Trading Balancing Green Certificates Derivatives FEPAS Futures Derivatives Futures

6 Towards the European Target Model CHALLENGES & MILESTONES

7 Hellenic Electricity Market key figures 80 Price ( /MWh) ,35 45,66 59,36 56,60 41,47 57,47 51,92 42,84 54,68 49, Volume (TWh) 50 55,59 55,47 55,07 56,28 54,73 51,63 53,16 53,07 55,26 55, Participants

8 Steps towards the new Spot markets 1/5 SPOT TRADING RULEBOOK Drafting HEnEx approval and submission to RAE Finished Advanced Started Not started Consultation Re-Drafting submission to RAE RAE approval

9 Steps towards the new Spot markets 2/5 SPOT CLEARING RULEBOOK Drafting HEnEx approval and submission to RAE Finished Advanced Started Not started Consultation Re-Drafting submission to RAE RAE approval

10 Steps towards the new Spot markets 3/5 SPOT IT SYSTEMS Analysis Phase PCR full membership Finished Advanced Started Not started PCR testing Environment setup System Implementation User Acceptance Tests Training (Operators, Market Participants, Clearing members) Dry Run

11 Steps towards the new Spot markets 4/5 DAY AHEAD MARKET IMPLEMENTATION PCR evaluation - Order types impact Dry Run Start Finished Advanced Started Not started Local Go-Live Application to IBWT SC Market Coupling GR - IT Market Coupling GR - BG

12 Steps towards the new Spot markets 5/5 INTRADAY MARKET IMPLEMENTATION Setup regional intraday auctions with IT Local Auctions Go-Live Finished Advanced Started Not started Market Coupling GR - IT Market Coupling GR - BG

13 Power Derivatives Market CHALLENGES & MILESTONES

14 Steps towards the Derivatives market 1/5 DERIVATIVES TRADING RULEBOOK Drafting HEnEx approval and submission to RAE Consultation Re-Drafting submission to RAE RAE approval

15 Steps towards the Derivatives market 2/5 DERIVATIVES CLEARING RULEBOOK Drafting HEnEx approval and submission to RAE Consultation Re-Drafting submission to RAE RAE approval New products authorization for ATHEX Clear (HCMC/EMIR College)

16 Steps towards the Derivatives market 3/5 DERIVATIVES IT SYSTEMS Analysis Phase System Implementation User Acceptance Tests Training (Operators, Market Participants, Clearing members) Dry Run

17 Steps towards the Derivatives market 4/5 DERIVATIVES MARKET IMPLEMENTATION User Testing Dry Run Start Go-Live

18 Lessons learned & New Challenges

19 Lessons learned & New Challenges Risk Management Credit Risk Market participant defaults Cost allocation to other participants and/or to the society Business Risk Uncontrolled expansion of key accounts (e.g. Renewables) Disruptive technologies Cost Characteristics High Investment Cost Very Low or Zero Marginal Cost Challenges Price signal formation Subsidy Schemes Investment incentives Capacity & Flexibility Markets

20 Natural Gas Market TAKING THE NEXT STEP

21 Hellenic Gas Market Developments & Prospects Forming the basis for a liquid Gas Market TAP pipeline 10 bcm (20 bcm) / year IGB pipeline 3 bcm (5 bcm) / year LNG Terminals Revithousa Upgrade Storage (+73%) Km3 Regasification Capacity (+40%) m3 LNG/h LNG carrier size (+68%) Km3 FSRU Terminals Alexandroupolis Storage: 170 Km3 Cap.:6,1 bcm/year Kavala Storage

22 Working towards the new NG market Our vision Establishment of a Gas Trading Platform HEnEx as a Trading Platform Operator (TPO) EnEx Clear as a Gas Clearing House Investigation of synergies for a Regional Gas Market Creation of regional indices and price signals First Step: Feasibility study Analysis and presentation of the European landscape Analysis of the Greek Natural Gas sector Suggestion for an NG exchange-based Trading and Clearing Model Potential for creation of a regional market Financial analysis of HENEX s activity as NG Trading Platform Operator (TPO) Implementation Plan

23 Thank you for your attention

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