EEX Phase III Auctions

Transcription

1 EEX Phase III Auctions Viviana Ciancibello, Senior Key Account Manager, EEX, Warsaw, 11 April 2013 European Energy Exchange AG Eurex Group

2 Agenda 1. EEX at a Glance 2. Emissions Auctions 3. Auction Design 4. Bidding in the Auctions 2

3 EEX at a Glance The European Energy Exchange (EEX) develops, operates and connects secure, liquid and transparent markets for energy and related products. 3

4 EEX Trading Members trading members from 22 countries: 132 EEX Spot Markets members 168 EEX Power Derivatives members 169 EEX Derivatives Markets members

5 EEX Emissions Products Primary Market: Spot Market Derivatives Market Primary Auction of EU Allowances (EUA) of EU ETS 2 nd and 3 rd rd trading period Primary Auction of European Aviation Allowances (EUAA) of the EU ETS Secondary Market: Spot Market EU Allowances (EUA) of the 2 nd EU ETS trading period EU Allowances of the 3rd EU ETS trading period European Aviation Allowances (EUAA) of the EU ETS valid for compliance in 2012 Derivatives Market EUA Futures (Maturities up to 2020) EUAA Futures (Maturities up to 2020) Certified Emission Reduction Futures (Maturities up to 2020) Emissions Reduction Units Futures (Maturities up to 2020) EU ETS Kyoto Offsets 5

6 EUA Auctions in Phase III Substantial increase of auctioning in Phase III More than half of the total volume of allowances will be auctioned, i.e. some 1bn EUAs per year Implications for market participants Power Sector: No free allocation (with temporary exceptions in some Member States) Industrial sectors: Sector without carbon leakage risk will receive around 80% of their benchmarked allowances for free in 2013, declining to 30% in 2020 Aviation sector: 15% of allowances, i.e. some 30mn EUAAs, will be auctioned from 2012 through

7 EUA Auctions in Phase III General Allowances The EU Commission estimates a total amount of 818,855,500 general allowances (EUAs) to be auctioned in The final amount has yet to be determined. The estimated total auction amount includes the deduction of: 151,566,054 EUAs allocated free of charge by eight EU Member States to certain power generators. Backloading proposal has not been considered For EEX, in both its capacity as the TCAP and German auction platform, this would comprise the following volumes for the whole year of 2013: Volume States Details 541,197, participating Member States, Poland and EEA-EFTA states Weekly auctions on Mondays, Tuesdays and Thursdays 182,560,500 Germany Weekly auctions on Fridays 7

8 Auction Calendar The EEX Auction Calendar detailing the TCAP and German auction dates and timing is accessible via the EEX website: 8

9 Eligibility Form EEX will request a self declaration form from all admitted Spot and Auction members in order to clarify each member s status according to the auction eligibility rules. Supporting documents will be required. Submission of this form is a prerequisite for participation in the auctions. 9

10 Full EEX membership EEX/Eurex Memberships Access to all EEX Markets (Spot, Derivatives) and products (power, natural gas, emissions, coal) Emissions-only EEX membership Access to both or either the Spot and Derivatives markets for emissions products only (EUA, CER, ERU, EUAA..) Possibility to bid in the Primary Auctions and trade on continuous trading Auction-only EEX membership Free Access: EEX Market Supervision enters bids on behalf of the member, via the Primary Auction Bidding form (no technical or membership fee) Trader Access: Direct access to the EEX Spot Auction Platform; the member can enter, modify and cancel bids (small technical fee is payable) 10

11 Phase III Auction Design Auction Design The Auction Design for all Phase III Auctions is in accordance with the rules set out in the EU Auctioning Regulation Articles 4-7 Auctioning Regulation Specification Description Auctioned Product Spot EU Allowances for the 3 rd trading period of the EU ETS (2013 to 2020) Auction Delivery Auction Format Next-day delivery (T+1) Single round: Bids will be submitted during one given bidding window Sealed bid: Bids will be submitted without seeing other participant s bids Uniform price: All successful bidders will pay the same auction clearing price Lot Size 500 allowances 11

12 Auction Design Submission of Bids Bids may be submitted, modified and withdrawn during the bidding window via the EEX Auction Platform Only authorized persons are entitled to place bids, i.e. authorized traders of the exchange member ( bidders representatives ) Trading-on-behalf: Authorized trader(s) [in case of auction-only participants : central coordinator] can submit Trading-on-Behalf forms via EEX Market Supervision up to 10 minutes before the auction close Each bid shall state: Volume bids as integral multiples of lots of 500 allowances Price bid in Euro for each allowance (in two decimal points) New for Phase III: Identity of the client (when bidding on behalf) Withdrawal of Bids During the bidding window Genuinely mistaken bids can be unwound only under restrictive conditions by EEX upon request of the bidder s representative 12

13 Auction Clearing Price Auction for 1 mt EUA Order book after close of call phase Bidder Price Volume A 7, B 7, C 7, D 6, E 7, F 7, G 7, H 7, I 6, J 7, Total Order book sorted by price Bidder Price Volume G 7, B 7, H 7, F 7, A 7, J 7, C 7, E 7, I 6, D 6, Total Allocation The total auction volume of 1 mt EUAs is allocated at an auction clearing price of 7,10 per allowance. Bidder E sets the price for all bidders, being the last successful buyer 13

14 Auction Settlement Auctioneer Exchange Trading Member Sell Buy Market Participants (Banks, Intermediaries) and EU ETS Operators Auctionneer Clearing House General Clearing Member Union Registry Account CO2 T+1 IM; Payment at T+1 Union Registry Account CO2 Trading Member s Union Registry Account T+1 Upon request of Trading Member 14

15 Reserve Price Phase III Auction Reserve Price The reserve price methodology is closely coordinated between the auction platform, the European Commission and the Member States and operationalizes Article 6 of the Auctioning Regulation: significantly under the price on the secondary market prevailing during and immediately before the bidding window when taking into account the short term volatility However, the reserve price as well as its underlying definitions are handled confidentially. This is in order to prevent any kind of manipulation or misconduct in the auctions, which could arise from the knowledge of this Methodology. 15

16 Cancelled Auctions Conditions for a Cancelled Auction The volume of all the bids at the close of the bidding window falls short of the total volume of auctioned allowances. Art. 7(5) Auctioning Regulation The auction clearing price does not match the Reserve Price Art. 7(6) Auctioning Regulation Other circumstances preventing the conduct of the auctions. Art. 9 Auctioning Regulation Volumes from Cancelled Auctions Volumes from cancelled auctions of General Allowances will be spread evenly over the next four scheduled auctions. Art. 7(8) and 9, Auctioning Regulation 16

17 Bidding in the Auctions (1) ComXerv EUA Primary Auction Platform Logins provided to authorized persons by EEX Market Supervision Auction information is displayed; bid for own or client account; trade and order reports are available for download post-auction Mass upload of a series of bids via excel is also available 17

18 Bidding in the Auctions (2) Bidding Form EUA Primary Auction EEX Market Supervision can enter bids on behalf of Authorized Traders via the Bidding Form Auction-Only members can enter bids via the form, avoiding the need for a technical access fee 18

19 EU TCAP Auction Results 19

20 EU TCAP Auction Results 20

21 German Auction Results 21

22 German Auction Results 22

23 Thank you for your attention! Viviana Ciancibello Senior Key Account Manager Tel.: +44(0) Manuel Möller Strategy & Market Design Tel.: European Energy Exchange AG Eurex Group