WHAT IS EPEX SPOT?
The European Power Exchange EPEX SPOT SE operates the short-term electricity markets for Germany, France, Austria and Switzerland. EPEX SPOT owns 100% of APX Group (including Belpex), operator of the short-term electricity markets for the Netherlands, the United Kingdom and Belgium. Striving for the creation of a European single market for electricity, EPEX SPOT shares its expertise with partners across the continent and beyond. EPEX SPOT is a European company (Societas Europaea) in corporate structure and staff, based in Paris with offices in Amsterdam, Bern, Brussels, Leipzig, London and Vienna. 275 companies trade over 450 TWh of electricity on EPEX SPOT and APX every year – one third of its countries’ electricity consumption. EPEX SPOT is held by EEX Group, part of Deutsche Börse, and European electricity transmission system operators.
WHICH REQUIREMENTS SHOULD BE MET IN ORDER TO BECOME A MEMBER?
Only a registered company can become a member of EPEX SPOT. It should be active on the energy market and have a relevant motivation to trade power on the wholesale market via the Exchange. There are three principal preconditions to be met in order to obtain membership.
Firstly, the company should be balance responsible with at least one Transmission System Operator of the market area(s) it would like to become active in (France: RTE; Germany: 50Hertz, Amprion, Tennet, TransnetBW; Switzerland: Swissgrid; Austria: APG). A company also has the possibility to use the balance responsible perimeter of a third party.Click here to get the TSO contacts
Secondly, it is necessary to sign an agreement with one of the clearing members at ECC (European Commodity Clearing), the partner Clearing house of EPEX SPOT. The chosen Clearing Bank endorses the role of intermediary between the market participant and the central counterparty on the market, embodied by ECC, for the financial and physical settlement of transactions.
Find here the list of Clearing Members at ECC.
Finally, the company would have to designate individual persons to be admitted as traders. They will have to take the EPEX SPOT Trader’s Exam following an online training course. The exam can be taken online and each new member is provided with two free accesses (training and exam) valid for the duration of one year.
To learn more, go to the trader training and exam
WHAT ARE THE OBLIGATIONSFOR TRADERS ON EPEX SPOT MARKETS?
There are no financial obligations required directly by EPEX SPOT; we do not demand a bank guarantee, deposit, nor any risk management certification. The financial guarantees are required by ECC and the necessary guarantees for each member are negotiated on individual basis through the clearing bank member at ECC. Find here the list of Clearing Members at ECC.
WHAT IS THE “KYC” QUESTIONNAIRE AND WHY IS THIS STEP MANDATORY FOR APPLICANTS?
The Know-Your-Customer process was introduced to enable EPEX SPOT to better understand members’ identity and market participant’s activities. Principally, this enables EPEX SPOT to prevent suspicious or potentially criminal entities from trading on the exchange, which ensures market security and integrity. The KYC questionnaire is a document to be completed by each company requesting to participate in the Exchange’s markets and thus represents the first step in the admission process of a new member. It asks for basic information concerning the company’s identity, its activities, experience and motivations to trade on the power market. The document is then updated regularly by the company and EPEX SPOT throughout the membership period.
WHAT KIND OF DOCUMENTS HAVE TO BE FILLED IN TO BECOME A MEMBER?
Once a company has provided the basic KYC information and passed the compliance screening, the EPEX SPOT Sales and Membership departments assist the applicant in its registration process and the completion of all necessary membership forms. The applicant will have to sign a Trading Agreement, complete specific identification and registration forms (notably for the set up of portfolios and traders) and also fill in technical forms to enable access to the trading systems.
HOW LONG DOES THE MEMBERSHIP PROCESS LAST IN AVERAGE?
It is difficult to assess the duration of the membership process since it depends on the starting point (if the company is already balance responsible or already has a clearing bank the process is naturally faster) and the progress of each applicant. Overall, the process often takes several months and for companies submitting their first Membership at an Exchange it can take much longer. That is why EPEX SPOT advises applicants to commence the different steps in parallel.
Contacting EPEX SPOT Sales and initiating KYC questionnaire process but also contacting Transmission System Operators in order to become balance responsible and negotiate with clearing banks (this step might be the longest one).
HOW TO TRADE ON THE MARKETS OR BENEFIT FROM THE EXCHANGE LIQUIDITY FOR A SMALL COMPANY?
Smaller actors on the wholesale power market are also active on EPEX SPOT. They often have access to the platform via an agreement with an Exchange member who acts as an intermediary and pools the interests of other companies.
WHAT IS THE MINIMUM VOLUME NEEDED IN ORDER TO HAVE AN INTEREST IN HAVING A DIRECT ACCESS TO THE EXCHANGE?
EPEX SPOT advises applicants to estimate their expected purchase and sale volumes, and compare the costs of a full membership with the fees charged by EPEX SPOT members who trade as third party representatives. Applicants should take into account both fixed and variable costs.
Please find the price list here.
WHAT KIND OF IT REQUIREMENTS ARE NECESSARY TO USE THE PLATFORM?
The EPEX SPOT platform is available through an easy and secured access. No particular IT requirements are needed in order to connect to the trading systems. The company should only be equipped with a Windows operating system and internet access.
To learn more, go the the technical documentation.
WHICH SYSTEMS /SOFTWARES ARE USED BY EPEX SPOT?
EPEX SPOT uses ETS (EPEX Trading System) as the system for the Day-Ahead market. For the Intraday market, the trading system is M7 (ex-ComXerv). Its latest version also offers the possibility to connect to the platform via an API (Public Message Interface).
To learn more, go the the technical documentation.