EPEX SPOT celebrates 10 years of Swissix
10 years of constant growth of the Swiss market testify high liquidity
Bern / Paris, 14 December 2016. The European Power Exchange EPEX SPOT celebrates this week the anniversary of the Swiss Electricity Index Swissix. It was established ten years ago. Witnessing a constant growth from its inception, the Swissix has been sending a reliable and relevant price signal for the electricity market in Switzerland and Europe.
With the liberalisation of the electricity sector at the end of the 1990’s, Power Exchanges became key actors organising free markets in their respective countries, bundling supply and demand and determining reliable price signals for wholesale electricity markets across Europe. Swissix refers to the Swiss Electricity Price Index and is calculated and published daily as Swissix Base (24 hours of the next day) and Swissix Peak (from 8AM to 8 PM of the next day).
The organised wholesale electricity market in Switzerland launched in 2006. It is an important market for EPEX SPOT, with a large number of market participants and traded volumes representing 41% of the national power consumption in 2015. 31 Swiss companies are currently trading on the EPEX SPOT markets. There are 75 market participants from all over Europe on the Swiss Day-Ahead market and 64 market participants on the Swiss Intraday market.
Volumes on the Day-Ahead market have increased continuously over the years while volatility decreased (cf. chart below). The data illustrates that the spot market has become an indispensable pillar of the Swiss energy value chain and it mirrors strong interactions with neighbouring countries. Swissix settles at a decreasing level of prices over time and has established a rather stable variation of base and peak levels, reflecting stability in the market. Switzerland’s geographical position makes it an important transit state and its energy mix offers a high level of flexibility. “Thanks to its hydropower capacities and the exceptional cross-border infrastructure (40 cross-border grids) Switzerland could thus be the ideal power storage in the heart of Europe”, underlines Davide Orifici, Head of EPEX SPOT Switzerland.
However, political and regulatory circumstances currently prevent such developments: Different market coupling initiatives are being discussed and gradually implemented across Europe, except for Switzerland: The Price Coupling of Regions (PCR) project will integrate an even larger number of European Day-Ahead Markets as it is currently the case. The XBID project will integrate a large number of European Intraday markets. These market-coupling processes have proven to optimise cross-border flows, price formation and to increase social welfare. They will form an integral part of the EU Regulation on Capacity Allocation and Congestion Management, entered into force in August 2015, which however does not apply to Switzerland.
“While the Swiss market is exceptionally liquid and disposes of important cross-border capacity, Switzerland has not yet joined European market coupling” underlines Jean-François Conil-Lacoste, Chairman of the Management Board of EPEX SPOT. In close cooperation with the transmission system operator Swissgrid, EPEX SPOT has implemented all technical requirements necessary to complete the Swiss coupling process in January 2015, but the political prerequisites set by the European Commission are not yet fulfilled. “By coupling the Swiss market with its neighbour countries, the efficiency of the cross-border trades could be increased significantly. Important welfare gains could be achieved for both the Swiss population and industries and large consumers”, adds Jean-François Conil-Lacoste.
Over the years, the Swiss market has proven and secured its position as an important and relevant market in the centre of the European continent, however, its full potential is yet to be reached.
The European Power Exchange EPEX SPOT SE and its affiliates operate physical short-term electricity markets in Central Western Europe and the United Kingdom. The creation of a pan-European power market is what defines EPEX SPOT’s mission. In 2015, its 280 members traded 566 TWh – a third of the domestic consumption in the eight countries covered. 49% of its equity is held by HGRT, a holding of transmission system operators. EPEX SPOT is part of EEX Group. For more information, please visit www.epexspot.com .