EPEX SPOT to launch first pan-European Guarantees of Origin market in 2022
Monthly spot auctions planned in second quarter 2022 with clearing and delivery through ECC and EEX
Leipzig / Paris, 29 November 2021. The European Power Exchange (EPEX SPOT), European Energy Exchange (EEX) and European Commodity Clearing (ECC) plan to jointly launch a pan-European market for Guarantees of Origin (GOs) as part of EEX Group’s ongoing efforts to support the energy transition with market-based instruments.
The planned GOs spot auctions will be held once a month and operated by EPEX SPOT, Europe’s leading power spot exchange, under the exchange’s membership and market rules. Clearing and settlement will be conducted by the clearing house ECC and EEX will ensure delivery through its French GO registry. The launch of the new trading products is envisaged within the second quarter 2022, subject to successful testing and market readiness.
Guarantees of Origin are a tracking instrument that allows to confirm the origin of electricity and to determine the quantity stemming from renewable production within the total of electricity that flows through the grid. This makes them an indispensable tool to promote the production and consumption of green electricity, by ensuring its traceability and to enable investments into renewables. Thanks to this mechanism, European consumers subscribing to a green electricity offer with their energy provider can be assured that the exact amount of electricity they consume has been injected from renewable sources into the grid.
“EEX Group has a track record in operating registries for Guarantees of Origin and organizing GO primary auctions on behalf of Member States” says Dr Tobias Paulun, Chief Strategy Officer of EEX. “Through this launch, EEX Group is not only responding to a market’s need for a stronger and transparent price signal, it also falls within our efforts to fight climate change through a transition to renewable energy.”
In the context of the energy transition, a well-functioning and exchange-based GO market brings transparency on the traded products and the technologies that are most demanded on the market.
Ralph Danielski, Chief Executive Officer of EPEX SPOT, comments: “This is why we plan to launch the first exchange-based pan-European market for GO trading, bringing the well-known EPEX SPOT expertise to this new segment. We accompany the trading community by providing high trading standards, a robust technical solution, excellent exchange services, transparency and innovation. Building sustainable markets lies at the heart of our Group efforts, and an efficient GO market will incentivise the production and use of green energy.”
“ECC will support the new trading products with its secure and reliable clearing infrastructure and its expertise in settling Guarantees of Origin”, adds Dr Götz Dittrich, Chief Operating Officer of ECC. “Our state-of-the-art clearing services fulfil the specific requirements of the GO market, providing security for all participants who want to become active on the new market.”
The market design of this new pan-European spot auction foresees a monthly multilateral auction for GOs from renewable production in selected countries that are part of the European Energy Certificate System (EECS), as set by the Association of Issuing Bodies (AIB). Buyers and sellers will be able to access both specific and generic GOs within one pay-as-clear auction, optimising market liquidity. Several levels of specificity within three dimensions will be made available: country, technology, and subsidy regime. Indices will be published following each auction. Market participants will join a strong and diverse European trading community of more than 300 members backed by reliable membership and market rules.
The European Power Exchange EPEX SPOT SE and its affiliates operate physical short-term electricity markets in 13 countries: in Central Western Europe, Great Britain, Switzerland, the Nordics and in Poland. As part of EEX Group, a group of companies serving international commodity markets, EPEX SPOT is committed to the creation of a pan-European power market. Over 300 members trade electricity on EPEX SPOT. 49% of its equity is held by HGRT, a holding of transmission system operators. For more information, please visit www.epexspot.com.
The European Energy Exchange (EEX) is the leading energy exchange which builds secure, successful and sustainable commodity markets worldwide – together with its customers. As part of EEX Group, a group of companies serving international commodity markets, it offers contracts on Power, Natural Gas and Emission Allowances as well as Freight and Agricultural Products. EEX also provides registry services as well as auctions for Guarantees of Origin, on behalf of the French State. More information: www.eex.com
European Commodity Clearing (ECC) is a central clearing house which specialises in energy and commodity products. ECC assumes the counterparty risk and guarantees the physical and financial settlement of transactions, providing security and cross-margining benefits for its customers. As part of EEX Group, ECC provides clearing services for EEX, EEX Asia and EPEX SPOT and for the partner exchanges HUPX, HUDEX, NOREXECO, SEEPEX and SEMOpx. For more information, please visit www.ecc.de