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EFETnet – Well Connected

EFETnet – Well Connected. Electronic Confirmation Matching for European Energy Traders. The ad-hoc Response to Absense of Standards:. Broker. 1. Deal negotiated by phone or arranged by broker. Trader. Trader. Deal data is transfered to ETRM Systems. 2. ETRM System

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EFETnet – Well Connected

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  1. EFETnet – Well Connected Electronic Confirmation Matching for European Energy Traders

  2. The ad-hoc Response to Absense of Standards:

  3. Broker 1 Deal negotiated by phone or arranged by broker Trader Trader Deal data is transfered to ETRM Systems 2 ETRM System (Electronic Trade & Risk Management) ETRM System (Electronic Trade & Risk Management) Back-office Staff Checks & approves 3 Classic solution: Trade Confirmations are exchanged by fax 4 5 Faxed data is matched against ETRM data Manual work, media breaks, typos, high risk  COST How does Energy Trading work?

  4. Broker 1 Deal negotiated by phone or arranged by broker Trader Trader Deal data is transfered to ETRM Systems 2 ETRM System (Electronic Trade & Risk Management) ETRM System (Electronic Trade & Risk Management) Back-office Staff Checks & approves 3 XML XML EFET Box EFET Box ebMS 2.0 ebMS 2.0 New solution: Standardised exchange of XML documents using ebXML How does Energy Trading work with the EFET Box?

  5. The EFETnet Mantra: „Yin-Yang-Yong“

  6. The achievement of EFET eCM: Total Interoperability Standardisation standardised • “Yin/Yang/Yong”: • - Document Standard • Interoperable Software • - No “Spaghetti” situation • - # Converters = # Participants • „Spaghetti Communication“ • No Standard Business Process • No Standard for Data Exchnage • - No Standard for Document Formats • - # Converters ~ # Participants2

  7. EFETnet eCM Users & expected Users (Nov. 2006) 22 companies live or with projects started The next Wave UBS, EWE, MVV, CNR, ICP, Delta, WinGas, GazProm, Iberdrola, Man Financial, … >= 35 live end of 07

  8. Example of an EFETnet confirmation Extremely fast Electronic confirmations sent and matched within 2 minutes Typical Electronic confirmations sent and matched within one day

  9. Counterparty and Broker MatchExample 5: Trader, Counterparty and Broker involved in eCM, Broker‘s BCN matched with own CNF and BFI, and Counterparty‘s CNF matched with own CNF. Broker Match took place at first

  10. Benefits of eCM • Management • Automate overhead to business • Standardise non competitive activities • Share costs • Legal • Increased clarity of business interactions • Standardised industry terms and templates • Speed of processing new commercial relationships • Business • Reduced operational risk • Scalability & straight through processing (STP) • Process standardisation and quality • Technical • Increased time and budget to deal with ‘higher value’ internal IT • Certified industry standard solution can be leveraged for other messages • Defined service levels

  11. papiNet Users – A typical 3-Corner Relationship Sales Stock Management Financial Acct. Paper Supplier Transport Purchase Order Order Confirmation Delivery Notes Invoice Call-off Printer Reservation / Order Customer Stock Management Inventory Stock Production Management Stock Management Procurement Financial Acct.

  12. Ponton Consulting Ponton X/P Users

  13. Any Questions? $ # ? @

  14. Status of EFETnet Contractual framework - overview Ponton Consulting GmbH • Software Developer • Provides an industry wide licence • Maintenance, Support & Help Desk EFETnet Agreement • Monthly service fee • Back to back maintenance, support & help desk • Sub-licence EFETnet BV Participant C Participant B Participant A EFET Electronic Confirmation Agreement (ECA): bilateral agreement to exchange confirmations based on EFET Standards

  15. What is EFETnet ? • Independent company, owned 100% by EFET. • Aim is to provide the central infrastructure needed to enable its members to reliably and securely exchange documents within the European energy trading industry. • Peer-to-peer document-centric approach based on industry standards like EFET ECM 3.1 and ebXML. • In March 2006, EFETnet has 12 corporate customers • Initial focus on confirmation process with plans to move to scheduling, invoicing and CO2 title transfers in the future. www.efetnet.org

  16. Further Steps in Standardisation & Implementation • Next Steps: • Commodities • Spanish Swaps • Electronic Position Matching • Nominations • EUA Registry related process • Settlement / Clearing

  17. Status of EFETnet Expansion into neighbouring industry sectors • Traders & Brokers • Brokers: Spectron is life for 10 months, ICAP/GFI/Prebon to implement • Electronic Position Matching: Prototype bult by Dec. 06, product by July 07 • CO2 Regsitries: Messaging integration developed together with CDC/DEFRA • Processes: Registry transfer requests, Registry reports • Won against SWIFT! • ETSO: Exchange of Power schedule data between European Grid Operators • ESS 3.0 • Nominations • EASEE-gas: Data exchange among gas grid operators (planned) • EDIg@s, AS/2 • Nominations • Exchanges: Deutsche Börse/ENDEX/Powernext • Central Matching, Clearing

  18. Status of EFETnet For Example: EUA Registry Interface • History • Mid 2004 – an ‚API‘ was requested • Oct 05 – evaluation conducted: EFETnet, Swift, bespoke build • May 06 – questionnaire – to be completed by YOU!!! • June 06 – decision expected ? • Carbon Expo (May 2006) • A lot of interest in EFETnet for carbon • CDC keen on EFETnet GRETA/DEFRA still need lobbying • Status (Nov. 2006) • Demand identified for 6-10 national Registries • CDC implementing, integrating with Ponton X/P • DEFRA has issues CFT für Registry/messaging interface • Trading System vendors start developing interface for EUA transfer notification • Integration with pilot users (Gaselys, Electrabel) to start inDec. ´06

  19. B2B Integration Standards Business Business Consulting Consulting XML IT Consulting Solutions Development Back-end Integration Standardisation Ponton Consulting takes different roles in international B2B integration projects. Internal Processes External Processes Internal Processes M M XML XML Customer Supplier Transformation / Data Mapping Message Transfer ERP - System Transformation / Data Mapping ERP - System

  20. . . . . . . Trading Organisation Trading Organisation Trading Organisation Trading Organisation . . . . . . Same Communication Infrastructure EFET Box+ architecture and development Borderline of the EFET Box system Internet Trading Organisation Trading Organisation ETRM System ETRM System EFET Box EFET Box Match/ Dispatch Match/ Dispatch In Out Out In Audit Trail CNFs Audit Trail CNFs Archive Archive

  21. $ # ? @

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