Day ahead capacity Workshop Bonn 9 February

1. Day ahead capacity WorkshopBonn 9 February European Federation of Energy Traders EFET position Adam Cooper EFET Gas Committee

4. Outline • Background to proposals • Initial proposals

5. Background to Proposals • Development of German virtual hubs • ERT development of a ‘Choice market’ • Concern about how to participate • Availability of capacity viewed as important for liquidity and hub success • Capacity access may reduce imbalance risk • EFET developed ideas for a quickly implemented pilot solution

6. Initial Proposals • Proposed a number of border points for firm and interruptible capacity • Sought a bundled entry-exit product to enhance hub to hub trading • Allow voluntary capacity recycling from users • Outlined timetable • Considered revenue issues

7. Border Points

8. Timetable D-1 • Any time before the auction up to 0900 invite shippers to voluntarily offer any available capacity • Before 0930 the operator publishes available capacity and its nature • Between 0930 and 1000 participants indicate volume and price bids in Euro/MW • Results before 1015

9. Nature of Auction • Held early in the day to promote further trading activity • No upper or lower price limits • Could use a cleared price • Same per unit revenues (could differ for firm and interruptible) accrue to either the TSO or users offering capacity • Half revenue to users placing only entry or exit

10. Implementation • Sought implementation by 1 April 2007 • Auction through secure websites • Use of a common platform to avoid system duplication • Outcomes to provide lessons for auctions of other capacity products

11. Thank you!