Due to the launch of CWE Market Coupling and the related Interim Tight Volume Coupling with the Nordic region, the CWE TSOs have amended the CWE Auction Rules.

 
In fact, this new day-ahead implicit mechanism impacts the explicit auctions process operated by CASC - CWE and governed by the present CWE Auction Rules:

- daily explicit auctions on the German borders will be suppressed;
- the valuation of the “UIOSI” on these borders will be based on the day-ahead spot market spread in case of Market Coupling and on the marginal price of the shadow auctions in case of decoupling; and
- a new explicit allocation process (shadow auctions) will be used in case of CWE Market Coupling unavailability.

Besides of these compulsory changes, TSOs have integrated in the new CWE Auction Rules some requests previously expressed by Regulators and Market Participants of the region:

- strengthened Market Participants consultation process in case of evolution of the CWE Auction Rules;
- compensation at day-ahead spot market spread on the French- Belgian border in case of curtailment before sending the programming authorizations (See CAPS VALUES);
- modification of the suspension conditions and procedure to better take into account the Participants' interests;

TSOs have also taken the opportunity of this new version of the CWE Auction Rules to bring some clarification to the text (in particular in the firmness article and in some definitions).

CWE TSOs have organized a market consultation, from the 2nd to the 17th of February 2010, with a market forum on the 8th of February 2010, in order to present the amendments of the Auction Rules to Market Participants and gather their questions and comments.

TSOs have then reviewed all requests and recommendations received from Market Participants and tried to take them into account as much as possible in the new CWE Auction Rules which they have submitted to the Regulators in March 2010.

In April 2010, additional remarks have been received from the Regulators which lead to a last submission of the Auction Rules in May 2010.

This version is now accepted by the Regulators and the approved CWE Auction Rules V2.2 are published by the TSOs and CASC-CWE on their websites.

They will enter into force on the Market Coupling launch date, currently foreseen as from the 9th of November 2010, for the delivery day of the 10th of November 2010. Should the launch date be shifted, and hence the entering into force of the CWE Auction Rules V2.2, you will be informed thereof promptly.


Major change for Market Participants?

The most significant changes for Market Participants are due to the suppression of daily auctions on German Borders and the introduction of the fallback solution of the CWE Market Coupling.

In case of CWE Market Coupling unavailability, allocation of daily capacity will be done explicitly via the shadow auctions, which can be:

• declared during the daily session in case of unforeseen decoupling;
• planned for the next daily session in case of foreseen decoupling;
• planned for the next daily sessions in case Rollback Mode is activated for the German Borders.

For shadow auctions, the user interface, financial guarantees, payment modalities, invoicing process, and time schedule will be different than for the current daily explicit auctions.


Shadow auctions bid submission:

Bids submitted by Market Participants through the shadow auctions Interface are default bids. They are valid for every day of the rolling year, for a specific border, direction and an hourly period. Participants can update their default bids at any time before the shadow auctions are run.

CASC-CWE will communicate the shadow auctions time schedule to Participants and will warn them during the daily session when shadow auctions are likely to be run and when they are actually running.

Market Participants will affect a priority rank to the default bids, according to their ID (priority 1 = ID 1), in order to avoid the rejection of all the bids in case the sum of their bids exceeds the ATC.

When shadow auctions are run, bids are created according to this priority order and the last created Bid that exceeds ATC is reduced so that the sum of the bids meets the ATC value.

The clearing algorithm remains unchanged for the allocation of capacities.

Shadow auctions: Payment modalities and financial aspects

As the activation of shadow auctions may be unforeseen, there will be no financial check when running the shadow auctions (no pre-payment), in order not to penalize the Market Participants.

For Participants with a Business Account, the payment and invoicing modalities, as well as incident conditions will remain unchanged.

A new type of participant has been created “Participant to Shadow Auctions Only”. These Participants do not open a Business Account and don’t sign the Participant Financial Agreement (PFA). The payment for shadow auctions will have to be performed directly on CASC-CWE account. No bank guarantee has to be provided by these Market Participants. Only in case of Rollback Mode, a bank guarantee of 100 000€ per Border will be requested (for Participants to shadow auctions on the German borders)

Impact on registration and entitlement

Depending on whether the Participant is already registered at CASC-CWE and to which types of auctions it wants to participate (yearly, monthly and/or shadow auctions), there are several possibilities:

1. For Participants already registered at CASC-CWE

a. willing to participate in yearly, monthly and shadow auctions (as Market Coupling fallback):

The Declaration of Acceptance (DAO) (= Appendix 1 of the CWE Auction Rules) remains valid but you have to :

‐ complete and send to CASC-CWE the new Appendix 5 of the CWE Auction Rules v2.2, to indicate on which borders you want to participate in shadow auctions and for Rollback Mode

‐ ensure that you have the appropriate nomination contracts to participate in auctions on these borders (article 9.04 of the CWE Auction Rules), an if not, contact as soon as possible the concerned TSO to enter into the appropriate contracts.

b. only willing to participate in shadow auctions (Market Coupling fallback), not in yearly, nor monthly auctions, there are 2 options:

‐ Option 1: keep your Business Account and be a “standard” Participant. The Declaration of Acceptance remains valid, simply follow the same instructions as 1.a

‐ Option 2: become a Participant to Shadow Auctions Only

‐ Close your Business Account and terminate the Participant Financial Agreement (PFA)

‐ Sign a new Declaration of Acceptance (= Appendix 1 of the CWE Auction Rules)to register as a Participant To Shadow Auctions Only (and indicate a payment account where CASC-CWE can pay compensations if any)

‐ Ensure that you have the appropriate nomination contracts to participate on the borders selected in the Declaration of Acceptance (= Appendix 1 of the CWE Auction Rules) (article 9.04 of the CWE Auction Rules), and if not, contact as soon as possible the concerned TSO to enter into the appropriate contracts.

2. For Participants which are not yet registered at CASC-CWE

 
a. willing to participate in yearly, monthly and shadow auctions (as Market Coupling fallback):

‐ Complete, sign and send the Declaration of Acceptance (DOA) (= Appendix 1 of the CWE Auction Rules)

 
‐ Sign the Participant Financial Agreement and open a Business Account

‐ Ensure that you have the appropriate nomination contracts in accordance with article 9.04 of the Auction Rules, and if not, contact as soon as possible the concerned TSO to enter into the appropriate contracts.

b. only willing to participate in shadow auctions (Market Coupling fallback), not in yearly, nor monthly auctions, there are 2 options:

‐ Option 1: Register as a “standard” Participant (opening a Business Account). Follow the same instructions as 2.a

‐ Option 2: Register as a Participant to Shadow Auctions Only:

‐ complete, sign and send the Declaration of Acceptance (= Appendix 1 of the CWE Auction Rules) to register as a Participant To Shadow Auctions Only (and indicate a payment account where CASC-CWE can pay compensations if any)

‐ Ensure you have the appropriate nomination contracts to participate on the borders selected in the Declaration of Acceptance (= Appendix 1 of the CWE Auction Rules) (article 9.04 of the CWE Auction Rules), and if not, contact as soon as possible the concerned TSO to enter into the appropriate contracts.

Reminder: If you choose to register as Participant to Shadow Auctions Only:

‐ The payment for shadow auctions has to be directly performed on CASC-CWE bank account.

‐ In case of Rollback, a Bank Guarantee of 100 000€ per Border will be requested (for Participants to shadow auctions on the German borders)

Deadlines to guarantee registration by the 9th of November 2010:

For Market Participants which are not yet registered at CASC-CWE and willing to open a Business Account and sign the Participant Financial Agreement (PFA) (register as “standard” Participant – 2a and 2b option 1), the above registration modalities should be performed as soon as possible and the forms should be sent to CASC-CWE at the latest on the 26th of October 2010, to be entitled to participate in the yearly auctions, monthly auctions and possibly shadow auctions which can be performed from the 9th of November 2010.

For Market Participants already registered at CASC-CWE, the appropriate forms shall be sent to CASC-CWE before the 2nd of November 2010.

ATTENTION POINTS

The first scheduled activity to be performed by CASC-CWE under the CWE Auction Rules V2.2 will be the monthly auctions for the delivery month of December 2010, starting on the 15th of November 2010

From the Market Coupling launch date on, for capacity allocated at the yearly auctions 2010 and at the monthly auctions for the month of November 2010, in case of curtailment before the sending of the Programming Authorizations, compensation will be made according to the new CWE auctions rules (V2.2).



CONTACT INFORMATION

For any clarification on the new CWE Auction Rules, CASC CWE and the CWE TSOs can be contacted:

CASC-CWE S.A
Tel.: +352 27 62 38 38
Fax: +352 27 61 66 05
Email : operations@casc-cwe.eu
www.casc-cwe.eu
2 rue de Bitbourg
L-1273 Luxembourg Hamm