Electricity Price Area Differentials (EPADs)
European Union Electricity Market Glossary

 


 

 

Commission Staff Working Document of 30.11.2016 Accompanying the document Report from the Commission Final Report of the Sector Inquiry on Capacity Mechanisms {COM(2016) 752 final} SWD(2016) 385 final, explains the Electricity Price Area Differentials (EPADs) as follows (p. 35):

 

"In the context of a limited number of liquid forward markets in Europe, the cross-border access to these markets becomes particularly important. The cross-border access to forward markets depends on the market design. In most of Europe the cross-border access to forward markets is based on TRs, either physical (PTRs) or financial (FTRs), issued by TSOs which enable market participants to hedge short-term price differentials between two neighbouring zones. In the Nordic and Baltic markets and within Italy, cross-border access to forward markets is based on contracts which cover the difference between the relevant "hub" price (which represents the forward price reference for a group of bidding zones) and each specific bidding zone price. Examples of these contracts are the so-called Electricity Price Area Differentials (EPADs) in the Nordic and Baltic markets or FTRs within Italy."

 

Data on the EPADs' important economic parameters can be found in the ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity Market in 2015, September 2016 (see tables below).

 

 

Discrepancies between the price of EPADs (monthly products) and the DA price spreads between the system price and the relevant price in the bidding zone – 2011–2015 (euros/MWh)

 

sourceACER/CEER Annual Report on the Results of Monitoring the Internal Electricity Market in 2015, September 2016, p. 39

  

EPADs and the DA price spreads

 

Average risk premia, price correlation between system and zonal price, average bid-ask spread, and supply concentration levels of traded EPADs on the power exchange – 2011–2015 (euros/MWh and %)

 

source: ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity Market in 2015, September 2016, p. 40

 

 EPADs average risk premia

 

 


 

 

 

Documentation

 

 

ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity Market in 2015, September 2016, p. 39, 40

 

Commission Staff Working Document of 30.11.2016 Accompanying the document Report from the Commission Final Report of the Sector Inquiry on Capacity Mechanisms {COM(2016) 752 final} SWD(2016) 385 final, p. 35

 

 

 

 

 

Last Updated on Friday, 20 January 2017 14:10
 

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