CROPEX – The first marketplace for SEE towards EU coupled

markets

10 May 2018, Athens

CROPEX

• CROATIAN POWER EXCHANGE Ltd. – established on 20th May 2014

• Jointly owned company (50-50) – CROATIAN ENERGY MARKET OPERATOR Ltd. (HROTE) and CROATIAN TRANSMISSION SYSTEM OPERATOR Ltd. (HOPS)

• CROPEX seat: Ulica grada Vukovara 284, Zagreb

• www.cropex.hr

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POWER EXCHANGE MODEL OF CROPEX

• PCR serviced PX (PCR service provider Nord Pool, co-owner of PCR algorithm)

• MRC Full Member with No Capacity (MRC DAM coupling Go-live announced for 19th June)

• NEMO exchange for Day Ahead & Intraday market coupling

• CROPEX: Central Counter Party (CCP) • Provides services: trading on Day Ahead &

Intraday Market, Clearing and Settlement of all concluded transactions, REMIT services

TRADING PLATFORMS

TRADING PLATFORM – DAM (launched 10 FEB 2016)

Characteristics of the Day Ahead Market

Product Type Hourly products

Trading Hours 00:00 CET – 24:00 CET

Gate Closure 12:00 CET

Trade Lot 0,1 MW

Tick Size 0,1 €/MWh

Price Steps 200

Minimum Price Limit -500,00 €

Maximum Price Limit 3000,00 €

TRADING PLATFORM – ID (launched 26 APR 2017)

Characteristics of the Intraday Market

Trading starts 15:45 D-1

Trading ends 30 minutes prior to start of Delivery Period

Product Type Power Hour, Day Base, Day Peak and Block orders defined by members

Trade Lot 0,1 MW

Tick Size 0,1 €/MWh

Order Types Fill, All-or-Nothing, Fill-or-Kill, Immediate-or-Cancel, Iceberg Order

Minimum Price Limit -9.999,00 €

Maximum Price Limit 9.999,00 €

CLEARING AND SETTLEMENT

CLEARING AND SETTLEMENT AT CROPEX

• EUR is trading currency (EU wide practise)

• Collaterals in HRK and/or EUR: – Cash deposits

– Bank guarantees

• Transactional settlements (funds transfers) envisage: – Domestic settlement, executed in HRK, where resident trade

participants are involved

– FX settlement, executed in EUR, where non-resident trade

participants are involved

• Currency exchange transactions are involved in settlement; members are informed on applicable exchange rate (daily middle exchange rate by Croatian National Bank) on which CROPEX will translate EUR into HRK (and vice versa)

VAT with regard to seat of the traders

• Croatian VAT Act harmonised with the EU directive 2006/112/EC of 28 November 2006 on the common system of VAT

• VAT reverse charge mechanism applied

MARKET COUPLING PROJECTS

DAM MARKET COUPLING

• Integration of CROPEX market into the MRC through the IBWT (Italian Borders Working Table) project of implicit allocation of capacity at the HR-SI border

• On 21st March 2017, HOPS and CROPEX officially became IBWT Project Parties

• Go-live 19th June 2018 for the delivery day 20th June 2018 - subject of Regulatory and MRC approval

DA MARKET COUPLING

Coupled under MRC

MRC members

(not-coupled) • Croatia – first marketplace for SEE towards EU MRC coupled markets

INTRADAY MARKET COUPLING

• Member of XBID Accession Stream, signatory of XBID IDOA

• From August 2017 CROPEX and HOPS became part of 15th XBID Local Implementation Project with Germany, Czech Republic, Austria, Hungary, Romania and Slovenia

• Foreseen Go-live window – so called XBID 2nd wave – H2 2019

ID MARKET COUPLING – XBID LIP 15

WB6 + SEE cooperation (1)

• CROPEX - first EU PX that signed WB6 MoU • CROPEX - committed to launch WB6 coupling project with BiH

and to extend cooperation with other WB6 signatory parties • CROPEX:

- supports establishing market coupling with BiH’s (via CROPEX trading system or directly between CROPEX and future BiH PX) - preliminary documents drafted (BiH feedback is being awaited)

• CROPEX - requested formally receiving consultancy support from ECS and selected consultancies regarding kicking off the HR-BiH market coupling project (BiH feedback is being awaited)

WB6 + SEE (2)

• CROPEX after DAM coupling with EU represents: - first choice for BiH and SEE market participants to trade with EU liquid day ahead market - first choice for arbitrage trading between SEE PXs and CROPEX

• ECO balance group (RES incentivized production) offered at the HR markets and CROPEX as of 1st January 2019 (new opportunity to trade at CROPEX)