Short news item regarding the summary of Svenska kraftnät’s EPAD auctions during Q1 2023
Svenska kraftnät has summarized the results of the two first months of auctioning of EPAD-contracts. The first six auctions that were performed in February and March have garnered a significant interest.
It is still too early to draw firm conclusion on the potential positive effects on liquidity in the forward market, but the trading volumes in the continuous market seem to have increased slightly according to available data. Svenska kraftnät hope that the positive effects of the auctions will be distributed to market participants of all sizes and also to residential customers.
Read more about Pilot project: support for increased hedging opportunities in the Swedish electricity market
- The purpose of the auctions is to increase opportunities for hedging and to support the liquidity in the financial market for contracts hedging specific bidding zone price risks. By participating in a transparent and open market, we provide price signals to all market participants in the most distinct way possible. Had we chosen to act in markets or instruments that are not traded on transparent platforms, our efforts would not have had the same impact, says Peter Wigert, CFO of Svenska kraftnät. Our ambition is to support the market in a way that also makes it easier for end consumers to find offers for fixed price contracts.
One additional observation is that the first quarter of 2023 has been characterized by the market slowly recovering and stabilizing from a period of more than a year of energy crisis, severe challenges and turbulence. Part of the positive development identified, for instance the increased interest in trading in financial products, can therefore probably be attributed to a general improvement of market conditions.
A summary of the auctions for the first quarter of 2023 is available here (.pdf) Opens in a new window. Svenska kraftnät intends to continuously publish quarterly summaries of the auctions. In the beginning of 2024 a report will also be provided that summarizes the first full year (2023) of auctioning of EPADs.