ICIS Power & Carbon Seminar - Amazon S3

ICIS Power amp Carbon Seminar

First Day

14-15 November 2018Berlin Germany

ICIS is a world leading price reporting agency and analytics powerhouse for commodity markets

Prices News Analytics Data

Petro-Chemical

Energy Fertilizers

1030-1100Keynote AddressBarbara Lempp Managing Director EFET

Dr Tobias Paulun EEX

1100-1145 Forecasting European power marketsPhilipp Ruf ICIS

1245-1315 QampA with the European CommissionPeter Zapfel European Commission

Coffee Break

1215-1245What is behind the latest carbon price

moveStefan Feuchtinger ICIS

Lunch Break

1415-1445What to look out for ndash a mid- to long-term

forecast for Europersquos carbon marketMarcus Ferdinand ICIS

1445-1530Southern Europe A renewable revolution

in Italy and SpainMatteo Mazzoni amp Matt Jones ICIS

1800Networking ReceptionSponsored by EEX

Melia Hotel Tapas Bar

Coffee Break

1600-1730Coal phase-out ndash key for low carbon

transitionMarcus Ferdinand amp Matt Jones amp Vija Pakalkaite ICIS

Keynote

Address

Barbara LemppManaging Director EFET

Dr Tobias PaulunChief Strategy Office EEX

Forecasting European Power Markets

This is a sample text Insert your

desired text here Philipp RufDirector ndash Carbon amp Power Analytics

copyright copy 2018 ICIS wwwiciscom 7

We are scaling up our country coverage to build a pan-European service on power price forecasting

Sep 2018

bullBiggest countries and central Western Europe

bullAT BE DE ES FR IT NL PL UK

Dec 2018

bullBaltics

bullEE LT LV

Jan 2019

bullNordics and Czech

bullCZ DK FI NO SE

H1 2019

bullSouth-East EU and remaining

bullConstant publication

bullBG CH GR HU HR IE PT RO SI SK


Model methodology

Overall methodology

Dispatch model ndash we are modelling

the hourly dispatch mimicking how

the market clearing works

Global optimization model that

minimizes all system costs subject

to a number of constrains (or

maximization of social welfare)

Formulated as a linear programming

model

Features

Optimal dispatch of generation including trade

Incorporation of start-up costs

Full EU integration capacities of all major interconnectors

Detailed hydro modelling

Accurate cycling of thermal generation

Taking into account technical restrictions part-load efficiencies reservoir levels ramping restrictions


Capacity assumptions

Existing Capacities

TSO Data

hellip

Nuclear

bull Project based new capacity

bull Decommissioning based on plant by plant approach

Fossil (lignite coal gas)


bull Decommissioning on announced closures coal phase-out plans and lifetime approach

Renewables

bull New capacity based on subsidy systems (incl auctions) as well as long-term country strategies

bull Only minor decommissioning expected

Future Capacities


What does that mean Where are capacities going

0

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600

700

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1000

ca

pa

city

Capacity Development of Modelled Countries

Nuclear Lignite Coal Gas Oil Hydropower Bio Wind Solar


Trend 1 ndash coal phase-outs all over Europe

Phase-outs planned in all

modelled countries

except Poland

Some are fixed in

legislation (AT FR ES

NL UK)

Others not (DE IT)

Total reduction of

capacity

Lignite 105GW or -38

Coal 512GW or -68

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600

700

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1000

ca

pa

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Trend 2 ndash increase of renewables

All modelled countries

have a significant

increase of renewables

We expect the largest

increase in wind

capacity with 131GW

additional or +120

Solar will deliver

second with 118GW

additional or +77

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Fuel price assumptions mixture of internal modelling and external benchmarks

Carbon ICIS carbon forecast

Lignite based on own assumptions

Coal Based on forward curve

(API2) and extrapolated behind the

curve

Gas Forward curve based on ICIS

price assessments behind the

forward curve we utilise World

Banklsquos natural gas forecast

000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price

Fuel Price Assumptions

carbon [EURtonne] lignite [EURtonne]

coal [USDtonne] gas [EURMWh]


Trend 3 ndash we expect carbon prices to increase rapidly in the early years of the 2020s and relax in the later years

Political context post-2020 reform with the strengthened MSR is cutting supply short and is a game changer for the system

Participants in the last month the increased political stability incentivised financial players to participate in the system

Volume Due to the MSR abatement in the future will be necessary and will have to be delivered through fuel switch in the power sector and carbon efficiency measures in industry

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price





Trend 4 Brexit

Power Markets

Link to internal energy markets at risk

As UK is highly dependent on electricity imports the continued functioning of the interconnectors are crucial

Long-term policies are defined independently of Brexit

Future of UK power market highly dependent on party manifestos

Carbon Markets

Creating sentiment effect in the last weeks

Short-term effects of hard Brexit selling by utilities and industrials

Long-term solution requires adjustment of the system

Both ambition levels for carbon reduction UK and EU should not be seriously affected


The base case power price forecasts

4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]

Power Price Forecast ndash Base Cases

AT BE ES FR DE IT NL PL UK

What is behind the latest carbon price move Have times really changed

Stefan FeuchtingerSenior Analyst ndash Carbon amp Power Analytics

Current Market Situation


Last 5 years EUA price developmentsEverything before 2018 was boring

000

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3000

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rbo

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to

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EUA price

+258 in the

last 12 months+334 peak



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1500

2000

2500

3000

ca

rbo

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to

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EUA price 200 per Mov Avg (EUA price)

+258 in the


EUA price developmentsVolumes are picking up EU carbon in second boom period

000

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3000

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1500

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nn

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to

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e]

EUA trading volume EUA price EUA trading volume (yearly average) EUA trading volume (quarterly average)


EUA price developments30-day-volatility was decreasing September massive increase towards historic heights then recently slight decrease

0

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03

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05

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07

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09

1

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30 d

ay v

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rbo

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EUA price 30-day volatility


EUA price and Article 29aBoogeyman or serious threat

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3500

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Historical_Price Six months trigger_Overlapping Two-year average_Overlapping

Six months trigger_Successive Two-year average_Successive


EUA auctions biddingBidding range increasing since early 2018 - successful bidders too

-6000

-4000

-2000

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2000

4000

6000

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1500

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2500

No

O

f b

idde

rs

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rbo

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SuccessfulBidders BidRange auctionPrice


The link to power pricesPower market spreads are key indicator for carbon price changes especially in key markets like Germany spreads are closely linked to carbon

Clean Brown Spread

000

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3000

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1000

1500

2000

2500

3000

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rbo

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to

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CB

S [

euroM

Wh

]

CBS (front month) CBS (front year) EUA price


Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

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500

1000

1500

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rbo

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CD

S [

euroM

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]

Axis Title

CDS (front month) CDS (front year) EUA price



Clean Spark Spread

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1500

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-1000

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1000

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CS

S [

euroM

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]

CSS (front month) CSS (front year) EUA price



Fuel Switching costs

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2500

3000

-1000

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1000

2000

3000

4000

5000

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rbo

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to

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To

tal sw

itch

ing

co

sts

[euro

MW

h]

FS (frontmonth) FS (frontyear) EUA price


EUA price developmentsWhy did we see a bull run What did change that EUAs are suddenly hip again

Legal certainty about Phase 4

reform

000

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EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform

Market stability reserve a game

changer (already now)

0

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400

600

800

1000

1200

[m E

UA

s]

MSR intake

final auction MSR intake

Increase intake rate from 12 to

24 for 5 years ndash 26bn from 21-30




reform



Utilities build strategic hedging

reserves

194

293

626

1919

2939

238

1077

33123399

3605

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2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE

hedged [m tonnes] synthetic [m tonnes]

strategic [m tonnes] open [m tonnes]




reform




reserves

New players getting active

(financials funds)

Sentiment amp price elasticity

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700

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traded positions traded positions (revised) price

Mid-Term View


The fundamentalsThe MSR is increasing the pressure on compliance companies in the next years

Yearly supply is not enough

anymore to cover yearly demand

Compliance companies will be

forced to invest in reduction

measures or historic surplus needs

to come to market

First available are fuel switch from

coal to gas

Later on industrial abatement

projects

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10000

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14000

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18000

20000

em

issio

nsE

UA

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to

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allocation auction other MSR BAU emissions


The fundamentalsWhere would CO2 reductions come from

Biggest abatement pressure is on

power sector in the beginning

Fuel switch on short notice available

No additional investments necessary

Immediate economic impact

Once fuel switch capacity is utilized

industrial and power sector need to

invest to abate emissions

Especially in second half of phase 4

industrials will start abating emissions

quicker

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180

ab

ate

me

nt tr

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red

[m

to

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abatement per sector

Power Industry


Price ForecastThe Base Case ndash a conservative view

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2000 euro

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3000 euro

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base


Price ForecastScenarios around the risk of a hard Brexit

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1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

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to

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hardBrexit60m hardBrexit30m base


The fundamentalsWhere does the historic surplus sit

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1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

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lute

ho

ldin

g [m

EU

As]

2017 holdings

utilities industry financial cumulative end of 2017


Price ForecastScenario around changed speculative buying

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2000 euro

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3000 euro

ca

rbo

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base Spec-ContinuedSpecDemand Spec-Q2sellOff



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

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-18000

-14000

-10000

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Base case Continued spec demand Spec sell-off


Conclusions

Only as of 2019 MSR intake leads to a significant scarcity on the market

In 2018 the increases are based on speculative buying and compliance

preparation for the MSR

Mid-term risks and opportunities

Hard Brexit

Clean spread development brown dark and spark spreads

Anticipation buying of compliance companies

Sell off triggered by one or few long players

Further behaviour of speculators


Price ForecastScenario comparison

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2000 euro

2500 euro

3000 euro

ca

rbo

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to

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e]

hardBrexit60m hardBrexit30m base Spec-ContinuedSpecDemand Spec-Q2sellOff price price

Peter ZapfelHead of Unit B1 ndash ETS policy Development and Auctioning European Commission

QampA

Marcus FerdinandHead of European Carbon amp Power Analytics

What to look out for ndash a mid to long-term forecast for Europersquos carbon market

copyright copy 2018 ICIS

Agenda

1) The market turns short

2) Market Stability Reserve ndash room for review

3) Coal phase-out ndash implications for the carbon price


The market balance during phase 4 ndash fundamental

-500

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1000

1500

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2500

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-200

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200

400

600

800

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1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

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arly b

ala

nce

in [m

to

nn

es]

FundamentalBalance CumulativeFundamentalBalance


The market balance during phase 4 ndash traded

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-500

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-200

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mu

lativ

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ba

nked

MS

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ton

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arly b

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in [m

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TradedBalance FundamentalBalance CumulativeTradedBalance CumulativeFundamentalBalance


The market balance during phase 4 ndash MSRbanked

-1000

-500

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1500

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3000

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-200

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400

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mu

lativ

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ba

nked

MS

R [m

ton

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arly b

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in [m

to

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CumulativeBanked CumulativeMSR TradedBalance FundamentalBalance CumulativeTradedBalance CumulativeFundamentalBalance

The market stability

reserve ndash room for review


One key bit needs to be taken into account the TNAC is not the available surplus

Due to the exclusion of EUA compliance by the aviation sector the TNAC is higher than the available surplus

Leads to overestimation of market surplus

Higher MSR outtake

In case aviation shortfall gt400 Mt lower threshold obsolete

Higher threshold nearly impossible to undercut

But CORSIA effect

We expect this to be changed and incorporate a TNAC equal to the surplus in our analysis from 2022 onwards

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2500

EU

As [

m to

nn

es]

cumulative aviation short thresholds surplus TNAC

Source ICIS


Our base case analysis

Market to be squeezed in early TP4

This will trigger significant emission

reductions in power and industry

Decreasing base emissions reduce

hedge demand significantly

MSR goes back to 12 and demand

decreases (lower base emissions)

Triggered abatement increases TNAC

MSR is not capable to reduce over-

supply at the same speed

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EU

As [

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MSR thresholds TNAC hedge demand base price

Source ICIS


The MSR in the context of coal phase-outs all over Europe20 less coal in Europe than BAU

Basics

20GW less than BAU coal capacity

150TWh less generation than BAU

50 back-filled by gas rest by RES

Roughly 90m tonnes emission cuts

Hedge demand reduces by 10m EUAs in 2030

Surplus increases by 15m EUAs

Prices will be more pressured and tend lower

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1800

EU

As [

m to

nn

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MSR thresholds TNAC hedge demand

Source ICIS



Basics



50 back-filled by gas rest by RES (investment needed)





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EU

As [

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Source ICIS



Basics








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As [

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Source ICIS


Consequences for the MSR parameter discussion (50 coal)

MSR parameters can be amended

with review

Two potential scenarios

Reduce thresholds (600 280 Mt)MSR continues to trigger

allowances during all years

MSR withdraws 235m allowances

more compared to 833400

thresholds

TNAC remains on lower pathway

0

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1200

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1800

EU

As [

m to

nn

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MSR_600280 thresholds

TNAC_600280 hedge demand_600280

Source ICIS




with review


Reduce thresholds (600 280 Mt)

Remain on 24 withdrawal rateMSR continues to trigger



more compared to old thresholds

and 12 rate


0

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1200

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1800

EU

As [

m to

nn

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MSR_600280 MSR_600280_24

thresholds TNAC_600280

hedge demand_600280 TNAC_600280_24

hedge demand_600280_24

Source ICIS


Price trajectories ndash highly assumptions-driven

000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro

ICIS base case base emissions - MSR withdrawal rate base emissions - MSR threshold and withdrawal rate

20 coal reduction 50 coal reduction 70 coal reduction

20 coal - MSR thresholds 50 coal - MSR thresholds 70 coal - MSR thresholds

20 coal - MSR thresholds and withdrawal 50 coal - MSR thresholds and withdrawal 70 coal - MSR thresholds and withdrawal

Source ICIS


Conclusion

Changing power sector dynamics could lead to significantly lower emissions

If we factor in the current trend towards coal phase-outs all over EuropeThe surplus increases more

The hedge demand reduces more

With lower power sector demand TNAC increases with current MSR parameters

According to our analysis the MSR will not be strong enough to mitigate the surplus built-up due to lower emissions

Less demand results in laxer market balance lower prices

Adjustment of MSR parameters an option to keep market tightness

Southern Europe ndash a renewable revolution in Italy and Spain

Matteo MazzoniSenior Analyst ndash EU Carbon amp Power Analytics

Matt JonesSenior Analyst ndash EU Carbon amp Power Analytics


Agenda

1) Historical renewable developments in Spain and Italy

2) Recent and upcoming auctions

3) Renewable growth trajectories

4) Potential for lsquosubsidy-freersquo renewables

Drivers of subsidy-free RES

Merchant-risk

PPAs

Government de-risking

5) Signposts

6) Conclusions

Historical renewable

developments in Spain

and Italy


Renewable generation within the energy mix

Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34

Italian Generation Mix Spanish Generation Mix

2008

2017

Source Terna Source REE


Where are they now RES capacity grew quickly

0

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60

80

100

120

GW

Installed RES capacity by country

Spain Germany Italy France UKSource IRENA


Renewable targets for 2020

10

12

14

16

18

20

22

Spain Italy

sh

are

Renewable shares vs 2020 target ()

2016 2020 target

Italy is already exceeding

its 2020 target due to

rapid growth 2010-2012 in

particular

Spain remains behind on

its own target due to

stagnant growth in recent

years

Uncertainty over whether

the 201617 auctions will

be enough for Spain to

reach its target


Feed-in-tariffs give way to auctions

Spain Italy

Market Premium scheme reformed 2012

-RES capacity almost flat since

-Numerous lawsuits under the ECT

-No longer open to installations

gt5MW

-De facto moratorium on new RES

FiT and FiP reformed in 2015



gt5MW


No Green Certificates scheme No Green Certificates scheme

Tendering scheme introduced in 2016

- Three rounds held

- Floor price mechanism

- More auctions planned but not

announced

RES auctions planned for 2019 and 2020

- First round suggested Jan-2019

- Contracts-for-differences style

scheme proposed

- Likely to be delayed again

Recent and upcoming

auctions


The introduction of renewable auctions in Spain

Source ICIS OMIE

Auction Date TechnologyCapacity target

(MW)

Capacity awarded

(MW)Weighted average floor price (euroMWh)

Jan 2016Onshore wind

700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422

Jul 2017Onshore wind

3000 in total1128 282

Solar 3909 327

Total 6700 8606


Key features of the Spanish auctions

Prices cleared below market prices

Bidders can expect to get the market price except when prices fall below the auction floor price

Payments for unlimited duration

The floor price level calculation methodology can be revised every six years

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70

Onshore windSpain

Solar Spain Onshore windItaly

Solar France Onshore windGermany

Solar Germany

euroM

Wh

(no

min

al)

Lowest subsidy price vs 2020 market price

Lowest subsidy 2020 power price (ICIS assessment 30 Oct)


Auctions in Spain and Italy

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160

euroM

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(no

min

al)

Prices at auctions - Spain vs other EU countries

Onshore wind Spain Solar Spain Onshore wind Italy Onshore wind Germany Solar Germany Solar France


Upcoming auctions in Italy

Italy is planning to auction 79 GW of capacity between January 2019 and May 2021

Of the total 56GW will be for solar and wind competing against one another

Winning bidders will be offered a CfD contract (like the UK model for RES support)

The latest draft of the decree sets a 70 euroMWh for wind and solar

Session Date Auction Registry Auction Registry Auction Registry Auction Registry

1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80

Solar-Wind Solar asbestos sub Hydro-Biogas Repowering

Total

CAPACITY AVAILABLE (MW)

Source MiSE

Renewable growth

trajectories


SpainItaly 2030 RES targets in the EU context

RES Targets 2020 2030

Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)

The EU has recently agreed on a

32 RES target by 2030

Italy set a 28 RES target for

2030 which is below the EU target

Notwithstanding numerous

announcements Spain has yet to

publish the Energy Transition

Strategy which is expected to

come by the end of the year


Italy the National Energy Strategy (SEN)

1740

22

28

2016 2030 BAU 2030 SEN

RES ON ENERGY CONSUMPTION

335038

55

2016 2030 BAU 2030 SEN

RES ON ELECTRICITY CONSUMPTION

The SEN was presented in November 2017 after a long consultation with more than 250 stakeholders

The SEN went beyond the RES EU target proposed by the EC but it now falls short of the new target

Great part of the rise is on the power sector with solar accounting for 24 of the electricity consumption and wind for 13

The SEN foresees EUR 35bn to be invested in RES and EUR 30bn to be invested in grids

Source MiSE


Expectations for Spanish and Italian RES capacity

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60

GW

Solar capacity forecast 2018-2030 (GW)

Spain Italy

0

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10

15

20

25

30

35

GW

Wind capacity forecast 2018-2030 (GW)

Spain Italy

Source Icis Horizon Power model

Subsidy-free solar and

wind growth


Why is subsidy-free renewables increasingly discussed

We have started to see the

first zero-subsidy solar and

onshore wind project come

online while offshore wind

projects are due in the

early 2020s

The development is driven

primarily by rapidly falling

technology costs 0

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pa

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Str

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Wh

)

Solar auction results in Germany since 2015

capacity (MW) mean average successful bid (euroMWh)


Why are Spain and Italy likely to be at the forefront

Both Spain and Italy have good resources for solar and wind

Both countries have high power prices by European standards

0

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60

70

2016 2017 2018 YTD

euroM

Wh

Average power prices in Spain and Italy are ~euro16MWh higher vs Germany

Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh

ICIS Horizon power price forecasts euroMWh

Italy Spain Germany


Full merchant risk ndash price volatility

Merchant projects are risky given

uncertainty over future prices and

volatility

Without a guaranteed strike price

generators would be faced with

varying income on the wholesale

market

Volatility to increase over time

while seasonal variation will

increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh

Spanish hourly prices July 2017-July 2018

Hourly prices Average price


Full merchant risk ndash price direction uncertainty

We expect power prices to be driven significantly by carbon prices through to 2030

As a result wholesale power prices will be at their highest in 202324 before declining

as EUA prices fall and as more RES capacity is added

47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany


Full merchant risk ndash price cannibalisation

In the absence of subsidy the key metric is the capture price rather than the wholesale

price as this reflects what the generator will actually receive

Capture prices are pushed lower as addition RES units of the same type are added

(price cannibalisation)

40

45

50

55

60

65

euroM

Wh

Italy average price vs RES capture prices

Onshore wind capture price Solar capture price Annual average wholesale price







30

35

40

45

50

55

60

65

euroM

Wh

Spain average price vs RES capture price



Power Purchase Agreements (PPAs)

PPAs de-risk projects by locking

in long-term prices

We are starting to see the first

PPAs signed for RES projects in

Spain and Italy

Most in Spain have been supplier

PPAs rather than the more

publicised corporate PPAs

PPA

Corporate Supplier




in long-term prices



Spain and Italy

The question is whether there will

be enough demand for PPAs to

enable large-scale subsidy-free

rollout

Source ICISWindEurope

0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW

European corporate PPA demand vs Spanish and Italian RES capacity anticipation

European RES capacity sourced through PPAs

Spain anticipated RES per year (2019-2030)

Italy anticipated RES per year (2019-2030)


Spain 15 PPAs signed since the start of 2017

Total PPA capacity 2437MW

All due to be commissioned by 2020

Most of the PPAs are for solar PV

Six corporate PPAs seen totalling 481MW

lsquoUndisclosed buyerrsquo 820MW

Publicly-announced PPAs signed for new renewable capacity on the

Spanish mainland

0

1

2

3

4

5

Supplier Corporate Undisclosed Mixed

Num

ber

Spanish RES PPAs signed since 2017 by fuel and buyer

Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind


The most popular duration for PPAs in Spain is ten years

Five of the fifteen PPAs are for

ten years

Five PPAs are for longer than ten

years

Four PPAs are for an unreported

duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)

Spanish RES PPAs signed since 2017 by duration

Capacity Count


Government support Minimum price floors

Minimum price floors provide

some protection against worst

case scenario prices

However the price floor needs to

be high enough to improve

bankability but low enough to

protect the government from

paying large subsidies

The recent price floors seen in

Spain were set at very low levels

20

25

30

35

40

45

50

55

60

euroM

Wh

Spanish RES capture prices vs minimum price floors

Onshore wind capture price Solar capture price

Wind price floor Solar price floor


Government support ldquoSubsidy-freerdquo CfDs

There is increasing talk in the UK

over ldquosubsidy-freerdquo CfDs for onshore

wind and solar

A similar idea could be seen in Italy

in the future

Generators would only be able to bid

in at the forecast power price level

Potential upside for the government

if prices rise above expectations but

downside if prices fall as subsidies

would be paid

40

45

50

55

60

65

70

euroM

Wh

Subsidy-free CfD price risk

ICIS price forecast Low price scenario High price scenario


Signposts

The Spanish energy strategy due before end of 2018

The new Italian government announced it will revise its 2017 National Energy

Strategy

Strike prices in the upcoming Italian auctions

RES projects in Spanish recent auctions ndash how many projects will be

commissioned and on time


Conclusions

Subsidy-free projects are beginning to emerge in a number of EU member

states

However Spain and Italy could be the first EU countries to attempt to roll out

subsidy-free capacity at scale driven by comparatively higher power prices

Investor appetite for risk given market price uncertainty will remain the greatest

challenge going forward How many projects can get off the ground

The PPA market can help de-risk projects but it remains in a nascent stage

Continued reductions in LCOE will help improve the prospects for projects

Our forecasts suggest that profit margins will be best for early movers

Coal phase-outs ndash key for the low carbon transition

Vija PakalkaiteAnalyst ndash EU Carbon amp Power Analytics


Marcus FerdinandHead of EU Carbon amp Power Analytics


Agenda

1) Overview of coal phase-out in Europe Policy discussions and capacity

expectations

2) Netherlands Total phase-out and carbon price floor

3) Germany Gradual phase-out

4) Poland Clinging on to coal

5) Conclusions Comparing the three national approaches

Overview of coal-phase

out in Europe


Europersquos current power mix

Nuclear 27

Coal and lignite 23Gas 17

Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share

Coal and lignite account for 23 of the

European electricity mix at present

Coal and lignite have the second

largest installed capacity in the EU

(139GW) behind gas and ahead of

nuclear

Germany is the dominant country for

coal and lignite accounting for 31 of

EU capacity followed by Poland (21)

0

50

100

150

200

250

Gas Coal amp lignite Nuclear

GW

Installed capacity in the EU


Coal phase-out plans

CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025

Netherlands 4692 2030

Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits

Put restrictions on the NOx and SO2

emissions from plants

Plants will have to abide by

regulations from 2021 or close

Estimates that up to a third of

Europersquos coal-fired capacity affected

Will countries be able to obtain

derogations


Capacity market legislation

Council Parliament

Rule

New plants will only be eligible to receive payments in a capacity

market if their emissions are below 550 gr CO2KWh or if their

emissions are less than 700 Kg CO2

New plants will only be eligible to receive payments in a capacity market if their emissions are below 550 gr CO2KWh However specific lower limit of 200 Kg

CO2 on average per year per installed KW is applied to plants in a strategic reserve

Date applicable

2025 (new) 2030 (existing) 2019 (new) 2024 (existing)

Coal-fired plants wanting to enter a capacity market will be affected by

EU legislation in the Electricity Market Design Regulation

Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7

200 (Parliament) 3 2


EU Coallignite capacity forecast 2018-2030

Coallignite capacity expected to decline from 139GW in 2018 to

88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW

EU coal amp lignite capacity by country 2018-2030 (MW)

Germany Poland UK Czech Republic Spain Italy NetherlandsGreece Bulgaria Romania Denmark France Finland PortugalHungary Slovenia Ireland Austria Slovakia Croatia Sweden

Source ICIS Source ICIS




88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW

EU coal amp lignite capacity 2018 and 2030 (MW)

2018 2030Source ICIS


Differing trends for coal and lignite

We expect coal capacity to fall considerably while lignite will prove more resilient

Coal capacity to fall from 87GW in 2018 to 26GW in 2030

Lignite to decline from 52GW in 2018 to 32GW in 2030

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW

EU coal and lignite capacity 2018-2030 (MW)

Coal LigniteSource ICIS

Source ICIS

Netherlands Coal phase-

out and carbon price floor


Complete coal phase-out by 2030

Currently the Netherlands has 47GW coal-fired capacity available (5 plants)

three of which came online as recently as 2015

Remaining units

Source ICIS



The two oldest plants will be forced to close at the end of 2024 the three

newest plants by the end of 2029



Remaining units

Source ICIS


Dutch CO2 emissions and targets

Urgenda ruling called for 25 cut in CO2 (compared to 1990) by 2020 ndash

government in danger of missing this target

Government has set its own ambitions for a 49 cut by 2030 ndash this is driving

the plans for coal phase-out and the carbon price floor

0

50

100

150

200

250

mtC

O2

Dutch greenhouse gas emissions

Actual Urgenda target Coalition target

Source ICIS


Coal amp gas in the Dutch power mix

Several older coal-fired plants have closed over the past three years which has

led to lower coal-fired generation output

Gas output has begun to exceed coal output and the trend will continue due to

carbon prices and coal closures

0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]

Dutch coal amp gas capacity (GW)

Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]

Dutch coal amp gas output (TWh)

Coal Gas

Source TenneT


Modelling Impact on coal output

Coal capacity will close in line with the announced dates (20252030)

Output will be driven partially by these closures but also by our carbon price

expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]

Dutch coal capacity forecast (MW)

0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]

Dutch coal generation forecast (TWh)

Source ICIS


Modelling Impact on gas output

Gas-fired output will increase through to 2023 as EUA prices drive fuel switching

Output will decline in the later 2020s due to softening EUAs and increased RES

Full coal phase-out in 2030 will lead to an increase in gas output

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]

Dutch gas capacity forecast (MW)

0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]

Dutch gas generation forecast (TWh)

Source ICIS


Modelling Price impact

46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW

h] Dutch power price forecast (euroMWh)

Final three coal

plants close

Prices driven higher by

EUA price increase

Fuel switching seen

EUA prices fall increasing

offshore wind and solar

output pressures prices

lower

Gas and coal

prices soften

new

interconnectors

Source ICIS


Carbon price floor plan

In addition to the coal phase-out the government plans to introduce a carbon price floor for the

power sector

The floor would start at euro18tonne in 2020 increasing to euro43tonne in 2030

We anticipate the floor to be below EUA prices until 2026

0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]

ICIS EUA forecast vs proposed Dutch carbon price floor

Proposed price floor ICIS carbon priceSource ICIS


Carbon price floor ndash coal amp gas output

We anticipate that the carbon price floor would have no impact for the first five years after

implementation

From 2026-2030 the price floor would lead to a reduction in both coal and gas output

compared to the base case

0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]

Dutch coal output forecast (TWh)

Base case Carbon price floor

0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]

Dutch gas output forecast (TWh)


Source ICIS


Carbon price floor ndash net imports

Under the base case assumptions the Netherlands becomes a net exporter in 2023 and

maintains this position through to 2030

If the carbon price floor is introduced the Netherlands will revert back to a net importer status as

imports replace domestic coal amp gas generation

-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]

Base case net imports (TWh)

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]

Carbon price floor net imports (TWh)

Source ICIS


Carbon price floor ndash prices

From 2026 the carbon price floor would start to increase prices

Modelling suggests that annual prices would be on average euro148MWh higher

than the base case 2026-2030

42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]

Dutch power price forecast (euroMWh)

Base case Carbon price floorSource ICIS


Carbon price floor ndash Emissions

Under the base case assumptions power sector emissions would decline only

marginally through to 2029 before a big drop associated with coal phase-out in 2030

The carbon price floor would lead to a much more significant drop 2026-2030

However the emissions decline would be cancelled out by an increase elsewhere

0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]

Base case power sector emissions

0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]

Carbon price floor power sector emissions

Source ICIS

Germanylsquos coal phase-

out scenario analysis


Agenda

1) The bdquocoal commissionldquo at work

2) Market fundamentals

3) Our phase-out scenarios

4) Impact on German power prices

5) Hambacher Forest and its implications


The bdquocoal commissionldquo

Two working groups

economic development and jobs in

the region

Energy industry and climate goals

Plenary and WGs meet once a

month

Equal voting rights

Two-thirds majority

Four commission leaders

Eight representatives of federal ministries (economy environment internal affairs labour transport finance agriculture and education)

Six representatives of federal states (North Rhine-Westphalia Brandenburg Saxony Saxony-Anhalt Lower Saxony and Saarland)

Three members of parliament without voting rights (CDU CSU and SPD)

24 experts (political groups research institutes associations NGOs and the private sector)

The secretariat with seven people is hosted within the economy ministry


Aims and timeplan for decision making

Guidelines

Options for closing gap to 2020 target

Measures to ensure 2030 target

achievement

Step-wise reduction and phase-out of

coal generation incl phase-out date

Ensuring financial security for structural

changes

Potentially delaying final report

depending on ability to find consensus

Current status

1516 November next meeting discussiondetails expected regarding phase-out

So far intermediate report on structuralchanges adopted on 1 Nov details on financig instruments levels missing

Aim to have final report before end of year interim report expected by mid-December

German coalition struggle could impact theCommissions work (depending on nextCDU leader) pressure to meet timeplan


Power generation in Germany

2017 generation

Lignite 134 TWh (242)

Hard coal 817 TWh (148)

Total production was 5571 TWh

Combined lignite and hard coal

~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]

Lignite Hard coal Nuclear Gas Oil

Hydro Biomass Wind Solar Other

Source ICIS


Capacity development ndash bdquomoderate scenarioldquo

Installed capacity 2018

Hard coal 227 GW

Lignite 20 GW

Lignite reserve 18 GW increasing

to 27 GW in 2019

Additional 23 GW hard coal and 30

GW lignite in grid reserve (not

available to market)

0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]

Lignite Hard coalNuclear Natural gasOil Hydro pump storage totalHydro reservoir Hydro run-of-riverBiomass Wind (onshore)Wind (offshore) Solar PVGeothermal

Source ICIS


Scenario set-up

Four phase-out scenarios

Moderate 45 GW reduction by 2020 halved by 2030

Slow Reduction by approx frac14 towards2030

Speedy 105 GW drop towards 2020 70 drop by 2030

Lignite-only Lignite phase-out until 2030 hard coal stable

Lifetime approach for hard coal and lignite

Initial capacity reduction towards 2020 target

All other parameters unchanged

Nuclear phase-out by 2022

Nat gas capacity adjusted by additions and closures fluctuating around 24 GW

Hydro fluctuating around 96 GW

Wind onshore auction results+adjustedEEG2017 corridor

Wind offshore Adjusted EEG2017 corridor

Solar PV Auction+adjusted EEG2017 corridor


Phase-out scenarios ndash capacity development

00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)

Moderate lignite Slow lignite

Speedy lignite Lignite-only lignite

00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)

Moderate hard coal Slow hard coal

Speedy hard coal Lignite-only hard coal

Source ICIS


Impact on German power prices

2019-2023 Prices predominantlydriven by higher carbon pricesirrespective of phase-out speed

Germany net-importer in 2023 under all scenarios 2022 to 2025 for lignite-only and speedy

After 2023 coallignite generationincentivised to ramp up

Declining carbon higherrenewables net exporter towardssecond half of 2020s

Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)

Moderate phase-out Slow phase-out

Speedy phase-out Lignite-only phase-out


Hourly price comparison

Increasing number of

hours with high prices

in winter

Lack of gas in times

of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week

Moderate phase-out Slow phase-out Speedy phase-out Lignite-only phase-out

Source ICIS


Hambacher Forest ndash RWE impact

Muumlnster Higher Administrative Court ruled to halt forest clearance 5 Oct

Final decision to be reached in main proceedings likely end of 2020

Lignite mining possible until approx end 2019

But annual reduction expected from 40 Mt tobetween 25 and 30 Mt (2019-21)

RWE expects substantial short-term operational effects as of 2019

Power generation to decrease by between 9 and13 TWh

Affected plants are Neurath and Niederauszligem

Clearance work only permitted Oct to Feb Delay of at least a year

Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012

Niederauszligem Capacity

[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003


Impact on Hambach generation

With potential closures we see a

reduction of 182 TWh in 2023

This would translate to a reduction

of 138 Mt emissions in 2023

Below our assumptions for the

bdquomoderate scenarioldquo which assumes

68 GW lignite and 36 GW hard

coal to drop-out

Hambach can be seen as preview

towards coal commission result

00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]

Neurath - full generation Niederauszligem - full generation

Neurath - reduced generation Niederauszligem - reduced generation

Source ICIS


Impact of Hambach Forest decision on carbon price

On average 2020 to

2030 Hambacher Forest

scenario euro05t lower

compared to base case

Reducing emissions by

a total of 35 Mt over

2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]

Hambach impact base case

Source ICIS

The Polish energy market

and the coal dependency


Production of solid fuels in the EU

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

Polish coal production EUs coal production without PolandSource Eurostat


Future of coal in Poland ndash no clear strategy

Last adopted energy strategy ndash almost a decade old

New draft presented in 2015 under previous government

Draft update promised by December 2018 ndash COP24 in Katowice in parallel to

ldquoNational Energy and Climate Plan for 2021-2030rdquo

Bits and pieces in media

2018 July Energy Minister Krzysztof Tchoacuterzewski ldquothe share of coal in electricity

generation will systematically fall It is predicted that in 2050 it will be 50rdquo

2018 October ldquoPower from coal seen down at 50 by 2040-govt officialrdquo


Industrial Emissions Directive

District heating plants (CHP) list ndash phase-out from 2023

Limited Lifetime Derogation (LLD) list ndash phase out from 2024

Unclear future of the plants in the Transitional National Plan

(TNP)


Planned coal capacity additions

Max 4GW new coal capacity mid-term

Opole 900MW in late 2018 and 900MW in 2019

Byczyna (Jaworzno) unit 910MW in 2019

[2023]1000MW Ostroleka C in northeast Poland

Energy Minister Krzysztof Tchoacuterzewski about Ostroleka C lsquothe last coal-burning plant to be built in Polandrsquo

Ostrołęka C Power plant


Capacity market auction to commence this week

Basic fuel Net reachable power [GW]

Existing physical generating units

Physical generating units planned

Gas 228 437

Coal and lignite 2632 402

Sum 3633 890

Sum existing and planned

4523


Horizon base case Capacity and generation assumptions

0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]

Hard Coal Gas Lignite

Oil Solar Wind

Hydropower Bio Demand

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]

Lignite Coal Gas Fuel oil Bio Hydro Solar Wind


Zooming in ndash EUAs price forecast and fossil generation

00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]

Hard Coal Gas Lignite EUAs price forecast


2019-2030 Polish power price outlook

25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]

TGE day-ahead prices Horizon forecast



500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]

Horizon price outlook

EUA increase

outweighed by coal

and gas prices

softening


EUA price increase

Fuel switching seenSome coal capacity

phased-out

EUA prices fall more

RES capacity comes

onlineRegional coal

closures (especially

NL phase-out) push

regional prices higher

Conclusions


Coal phase-out across the EU

Coal and lignite have the second largest installed capacity in the EU

10 EU countries decided to phase out coal several more in

discussion

Phase-out will come in waves 2021-2022 2025 and 2030

Regardless of coal phase-out plans BREF will affect one third of

Europersquos coal-fired capacity


Capacity implications

Three very different policy approaches to coal

Netherlands Complete phase out by 2030 and (potentially) a carbon price floor

Germany Gradual reduction over the next ten years driven by government intervention

Poland Attempting to keep capacity online using the capacity mechanism to provide support

None of the three countries will phase out coal rapidly

In absence of policy decision Industrial Emissions DirectiveBREF will define the pathway

0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]

Coal-fired capacity expectations 2019-2030

Germany Poland Netherlands

Source ICIS


Generation implications ndash carbon price importance

Coal generation will fall in all three

countries regardless of the coal

capacity developments because of

the bullish EUA prices

As EUA prices soften from 2024

coal-fired output will rebound

The most significant increase will be

seen in Poland as the majority of

capacity remains online 0

5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]

Coal-fired generation 2019-2030

Germany Poland

Netherlands ICIS EUAs price forecast

Source ICIS ICIS Power Horizon


Price implications

Power prices in all three markets will follow a similar pattern

2019-2023 EUA increase pushes prices higher

2024-2030 Softening of EUA prices and increased RES output leads to lower prices

Dutch carbon price floor and complete phase-out to boost prices comparatively 2026-2030

A speedier German phase-out would push prices higher compared to the base case

45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]

Wholesale price forecasts 2019-2030


Source ICIS

Stay focused on the power market developments that are important to your business with the new online tool from ICIS

Understand the impact of energy policy changes

Anticipate market developments across Europe

Foresee risks and spot profitable opportunities Fast

ICIS Power Perspective amp Horizon

Speak to us to find out more

Tel +44 20 7911 1919 | Email powerperspectiveiciscom | wwwiciscompowerperspective

Reliable provider of global carbon market analytics and forecasts

Learn more

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Make profitable investments within seconds

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wwwiciscom


Second Day


1230-1300 Power Purchase AgreementsVivianna Ciancibello EEX

0930-0945 WelcomePhilipp Ruf ICIS

0945-1115

Brexit and its impact on the UK electricity

market and the EU ETSHenry Evans amp Matt Jones amp Marcus Ferdinand ICIS

Mark Copley BEIS

Coffee Break

1145-1230 Renewable energy trends across EuropeMatteo Mazzoni amp Vija Pakalkaite ICIS

Goodbye and wrap-up

Brexit and its impact on the UK electricity market and the EU ETS

Henry EvansSenior Market Reporter



Mark CopleyDeputy Director ndash EU Exit Energy amp Climate Programme at BEIS

The future of the UK

electricity market post-

Brexit


Deal or no-deal What is the timeline

November

bull Negotiators for UK and EU reach agreement in principle on Withdrawal Agreement

bull 25 November EU emergency Council meeting on Agreement

December

bull UK Parliament likely to vote on Agreement in early December

bull 13-14 Dec ndash last EU Council of 2018

2019

bull UK and EU parliamentary approval required for any deal

bull New UK legislation will need to be passed before 29 March

bull Potential for extension of date if no deal agreed


EU vs UK ndash where do they both stand on energy

EU Commission publishes notice on

27 April detailing the UKrsquos position

in the EUrsquos internal energy market in

the event of ldquono dealrdquo

UK government published its Brexit

white paper on 12 July following the

fabled Chequers meeting ndash pages

44-45 are the important part


Will the interconnectors stop flowing power

UK currently has three underwater cables connected to the EU ndash 2GW IFA with

France 1GW BritNed with Netherlands and 500MW East-West Interconnector

with Ireland

UK and EU papers make no mention of flows between the UK and EU halting

on 29 March 2019

National Grid 28 June 2018 ndash ldquoOur internal analysis backed up by two

separate external legal views has stated that there is no legal right for the

interconnectors to be simply ldquoswitched offrdquo post Brexitrdquo


What will the commercial arrangements be

UK will lose access to the single allocation platform for forward interconnection capacity European balancing platforms and the single day-ahead and intraday coupling

UKrsquos NEMOs ndash ie EPEX Spot and Nord Pool ndash will become third country operators and will no longer be able to carry out market coupling services between UK and EU

Option 1 - open to remaining in the EUrsquos internal energy market (IEM) This includes remaining part of the EUrsquos Emissions Trading System One caveat ldquoThe UK does not believe that participation in the IEM should require a common rulebook on wider environmental and climate change rulesrdquo

Option 2 ndash Leave the IEM and explore how interconnector trade continues without automatic capacity allocation National Grid has contingencies in place

What has the EU said What has the UK said


Regulations and REMIT

UK market participants will have to

register with the regulatory authority

of the Member State in which they

are active

The registration form has to be

submitted prior to entering into a

transaction which is required to be

reported

ldquoThe UK is putting in place

arrangements so that when trading

after exit businesses will have

certainty that they will not face

substantially different requirements

compared to their current

obligations under the Regulation on

Wholesale Energy Market Integrity

and Transparency (REMIT)rdquo



If the UK leaves the IEM what happens

Positive for existing interconnectors Increased price divergence between UK

and continental markets possible without market coupling

Negative for interconnectors in development Investor confidence weakens

New projects already delayed

Will liquidity in wholesale market be affected


BEIS Update

on Brexit

Brexit and its impact on

the EU ETS


Agenda

1) Brexit ndash UK installations and the short-term market impact

2) Long-term considerations for the EUA price

3) Beware of interactions

4) Future of the carbon price support


Short-term considerations

UK installations will exit the EU ETS on 29 March 2019

UK brought forward its compliance deadline to 15 March 2019

UK compliance is guaranteed for emissions year 2018

Depending on broad negotiations transition period could lead to Brexit

adjustments only for phase 4

Likely no auctioning as of 1 January 2019 in case of bdquono-dealldquo scenario or

remaining uncertainty


Preparing for the worst ndash a no-deal setting

Technical note on no-deal Brexit

Published 12 October 2018

2019 free allocation cannot be used by UK

operators for 2018 obligations

Recommends to open a second registry

account in another EU member state and to

transfer their EUAs to these accounts

In no dealrsquo scenario the UK government

will initially meet its existing carbon pricing

commitments via CO2 tax system

UK 2018 budget

Released on 29 October 2018

Carbon Price Support (CPS) rate at pound18t

until including the financial year 2020-21

If no-deal scenario Carbon Emissions Tax

Tax rate of pound16t (~euro18t) above an installationrsquos

emissions allowance (on top of CPS)

All stationary installations currently participating in

the EU ETS from 1 April 2019 (incl industry)

Next rate defined in 2019 budget

Emissions allowance set by EU ETS free

allocation


Considerations following the preliminary agreement

Withdrawal Agreement

Published 14 Nov 2018

ldquoThe United Kingdom shall implement a

system of carbon pricing of at least the

same effectiveness and scope as that

provided by Directive 200387EC of the

European Parliament and of the Council of

13 October 2003 establishing a scheme for

greenhouse gas emission allowance

trading within the Communityrdquo

Future relationship

Released on 14 Nov 2018

ldquoConsideration of cooperation on carbon

pricing by linking a United Kingdom

national greenhouse gas emissions

trading system with the Unionrsquos

Emissions Trading Systemrdquo


Short-term implications

Short-term

UK utilities expected to reduce total

hedging (in EUAs) from ~100m in

2017 to ~35m in 2030

UK utilities end 2018 locked-in 71m

EUAs for 201920

Industrials to add another

~30m~60m Brexit-related supply

Bearish risk approx euro2t-euro3t if

released Q1 20191000 euro

1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS


Brexit impacts the market balance

In the long-term annual

balance with Brexit is tighter

given that UK is net-long

However during the middle of

phase 4 MSR operation and

abatement dynamics cause a

slightly more relaxed Brexit

balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]

Annual traded balance (Brexit) Annual traded balance (non-Brexit)

Cumulative traded balance (Brexit) Cumulative traded balance (Brexit)

Cumulative traded balance (non-Brexit) Source ICIS


Brexitlsquos long-term EUA price risk related to Brexit

Long-term

Assumption that transition period of

21 months (until end 2020) is

agreed

Adjustment of demand and supply

for departure of UK installations

Net long position removed from the

market

But ndash implications for parameters

like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]

Brexit case No-Brexit case

Source ICIS


Risk that market stability reserve operation is affected by Brexit

Removing UK as net

emitter reduces TNAC

MSR gets triggered less

and for fewer years in case

of Brexit

Sensitivity of TNAC around

upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]

MSR Brexit MSR No-Brexit TNAC Brexit

TNAC No-Brexit MSR threshold Source ICIS


Carbon Price support ndash what does it actually mean

Future of UK carbon priceremains vague

In 2017 budget

Government total carbon price is set at the right level

In 2018 budget

The government will seek to reduce the CPS rate if the Total Carbon Price remains high

Carbon Emission tax level for2021 set at next budget

Delta btw 2017 and 2018 budgetapproach is approx 100m tonsbetween 2019 and 2030

0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]

EUA price (ICIS base case) Total carbon price (2017) inflation adjusted

Total carbon price (2018) inflation adjusted Carbon Price UK (no adjustment EU ETS participation)

Carbon Emissions Tax

Source ICISbdquoCarbon price UKldquo means EU ETS price + Carbon Price support frozen at pound18 accounting for inflation adjustment

(CET + CPS)


Conclusion

A no-deal scenario would have a moderate short-term bearish effect on EUA

prices

Fundamentally we talk about extra supply of between 100 to 130m allowances until29 March

Sentiment might weigh heavier

Long-term Brexit will in principle support carbon prices

Net length removed

But MSR to be very sensitive

Highly dependant on which of the four options is chosen


the UK electricity market

and the EU ETS


Agenda

1) Will Brexit impact renewable development in the UK

2) Coal and gas generation

3) Interconnectors

4) Power price expectations


Renewables in the UK ndash Historical development

Onshore wind and solar capacity grew

quickly under the Renewable Obligation

(RO) scheme but that is now closed

Since 2014 onshore wind and solar

have been excluded from the Contracts

for Difference (CfD) scheme

Therefore offshore wind looks set to

dominate capacity additions under

current policies

0

2

4

6

8

10

12

14

GW

UK renewable growth 2008-2017

Onshore wind Offshore wind Solar

Source IRENA


How will Brexit impact renewable targets

The UK wants to remain in the IEM while removing itself from climate

change targets and commitments

If this were to be agreed the UK would not have to commit to a share

of the EUrsquos recently agreed 2030 renewable target of 32

If there were to be no deal this would also lead to the government

dropping out of the EU renewable target



If this were to happen the impact on the UK would be minimal compared to current expectations

With no subsidies for onshore wind and solar future growth will come from subsidy-free projects

Funding of pound557m has already been agreed for additional CfD rounds which will lead to offshore wind growth

0

5

10

15

20

25

GW

UK renewable growth forecast to 2030


Source IRENAICIS


How would a Labour government impact renewables

While Brexit will not have a major impact on renewable development a Labour government certainly would

In October the Labour Party released plans to massively increase RES capacity by 2030

Offshore wind ndash 52GW (from 8GW currently

Onshore wind ndash 30GW (from 13GW currently)

Solar ndash 35GW (from 13GW currently)

RES share in electricity ndash 85

0

20

40

60

80

100

120

GW

UK onshore wind offshore wind and solar capacity forecast

Base case Labour scenario

Source ICIS


Labour targets would push down prices significantly

Our modelling suggests that if

the capacity was brought online

as planned it would significantly

reduce prices

By 2030 average annual prices

would be euro184MWh below the

base case 40

45

50

55

60

65

70

75

euroM

Wh

Power price forecast 2019-2030


Source ICIS


The impact on capture prices would prevent subsidy-free developments

A massive expansion of renewables would lead to price cannibalisation pushing capture prices lower

By 2030 offshore wind capture prices are forecast to be euro22MWh below the base case assumption

Such low capture prices would prevent subsidy-free development in the long-term and lock in huge subsidies for existing capacity

30

35

40

45

50

55

60

65

70

75

euroW

Mh

Offshore wind capture price forecast 2019-2030


Source ICIS


Coal and gas output in the UK - Historical

UK coal output has declined considerably since the CPS was introduced in

2013 (from 137TWh in 2012 to 21TWh in 2017)

Over the same period gas generation increased from 83TWh to 120TWh

0

20

40

60

80

100

120

140

160

TW

h

UK coal generation 2012-2018

0

20

40

60

80

100

120

140

TW

h

UK gas generation 2012-2018

Source National Grid


Coal and gas output in the UK - Forecasts

All coal plants in the UK will have to close by October 2025

However given the anticipated increase in carbon prices we anticipate

coal being almost completely phased out by 2021

0

2

4

6

8

10

12

14

16

TW

h

UK coal generation forecast 2019-2030

0

20

40

60

80

100

120

140

160

180

TW

h

UK gas generation forecast 2019-2030

Source ICIS


Impact on power prices

Since fuel switch has already mostly taken place the impending carbon price rise

will have less impact on the UK than on other coal-dependent countries

As a result spreads to other EU markets will narrow

45

50

55

60

65

70

euroM

Wh

Power price forecasts 2020-2030

UK Netherlands Italy

Spain Germany Poland

0

2

4

6

8

10

euroM

Wh

Power price increase 2020-2023

Source ICIS


Modelling UK capacity forecast

0

20000

40000

60000

80000

100000

120000M

WUk electricity capacity forecast 2019-2030 (MW)

Nuclear Coal Gas Bio Hydro Offshore wind Onshore wind Solar

Source ICIS


Modelling UK generation forecast

0

50

100

150

200

250

300

350

400

TW

hUK electricity generation forecast 2019-2030 (TWh)


Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh

UK electricity generation forecast 2019-2030 (TWh)

Nuclear Coal Gas Bio Hydro Offshore wind Onshore wind Solar Demand

Source ICIS



0

50

100

150

200

250

300

350

400

TW


Nuclear Coal Gas Bio Hydro

Offshore wind Onshore wind Solar Imports Demand

Source ICIS


Modelling UK import forecast

0

10

20

30

40

50

60

70

80

90

100T

Wh

UK net imports 2019-2030 (TWh)

Belgium Denmark France Germany Netherlands Norway

Source ICIS


Modelling UK power price forecast

50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh

UK power price forecast 2019-2030 (poundMWh)

Gas prices ease

pressuring power

prices lower new

interconnector

Increasing carbon price

pushes up prices (but less

pronounced than other

markets)

Carbon prices soften

offshore wind capacity

expands increased imports

via new interconnectors

Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions

The biggest disrupter to the power market comes not from Brexit but from a

Labour government

This would likely lead to a rapid renewable expansion which would pressure prices lower

Under current policies renewable growth will be dominated by offshore wind in

the mid-term due to the absence of subsidies for onshore wind or solar

Despite an official coal phase-out date of October 2025 coal will be almost

completely pushed out of the mix from 2021

The UK looks set to increasingly rely on interconnectors as older thermal

capacity closes

Renewable energy trends across Europe


Dr Vija PakalkaiteAnalyst ndash EU Carbon amp Power Analytics


Agenda

1) Regulatory environment

Race to reach the 2020 targets

Recast Renewable Energy Directive

2) RES auctions trends

Auction designs

Auction results

3) RES costs and future outlook

4) Conclusions



EU level

Binding target of 20 RES in final energy

consumption in 2020 (comprised of Electricity

(RES-E) Heating amp Cooling and Transport

No binding target for RES-E

It reached 17 in 2016 and is on course for

2020

Member State level

Each country has a binding target for RES in

final energy consumption

11 member states already exceeded this target

in 2016 most of the 17 other countries are on

course to meet 2020 target

0

5

10

15

20

25

[]

EU-RES share in final energy consumption

res share target

Source ICIS based on Eurostat


2020 RES share and distance to the target in 2016

-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts



2016 distance to 2020 target in energy volume

-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]



Implications of non-compliance and MS strategies

2020 can be reached by

Physical investments (both national or joint)

Administrative measures statistical transfers

Consequences of non compliance

No penalty mechanism in Directive itself

Infringement proceedingsReasoned Opinion by the EC referral to CJEU Burdensome for all parties and can take several years

Ramp-up

Statistical transfers

Wait and see


Statistical transfers first deals made in late 2017 increase expected especially towardsfor 2020 delivery

Luxembourg ndash Estonia

Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown

Cost ldquoAt least euro10mrdquo

Cost per unit around

euro15MWh


Proliferation of RES tendersauctions

MS behind their RES 2020 targets

lsquowoke uprsquo and speedily install

tenderingincrease volumes

2018 ndash last year to tender multi-

technology for 2020 target 2019 ndash

last year for solar (shorter lead time)

11 MS have executed

tendersauctions

5 MS Legal frameworks in place or

about to be adopted

Source ICIS RES auctions database


Countries behind the 2020 target ramp up

0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]

DE auction volumes ES auction volumes FR auction volumes NL auction volumes UK auction volumes other countries



Assumed cumulative generation from auctions to be added by 2020

Country Estimated additional

RES generation [TWh]

Progress in closing the

gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333

United Kingdom 45 51

total 609 152

total without UK 564 181


Renewable energy targets for 2030


ndash 2030 target for RES in final

energy consumption

Progress control in Governance

Regulation

Draft national energy and climate

plans (trajectories) ndash end 2018

ldquoGap fillerrdquo mechanisms

Overall EU target 32

No national binding targets

2020 targets will be baseline


RES share 2020 ndash the baseline through 2030

ldquoUnder no circumstances the

national RES share should fall

belowrdquo

If deviated from the baseline ndash

additional national measures to be

taken ldquowithin one yearrdquo

Additional measures to take

Within 2021 or 2022

Statistics compiled

Oct 2021 national statistics agencies

Jan 2022 Eurostat publication

Fulfilling the 2009 RED requirements

National binding target

Full year 2020


Recast Directive and RES support schemes

ldquoDesigned in a market-based wayrdquo

Competitive bidding except for small scale RES

Feed-in Premiums instead of Feed-in Tariffs or Certificates of Origin (ldquogreen certificatesrdquo)

Bidding should be non-discriminatory (technology neutral)

Opening up support schemes

Voluntary

At least 5 of newly supported RES capacity in 2023-2026 increase to 10 in 2027-2030)

Or the level of interconnectivity of a MS if lower

Guarantees of Origin and supported electricity

RES auction trends


Trends in auction designs

From technology-specific to multi-technology

Germany and France have had ldquopilotrdquo auctions wind vs solar

Legal frameworks for ldquotechnology neutralrdquo in Hungary Finland Ireland Lithuania Spain Slovenia

But many limitations

From tariffs towards premiums

Floating FiP Denmark Finland France Germany Hungary Ireland Italy Lithuania Netherlands Slovenia Spain

Contracts for Difference Denmark(offshore) Hungary Greece Poland the UK Italy (forthcoming)

Fixed FiP Denmark (solar) Estonia


Auction results the success of solar PV

0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]

solar wind onshore wind offshore biogasampbiomass hydro other RESSource ICIS RES auctions database


Trends in auction results solar vs wind

0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]

Technology specific RES auctions

German Auction-Solar German Auction-Wind

French Auction-Solar French Auction-Wind

Greek Auction-Solar Greek Auction-Wind

Lithuanian Auction-Wind

0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]

Multi-technology RES auctions

German Auction-Solar Spanish Auction-Solar

Spanish Auction-Wind French Auction-Solar

Dutch Auction-Solar Dutch Auction-Wind

Slovenian Auction-Solar Slovenian Auction-Wind

UK Auction-Solar UK Auction-Wind

Source ICIS RES auctions database Source ICIS RES auctions database


Offshore wind is picking up

0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]

Source ICIS Power Perspective


Offshore wind ndash closing the RES gap

0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15

Electrical infastructure

9

Assembly amp Installation

19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1

Breakdown of offshore wind costs

Recipe for a ldquosubsidy freerdquo offshore trends

Larger turbines

Synergies with adjacent

sites

Grid connection

Longer lifetime (30y)

Potential costs reductions

Source NREL

Renewable energy outlook


RES outlook


RES costs developments

The overall trend sees all

renewable costs (LCOEs) falling

over the next decade

Solar and offshore wind will be

the technologies experiencing

the biggest reduction

Market parity may come sooner

than expected

However RES business plan

needs stability -gt PPAs

0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW

]PV Wind onshore Wind offshore Hydro Bioenergy

Sources IRENA BEIS auctions Bundesnetzagentur McKinsey Lazard 2017-18


Centralized vs Decentralized

Source Lazard 2018

Solar has the largest potential in terms of penetration

Solar costs vary a lot based on the size of the plant

Onshore wind and utility scale PV are already cost-competitive with conventional thermal plants

Two different market models may be competing

Grid defection problem

0

50

100

150

200

250

RooftopRes

RooftopCampI

Community Utility Scale- Crystaline

Utility Scale- Thin film

Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]


Storage is catching up and it may be the game-changer

0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh

Pumped Hydro CAES li-Ion (LFP) NaS Vanadium

Source IRENA 2018

Higher RES in the system will require a higher degree of flexibility

Electricity storage will play a crucial role in enabling the next phase of the energy transition

Prices are falling and based on the difference services that could be provided storage may become attractive quite soon

Power-to-gas may enter into the game (seasonal storage)


RES costs and Horizon power price outlook

10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]

Horizon price outlook PV LCOE Wind onshore LCOE Wind offshore LCEO

Source ICIS Power Horizon BEIS auctions Bundesnetzagentur McKinsey Lazard 2017-18


Conclusions

Targets Unclear destiny of binding national targets

EU as a whole is at risk to miss the 2020 target as the worst performers also are largest consumers

Statistical transfers can help fill the gap but will likely not be used for entire delta

Uncertainty regarding implications of not meeting national targets

PolicyRamp up of support and statistical transfers in early 2020s

Technology neutral auctions is the new black in mid-term

PPAs will play an important role

Targets

Policies

Costs

Market impact


CostsRenewables costs will continue to fall

Wind and solar utility-scale projects are already competitive with conventional thermal

Storage systems will be essential in driving the decarbonisation

Market impactGrid-parity is already a reality in some cases while market parity maybe just behind the corner

Carbon price pushing up power prices will make renewables far more competitive reducing the need for subsidies

Power markets design remains an open issue

Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom

Viviana Ciancibello Business Developer EEX

ICIS Power and Carbon Seminar

Berlin 15 November 2018

Power Purchase Agreements

Hedging via EEX Power Futures

A few key figures

copy EEX AG 2018 2

32 June 2018 new binding 2030 renewable

energy target for the EU

euro62bn Feb 2018 IRENA report of estimated

average investment in renewable energy

per year to reach 34 capacity in the EU

17 2016 estimated share of renewable energy

in the EUs gross final energy consumption

Source EU Commission Bloomberg

One PPA is not like the other

3

Power Purchase Agreement (PPA)

Long term contract between a party generating and selling electricity and a

party purchasing electricity Have existed for decades

Corporate PPA

Renewable Corporate PPA

Electricity traded between the two parties comes from a Renewable Energy

power plant PPAs are necessary to be in place prior to a RE asset

developer securing financing from a bank for their project Purchasers

are attracted by lower prices and the lsquogreen credentialsrsquo in having their power

supply come from 100 renewable sources RE Corporate PPAs are often

fixed for long periods up to 15 years to ensure revenue security for the

developer

Corporate PPAs enable businesses to source electricity from generators at

an agreed price while giving producers a reliable guaranteed buyer at a

stable price

copy EEX AG 2018

RE Corporate PPAs are quickly gaining in popularity

in Europe

4

Around 6 of new installed wind

power capacity in Europe in the

last 5 years is under PPAs

In Europe over 1GW of power was contracted

under PPAs in 2017 with 95 of this volume

coming from the Netherlands Norway

Sweden and the UK due to favourable policy

conditions

More PPAs in Germany and Europe are

expected once wind and solar assets start

coming off of subsidies in the next few

years

Source WindEuropecopy EEX AG 2018

Who are the Corporates and what is driving them

5

RE 100 is a global initiative uniting more than 100 influential

businesses committed to sourcing 100 of their power

supply from renewable electricity by a specified year

Table source RE 100copy EEX AG 2018

EEX lists full Power Futures curves in 16 European

market areas

copy EEX AG 2018 6

EEX connects 264 trading

participants from 28 countries

8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy

5 non-European participants

Canada Cayman Islands USA

Exchange traded EEX Power Futures

EEX Trade Registration Services for Power Futures

New Market Area As of 31 May 2018

1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom

How are EEX Members active in PPAs

7

EEX Members buy Power

via Long-Term PPAs

and build RE assets

EEX Members provide

balancing services on Spot

amp hedge via Futures

RE Developers sell Power via

Long-Term PPAs

EEX Members sell Power from their own

RE assets via LT Corporate PPAs

Banks provide financing

once PPA is in place

copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price

PPAs affect the hedging profile of EEX Members

and extends it to the long-term

8

Old hedging horizon to Cal+3

New hedging horizon to Cal+10

EEX members have been using Power Futures to hedge merchant risk from

conventional power plants for years

EEX is investigating listing further calendar expiries to support long-term

hedging of Renewable Energy assets

10-Year PPA Fixed Price and Volume Profile

Current EEX Futures to Cal+6

copy EEX AG 2018

How do EEX Power Derivatives help to mitigate

PPA Price Risk

9

Since 29th May 2018 15 long-term hedges of calendar contracts up to 2024

have been registered OTC in Spanish Power with a total volume of 116 TWh

copy EEX AG 2018

Market participants who enter into long-term PPAs can register a strip of cash-

settled calendar futures out to Cal+6 for clearing with EEX

This means that sellers can lock in a secure cash flow for up to 6 years

for the sale of electricity in the respective market area

Buyers lock in a guaranteed price of purchase for up to 6 years providing

certainty on their future electricity price and protecting against upswings

Therefore the purchase or sale of derivatives provides long-term price risk hedging

together with counterparty risk mitigation through the ECC clearing house

Example Long-Term Hedge cleared on 12 July on

Spanish Power

10

A 50 MW strip from July 18 to Cal+6 was cleared in Spanish Power on 12 July

2018 with an initial margin requirement of 6543286 EUR

The Initial Margin percentage of the notional value of the trade was 466

The execution price of each trade was 4985 EUR

Trade Date ProductExpiry

Year

Expiry

MonthTrade Price

Initial

Margin per

Contract

ContractsTotal Initial

Margin

Trade Volume

(in MWh)Notional Value

12072018

Spanish Power Base Month 2018 8 4985 euro 3266 euro 50 163300 euro 37200 37088 euro


Spanish Power Base Quarter 2018 10 4985 euro 7908 euro 50 395400 euro 109500 5458575 euro

Spanish Power Base Year 2019 12 4985 euro 12527 euro 50 626340 euro 438000 21834300 euro






6543286 euro 2814300 140292855 euro

Initial Margin in of Notional Value 466

copy EEX AG 2018

Long-term Hedges contribute to overall Open

Interest in Spanish Power

11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018

Long-term hedges cause volume spikes and contribute to Open Interest

Spanish Power now has the highest Open Interest in long-dated contracts

Daily Settlement in Illiquid Contracts and Legacy

Trades

12

In illiquid long-dated contracts where there have been no order book trades

EEX uses two methods to determine settlement prices

Fair Value Providers ask chief traders from select members what their fair

values are for settlement

Market Structure take the daily price dynamic of the last liquid expiry and

apply it to the illiquid expiries (ex Cal21 increases by 30 euroct then Cal22 ndash

Cal24 will increase by 30 euroct)

Legacy Trades are possible at EEX in order to ldquoroll overrdquo a long-term hedge

at the previously traded price once a new Cal is open

Prices which are out of range must be approved by the respective General

Clearing Member

copy EEX AG 2018

Renewable Corporate PPAs are the dawn of a new

era in the Energy Transition

13

PPAs are an enabler of new Renewable Energy

developmentshellip

Major energy players are already starting to hedge their

long-term price risk with standard EEX products

hellipbut the market is in need of more standardisation and

better risk management products in order to grow and

meet the EUrsquos ambitious targets

EEX will ensure we remain part of our Membersrsquo long-term

hedging strategy and explore opportunities to build new

PPA-related products

copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer

European Power Derivatives

VivianaCiancibelloeexcom

ICIS_2018_11_26_Power_and_Carbon_Seminar_slides

181113_EEX_PPAs_ICIS (1)

ICIS is a world leading price reporting agency and analytics powerhouse for commodity markets

Prices News Analytics Data

Petro-Chemical

Energy Fertilizers





Coffee Break



Lunch Break







Coffee Break



Keynote

Address








Sep 2018



Dec 2018

bullBaltics

bullEE LT LV

Jan 2019


bullCZ DK FI NO SE

H1 2019





Model methodology

Overall methodology









model

Features









Existing Capacities

TSO Data

hellip

Nuclear






Renewables



Future Capacities



0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






modelled countries

except Poland

Some are fixed in


NL UK)

Others not (DE IT)

Total reduction of

capacity


Coal 512GW or -68

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






have a significant



increase in wind

capacity with 131GW

additional or +120

Solar will deliver

second with 118GW

additional or +77

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city









curve





000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price









000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price





Trend 4 Brexit

Power Markets





Carbon Markets







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


Second Day




0945-1115



Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer









Coffee Break



Lunch Break







Coffee Break



Keynote

Address








Sep 2018



Dec 2018

bullBaltics

bullEE LT LV

Jan 2019


bullCZ DK FI NO SE

H1 2019





Model methodology

Overall methodology









model

Features









Existing Capacities

TSO Data

hellip

Nuclear






Renewables



Future Capacities



0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






modelled countries

except Poland

Some are fixed in


NL UK)

Others not (DE IT)

Total reduction of

capacity


Coal 512GW or -68

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






have a significant



increase in wind

capacity with 131GW

additional or +120

Solar will deliver

second with 118GW

additional or +77

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city









curve





000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price









000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price





Trend 4 Brexit

Power Markets





Carbon Markets







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


Second Day




0945-1115



Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer











Coffee Break



Keynote

Address








Sep 2018



Dec 2018

bullBaltics

bullEE LT LV

Jan 2019


bullCZ DK FI NO SE

H1 2019





Model methodology

Overall methodology









model

Features









Existing Capacities

TSO Data

hellip

Nuclear






Renewables



Future Capacities



0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






modelled countries

except Poland

Some are fixed in


NL UK)

Others not (DE IT)

Total reduction of

capacity


Coal 512GW or -68

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






have a significant



increase in wind

capacity with 131GW

additional or +120

Solar will deliver

second with 118GW

additional or +77

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city









curve





000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price









000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price





Trend 4 Brexit

Power Markets





Carbon Markets







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


Second Day




0945-1115



Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer





Keynote

Address








Sep 2018



Dec 2018

bullBaltics

bullEE LT LV

Jan 2019


bullCZ DK FI NO SE

H1 2019





Model methodology

Overall methodology









model

Features









Existing Capacities

TSO Data

hellip

Nuclear






Renewables



Future Capacities



0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






modelled countries

except Poland

Some are fixed in


NL UK)

Others not (DE IT)

Total reduction of

capacity


Coal 512GW or -68

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






have a significant



increase in wind

capacity with 131GW

additional or +120

Solar will deliver

second with 118GW

additional or +77

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city









curve





000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price









000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price





Trend 4 Brexit

Power Markets





Carbon Markets







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


Second Day




0945-1115



Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer










Sep 2018



Dec 2018

bullBaltics

bullEE LT LV

Jan 2019


bullCZ DK FI NO SE

H1 2019





Model methodology

Overall methodology









model

Features









Existing Capacities

TSO Data

hellip

Nuclear






Renewables



Future Capacities



0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






modelled countries

except Poland

Some are fixed in


NL UK)

Others not (DE IT)

Total reduction of

capacity


Coal 512GW or -68

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






have a significant



increase in wind

capacity with 131GW

additional or +120

Solar will deliver

second with 118GW

additional or +77

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city









curve





000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price









000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price





Trend 4 Brexit

Power Markets





Carbon Markets







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


Second Day




0945-1115



Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer






Model methodology

Overall methodology









model

Features









Existing Capacities

TSO Data

hellip

Nuclear






Renewables



Future Capacities



0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






modelled countries

except Poland

Some are fixed in


NL UK)

Others not (DE IT)

Total reduction of

capacity


Coal 512GW or -68

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






have a significant



increase in wind

capacity with 131GW

additional or +120

Solar will deliver

second with 118GW

additional or +77

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city









curve





000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price









000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price





Trend 4 Brexit

Power Markets





Carbon Markets







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


Second Day




0945-1115



Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer







Existing Capacities

TSO Data

hellip

Nuclear






Renewables



Future Capacities



0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






modelled countries

except Poland

Some are fixed in


NL UK)

Others not (DE IT)

Total reduction of

capacity


Coal 512GW or -68

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






have a significant



increase in wind

capacity with 131GW

additional or +120

Solar will deliver

second with 118GW

additional or +77

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city









curve





000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price









000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price





Trend 4 Brexit

Power Markets





Carbon Markets







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


Second Day




0945-1115



Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer







0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






modelled countries

except Poland

Some are fixed in


NL UK)

Others not (DE IT)

Total reduction of

capacity


Coal 512GW or -68

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






have a significant



increase in wind

capacity with 131GW

additional or +120

Solar will deliver

second with 118GW

additional or +77

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city









curve





000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price









000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price





Trend 4 Brexit

Power Markets





Carbon Markets







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


Second Day




0945-1115



Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer








modelled countries

except Poland

Some are fixed in


NL UK)

Others not (DE IT)

Total reduction of

capacity


Coal 512GW or -68

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city






have a significant



increase in wind

capacity with 131GW

additional or +120

Solar will deliver

second with 118GW

additional or +77

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city









curve





000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price









000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price





Trend 4 Brexit

Power Markets





Carbon Markets







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


Second Day




0945-1115



Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer








have a significant



increase in wind

capacity with 131GW

additional or +120

Solar will deliver

second with 118GW

additional or +77

0

100

200

300

400

500

600

700

800

900

1000

ca

pa

city









curve





000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price









000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price





Trend 4 Brexit

Power Markets





Carbon Markets







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


Second Day




0945-1115



Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer











curve





000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price









000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price





Trend 4 Brexit

Power Markets





Carbon Markets







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


Second Day




0945-1115



Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer










000

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

price





Trend 4 Brexit

Power Markets





Carbon Markets







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


Second Day




0945-1115



Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer






Trend 4 Brexit

Power Markets





Carbon Markets







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


Second Day




0945-1115



Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer







4500

5000

5500

6000

6500

7000

7500

price

fo

reca

st [E

UR

MW

h]








000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

+258 in the




000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]


+258 in the



000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]




0

01

02

03

04

05

06

07

08

09

1

000

500

1000

1500

2000

2500

3000

30 d

ay v

ola

tilit

y

ca

rbo

n p

rice [euro

to

nn

e]




000

500

1000

1500

2000

2500

3000

3500

ca

rbo

n p

rice [euro

to

nn

e]





-6000

-4000

-2000

000

2000

4000

6000

000

500

1000

1500

2000

2500

No

O

f b

idde

rs

ca

rbo

n p

rice [euro

to

nn

e]




Clean Brown Spread

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

ca

rbo

n p

rice [euro

to

nn

e]

CB

S [

euroM

Wh

]



Clean Dark Spread

000

500

1000

1500

2000

2500

3000

-1000

-500

000

500

1000

1500

ca

rbo

n p

rice [euro

to

nn

e]

CD

S [

euroM

Wh

]

Axis Title




Clean Spark Spread

000

500

1000

1500

2000

2500

3000

-2000

-1500

-1000

-500

000

500

1000

ca

rbo

n p

rice [euro

to

nn

e]

CS

S [

euroM

Wh

]





000

500

1000

1500

2000

2500

3000

-1000

000

1000

2000

3000

4000

5000

ca

rbo

n p

rice [euro

to

nn

e]

To

tal sw

itch

ing

co

sts

[euro

MW

h]





reform

000

500

1000

1500

2000

2500

3000

000

500

1000

1500

2000

2500

3000

vo

lum

e [

m to

nn

es]

ca

rbo

n p

rice [euro

to

nn

e]

EUA price

first vote in

Parliament

first vote in

Council

discussion Trilogue

negotiations

compromise

reached

rubberstamping




reform



0

200

400

600

800

1000

1200

[m E

UA

s]

MSR intake







reform




reserves

194

293

626

1919

2939

238

1077

33123399

3605

000

2000

4000

6000

8000

10000

EU

As [m

to

nn

es]

CO2 position RWE






reform




reserves


(financials funds)


000

500

1000

1500

2000

2500

3000

-1800

-1300

-800

-300

200

700

ca

rbo

n p

rice [euro

to

nn

e]

qu

art

erly m

ark

et b

ala

nce

[m

to

nn

es]


Mid-Term View








to come to market


coal to gas


projects

00

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

em

issio

nsE

UA

s [m

to

nn

es]














quicker

0

20

40

60

80

100

120

140

160

180

ab

ate

me

nt tr

igge

red

[m

to

nn

es]


Power Industry



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

base



1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




0

400

800

1200

1600

2000

0

200

400

600

800

1000

cu

mu

lative

ho

ldin

g [m

EU

As]

ab

so

lute

ho

ldin

g [m

EU

As]

2017 holdings




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]




1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]

-18000

-14000

-10000

-6000

-2000

2000

6000

10000

sp

ecu

lative

vo

lum

e [

m E

UA

s]



Conclusions





Hard Brexit







1000 euro

1500 euro

2000 euro

2500 euro

3000 euro

ca

rbo

n p

rice [euro

to

nn

e]



QampA




Agenda






-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]




-1000

-500

0

500

1000

1500

2000

2500

3000

-400

-200

0

200

400

600

800

1000

1200 cu

mu

lativ

e b

ala

nce

ba

nked

MS

R [m

ton

ne

s]

ye

arly b

ala

nce

in [m

to

nn

es]








Higher MSR outtake



But CORSIA effect


0

500

1000

1500

2000

2500

EU

As [

m to

nn

es]


Source ICIS













000

1000

2000

3000

4000

0

200

400

600

800

1000

1200

1400

1600

1800

ca

rbo

n p

rice [euro

to

nn

e]

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS



Basics








0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]


Source ICIS




with review






thresholds


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]



Source ICIS




with review







and 12 rate


0

200

400

600

800

1000

1200

1400

1600

1800

EU

As [

m to

nn

es]

MSR_600280 MSR_600280_24




Source ICIS



000 euro

1000 euro

2000 euro

3000 euro

4000 euro

5000 euro





Source ICIS


Conclusion












Agenda






Merchant-risk

PPAs


5) Signposts

6) Conclusions



and Italy



Gas41

Coal16

Nuclear19

Other fossil4

Hydro7

Solar1

Wind11

Biomass1

RES20

Gas25

Coal17

Nuclear21

Other fossil4

Hydro8

Solar5

Wind18

Biomass1

Others0

RES32

Gas58

Coal14

Other fossil8

Hydro14

Solar0

Wind2

Biomass3

Others2

RES20

Gas46

Coal11

Other fossil8

Hydro12

Solar8

Wind6

Biomass6

Others2

RES34


2008

2017




0

20

40

60

80

100

120

GW





10

12

14

16

18

20

22

Spain Italy

sh

are


2016 2020 target




particular




years




reach its target



Spain Italy





gt5MW





gt5MW




- Three rounds held



announced




scheme proposed


Recent and upcoming

auctions



Source ICIS OMIE


(MW)

Capacity awarded



700 in total569 0

Biomass 200 0

May 2017

Onshore wind

3000 in total

2780 399

Other RES 19 416

Solar 1 422


3000 in total1128 282

Solar 3909 327

Total 6700 8606







0

10

20

30

40

50

60

70

Onshore windSpain



Solar Germany

euroM

Wh

(no

min

al)





0

20

40

60

80

100

120

140

160

euroM

Wh

(no

min

al)










1 31012019 500 45 - 100 10 10 60 10

2 31052019 500 45 - 100 10 10 60 10

3 30092019 700 100 - 100 10 10 60 10

4 31012020 700 100 - 100 10 10 60 10

5 31052020 800 120 - 100 10 10 60 10

6 30092020 800 120 - 100 20 10 60 10

7 31012021 800 120 - 100 20 10 70 10

8 31052021 800 120 - 100 20 10 70 10

5600 770 0 800 110 80 500 80


Total


Source MiSE

Renewable growth

trajectories




Europe20

(binding)

32

(binding)

Italy17

(binding)

28

(non-binding)

Spain20

(binding)

35

(non-binding)












1740

22

28

2016 2030 BAU 2030 SEN


335038

55

2016 2030 BAU 2030 SEN






Source MiSE



0

10

20

30

40

50

60

GW


Spain Italy

0

5

10

15

20

25

30

35

GW


Spain Italy



wind growth








early 2020s



technology costs 0

50

100

150

200

250

30

40

50

60

70

80

90

100

Ca

pa

city a

uctio

ne

d (

MW

)

Str

ike

price (

euroM

Wh

)







0

10

20

30

40

50

60

70

2016 2017 2018 YTD

euroM

Wh


Germany Italy Spain





47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany





volatility




market



increaseSource OMIE

0

10

20

30

40

50

60

70

80

90

100

euroM

Wh








47

49

51

53

55

57

59

61

63

euroM

Wh


Italy Spain Germany







40

45

50

55

60

65

euroM

Wh









30

35

40

45

50

55

60

65

euroM

Wh






in long-term prices



Spain and Italy




PPA

Corporate Supplier




in long-term prices



Spain and Italy




rollout


0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

GW













Spanish mainland

0

1

2

3

4

5


Num

ber


Solar Wind

0

200

400

600

800

1000


Tota

l C

apacity (

MW

)


Solar Wind




ten years


years


duration0

1

2

3

4

5

6

0

200

400

600

800

1000

1200

Nu

mb

er o

f P

PA

s

Tota

l cap

acit

y (M

W)

Duration (years)


Capacity Count













20

25

30

35

40

45

50

55

60

euroM

Wh








wind and solar


in the future






would be paid

40

45

50

55

60

65

70

euroM

Wh




Signposts



Strategy





Conclusions


states













Agenda


expectations






out in Europe



Nuclear 27


Oil 2

Biomass 6

Hydro 12

Wind 10Solar 3

EU generation share






nuclear




0

50

100

150

200

250


GW




CountryCapacity

(MW)Phase-out date

UK 11160 2025

Italy 7806 2025


Denmark 2776 2030

France 2335 2021

Finland 1693 2029

Portugal 1677 2030

Ireland 855 2025

Austria 644 2025

Sweden 130 2022


BREF limits








derogations



Council Parliament

Rule






Date applicable




Hard coal 08tMWh

Lignite 11tMWh

700 (Council) 10 7





88GW in 2025 and 58GW in 2030

0

20000

40000

60000

80000

100000

120000

140000

160000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MW







88GW in 2025 and 58GW in 2030

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

MW








0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

MW



Source ICIS







Remaining units

Source ICIS







Remaining units

Source ICIS







0

50

100

150

200

250

mtC

O2



Source ICIS







0

5

10

15

20

2015 2016 2017

Cap

acity [

GW

]


Coal Gas

0

10

20

30

40

50

2015 2016 2017

Ge

ne

ratio

n [T

Wh]


Coal Gas

Source TenneT





expectations

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cap

acity [

MW

]


0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]


Source ICIS






0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Cap

acity [

MW

]


0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]


Source ICIS



46

48

50

52

54

56

58

Duts

ch

po

we

r p

rice

fo

reca

st [euro

MW


Final three coal

plants close


EUA price increase

Fuel switching seen




lower

Gas and coal

prices soften

new

interconnectors

Source ICIS




power sector



0

10

20

30

40

50

Car

bo

n p

rice

flo

or

[eurot

on

ne

]






implementation



0

5

10

15

20

25

30

Ge

ne

ratio

n [T

Wh]



0

10

20

30

40

50

60

70

80

Ge

ne

ratio

n [T

Wh]



Source ICIS







-15

-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


-10

-5

0

5

10

15

20

25

Net im

po

rts [T

Wh

]


Source ICIS






42

44

46

48

50

52

54

56

58

60

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Dutc

h p

ow

er

price

[euro

MW

h]









0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


0

5

10

15

20

25

30

35

40

45

50

Po

we

r se

cto

r e

mis

sio

ns [M

tCO

2]


Source ICIS




Agenda








Two working groups


the region



month

Equal voting rights

Two-thirds majority









Guidelines



achievement




changes



Current status







2017 generation





~80 of emissions

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

An

nu

al D

E p

ow

er

ge

ne

ratio

n [T

Wh

]



Source ICIS




Hard coal 227 GW

Lignite 20 GW


to 27 GW in 2019




0

50

100

150

200

250

300

Insta

lled

ca

pa

city [G

W]


Source ICIS


Scenario set-up

















00

50

100

150

200

250

Insta

lled

lig

nite

ca

pa

city (

GW

)



00

50

100

150

200

250

Insta

lled

ha

rd c

oa

l ca

pa

city (

GW

)



Source ICIS







Source ICIS

30

35

40

45

50

55

60

65

Ge

rma

n p

ow

er

price

(euro

MW

h)







in winter


of low RES

generation

Speedy and lignite-

only scenarios more

visible spikes 30

80

130

180

230

280

330

380

430

480

530

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

101

106

111

116

121

126

131

136

141

146

151

156

161

166

Ge

rma

n h

ou

rly p

ow

er

price

w

ee

k 3

20

24

(euro

MW

h)

Hour of the week


Source ICIS











Neurath Capacity

[MW]

Commissioning

[year]

Expected

closure

A 294 1972 2021

B 294 1972 Oct-19

C 292 1973 2021

D 607 1975

E 604 1976

F 1060 2012

G 1060 2012


[MW]

Commissioning

[year]

Expected

closure

C 295 1965 2020

D 297 1968 2020

E 295 1970 Oct-18

F 299 1971 Oct-18

G 628 1974 2022

H 638 1974 2023

K 944 2003










coal to drop-out



00

50

100

150

200

250

300

350

2018 2019 2020 2021 2022 2023

Ha

mb

ach

po

we

r g

en

era

tio

n [T

Wh

]



Source ICIS



On average 2020 to






2020-23

00

50

100

150

200

250

300

350

400

450

EU

A p

rice

[euro

t]


Source ICIS





0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2010 2011 2012 2013 2014 2015 2016

Eu

rosta

t so

lid f

ue

l p

rod

uctio

n [1

00

00

to

e]

















(TNP)














Gas 228 437


Sum 3633 890


4523



0

20

40

60

80

100

120

140

160

180

200

Fo

reca

ste

d g

en

era

tio

n [

TW

h]


Oil Solar Wind


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Fo

reca

ste

d c

ap

acity [

MW

]




00

50

100

150

200

250

300

350

400

450

0

20

40

60

80

100

120

140

160

180

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Ge

ne

ratio

n fo

reca

st [T

Wh

]




25

35

45

55

65

75

85

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]




500

520

540

560

580

600

620

640

660

680

700

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

lish

po

we

r p

rice

[euro

MW

h]


EUA increase

outweighed by coal

and gas prices

softening


EUA price increase


phased-out


RES capacity comes

onlineRegional coal


NL phase-out) push


Conclusions





discussion












0

5

10

15

20

25

30

35

40

45

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cap

acity [

GW

]



Source ICIS












5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

EU

As p

rice

fo

reca

st [euro

to

nn

e]

Po

we

r H

orizo

n f

ore

ca

ste

d g

en

era

tio

n [

TW

h]


Germany Poland




Price implications






45

47

49

51

53

55

57

59

61

63

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Po

we

r p

rice

[euro

MW

h]



Source ICIS









Learn more





wwwiciscom


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Mark Copley BEIS

Coffee Break


Goodbye and wrap-up








Brexit



November



December



2019


















with Ireland


on 29 March 2019
















are active




reported



















BEIS Update

on Brexit


the EU ETS


Agenda


























UK 2018 budget











allocation













Future relationship









Short-term



2017 to ~35m in 2030


EUAs for 201920





1200 euro

1400 euro

1600 euro

1800 euro

2000 euro

2200 euro

2400 euro

2600 euro

2800 euro

3000 euro

EU

A p

rice

[euro

to

nn

e]


Source ICIS










balance-600

-400

-200

0

200

400

600

Tra

de

d b

ala

nce

[m

EU

As]






Long-term



agreed




market


like MSR000

500

1000

1500

2000

2500

3000

3500

4000

4500

EU

A p

rice

[euro

to

nn

e]


Source ICIS



Removing UK as net




of Brexit


upper threshold

-500

0

500

1000

1500

2000

2500

TN

AC

an

d M

SR

with

dra

wa

l [M

t]






In 2017 budget


In 2018 budget




0

10

20

30

40

50

60

70

EU

A p

rice

an

d U

K p

rice

flo

or

tax [euro

t]





(CET + CPS)


Conclusion


prices




Net length removed





and the EU ETS


Agenda



3) Interconnectors












current policies

0

2

4

6

8

10

12

14

GW



Source IRENA














0

5

10

15

20

25

GW



Source IRENAICIS









0

20

40

60

80

100

120

GW



Source ICIS






reduce prices



base case 40

45

50

55

60

65

70

75

euroM

Wh



Source ICIS






30

35

40

45

50

55

60

65

70

75

euroW

Mh



Source ICIS






0

20

40

60

80

100

120

140

160

TW

h


0

20

40

60

80

100

120

140

TW

h








0

2

4

6

8

10

12

14

16

TW

h


0

20

40

60

80

100

120

140

160

180

TW

h


Source ICIS






45

50

55

60

65

70

euroM

Wh




0

2

4

6

8

10

euroM

Wh


Source ICIS



0

20000

40000

60000

80000

100000

120000M



Source ICIS



0

50

100

150

200

250

300

350

400

TW



Source ICIS



0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh



Source ICIS



0

50

100

150

200

250

300

350

400

TW




Source ICIS



0

10

20

30

40

50

60

70

80

90

100T

Wh



Source ICIS



50

52

54

56

58

60

62

64

66

68

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

poundM

Wh


Gas prices ease

pressuring power

prices lower new

interconnector




markets)





Nuclear

reduction coal

closures in

neighbouring

countries

Source ICIS


Conclusions


Labour government







capacity closes





Agenda





Auction designs

Auction results


4) Conclusions



EU level






2020

Member State level






0

5

10

15

20

25

[]


res share target




-9-7-5-3-113579

Ga

p to

th

e ta

rge

ts [p

p]

14

23

16 1511 13

1013 15

25

18 18

40

20

31

14

34

17

38

24

13 13

30

23

16

25

49

20

202

0 R

ES

[

] ta

rge

ts




-1300

-1100

-900

-700

-500

-300

-100

100

300

Dis

tan

ce

to

ta

rge

t ke

ep

ing 2

01

6 c

on

sta

nt [T

Wh

]










Ramp-up


Wait and see




Length 2018-2020

Volume 700MWh

Cost euro105m

Cost per unit

euro15MWh

Luxembourg ndash

Lithuania

Length 2018-2020

Volume Unknown



euro15MWh









11 MS have executed

tendersauctions


about to be adopted




0

5

10

15

20

25

30

RE

S a

uctio

n r

esu

lts v

olu

me

s [G

W]








gap

France 100 79

Germany 100 120

Netherlands 274 590

Poland 04 14

Spain 84 333


total 609 152






energy consumption


Regulation











belowrdquo





Within 2021 or 2022

Statistics compiled





Full year 2020








Voluntary




RES auction trends













0

5

10

15

20

25

30

Aw

ard

ed

vo

lum

es in

au

ctio

ns in E

uro

pe

[G

W]




0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]






0

50

100

150

200

250

Str

ike

price

ave

rage

s [

euroM

W]










0

50

100

150

200

250

Str

ike

price

s in

re

ce

nt E

U o

ffsh

ore

win

d p

roje

cts

[euro

MW

h]




0

5

10

15

20

25

30

35

Bu

ilt a

nd

pla

nn

ed

off

sh

ore

win

d c

ap

acity [M

W]



Turbine

Balance of System

Financial

Turbine32

Development3

Foundations15


9


19

Commissioning1

Decommissioning

5

Contingency6

Finance9

Insurance1



Larger turbines


sites

Grid connection



Source NREL



RES outlook










than expected



0

20

40

60

80

100

120

Estim

ate

d R

ES

-E L

CO

ES

[euro

MW





Source Lazard 2018






0

50

100

150

200

250

RooftopRes

RooftopCampI



Wind

LC

OE

pe

r P

V a

nd

win

d insta

llatio

ns [euro

MW

]



0

100

200

300

400

500

600

Sto

rage

ndashe

ne

rgy insta

llatio

n c

osts

euroM

Wh


Source IRENA 2018







10

20

30

40

50

60

70

80

90

100

110

RE

S a

nd

Horizo

n p

rice

fo

reca

st [E

UR

MW

h]




Conclusions








Targets

Policies

Costs

Market impact








Targets

Policies

Costs

Market impact

Conclusions









Learn more





wwwiciscom






A few key figures

copy EEX AG 2018 2










3




Corporate PPA








developer



stable price

copy EEX AG 2018


in Europe

4








conditions




years



5






market areas

copy EEX AG 2018 6



8 Austria

1 Belgium

1 Bulgaria

1 Croatia

20 Czech Republic

7 Denmark

2 Finland

13 France

57 Germany

2 Greece

3 Hungary

1 Ireland

34 Italy






1 Luxembourg

10 Netherlands

6 Norway

10 Poland

1 Portugal

3 Romania

4 Slovakia

4 Slovenia

14 Spain

3 Sweden

20 Switzerland

33 United Kingdom


7


via Long-Term PPAs

and build RE assets

EEX Members provide




Long-Term PPAs





copy EEX AG 2018

euro

0

5

10

15

20

25

30

35

40

45

50

0

5

10

15

20

25

30

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pri

ce (

EUR

)

MW

MW Price



8









copy EEX AG 2018


PPA Price Risk

9



copy EEX AG 2018










Spanish Power

10






Year

Expiry

MonthTrade Price

Initial

Margin per

Contract


Margin

Trade Volume


12072018










6543286 euro 2814300 140292855 euro


copy EEX AG 2018



11

Op

en In

tere

st M

Wh

(p

rev

day

)

Trad

ed V

olu

me

MW

h

copy EEX AG 2018




Trades

12











Clearing Member

copy EEX AG 2018



13


developmentshellip









copy EEX AG 2018

Thank you

Viviana Ciancibello

Business Developer





ICIS Power & Carbon Seminar - Amazon S3

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