PrePared for the 15 year S of energy - Powernext...with Jean-Pierre goux, Deputy CEO of Powernext,...

PreParedfor the

future of energy

Annual Report 2016

15 yearS

www.powernext.com

06

32

Our visiOn

Our fOcus

Our Mindset

table of contentS

1402 15 years of experience04 The Powernext universe

06 Our vision 07 Preface by Dr Egbert Laege 08 Our teams at Powernext 10 Joint interview with Jean-Pierre Goux & Dr Jürgen Kroneberg12 Prepared for a changing energy landscape

14 Our focus 15 Powernext's product portfolio16 Global gas market trends 19 The PEGAS product offering21 New product developments in 201622 PEGAS: a European Platform 24 The integration of Gaspoint Nordic26 Cooperation with the Central European Gas Hub28 Providing market solutions for energy services 30 Guarantees of Origin

32 Our mindset33 European energy market regulation35 Portraits of expertise38 We thank all our contributors

40 Financial report 2016

annual report 2o16 / Powernext

Published by Powernext SA, 5, boulevard Montmartre, 75002 PARIS, France

Editorial Directors: Dr Jan Richter

Editors: Lilly Höhn, Dr Jan Richter

Consulting, design creation, production:

Photo credits: Stéphane Bagros, Romain Dufrene, iStockphoto.com (Xavier Arnau, Kelvin Jay, Tauri Minogue), all rights reserved.

Powernext is com-mitted to responsibly managing its paper purchases. The paper used in the annual report 2016 docu-ment is FSC-certified. This certification guarantees compliance with a globally-recognised set of principles and criteria for forest management.

May 2017

PrePared for the futureof energy

the energy sector is in transition. Powernext is an active participant in these developments, as market facilitator based in france and active across europe. our core activity is the operation and development of PegAS, the European platform for gas trading. Connecting 11 hubs across europe, PegAS is a key driver for the integration of the european internal energy market. We believe that an innovative spirit is needed in order to develop the tools required to meet the market needs of today and the future. As you will see in this report, our willingness to innovate goes beyond gas trading and into new product areas.“Prepared for the future of energy” is Powernext’s first annual report and is designed to help you understand our activities and objectives whilst familiarising you with our team. It also aims to give you a better grasp of where we see our role in the years to come, at the heart of the energy challenge. Divided into three main sections, this report features contributions from more than 30 of our employees and partners across france and europe.

01

15 years of experience

Annual report 2o16 / Powernext02

2005

2008

20012004

Launch of spot market for European CO2 allowances

Introduction of gas spot and futures market segments. Incorporation of EPEX SPOT as a joint venture with EEX

Incorporation of Powernext and launch of power spot market in France

Launch of power futures market segment in France

03

2016

2013

2009

2015

Successful integration of spot and futures products of Central European Gas Hub (CEGH) and Gaspoint Nordic into the PEGAS platform

Powernext operates the French National Registry for Guarantees of Origin

EEX becomes Powernext’s majority shareholder. Successful migration of all active EEX gas market members to Powernext, which becomes the exclusive operator of the PEGAS platform

EEX and Powernext launch the PEGAS platform as a cooperation for natural gas trading in Europe

Transfer of French power futures market into EEX Power Derivatives GmbH

eeX groupA group of international companies and partners that is the leader in European energy trading. EEX Group is active in Europe, Asia and the US.

PowernextPowernext has been a full consolidated member of the EEX Group since January 2015, with European Energy Exchange AG as the majority shareholder (87.73%).

87.73 %

The Powernext universe

Our structure


Our ambitionSecurityWe offer secure market solutions and clearing services provided by European Commodity Clearing (ECC).

transparencyWe work to ensure well-functioning markets through fair and transparent pricing of products and services.

CustomerorientationProximity to our customers is our first and foremost priority, and our product offering is designed to mirror our customers' needs.

natural gastradingWe operate the gas trading activities of the EEX group under the PEGAS brand, which covers 11 hubs.

guaranteesof originWe are currently the appointed operator of the French GO registry, which allows the tracking of green electricity production and consumption.

ServicesWe offer a range of energy-related services such as auction design, registries and algorithm development.

Our focus

05

VISIon

our


PrefacemarkeT soluTions for The energy TransiTion

the biggest challenge of the 21st century is to develop a secure and environmentally-friendly energy system. Market structures have proven to be the best instrument for efficiently managing this transition within the energy sector. for the last 15 years, Powernext has been providing solutions to facilitate these markets.

“Prepared for the energy challenge”, that's the title that we have chosen for Powernext’s first annual report. And we believe that being prepared has three dimensions. The first dimension is our expertise and experience – the experience that Powernext has gathered in establishing new market structures for the energy sector over the last 15 years. We have developed new products and entered new markets to support our customers through the constant changes in the European energy sector. From our original power trading products, we have expanded our activities to include product offerings for gas trading, a registry for Guarantees of Origin and further energy-related services. The second dimension is our attitude. An attitude of curiosity, flexibility and inventiveness with which we embrace our challenges.

This enables us to respond quickly to the needs of our customers and to today's fast-changing markets. We believe that being close to our customers and their needs helps us to identify the path we need to take in order to be successful in the future. Finally, the third dimension is our belief in the importance of networks and partnerships. Powernext is actively building a community of experts so that we can develop market solutions together. We are proud to announce that several of our partners have also expressed their views in this first annual report. With these three dimensions, we feel prepared to continue delivering superior energy market solutions to our partners and customers, always with one eye on the future. In the following pages, you will find out more about our mission, our energy and our markets.

By Dr EgBErt LaEgEChief Executive Officer of Powernext

OUR

visi

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07

overview our Teams aT PowernexT

thiErry CarOLDeputy CEO

“ the caring spirit of our supporting functions is key to managing our relationships with internal and external stakeholders, and as such is critical to the success of Powernext. From finance, membership, compliance surveillance and risk, through to internal communication and hr, these departments ensure that our relations with shareholders, regulators, partners and our own staff are managed not only with care, but also with commitment and expertise.”

“ the teams within my field of responsability coordinate the conception, implementation and testing of new products and business solutions. We observe and analyse market trends and identify risks and opportunities. Our aim is the continuous and ambitious development of a business portfolio which provides new tools to ensure better functioning of the market and which adds value to our costumers.”

JEan-PiErrE gOuxDeputy CEO

Powernext is headquartered in Paris and active in 8 european countries.

Annual Report 2O16 / Powernext08

“the Sales team maintains a closeand local relationship with market members and prospects. We consider ourselves as community managers and try to engage in constant dialogue with the gas trading industry, to better understand their needs and to optimise the service provided by Powernext.”

“ the Market Operations team is often referred to as the ‘core of the reactor’, enabling our community members to access the trading system and registries and monitor their activities 24/7. Our priority is to provide a reliable service to our customers and to respond rapidly to their enquiries. What distinguishes Powernext Ops from other market operators is the real-time link with our sales and membership team and other departments, which they benefit from every single day.”

rOMain rOuSSEauDirector of Market Operations

MiChEL BErtranDIT Director

“ Our it teams develop the technical solutions and infrastructure for Powernext’s services to internal and external customers. Our department is divided into two teams – one is responsible for developing new business products, while the other guarantees the proper functioning of our technical services and databases. Most of our solutions are developed in-house and are tailor-made. Our reliable it systems are key to ensuring that the markets run smoothly.”

riCharD KatzSales Director

OUR

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09

with Jean-Pierre goux,Deputy CEO of Powernext, and Dr Jürgen Kroneberg,Chairman of Powernext's Board of Directors

Is the concept of exchange still relevant in the energy industry of the 21st century?

J.K When Powernext joined the European energy market 15 years ago, it became part of a century-old tradition of exchanges and an important facilitator for market efficiency. Now more than ever, we need institutions to operate regulated marketplaces, governed with their members, in order to bring transparency and security to the energy sector. Exchanges bring with them the trust and technology required for this. This is especially true in this constantly-evolving energy world and in particular the gas industry, where security of supply and the increasing role of markets in contract indexation and balancing places huge pressure on the exchanges to provide solutions.

J.-P.G Our central role means we need to respond rapidly to our customers’ fast-evolving needs. The central marketplace must be an asset that fosters the development of the industry, not a constraint. There must be a balance between innovation and regulation, to ensure agility in terms of both software and decision making, with the customers’ needs at the core of our activity. The gas sector is going through the same series of transformations as the rest of the business world – digitalisation, decentralisation, big data, and so on. As an exchange, we need to lead this evolution and integrate all of these transformations into our offering, so that we continue shaping the market into the next decade.

Joint interviewBalancing innovaTion and insTiTuTion aT PowernexT


How do you ensure this accountability towards very different stakeholders?

J.K In terms of governance, we try to be as lean as possible. Powernext’s Board of Directors meets quarterly to validate the Powernext strategy and provide management with the means to implement it. Our results over recent years, in both European gas trading and services, have been exceptional. Our shareholders and Board of Directors will continue to support the Powernext teams as they tackle new challenges.

J.-P.G The PEGAS Exchange Council represents the member side of the business. It also meets quarterly and is composed of 15 leaders from the European gas trading and transportation industry. This group provides key customer input on new product development, plus strategic guidance for management on the best directions to explore. This works very well. We see gas and financial regulations as an innovation enabler for new services, rather than as a constraint for our business. We have demonstrated this with all the services introduced across Europe to support implementation of the gas target model on balancing. Another successful example is the introduction of non-MTF products as part of MiFID II. The very solid relationship that we have developed with the energy and financial regulators at both national and European levels is extremely important to us and is what differentiates us from our competitors.

How do you incorporate the group dimension into this set of activities?

J.K The group encompasses a large number of companies – among others EEX, Powernext, EPEX Spot, ECC, Cleartrade in Singapore, and since very recently Nodal Exchange in the US. All have the same goal of delivering state- of-the-art services to customers, and each possesses unique expertise to serve its particular customers. The EEX Management Board aligns the interests of all the different parts of the group on a daily basis and we also work on this alignment at supervisory board level.

J.-P.G For Powernext, being part of EEX Group is a unique opportunity. It allows us to face competition from global exchange players and build an outstanding portfolio of products that none of our competitors can offer. Exploiting synergies across these different commodities to provide both an innovative offering and a local presence is key to the next stage of our global development.

So would you say that being an established exchange is compatible with responding to the changing nature of the energy world?

J.K Being both an institution of the existing market and a place for innovation is not a contradiction but a strength.

J.-P.G You could actually describe us as an institutional start-up. Adapting to the changing needs of our customers is exciting, while remaining accountable to institutions and society gives meaning to everything we do.

Powernext shareholdersSince January 2015, EEX AG has been the majority shareholder of Powernext.

edev (edf)6,31%grTgaz & Tigf

5,96%

eex ag87,73%

11

OUR

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towards a more sustainable energy systemOver the last decade, the European Union has made significant efforts to develop policies encouraging renewable energy development and the reduction of greenhouse gas emissions. Despite the falling price of oil and abundant coal resources, the energy transition is moving forward at a rapid pace. Renewable energies already accounted for 16.4% of the total electricity share in the EU in 2014 1. In Germany, renewable energies now account for about one third of the total electricity production 2. The EU is committed to reducing CO2 emissions by 40% by 2030 and targets a renewable energy share of 27%, compared to the 2020 target of 20%. One of the main goals of the European Commission’s Juncker presidency is to create a fully-integrated Energy Union, in order to successfully implement the energy transition. In line with the energy triangle principle, the European Commission aims to create a European energy market which ensures economic viability, security of supply and sustainability. In this changing environment, natural gas, as the cleanest of all fossil fuels (emitting less than half the CO2 of coal 1) has an important role,

as a bridge towards a more sustainable energy future. The International Energy Agency expects the share of natural gas to grow by 2% per year up to 2020 3. Natural gas is the clearest available choice to serve as a complement to, and a back-up solution for, the increasing share of intermittent renewable energies in the system.

2016 was yet another extraordinary year for the energy sector. this was due in no small part to the important geopolitical, environmental and technical developments that have taken place over the last few years. In particular, growing awareness of environmental challenges has contributed to changing preferences in the choice of energy supply. — By Dr Jan Richter

focusPrePared for a changing energy landscaPe

Renewable energies already accounted for 16.4% of the total electricity share in the EU in 2014 (European Commission)

16.4%

renewable energies


natural gas, a vital bridgeGas turbines are more flexible and responsive to peaks in demand and sudden shortages than heavy, base-load power plants, such as nuclear and coal-fired plants. Technologies like power- to-gas are considered key elements of a cleaner and more responsive energy system. In addition, natural gas could serve as a cleaner source for fuelling the transport sector of the future. Natural gas is inevitably a key part of the response to the new challenges of a changing energy system. In order to efficiently steer the distribution of electricity and natural gas across Europe, the internal European market has been put in place. In addition, the market mechanisms established make it possible to coordinate the generation of electricity from gas-fired power plants when renewable energy sources are not available. Furthermore, these market mechanisms permit the efficient distribution of green energy to the end consumer.

Developing well-functioning marketsThe European Commissions's Winter Package 4 strongly emphasises the market’s role in ensuring energy security in Europe. In order to develop well-functioning markets in the natural gas sector, a sufficiently interconnected, market-based system that reflects price signals is required. Security of supply can only be improved if sufficient infrastructure is available and gas can be shipped freely between market zones. Assuming the role of a market facilitator, Powernext is well positioned to contribute to the integrated European market. Our products and services provide our customers with solutions for the upcoming challenges of the changing energy landscape.

JOChEn hOMannPresident of the German Federal Network Agency(Bundesnetzagentur)

“to balance fluctuating electricityfeed-in from renewables, the energy transition provides increased market opportunities for flexible power producers, such as gas-fired power plants. trading platforms like PEgaS allow power plant operators to source their gas flexibly and at the lowest cost across several gas market areas. thus, they deliver benefits to end consumers and play an important role in implementing the internal gas market.”

The role of natural gas worldwideGas makes up 24% of the global energy mix. This share is expected to increase by 2% per year until 2020. (IEA)

13

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our


PowernexT’s ProducT PorTfolio

11hubs for natural gas trading across europe

The energy transition and changes to the global energy system present both a challenge and an opportunity for our society. At Powernext we are convinced that markets provide the best mechanism to respond to these changes. Our key strength is our ability to develop commodity markets that increase the efficiency of the wider energy market. The huge success of our products is proof of this ability.

Our core activity is the development of Europe’s gas market via the PEGAS platform. Our 232 exchange members trade spot and futures products with various maturities as well as location and time spreads for 11 separate European locations. All products are cleared by European Commodity Clearing (ECC) – the central clearing house of EEX Group. Futures trading enables the efficient hedging of long-term price risks, while spot trading enables market participants to balance their portfolios over the short term. In this way, natural gas — whether imported or produced within Europe —

is efficiently allocated across the continent, to the benefit of the end consumer. In addition to the PEGAS trading platform, Powernext provides services related to gas trading. Powernext has developed algorithmic trading solutions that enable Transmission System Operators (TSOs), to efficiently balance their portfolios 24/7. Powernext also supports the coupling of two French hubs — PEG Nord and TRS. Via the PEGAS platform, transmission capacity between these two hubs is allocated to traders automatically, thereby ensuring efficient use of infrastructure. While tailor-made, these market solutions are not destined exclusively for the gas markets. Since the launch of France’s power capacity mechanism in 2015, Powernext has developed and operated an electronic registry system for RTE (the operator of France’s electricity transmission network), enabling capacity guarantee certificates to be transferred between market participants. Finally, Powernext has been chosen to operate France’s Guarantees of Origin registry — a scheme to ensure that green power plants are certified and the use of their production is tracked. More than 300 renewable power plants, representing around 16 TW of installed capacity, are currently being registered in the Powernext database. Read on to find out more about our diverse product offering and range of expertise.

232

exchange members

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the changing dynamics of global gas supplyNatural gas is a key commodity in today’s global energy mix. In 2015, it accounted for around 24% of the world’s total primary energy consumption 5. Its importance as an energy source has increased significantly over the past decade, with the potential to grow further in the coming years.

Between 2000 and 2015, both the consumption and the production of natural gas saw remarkable growth, surpassing the 40% mark on a global level. Today, the largest consumers

are the USA (23% of the total), Russia (11%), Iran (5.5%), and China (3.9%). The largest producers are the USA (22% of the total), Russia (16%), Iran (5.4%), and Qatar (5.1%) (BP, 2016 5). Developments in the Chinese and US markets are of particular interest. China’s production rose almost fourfold between 2000 and 2015, reaching approximately 3.9% of the world’s total. During the same period, the USA increased its production by 41%, and in 2009

natural gas accounts for about a quarter of the world’s total primary energy consumption. Its increasing importance as a global energy commodity has been reflected in growing international trade volumes. recently, the most significant changes in global gas trading have been linked to the increase in uS domestic production, the rise of Lng trade, and the drop in oil prices.— By Dr Giovanni Saverio Sorda

gloBal gas markeT Trends

LaurEnt CaLDiChOuryHead of Gas and Power Asset Optimization & Trading, ENGIEand chairman of the PEGAS Exchange Council

“EngiE aims to be a global leaderof the energy transition. as part of this, the group believes that natural gas will play a key role in the energy sector’s evolution over the coming decade. natural gas will be the best partner for renewables. it will also support the proliferation of disruptive innovations such as biogas and hydrogen, and the development of international trade platforms such as PEgaS, that provide a direct gateway to global energy markets.”

usa increases production by 41%


30it surpassed Russia as the largest natural gas producer in the world. This gain is primarily due to the increase in domestic shale-gas production. Shale gas is natural gas found within shale formations, which are fine-grained sedimentary rocks. Due to a refinement of techniques such as horizontal drilling and hydraulic fracturing (a process also known as fracking), it has been possible to access large natural gas (and oil) basins previously deemed too costly to access. In 2015, shale gas accounted for about 50% of the US’s total natural gas production, a share that is expected to increase significantly in the future 6. This change in US domestic natural gas production is likely to have significant implications for international trade flows, with the USA expected to transition from a net importer to a net exporter of natural gas.

an increasing role for Lng tradingThe transport of natural gas via pipelines still accounts for the largest share of global trade (approx. 70% of the total). The largest exporter via pipeline is Russia, which exports mainly to Europe. Europe’s dependency on foreign pipeline imports is due to its relatively stable domestic consumption and waning domestic production, compounded by declining reserves that have already reached peak production levels. A shale gas revolution akin to that in the USA is unlikely. As a result, there are ongoing concerns related to security of supply. In 2015, imports of natural gas from Russia amounted to approximately 36% of Europe’s total natural gas consumption 7, and it is projected that Russian imports may account for as much of 50% of consumption in the future. One potential way to increase Europe’s security of supply is the use of liquefied natural gas (LNG). LNG is natural gas that has been cooled to a liquid state. Since natural gas is about 600 times smaller in its liquid state than in its gaseous state, LNG is ideal for shipping and storage. In 2015, LNG accounted for about 30% of the world’s international trade, and the volume of LNG traded globally has more than doubled

In 2015, LNG accounted for about 30% of the world’s international trade, and the volume of LNG traded globally has more than doubled since 2000

In europe there are already 25 large-scale Lng terminals in operation.

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LNG trading flowsExisting and potential new flows in the short term

since 2000 8. This trend has been accompanied by infrastructure investments in regasification capacity (regasification is the process by which LNG is converted back to natural gas at atmospheric temperatures). In Europe, for instance, there are 25 large-scale LNG terminals, and an additional 25 are planned or under construction 9. However, Europe currently accounts for a relatively small share of the total LNG market (12%). At present, LNG is primarily destined for the Asian market (70% of the total), half of which is for Japan, followed by South Korea and China. The supply side of LNG is also highly concentrated. In 2015, Qatar accounted for about 31% of the world’s total, followed by Australia (12%) and Malaysia (10%).

Although Europe could use LNG to diminish its reliance on Russian pipeline imports, LNG will continue to be shipped wherever prices are highest. The rising importance of LNG across global trade routes is likely to increase international competition and create a different type of interdependency, potentially on a larger scale than that arising from pipeline trade between two states. These global developments will stimulate trading in Europe and strengthen local markets and indices, leading to a further decline in the oil indexation of natural gas contracts. Powernext is prepared to provide the solutions that the market needs in order to benefit from these new trading opportunities.

Potential new flows in the short term

Increased exports or production

Gas production

Exports

Stable demand in

Europe

Qatar remains largest exporter

Stable imports in Asia


a European platform for 11 locations The continuous growth of the PEGAS platform is a testament to our approach — European in scope and reach, but willing and able to respond to local requirements. Our strong customer orientation allows us to react quickly to the needs of the market. The PEGAS team is dedicated to engaging in constant dialogue with members, in order to collect feedback, validate product-design choices and evaluate traders’ possible interests. Our product offering simplifies and enhances our clients’ interactions with the European gas market. Most visibly, large European players can benefit from simple, affordable access to multiple hubs on a single platform, simplifying their daily operations and financial arrangements. Equally, smaller clients present in individual hubs can benefit from the presence of such European players on our markets, supported by the locational spread products we introduced in 2015. These contracts enable smaller hubs and local players to benefit from the liquidity of PEGAS flagship hubs, such as TTF and NCG, while offering additional value and arbitrage opportunities for larger pan-European clients. PEGAS has a wide range of clients, from physical

2016 will be remembered as the PEgaS platform’s most successful year since its launch in 2013. At present, PegAS covers 11 European hubs, now including Austria’s Cegh VtP and Denmark’s etf, and continues to grow year-on-year in terms of volumes and products.— By Philip Bloomfield

The Pegas ProducT offering

DOug WOODChairman of the Gas Committee at EFET

“Liquid, well-functioning marketsare crucial to securing Europe’s gas future in the coming years. Shippers, tSOs and Market Operators all benefit from efficient, reliable and liquid exchange trading platforms, which support their efforts to maintain security of supply, provide energy to the consumer at a fair price and ensure clear signals for investment. the ability of trading venues to continue to propose a wide variety of products, tailored to the needs of the market, is a key component in facilitating these objectives and securing the future of European gas.”

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players to trading firms and utilities as well as Transmission System Operators (TSOs), that are active in our markets. This diverse client base has led us to develop bespoke products to complement our standardized offers.

Developing our product portfolio The success in 2016 of our off-hour and hourly products for the German and Dutch Markets, in response to the balancing requirements of TSOs in these areas, is proof of our ability to respond to such specific market needs. Furthermore,

our role in promoting market-based balancing mechanisms, in close cooperation with TSOs, storage operators and MAOs, has been mutually beneficial. This has ensured market liquidity in order to carry out efficient balancing interventions, while simultaneously supporting the development of liquidity. PEGAS has also been able to leverage its success in the spot market to develop our offering further down the curve. Our derivative product offering aims to help our clients hedge their risks and benefit from arbitrage opportunities, while also enticing players with pure investment or trading interests to participate in gas markets.

PEGAS trade volumes since 2013Between 2015 and 2016, PEGAS volumes rose by 87%.

2013 2014 2015 2016

J J J Jf f f fM M M MA A A AM M M MJ J J JJ J J JA A A AS S S So o o on n n nD D D D

200

150

100

50

0

12 11 15 11 10 9 10 10 1115

1916

24 19 1922

22 20 2324

36

28 34

4137

41

47

30

2826

2430

41

46

49

52

64

57

49

47 40

40

50

54

52

6275

6 6 5 5 5 6 5 6 58

97

19 27 2414

26 25 2530

29

27 17

3143

51

30

15

4046

4241

68

84

94

126

165

76

104

77 85

46

76

100

81

8378

1913

spot futures

TWh →


OtF trading in 2018Our derivatives markets will have expanded significantly by January 2018, when we will offer trading on an Organised Trading Facility (OTF), in addition to our offering on the exchange. This is due to the revision of the “Markets in Financial Instruments Directive”, which governs trading on such platforms, and follows the demand of our client base. To prepare for this change, we launched a new market segment in July 2016 under the name “non-MTF”. Once the relevant national legislation has been finalised in 2017, we will seek to obtain an OTF license for this segment. Powernext has also continued its successful cooperation with the national storage and transmission system operators. Starting in September 2016, PEGAS and the French natural gas transmission system operator GRTgaz announced an extension of the operating hours of the coupling mechanism between France’s PEG Nord and TRS delivery zones, to weekends and bank holidays. Last but certainly not least, we expanded PEGAS with new hubs in Denmark and Austria — please read more on pages 24 & 27.

Connecting hubs For our PEGAS spot markets, we have been able to respond to the need for short-term trading and portfolio balancing. Hourly products were introduced in March 2016 for the Dutch and German virtual trading points, and in the German NCG market area at the locational points Elten and Vreden. These hourly products allow more efficient dispatching from gas-fired power plants in the short-term, in order to compensate for fluctuations in wind and solar power generation. The importance of such products has been proven by their success — traded volumes totalled 8.5 TWh in 2016. Spread products, which have been part of the PEGAS portfolio since its launch, constitute another key instrument for the development of the European internal market for gas trading. Such products enable price differences between the different hubs to be hedged. This permits an efficient combination of spot trading on local hubs with derivative trading on larger central hubs (such as TTF).

hourly products introduced in 2016 amounted to 8.5 tWh in the same year

the constant development of our productportfolio is at the heart of the PegAS platformstrategy. our strong customer orientation allows us to react quickly to the needs of the market. the PegAS team is dedicated to engaging in constant dialogue with members, in order to collect feedback, validate product-design choices and evaluate traders’ possible interests.— By Richard Katz

new ProducT develoPmenTs in 2016

21

OUR

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S

ttF

182,701,802

892,596,564

nBP

197,501

zEE

890,441

865,735

PEg nOrD

88,077,149

40,996,050

trS

48,887,210

2,146,320

ztP

22,607,015

359,665

With the integration of gaspoint nordic in 2016, the etf hub joined the PegAS platform. All 18 members of gaspoint nordic are today members of Powernext.

267,428

a europeanPlatform


nCg

206,314,580

91,145,315

gaSPOOL

79,904,941

37,985,002

EtF

23,056,798

1,064,945

CEgh VtP

24,706,442

7,762,080

PSV

Physical 16,259,500

Financial 5,646,480 Powernext welcomed

38 new members from Cegh who joined as part of the migration to the PegAS platform.

traDing VOLuMES

in 2016

643,532,650

1,089,749,609

gas Spot Market 2016 Volumes in MWh

gas Derivatives Market 2016 Volumes in MWh

23

our

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s

Further growth opportunities arising from this cooperation will strengthen the ETF hub in Denmark, further supporting transparency and competition on the Danish market.

Expanding the futures portfolioLaunching ETF products on the PEGAS screen enables us to increase liquidity, attract new participants and introduce futures products beyond the front month. Additionally, spread products allow the ETF market to benefit further from the liquidity available in the wider European trading community. The ETF hub will benefit from the pan-European product offering which is constantly being expanded by the PEGAS team. Our trading members and stakeholders have embraced these benefits and fully supported us throughout the entire project. Volumes at the Danish ETF hub have continued to grow since the migration to the PEGAS platform. In addition, immediate trading activities following the PEGAS integration indicate a stronger price link between the ETF hub and the other hubs at PEGAS. We look forward to building on these initial successes in 2017.

another step in the development of PEgaSDanish ETF hub and the trading platform Gaspoint Nordic were established as a regional offering in 2008, with the aim of creating an index for a gas market that was historically heavily reliant on oil indexation. Trading on ETF has grown steadily and today covers more than 75% of domestic demand in Denmark. More importantly, ETF prices have become the reference for short-term gas trading on the Danish market. Despite this success, the ETF hub has remained small in terms of both absolute volume and number of trading members. Our international members’ needs for trading on other European hubs led us to pursue a cooperation with the PEGAS platform.

on 17 november 2016, Powernext and gaspoint nordic successfully launched spot and futures contracts for the Danish hub etf on the PegAS platform. this completes the cooperation between the two companies that started in July 2016, when Powernext acquired 100% of gaspoint nordic from its two former shareholders, eeX Ag and energinet.dk. — By Jacob Pedersen

The inTegraTion of gasPoinT nordic

JaCOB PEDErSEnCEO of Gaspoint Nordic


Gaspoint Nordic volumes 2010 → 2016Another big step towards the development of the pan-European PEGAS platform.

2010

54,07 4,01

6,93

9,28 10

17

24,1

TWh →

10

15

20

25

2011 2012 2013 2014 2015 2016

tOrBEn BraBOSenior Vice President Gas, Energinet.dk

“ For Energinet.dk, the sale in July 2016 of its half of Danish gas exchange gaspoint nordic to co-owner Powernext was the last, natural step on a journey aimed at creating a well-functioning and transparent nordic gas market. Powernext was the natural choice in our endeavour to continue the activities of gaspoint nordic, whose integration into PEgaS gives exchange members access to the European gas market and to a greater range of products.

What’s more, Powernext's business model ensures that gaspoint nordic members continue to benefit from having a local point of contact, via a sales office in Denmark.”

75% of domestic demand in Denmark is traded via the Danish hub etf.

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gateway to the East for the PEgaS platform The Central European Gas Hub has a long history as a trading platform in the CEE region, with the first nominations in the CEGH OTC (over-the-counter) market taking place in October 2005. In December 2009, the Gas Exchange Spot Market was launched, followed one year later by the Futures Market. The combination of operating the Austrian VTP on the one hand and fostering exchange trading on the other has helped establish the currently strong position of CEGH, which has become both the preferred trading platform for natural gas in the CEE region and one of the leading gas hubs in Central Europe. CEGH serves as a gateway between East and West and is therefore the most interesting trading platform for South-East European markets. In recent years, more and more traders have used CEGH as a trading hub between West and East, reflecting the needs of Eastern European countries to import gas from the West.

the Central european gas hub (Cegh), located in Vienna, austria, is the leading hub for trading gas between East and West. Providing an excellent position for growth in the Central-eastern european (Cee) region, CEgh was the partner of choice for Powernext. Via a common joint venture, Cegh (49%) and Powernext (51%) offer trading in the CEE region via the PegAS platform. — By Gottfried Steiner

cooPeraTion wiTh The cenTral euroPean gas huB

gOttFriED StEinErCEO of Central European Gas Hub AG

increase in exchange trading on the CEGH hub in 2016

23Annual Report 2O16 / Powernext26

additional benefits for Eastern European traders The role of CEGH in trading in the CEE region and the position of Powernext in Western Europe has brought the two companies together. The CEGH Gas Exchange spot and futures contracts have been migrated to the PEGAS platform, offering traders additional benefits like spread products along with enhanced trading opportunities. Only six months after signing a cooperation agreement in June 2016, we were able to celebrate the successful launch of the CEGH contracts on the PEGAS trading platform. At the CEGH Gas Exchange Market, 32.5 TWh were traded in 2016 — an increase of 23% compared to the year before. December 2016, the first month of the cooperation between Powernext and CEGH, already saw an all-time high in the exchange traded volume for Austria, at 3.78 TWh. At 0.43 TWh traded, it was also the best volume ever recorded for the Austrian futures market. A promising start for the PEGAS CEGH market and an excellent indicator for 2017.

BErnharD PainzHead of Gas at the Austrian energy regulator E-Control

“as operator of the Virtual tradingPoint and the gas exchange, CEgh plays an important role in facilitating trading and fostering liquidity in the austrian gas market. E-Control welcomes the recently implemented migration of exchange trading to the pan-European PEgaS platform. Constantly increasing liquidity, both on OtC and exchange markets, demonstrates the acceptance of the CEgh trading platform and its growing significance for the whole CEE region.”

0,009

2009

2010

2011

2012

2013

2014

2015

2016

3,0

1,1

13,2

26,4

2,5

21,2

32,4

CEGH as a benchmarkThe CEGH hub serves as a benchmark in Central Eastern Europe (CEE) and is expected to grow further.

5

TWh →

10

15

20

25

30

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of the PEG Nord–TRS interconnection. Whenever any available capacity is not booked by the market in Day Ahead, this tool simply offers it via a direct swap of gas between the two French zones using a geographical spread product on the PEGAS screen. This mechanism ensures that capacity is sold at market value, thereby contributing to price convergence and market liquidity while simplifying the booking and nomination process for shippers.

Supporting the French capacity market for power Following the launch of the French power capacity mechanism in 2015, Powernext has developed and operated an electronic registry solution for RTE (France’s electricity transmission network) that enables capacity guarantee certificates to be transferred between market participants. This capacity mechanism is unique in Europe and a key tool for France’s energy transition. With a higher share of renewables linked to the grid, peak capacity tends to exceed off-peak capacity. The French capacity mechanism is designed to address this issue, encouraging adequate investment in generation-and-demand response capacities, while also

Balancing solutions for natural gasIn our natural gas markets, Powernext provides services to Transmission System Operators (TSOs) to support their balancing activities. In order to diminish operational risks, as well as organisational issues and costs, Powernext has developed algorithmic trading solutions which provide, among other things, simple and efficient 24/7 balancing services. Based on rules and

principles configured according to the TSOs’ requirements, these trade algorithms provide auditable reports of all order and trade data to both TSOs and regulators. Operations

are monitored by PEGAS Market Operations, while the TSOs manage all of the features and parameters via a web interface. In order to construct the internal market for natural gas, efficient use of the interconnection capacity between market areas is vital, especially on congested interconnections. In line with the EU Network codes, and in conjunction with French TSO GRTgaz, Powernext has developed an implicit allocation solution to maximise use

Since 2001, Powernext has developed solid expertise in the design and operation of spot and futures exchanges for gas, power and emissions. Additionally, it also provides energy-related services, including algorithmic trading software for balancing and market coupling services, auction platforms and a registry solution for power capacity certificates. — By Antoine Devillers

Providing markeT soluTions for energy services

Tailor-made solutions


incentivising a modification of consumption behaviour during peak periods. In practical terms, producers and demand response management operators are awarded capacity certificates (each representing 0.1 MW) corresponding to the available power capacity they can provide to the grid during peak periods. Concurrently, obligations to acquire capacity guarantees are assigned to suppliers based on their customers’ actual consumption during peak periods. Since 2015, the service offered by Powernext to RTE has enabled market participants to monitor their capacity balance accounts and transfer certificates between each other. 2016 has been a key year for the French capacity system, with the first capacity auction held in December 2016. The EPEX SPOT auction platform is connected to the RTE registry, designed and operated by Powernext. Powernext aims to further improve the performance of energy markets by using such tailor-made services to respond to market needs. The successful implementation and operation of auction platforms for TSOs, of algorithmic trading services for infrastructure operators, and of registries are proof of our determination to deliver important and meaningful improvements to energy markets.

JEan-LOuP MinEBOiSDirector of Sales and Development at TIGF

“We wanted to use state-of-the-arttools for our balancing operations and took this opportunity while working on the extension of our trading hours. We are extremely satisfied with the growth of liquidity on the products operated by PEgaS in the trS market area. We believe these new measures will contribute to its further development and improve price formation in this zone, especially during the weekends which were previously not very liquid.”

thiErry trOuVéChief Executive Officer of GRTGaz

“the market coupling experimentwas an innovation supported by the French regulator CrE and market participants. it managed to optimise usage of the north-to-South link while

sustaining the development of market liquidity and price resilience. Operations have been fully automated and are thus more efficient and auditable, which makes the mechanism virtuous.”

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Consumer commitment: the key to the energy transitionThe EU member states have correctly identified that consumer choice is key to the energy transition. All states have put regulations in place to ensure that green electricity can be offered to consumers on a reliable basis. Throughout Europe, suppliers are obliged to indicate on their customers’ invoices the share of energy sources used to generate power. However, electricity cannot be tracked as easily as other goods. An electron cannot be directed for consumption at a particular point, nor can it be physically tracked from one specific power plant. At the same time, consumers want to know whether or not they are consuming electricity from a renewable energy source. The Guarantees of Origin (GO) system has been created in response to this particular problem. It ensures that the same amount of green electricity is being produced and fed into the grid as is being consumed. As soon as a supplier generates green electricity, each MWh can be assigned to a specific household. The plant does not necessarily need to be located next to the place of consumption. However, the consumer knows the exact location of the plants where the green electricity has originated. GOs are electronic certificates which are held on different registries in each country throughout Europe. Each registry allows the registration of renewable production devices in its own country and is responsible for

the public and political debate around climate change has never been so visible or important, following the Paris 2015 Climate Agreement. the development of guarantees of Origin provides an opportunity for individuals and companies to actively participate in the energy transition. — By Aude Filippi

guaranTees of origin

tiMOthéE FurOiSHead of Renewable Energies at France’s National Energy and Climate Directorate (DGEC)

“ Since 2013, Powernext has played a key role in improving the reliability of the guarantees of Origin system in France. in addition to the development and operation of an internationally connected, robust registry, Powernext has supported the work of the DgEC by helping us to design clearer rules to ensure that the system is more transparent and accessible to the final consumer.”

In 2016, about 40 TWh of renewable energy were certified in France.40

tWhAnnual Report 2O16 / Powernext30

the issuance, transfer and cancellation of all GOs within its registry. Powernext has been appointed by the Direction Générale de l’Energie et du Climat to operate France’s national GO registry and ensure a fully reliable GO system. Powernext is also an active member of the European Association of Issuing Bodies (AIB), which allows the promotion of a Europe-wide quality standard for the origination of GOs. All producers of green electricity registered in the Powernext database are systematically checked and regularly audited in cooperation with the French grid operators and professional auditors.

Providing transparency for green electricityAt the end of each month, producers receive GOs based on the net electricity that has actually been injected into the grid. One GO represents one MWh of electricity produced in a specific month, and contains all relevant information on the power plant (location, capacity, type and energy source etc.). These certificates can then be electronically transferred to another market participant in France within the French registry or even Europe from one registry to another via the AIB electronic hub. GOs are mostly traded bilaterally but EEX offers the possibility to trade the certificates via an exchange. GOs are ultimately assigned to end consumers. Powernext ensures full transparency

and publishes a list of each GO issued in France on its website, so that consumers can easily check where the electricity they consume comes from. Today, more than 300 renewable power plants, representing around 16 GW of installed capacity, are being registered in the Powernext database. In 2016, about 40 TWh of renewable energy was certified in France and then either consumed locally or exported within Europe. This represents about one half of the renewable production in France, which is a national record and exceeds 2015 volumes by 50%.

Guarantees of Origin — a market-based instrument to track green electricity.

Issuance transfer Cancellation

ProducTion

Transmission grid

consumPTion

guaranTees of origin regisTry

the increase in go volumes shows that consumers are committed to taking part in the energy transition.

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Ofgem (UK). Their main role is to regulate operation of the grid infrastructures and ensure non-discriminatory access for all electricity and gas suppliers.

the emergence of exchange platforms On the trading side, the liberalisation of European markets has led to the emergence of trading/exchange platforms. The products offered for trading reflect the physical realities — bottlenecks in the transport infrastructure can cause a price divergence between regions, which in turn requires separate markets in the regions concerned. However, if these bottlenecks are not significant, their impact on the market is absorbed by the system operators managing the grid. Finding the right balance between the grid infrastructure and trading markets is essential for well-functioning markets. With the development of trading and the introduction of renewable energy policies, complementary markets have emerged. These include the markets for EU Emission Allowances and Guarantees of Origin. Such products allow traders and retailers to fine-tune their portfolios in order to meet regulatory

towards a liberalised market The European energy market was once dominated by natural monopolies. These markets had long been considered non-contestable due to the high upfront costs required in the energy sector. Historically, just one large, often state-owned, supplier served the whole retail market. Attempts by the European Union to liberalise

these markets date back to 1996, when the first directive regarding the liberalisation of electricity markets entered into force. This was based on

the observation that it is the transmission network which renders these markets non-contestable. The separation of production from distribution would therefore create competition at the trading level and be socially beneficial. Grid infrastructures have therefore remained regulated by public bodies. At the European level, ACER (Agency for the Cooperation of Energy Regulators) coordinates the work of national regulators, such as CRE (France), Bundesnetzagentur (Germany) and

euroPean energy markeT regulaTion

a complex task of coordination

the regulatory framework for gas and power trading is becoming increasingly complex. following a liberalisation process in the european energy market, a new regulation process is now in place with the aim of ensuring well-functioning markets and reducing systemic risk in the aftermath of the financial crisis.— By Lilly Höhn

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obligations or end consumers’ demands. Today, such markets permit the creation of products for end users that comprise a certain share of renewable electricity. The markets in which Powernext operates have matured over the last 15 years to become more and more standardised, digital and fast-paced. The trading participants no longer consist exclusively of utilities, but also include commodity trading houses and financial institutions. These ‘new’ traders enable market participants to effectively manage their price risks. Ultimately, this transmission of risks is vital, enabling participants to invest in the capital-intensive assets that are indispensable to an effective energy transition.

adapting to financial regulationIn the wake of the 2008 financial crisis, it has also become imperative to protect such markets from the risk of future similar events. Under this logic, commodity markets are considered as financial markets and fall within the framework of financial regulation, notably the revision of the “Markets

in Financial Instruments Directive” (MiFID II). From January 2018 onwards, this directive and related regulatory initiatives will apply to commodity

trading. The framework of financial regulation presents new challenges for all stakeholders. The existing markets and their specific energy regulatory framework need to be embedded in the broader picture of financial regulation, as originally developed for the financial sector. Responsibility for supervising the financial regulation framework rests with the national financial regulators, such as AMF in France, BaFin in Germany and FCA in the United Kingdom. ESMA, the European Securities Market Authority, coordinates national regulation at the European level. Powernext will use its experience to ensure that both energy markets and these new

regulatory frameworks can successfully co-exist. Minimising adverse effects and putting these pieces of the puzzle together requires cooperation between system operators, traders, trading platforms and regulators. From our position at the centre of the energy industry, we perceive ourselves as an intermediary who can bring together these stakeholders, not only on the trading floor, but also in the public sphere where the markets and relevant regulations are being shaped.

aLBErtO POtOtSChnigDirector of the Agency for the Cooperation of Energy Regulators (ACER)

“the complexity of power and gasmarkets represents a particular challenge for actors and regulators. the grid-bound nature and limited capacity for the storage of these commodities requires balancing of supply and demand in real time. at the same time, these markets are subject to a comprehensive regulatory framework to ensure fair competition and to prevent market abuse. Energy exchange operators such as Powernext play a significant role in helping to balance these two requirements, and in doing so contribute to delivering on the objectives of the third Energy Package.”

system stability as main priority


Our beliefsWe value a creative and adaptive approach to our work, which enables us to develop innovative solutions and new projects for the constantly changing market that we serve. Our experience and competency are the foundations upon which we have built our reputation as a trusted and reliable partner for our stakeholders and clients. Furthermore, we constantly seek to share our knowledge, both amongst colleagues and with our clients, to enable us to better attain our objectives. Powernext is committed to providing a working environment conducive to the development of ideas, skills and individuality amongst our employees. In the following section, four employees explain how their experiences relate to our values.

talentPorTraiTs of exPerTise

Powernext is a dynamic, open-minded and diverse company: our 50 experts encompass 10 different nationalities. our shared values help us both to define our objectives and to shape our daily work. they are what bind us together as a team, ensuring that we are motivated and well-positioned to service our clients' needs.

10 Powernext experts encompass 10 nationalitiesthe average age of Powernext's employees is just 35.

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Creativity describes a strong problem — solving orientation, the constant search for efficiency, and the regular adaptation

of working methods to context and individuals. Achieving creativity within the working environment is a win-win situation for employees, management and customers. At Powernext, staff and management are committed to building a structure that supports creativity. Essentially, we lead with the help of transparent targets — honestly defining directions and no-gos. We develop enduring trust by openly acknowledging when targets are challenging and accepting that attempts comprise failures. Finally, we aspire to enabling individuals to grow and learn, by valuing suggestions and providing constructive feedback. Eventually, empowered teams can freely imagine, propose and implement. Individuals can therefore be at the heart of a company’s growth.

Our mission is to respond to our customers’ needs by making best use of the technologies available to us. On a daily basis, we work as a team to specify,

conceptualise, develop and test our products. As part of our drive for continuous improvement, we are currently focusing on three key areas — safety, quality, and our technology monitoring unit. Operating within a sector that demands safe applications and manufacturing processes, we work constantly to develop and improve our tools and conduct regular inspections and monitoring. We also call upon specialised service providers to review the safety of our products. In order to optimise our production chain, we have implemented automation and verification processes upstream of all our new developments to limit the risk of failure and return on the versions tested by our teams. Development is about knowing how to use the tools not just of today but also of tomorrow, in order to meet our future needs.

gaëLLE SErEtProject Manager

we are creative

we are experts

MiChaëL BErtOCChiComputer Engineer – IT Development


Being in daily contact with our customers, ‘we care’ is a basic value for us and of major importance in

our everyday work. We constantly strive to be responsive and flexible, to take into account the specific characteristics of the different companies in our exchange, and to offer customized solutions. Direct contact with our customers is extremely important to us. Colleagues across the different departments work hand in hand to ensure that members’ requests are met, to set up new trading accounts, and to develop new projects. This requires a high level of responsiveness and helpfulness between employees. Powernext prioritises customer closeness across all departments and provides its teams with the means to put customers’ needs first. This mindset is also reflected in employees’ relationships with each other, ensuring a pleasant and respectful working environment. We believe that sharing the good times and celebrating success together helps to build mutual trust and makes us better able to face the challenges ahead as a team.

Everybody within Powernext is committed in several ways and at different levels. We, the internal

communication team, are committed to all our colleagues, not only at Powernext Paris, but also at the other entities based across Europe, as part of the EEX Group or PEGAS cooperation. Powernext continues its growth through the development of new markets and the launch of new products. Such external expansion can only be achieved through internal success, thanks to our dedication to constantly improving in our daily work. We are committed to spreading the values of Powernext, to bringing them to life and ensuring that we all follow them. We are a small team, but we are getting bigger and bigger. It is crucial that we all have the same focus, in order to represent our company and group and promote the Powernext expertise and efficiency that our members have come to know and appreciate.

we care

we are committed

CriStina VinOt-griLLOInternal Communication Officer

aLExanDra PhiLiPPEHead of Membership

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we thank all our contributors riCharD Katz

Sales Director at Powernext

thiErry CarOLDeputy CEOof Powernext

MiChEL BErtranDIT Directorat Powernext

rOMain rOuSSEauDirector of Market Operations at Powernext

BErnharD PainzHead of Gas at the Austrian energy regulator E-Control

JEan-PiErrE gOuxDeputy CEOof Powernext

Dr EgBErt LaEgEChief Executive Officer of Powernext

Dr JürgEn KrOnEBErgChairman of Powernext's Board of Directors

Dr Jan riChtErHead of Regulatory Affairs & Communications at Powernext

JOChEn hOMannPresident of the German Federal Network Agency (Bundesnetzagentur)

Dr giOVanni SaVEriO SOrDaBusiness Development Manager at Powernext

LaurEnt CaLDiChOuryHead of Gas & Power Asset Optimization & Trading, ENGIE

PhiLiP BLOOMFiELDBusiness Development Manager at Powernext

DOug WOODChairman of the Gas Committee at EFET

JaCOB PEDErSEnChief Executive Officer of Gaspoint Nordic

tOrBEn BraBOSenior Vice President Gas, Energinet.dk

gOttFriED StEinErChief Executive Officer of Central European Gas Hub AG


references

P12 (1) European Commission, https://ec.europa.eu/energy/en/topics/renewable-energy. (2) BMWi, https://www.bmwi.de/Redaktion/DE/Dossier/erneuerbare-energien.html. (3) IEA, https://www.iea.org/topics/naturalgas.

P13 (4) European Commission, http://europa.eu/rapid/press-release_MEMO-17-309_en.htm.

P16 (5) BP (2016): BP Statistical Review of World Energy, London, UK.

P17 (6) EIA (2017): Annual Energy Outlook 2050, US Energy Information Administration, Washington, DC, USA.(7) BP (2016): BP Statistical Review of World Energy, London, UK.

P18 (8) IGU (2016): 2016 World LNG Report, International Gas Union, Fornebu, Norway.

(9) GIE (2016): GIE LNG Map, Gas Infrastructure Europe, Brussels. aLBErtO

POtOtSChnigDirector of the Agency for the Cooperation of Energy Regulators (ACER)

antOinE DEViLLErSBusiness Development Manager at Powernext

auDE FiLiPPiHead of Growth Initiativesat Powernext

tiMOthéE FurOiSHead of Renewable Energies at France’s National Energy & Climate Directorate (DGEC)

gaëLLE SErEtProject Managerat Powernext

aLExanDra PhiLiPPEHead of Membershipat Powernext

CriStina VinOt-griLLOInternal Commu-nication Officerat Powernext

JEan-LOuP MinEBOiSDirector of Sales & Development at TIGF

LiLLy höhnRegulatory Affairs Officerat Powernext

MiChaëL BErtOCChiComputer Engineer- IT Developmentat Powernext

LuCia VErgOzInternal Commu-nication Officerat Powernext

thiErry trOuVéChief Executive Officer of GRTGaz

39

* The following balance sheet reflects the financial situation of Powernext SA before distribution of the net income of the period. The financial statements are

established according to French generally accepted accounting principles which correspond to international financial reporting standards.

financial rePorT

Powernext’s financial statements *

Balance Sheet

In 2016, assets increased, with the establishment on the 20th June of the joint venture with CEGH in Vienna to develop liquidity especially on

CEGH’s hub, and the acquisition on the 6th July of Gaspoint Nordic which operated the Danish ETF exchange.

The total revenue is composed of gas revenue including trading fees from Pegas Spot and Pegas Futures, Annual & Technical connection

fees and market data as well as of revenue from services to third parties such as gas TSOs and revenue from intra-group services.

→ total revenue 27,490 20,139Sales revenues 26,651 19,003

Other operating income 839 1,136

→ total expenses 23,900 19,486Salaries and social contributions 6,867 6,043

Other operating expenses 16,542 12,338

Amortisation & provision 492 1,105

→ Operating profit 3,590 653Financial income 7,898 17,922

Tax 1,562 515

→ net profit 9,927 18,059

Fixed assets 19,775 9,905 Equity 29,994 46,856

Current assets 16,279 41,732 Debt 6,060 4,782

total 36,054 51,637 total 36,054 51,637

2016

2016 2015

K€

k€ k€

2015

ASSetS LIAbILItIeS

2016 2015


06

32

Our visiOn

Our fOcus

Our Mindset

table of contentS

1402 15 years of experience04 The Powernext universe

06 Our vision 07 Preface by Dr Egbert Laege 08 Our teams at Powernext 10 Joint interview with Jean-Pierre Goux & Dr Jürgen Kroneberg12 Prepared for a changing energy landscape

14 Our focus 15 Powernext's product portfolio16 Global gas market trends 19 The PEGAS product offering21 New product developments in 201622 PEGAS: a European Platform 24 The integration of Gaspoint Nordic26 Cooperation with the Central European Gas Hub28 Providing market solutions for energy services 30 Guarantees of Origin

32 Our mindset33 European energy market regulation35 Portraits of expertise38 We thank all our contributors

40 Financial report 2016

annual report 2o16 / Powernext

Published by Powernext SA, 5, boulevard Montmartre, 75002 PARIS, France

Editorial Directors: Dr Jan Richter

Editors: Lilly Höhn, Dr Jan Richter

Consulting, design creation, production:

Photo credits: Stéphane Bagros, Romain Dufrene, iStockphoto.com (Xavier Arnau, Kelvin Jay, Tauri Minogue), all rights reserved.

Powernext is com-mitted to responsibly managing its paper purchases. The paper used in the annual report 2016 docu-ment is FSC-certified. This certification guarantees compliance with a globally-recognised set of principles and criteria for forest management.

May 2017

PreParedfor the

future of energy

Annual Report 2016

15 yearS

www.powernext.com

PrePared for the 15 year S of energy - Powernext...with Jean-Pierre goux, Deputy CEO of Powernext,...

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