The energy transition and the increasing share of renewable energies pose new challenges for the European electricity system. Flexibility marketing in the continuous intraday market (IDc) of the European Power Exchange (EPEX) plays a key role in overcoming these challenges.
Since 2013, Entelios AG has been the second company in total to be technically connected directly to EPEX Spot. Since then, continuous intraday trading has been part of everyday business and is an important part of Entelios’ cross-market-optimized flexibility marketing. The direct technical connection enables a reaction to the market in fractions of a second.
Flexibility marketing: a central element
Flexibility is the ability to adjust electricity consumption or production at short notice. It compensates for fluctuations in renewable energies and unplanned events. Companies can use their systems profitably through flexibility marketing and contribute to grid stability.
What is the continuous intraday market?
The continuous intraday market (IDc) enables electricity trading until shortly before delivery – in contrast to the day-ahead market (DAM), where energy is auctioned for the following day. As a downstream trading option to the DAM, the IDc serves to compensate for forecast deviations and unexpected events such as power plant outages.
This allows market participants to reduce their deviations between forecast and actual volumes (balancing group deviations). The ability to trade balancing group imbalances until shortly before the start of delivery and close to real time leads – with the right incentives – to lower balancing group deviations among market participants. This also reduces the grid imbalances that the transmission system operators have to balance in real time.
The IDc is particularly important for the integration of renewable energies. It enables market participants to use more precise forecasts than in the day-ahead auction and to adjust their trading positions until shortly before the start of delivery. This allows them to react flexibly to unforeseen events.
Trading in the IDc starts at 3 pm on the previous day and runs until 5 minutes before the actual delivery of electricity. Market participants can place bids anonymously around the clock in increments of 0.1 MW. The price range of EUR -9,999 to EUR 9,999 per MWh is deliberately wide in order to reflect extreme market situations.
Market development
The monthly development of the volume-weighted average price (IDFull) of the 15-minute IDc is very similar to the development of the day-ahead market (DAM) prices:
This correlation arises because the DAM is cleared three hours before the start of the IDc and its prices serve as a reference for the IDc. The following chart illustrates the interaction between the two markets. Even this static view of IDc trading via an index (IDFull) shows the additional revenue opportunities or cost savings of participating in quarter-hour trading compared to hourly day-ahead trading.
The IDFull fluctuates around the DAM price. Price deviations of the IDc and DAM result from unforeseeable events such as power plant outages or weather changes, but also from systematic daily patterns. As most volumes on the spot market are traded via the hourly DAM, strong PV change ramps lead to predictable price deviations. In the morning, when PV feed-in is increasing, the IDFull is typically higher at the beginning of the hour. In the afternoon, when PV feed-in is decreasing, the opposite is true.
Trading volume
The trading volume of IDc fluctuates considerably over the course of the year, as does the price. These fluctuations are closely linked to the feed-in of fluctuating energy sources, as the following heat map illustrates.
Similarly, there is a strong correlation with the expansion of renewable energies over the year:
Fluctuation indicators
The correlation between the IDFull and DAM price changes over time. Larger short-term deviations from the plan on the spot markets lead to greater deviations of the IDc from the DAM. With the exception of the energy crisis (Q4 2021 to Q4 2022), the quarterly average IDc has never deviated from the DAM as much as in the last quarter (Q2 2024).
Irrespective of the price level, there are therefore relevant price differences that demonstrate the increased need for and value of flexibility in the electricity system.
The first chart shows the daily aggregated price indices and the trading volume for 2023. The price indices take into account over 85 million actual trades. In the next chart, we zoom in on our example day, Thursday, June 15, 2023. The price indices are now shown for each of the 96 quarters. In the third chart, the X-axis no longer shows the delivery time, but the trading time. The trades are shown for the quarter hour from 19:00 to 19:15 of the above day. It can be seen that the number of trades increases the closer you get to the delivery quarter of an hour. In the last diagram, we zoom into the trading period from 18:30 (30 minutes before delivery start) to 18:55 (5 minutes before delivery start) for the aforementioned delivery quarter hour from 19:00 to 19:15. During this period, participants may only trade within their own control area, in this case Amprion.
Conclusion
The continuous intraday market (IDc) of EPEX plays a key role in flexibility marketing and the stabilization of European power grids. By making strategic use of flexibility options, market participants can not only realize significant economic benefits, but also make a substantial contribution to the energy transition.
Compared to the day-ahead market (DAM), the IDc offers a significantly broader range of options. Consideration of the IDc as a central option is essential for value-maximizing flexibility marketing. In addition to flexibility marketing, the sometimes extreme price fluctuations in the IDc market also open up considerable savings potential in procurement optimization.
In order to make effective use of these market opportunities, it is essential that companies have sound expertise and an efficient technological infrastructure. The complexity and dynamics of the IDc market require not only a profound understanding of market mechanisms, but also the capacity to react to price fluctuations in real time. Companies such as Entelios, which can draw on many years of experience and advanced trading systems, are in an advantageous position to offer their customers optimal solutions and maximum added value.
