PRE Auctions

Framework

The Commercial Relations Regulation (RRC) and the Tariff Regulation (RT) establish the separation of the functions of purchase and sale of electricity for the supply of customers and the purchase and sale of electricity from special regime production (PRE), both performed by the supplier of last resort (CUR).

In the specific case of the purchase and sale of PRE, the RRC provides for the existence of a regulated mechanism for the sale of electricity purchased from producers under a special regime. The implementation of the aforementioned mechanism comprises the use of diversified market references, as a way of diversifying market risk in the placement of that energy and mitigating the price volatility of its integration exclusively in spot markets.

In this context, OMIP - The Iberian Energy Market Operator, S.G.M.R., S.A., is the entity responsible for organizing auctions for the sale of electricity acquired from producers under a special regime, and determining their results. The organization of the auction, in addition to its own rules, complies with the trading and clearing rules in force for the MIBEL Derivatives Market managed by OMIP and for the clearing house managed by OMIClear. The settlement of rights and obligations arising from auction trading is carried out under the conditions in force for the MIBEL Derivatives Market, whose clearing house, central counterparty and settlement system is managed by OMIClear.

The auctions for the long term sale of electricity under a special regime may include the following products listed on the market managed by OMIP and defined in terms of the respective published technical specifications:

a) Future contracts, with delivery in the Portuguese area of ​​MIBEL, with base load or peak load;

b) Mini swap contracts, with delivery in the Portuguese area of ​​MIBEL, with base load, with a tick of 0.1 MW.

Main Results

Between 2012 and 2020, 36 PRE Auctions were held, involving a total of five different products per year (one annual base load and four quarterly base load).

  • In 2012, a total volume of 397 MW of hourly power was placed. The volume placed in energy was 3,500 GWh, corresponding to about 7% of consumption needs.
  • From 2013 until 2018, a total volume of 650 MW of hourly power was placed, in quarterly products (400 MW) and annual product (250 MW). The annual volume placed in energy was 5,694 GWh (5,709 GWh in 2016), corresponding to around 12% of consumption needs.
  • In 2019, a total volume of 649 MW of hourly power was placed. This variation was due to the introduction during the last quarter of mini contracts. Since 5 MW allocated to these contracts were not traded, this quarter stood at 395 MW. The remaining maturities were similar to that observed in the period 2013 to 2018. The volume placed in energy was 5,685 GWh, corresponding to around 11% of consumption needs.
  • In 2020, a total volume of 640 MW of hourly power was placed, divided into 395 MW in each of the quarterly products and 245 MW in the annual product. The volume placed in energy was 5,622 GWh, corresponding to about 12% of consumption needs.