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New algo trading bourse targets 50% of intraday volumes


13 Jun 2023 08:49

13 Jun 2023 08:49

(Montel) A new intraday power trading exchange, to be launched on Wednesday by Amsterdam-based ETPA, wants to handle up to 50% of intraday trading volumes by 2027 in the European markets where it will be active, its chief executive told Montel.

On Monday, the bourse received the go-ahead to become a Nominated Electricity Market Operator (Nemo) offering trading in the Dutch market as part of the European Single Intraday Coupling (SIDC) bidding zone. ETPA will be the third Nemo active in the SIDC’s Dutch market next to Nord Pool and Epex Spot.

“The volumes for intraday trading have really been increasing. We really believe that’s the future,” said Michiel Lensink, who took over as chief executive of the exchange on 1 May, in an interview.

“Many of our clients who use manual trading can now barely cope because automated trading is taking over and it’s moving very fast.”

ETPA’s new platform uses the scalable Amazon Web Services technology which enables high-speed data performance and can therefore accommodate large volumes of electricity trading.

“We are not here to be a niche player, we are really at the forefront of trading technology,” said Lensink.

ETPA has been offering a platform for short-term trading since 2015, including day-ahead, weekly and weekend contracts.


Launching in the Dutch market on Wednesday, ETPA will expand its SIDC offering into Germany and Austria later this year and is targeting the French and Belgian power markets in 2024.

“With more market participants joining SIDC, it creates an opportunity for more assets to react to price signals and therefore increasing the potential to add flexibility and reduce price volatility,” SIDC said in a statement.

The growth in renewable electricity production has been shifting power trading focus onto the very short term. Intraday trading volumes on Epex Spot, for example, rose 27% year on year in May, with new volume records reached in the German, UK, Austrian and Polish markets.

The high influx in green power has caused European spot power prices to turn negative on a regular basis

“We ain’t seen nothing yet. With the increase of renewables as a percentage of the total electricity market, the intraday price difference will only increase over time,” Lensink said.

He referred to new energy technologies such as battery storage or hydrogen which rely on short-term electricity price indicators.

“All these companies are no longer trading manually, they’re all going to need some form of algorithm to trade. That’s exactly what we will be focusing on,” he added.

Complex delay

ETPA’s expansion into SIDC was delayed from the end of last year as its admission took longer than expected. 

“We are pioneers doing this and unfortunately the price you pay is that things take a lot of time. Everything is new for everyone so there was a lot of work to be done across a very extensive testing period,” Lensink said.

ETPA is also looking after the Dutch congestion management platform Gopacs jointly with TSO Tennet. The system has proven an effective tool for smoothing out grid bottlenecks, Lensink said, so much so that the parties are in talks to expand it into Germany and Belgium.

“It doesn’t currently fit the German legal model, but it’s a matter of how you implement the technology.”

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