Enmascarado y proceso de etching

The purpose of the daily (day-ahead) market is to handle electricity transaction for the following day through the submission of sale and purchase bids by market participants. All available production units that are not bound by physical bilateral contracts are obliged to present bids for the daily market, exceptions are made for:

• Units with installed capacity of less than 50 MW

• Production units with installed capacity of more than 1 MW may provide bids for any period only when they deem appropriate.

• Self-producers and producers under special regime are also not obligated to declare surplus power to the market.

Buyers on the electrical power market are:

• Distributors: They purchase the electricity to supply consumers under regulated tariff regime.

• Resellers: They purchase electricity to sell it to other resellers or to Qualified Consumers.

• Qualified Consumers: At the beginning for a consumer to be considered “qualified” he must have an annual consumption above certain limit. This limit decrease with time and nowadays all consumers are considered qualified and may purchase electricity directly on the Spot Market through a reseller or by signing a bilateral contract with a producer.

• External agents who are authorized to participate in the market as seller or buyer.

OMEL Daily Key Features

• Bids can be made between 1 – 25 energy blocks on each hour.

• Electricity sale bids may be simple or incorporate complex conditions.

The following documents or files are generated during the daily process:

• Daily Matched Schedule (PBC) 7_{: Demand and generation schedule}

given on an hourly basis, prepared by the MO on the basis of the balancing or matching energy sell and buy bids submitted by the market agents.

• Base Daily Schedule (PBF): PBC + the individualized schedules of physical bilateral contract whose execution has been communicated and the energy delivered forecasts for special regime production that does not submits to the production market, communicated by the distribution agents responsible for managing those energy deliveries.

• Provisional viable daily schedule (PVP): Schedule given on an hourly basis, prepared by the System Operator and incorporating any modifications made to the PBF in order to solve technical constraints identified for security reasons and to subsequently rebalance generation and demand.

Daily Timetable

1. Between 8:30 and 10:00, on the day D-1, all the bids for the following day must be presented by the Market Agents (MA) to the Market Operator. The market is organized on an hourly basis so the bids and the energy assigned will be in hourly energy blocks.

2. One hour before the closure of the submission period, the System Operator make available to the MA and MO the information on demand forecasts and the interchange capacity for the following day.

3. Once the daily market session has finished and before 11:00, the Market Operator generates the Daily Matched Schedule (PBC) and sends it to the System Operator, this corresponds to the following day and the merit order of energy buy and sell submitted to this market.

4. From 11 to 11:30 the System Operator receives the bids for the process to solve technical constraints.

5. Before 12:00, taking into account the schedule resulting from the daily market plus the bilateral contracts and the special regime, the System Operator modifies the production units schedule and obtained the Base Daily Schedule (PBF).

The Base Daily Schedule includes the Marginal Price for each hour, generation by each Production Unit and demand by each Purchase Unit.

6. The System Operator studies the technical viability of the operation schedule. If the Base Daily Schedule does not comply with safety and reliability requirements, the System Operator modifies the PBF, incorporating or removing the production necessary to resolve technical problems obtaining the Provisional Viable Daily Schedule (PVP) before 14:00.

7 _{Corresponds to the acronym in Spanish.}

The activities and schedule are summarized on the table below.

Daily Market Schedule

Session Opening 8:30

International bilateral contracts reception 10:00

Session closing 10:00

Matching results 11:00

Domestic bilateral contracts reception 11:00

Daily Matched Schedule (PBC) 11:00

Reception of breakdowns of production and demand inputs 12:00

Base Daily Schedule (PBF) 12:00

Adjustments for constraints analysis 14:00

Provisional Viable Daily Schedule (PVP) 14:00

Table 11. Timetable for Daily Market Sessions

Types of Bids

1. Simple Bids: Indicates price and volume

2. Complex Bids: In compliance with simple bid requirements, also include one or more technical (Load gradients, Indivisibility and Schedule Stop) or economic conditions (Minimum income).

x Load gradients: Establishes the maximum difference between the starting hourly power and final hourly power of the production unit to be established, limiting maximum

matchable power by matching the previous hour and the following hour, in order to avoid sudden changes in the production units that latter are unable to follow from a technical standpoint.

x Indivisibility: Enables a minimum operating value to be fixed in the first block of each hour.

x Scheduled Stop: Enables Production Units that have been

withdrawn from the matching process because they fail to comply the stipulated minimum income condition to carry out a scheduled stop for a maximum period of three (3) hours. The first slot of three hours will be accepted as simple bids with the condition that the energy offered in bids must drop in each hour. 120 100 80 60 40 20 23 24 1 2 3 4 Offer Day Day Ahead MW/h Hours

Figure 12. Schedule Stop Condition

Economic Condition

• Minimum income: Enables bids to be presented in all hours do not participate in the daily clearing result if the total production obtained by it in the day does not exceed an income level above an established amount. The minimum income has a fixed (Cent Euro) and a variable term (Cent KWh) according to every KWh cleared.

Daily Market Price Analysis

On the next graphic and table is presented the volumes and prices of energy traded on the daily market since the beginning of the Spot Market.

0 50.000 100.000 150.000 200.000 250.000 1998 1999 2000 2001 2002 2003 2004 2005 2006 0 10 20 30 40 50 60 E nergy Price GWh _€/MWh

Figure 13. OMEL Daily Market Price/Volume History

Year Average Price €MW Energy GWh 1998 25,06 154.456 1999 25,94 162.764 2000 30,57 171.556 2001 30,13 177.363 2002 37,4 184.602 2003 28,96 198.046 2004 27,94 201.773 2005 53,68 223.290 2006 50,53 117.811 Source: Omel

Table 12. OMEL Average Prices and Energy traded

• Since the beginning of the market, the traded volumes have had an annual growth of 5,4% as shown in table 12.

• 1999 the price of sale bids and the matching result were sensitive not only to the evolution of electricity demand, but also to conditions of

hydraulicity and hydraulic producible in the period from January to December.

• During the year 2001, and coinciding with the continuous low temperatures that affected Spain and other European countries, historically high figure were reached for maximum system scheduled capacity and power, including production under the special regime.

• In 2002 the Special Regime entered the market as market participants.

• The amount of energy traded in 2005 is influenced by both economic activity and a seasonal component, which prompts significant fluctuations in trading, with the consequent effect on the financial volume of trading.

• A very significant decrease has been produced in the energy traded in the daily markets in 2006. This decrease was because of the following:

o 59,162 GWh were negotiated through bilateral contracts which suppose a 22.3% of the energy traded in the year.

o After the entry into force the Royal Decree Law 3/2006 there was a significant decrease of energy resulting from the matching process in the daily market.