Ex-Post Market

What is the Ex-Post Market?

The Ex-Post Market is a crucial post-delivery market mechanism that allows market participants to adjust their nominated positions post delivery. This ensures that contracted energy volumes align with actual consumption or production. The Ex-Post Market, unlike the Day Ahead Market, the intraday continuous, and the intraday auction markets, operates after delivery.  This adjustment is essential for reducing costs associated with imbalances. Etpa's platform is the exclusive marketplace for Ex-Post trading, characterised by its liquidity and impressive growth, with a 111% Compound Annual Growth Rate (CAGR) in volume from 2020 to 2023.

The Purpose of the Ex-Post Market

The primary purpose of the Ex-Post Market is to provide a platform for market participants to trade out their imbalances before being invoiced by the Transmission System Operator (TSO) (TenneT, in the Netherlands). This market operates within the broader power trading framework alongside the Day-Ahead and Intraday markets, playing a vital role in minimizing the risks and costs associated with imbalances. Participants have until 9:30 a.m. on the day following delivery to make the necessary corrections to their positions. In Europe, the Ex-Post Market is only active in The Netherlands and in Belgium.

How the Ex-Post Market Operates

Imbalances in power grids arise when there is a discrepancy between forecasted and actual electricity consumption or production. These imbalances pose significant challenges to grid operators and market participants. TSOs conduct regulation activities to ensure grid stability by managing these imbalances. These activities involve adjusting the generation and consumption of electricity in real time to match the actual demand, ensuring that the grid frequency remains stable. The regulation state for each Programme Time Unit (PTU) is determined by the TSO and can be one of the following:

• 0: Neither upward nor downward regulation
• +1: Exclusively upward regulation
• -1: Exclusively downward regulation
• 2: Both upward and downward regulation

In regulation state 2, where both upward and downward regulation are needed, there is a spread between buy and sell prices (dual pricing). This state creates a significant incentive for Ex-Post trading. After the delivery of electricity, market participants identify any imbalances between their forecasted and actual electricity consumption or production. These imbalances can result from unexpected changes in consumption patterns, unforeseen production levels, or other operational variances. Participants have the opportunity to trade these imbalances on the Ex-Post market before being invoiced by TenneT. They can buy or sell the excess or shortfall in electricity to align their contracted volumes with actual performance. This allows them to correct their positions and avoid potentially higher imbalance settlement costs imposed by TenneT. In the Ex-Post market, participants submit their offers to buy or sell the necessary volume of electricity per Regulation State 2 PTU to balance their positions. The trading platform matches these buy and sell offers based on price and volume. This trade occurs within a designated time frame: before 9:30 a.m. on the day following the delivery. By trading on the Ex-Post market, participants can settle their imbalances at more favorable prices compared to the imbalance prices set by TenneT. This dual pricing mechanism in regulation state 2 allows participants to trade out their imbalances, thus reducing their financial exposure. The selling party benefits from receiving a higher price, while the buying party pays a lower price compared to what would be invoiced by the TSO.

Shown above is a very simplified example of the Ex-Post Market workings. A more detailed example is available here.

The Impact of the Ex-Post Market

The Ex-Post Market offers several benefits, the most prominent being cost savings. In 2023, market participants collectively saved over €30 million through Ex-Post trading on Etpa's platform. The Ex-Post market creates a Win-Win scenario for those involved, making trading imbalances Ex-Post a no-brainer.

Conclusion

Etpa's platform is the premier marketplace for Ex-Post trading in the Netherlands, offering significant liquidity and consistent growth. By providing a mechanism for post-delivery adjustments, Ex-Post trading optimizes market dynamics and participant outcomes, reducing costs and enhancing efficiency. As the power market continues to evolve, leveraging Ex-Post trading mechanisms will be crucial for navigating its complexities effectively.

To learn more about the detailed workings behind the Ex-Post Market, read Etpa's Ex-Post Whitepaper.

Glossary

• Transmission System Operator (TSO): An entity responsible for the transmission of electricity across the main high-voltage networks.
• Imbalance: A discrepancy between forecasted and actual electricity consumption or production.
• Ex-Post Trading: A market mechanism that allows participants to adjust their positions after delivery to correct imbalances.
• Programme Time Unit (PTU): A time unit used for scheduling and balancing electricity, with 96 PTUs per day.
• Dual Pricing: A pricing mechanism where different prices are applied for buying and selling electricity imbalances.
• Market Participant: An entity involved in trading electricity in the market.
• Compound Annual Growth Rate (CAGR): The rate of growth of an investment over a specified period of time.