Lead times and intraday trading procedure
Over the years, lead times for intraday trading have gotten shorter and shorter. For example, for trading within Germany, the lead time for each quarter-hour interval was reduced from 45 to 30 minutes on 16 July 2015. This has since been reduced to just five minutes in Germany. Lead times in Austria have come down from 75 minutes and are now 30 minutes prior to delivery. The EPEX spot market says this was caused by increased feed-in from fluctuating energy sources that make feed-in forecasting more difficult. To make portfolio management simpler, power traders were given the ability to trade with shorter lead times.
Intraday trading at the EPEX Spot opens at 3 p.m. on the previous day. This marks the start of continuous trading of hourly products and, since 9 December 2014, the opening auction of quarter-hour products. At the conclusion of the auction, quarter-hour products for the next day can be continuously traded from 4 p.m. The smallest tradable unit on the intraday market is 0.1 MW, which is the same minimum as the day-ahead market. The price of one megawatt-hour can range from -9,999 to 9,999 euros. As with day-ahead trading, intraday trading is anonymous and takes place on every day of the year. Power generated from conventional and renewable sources are treated the same and are traded without certificates of origin.
One main difference to day-ahead trading is the pricing on the intraday market. While day-ahead trades are related to market clearing price principles, where the last accepted bid sets the price for all transactions, the prices in intraday trading are set in a "pay-as-bid" process. This means prices are assessed in continuous trading based on each transaction that is completed.
This is why bid prices are often used in intraday trading. The result is that there are no fixed prices for products on the intraday market. It is much more common to have different prices for the same product depending on the time the trade occurs.
Since July 2018, quarter-hour blocks can also be traded on the EPEX Spot. According to statements from EPEX Spot, traders welcome the introduction of the block orders because it provides opportunities for arbitrage between the intraday and day-ahead auctions. In the future, it is theoretically possible that the currently rigid blocks will become more flexible and that larger and more intelligently-designed blocks will be possible.