3' MERCADO DE PRODUCCIN

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MAIN DEVELOPMENTS IN THE SPANISH ELECTRICITY
MARKET

• MARIA LUISA HUIDOBRO
• President and CEO
• COMPAÑÍA OPERADORA DEL MERCADO ESPAÑOL DE
  ELECTRICIDAD, S.A.

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LIBERALISATION PRINCIPLES IN SPAIN
LAW 54/1997 LIBERALISES THE ELECTRIC SYSTEM,
CREATES THE POWER PRODUCTION MARKET MANAGED BY
COMPAÑÍA OPERADORA DEL MERCADO ESPAÑOL DE
ELECTRICIDAD, S.A. (OMEL)

• PRODUCERS participates in free competence, with
  freedom to build new power plants. They submit
  bids to the market or trade directly with
  qualified consumers
• TRADERS participates in free competence they buy
  energy in the market to sell it to qualified
  consumers. The can buy energy from external
  agents from producers to incorporate it to the
  market.
• QUALIFIED CONSUMERS acquire energy through
  trading companies, directly in the market, or
  through bilateral contracts. Every consumer will
  be considered qualified on January 2003

ACCESS TO TRANSMISSION AND DISTRIBUTION NETWORKS
AT ACCESS TARIFFS OR MAXIMUM TOLLS APPROVED BY
THE GOVERNMENT

• MARKET OPERATOR receives electricity purchase and
  sell bids every day, obtains a matching price for
  each hour and is responsible for the ELECTRIC
  SYSTEM ECONOMIC MANAGEMENT
• SYSTEM OPERATOR is responsible for the electric
  system technical management

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PURCHASES BY RESELLERS, QUALIFIED CONSUMERS AND
EXTERNAL AGENTS
1998
1999
1999
2000
889.7
Energy at free prices (last week)
GWh (29.8 )
Total energy purchased (period)()
Total energy purchased (last week)
2,986.0
GWh
380,208.3
GWh
Excluding pumping and self-producers
Daily
Intraday
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POWER MARKET PARTICIPANTS
SELLERS
Self-production agent Special regime
Production agent
Selling External Agent
Phisical Bilateral Contract
OMEL
Qualified Consumer
Distribution agent
Reseller agent
Purchasing External Agent
BUYERS
Tariff Consumer
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DEMAND INTEGRATION IN THE MARKET

• More than 70.000 qualified consumers can access
  the market directly or indirectly annual
  consumption greater than 1 GWh. From July 2000,
  55 of the whole consumption is qualified
  consumers
• Currently 34 of the demand goes directly or
  indirectly to the market
• 80 of the energy liable to abandon tariff, is
  trading at free prices
• Important development of trading activity in a
  very competitive environment

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MAIN TOPICS

• INFORMATION
• INTERNATIONAL INTERCONECTION CONSTRAINTS AND NEW
  PARTICIPANTS IN THE MARKET
• FORWARD SUPPLY CONTRACTS IN ORGANIZED MARKETS
• METERING
• MARKET POWER AND COMPETITION

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INFORMATION

• EQUAL INFORMATION FOR PARTICIPANTS IN THE MARKETS
  AND FOR THIRD PARTIES
• AGREGATED DEMAND AND SUPPLY CURVES PUBLICATION

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COMMERCIAL CAPACITY (MW)
Source REE
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MEASUREMENT AND SETTLEMENT PROCESS
SIMEL analysis
Meter registers
Settlement
Main Concentrator

• Border points measurements
• Border points
• Losses
• International deviations
• Assignment of border points to units

Secondary Concentrator
System operator
Market operator
Participants
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MARKET POWER AND COMPETITION

• TEMPORARY LIMITATIONS TO DEVELOP NEW POWER
  STATIONS
• TEMPORARY LIMITATION FOR CONTRACTS BETWEEN
  PRODUCERS AND TRADERS
• NUMBER OF AGENTS