Greek power futures liquidity hits high in 4Q22

Market: Electricity
09/01/23

Greek power futures liquidity on the European energy exchange EEX increased in December, bringing exchanged volumes in the last quarter to their highest in 2022.

Exchanged volumes totalled 221GWh last month, some 21GWh higher compared with traded volumes in November. This brought exchanged volumes in the fourth quarter to 645GWh, some 294GWh higher compared to the third quarter and at their highest quarterly total in 2022.

Volumes remained at a deficit to 2021, though narrowing to a 481GWh deficit in December from 1.1TWh in November. Despite the narrower deficit in December, volumes in the fourth quarter of 2022 were 8.9TWh below liquidity for the same period in 2021.

The Greek government introduced a new legislation at the end of August which obliges power suppliers to announce their retail power prices for the next month on the 20th day of each calendar month. This exposes suppliers to the risk of estimating inaccurate prices, thus increasing their hedging for the month ahead and supporting higher market liquidity, market participants told Argus.

The Greek month-ahead contract was the most liquid in the fourth quarter, with exchanged volumes totalling 505GWh. Argus will launch daily assessments of the Greek and the Bulgarian month-ahead contracts today.

The 2023 calendar contract also gathered interest during the fourth quarter, with volumes totalling nearly 53GWh, supported by yearly cross-border capacity auctions on the Jao platform in November and December. In the Greek-Italian borders, both directions sold at their highest ever price for 2023, with Italy-Greece selling at nearly four times the cost for 2022.

Despite their increase in the fourth quarter, Greek futures liquidity was significantly below 2021 levels, with total exchanged volumes in 2022 reaching around 2TWh, from 16.6TWh a year earlier. High initial margin payments, market volatility and regulatory uncertainty have weighed on the decreasing market liquidity in 2022, market participants have previously told Argus.

By Apostolos Tsarikas

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