Power Asset Trading

During 2009, activities primarily focused on efforts to merge Atel and EOS asset trading operations and on the introduction of Switzerland's ancillary services market on 1 January. Thanks to timely preparation ahead of the liberalised Swiss market, Alpiq Trading was up and running from Day 1 and played a leading role in formulating the agreements and bids of the joint venture plants. The regulatory changes have eliminated certain obligations and created a new market. The technically limited liquidity of this market for ancillary services has resulted in mandatory market participation and a completely different way of managing power plants. Moreover, certain aspects of the new regime were already changed during the first year, necessitating continual adjustments and triggering heated political and regulatory discussions, both internally and externally.

Benefiting from market movements

Prices were characterised by sharp drops in the first quarter, followed by a calmer phase and then unexpected rises in the autumn due to the absence of precipitation and an unseasonably cold spell. This was compounded by the fact that price movements among the various countries could not always be predicted accurately and were sometimes surprisingly extreme. All these factors called for a highly flexible approach. Supported by its favourable positioning, Alpiq was able to benefit from the market movements, both from the fall in prices early in the year and from the opportunity to acquire annual capacities.

Focus on cross-border trading

At European level, projects aimed at regional cooperation and market coupling will bring about major changes in the marketplace. This means it is essential for Switzerland to be optimally integrated. A degree of market harmonisation can be expected, prompted by the need to avoid further distortion on spot exchanges and to address the growing problems of wind power feed-ins. Factors which will be key to the success of operations in and out of Switzerland will be the flexibility and effective integration of cross-border trading, and the ability of the new Swiss ancillary services market to overcome its teething troubles and gain critical mass.