1. First results of Market Coupling in gas: the French experience SG-meeting GRI NW 25 November 2011 1 SG-meeting GRI NW – 25 November 2011

2. Main principles (1/2) 2SG-meeting GRI NW – 25 November 2011 Cooperation between the TSO & the gas exchange Accessible through the IT system of the gas exchange Specific to the continuous trading of the gas exchange

3. Main principles (2/2) 3SG-meeting GRI NW – 25 November 2011 Based on the implementation of a day ahead spread product between North and South market areas in France (May 2011) Possible intervention of all market players (bid / ask) on the spread product Firm interconnection capacity dedicated to the experimentation (GRTgaz is able to sell the spread product) & automatic matching of this capacity with best market orders (July 2011)

4. Generation of automatic orders (1/2) 4SG-meeting GRI NW – 25 November 2011

5. Generation of automatic orders (1/2) 5SG-meeting GRI NW – 25 November 2011 A market player is willing to buy 750 MWh at 24,050 €/MWh

6. Generation of automatic orders (1/2) 6SG-meeting GRI NW – 25 November 2011 A market player is willing to buy 750 MWh at 24,050 €/MWh A market player is willing to buy A spread product corresponding to a 750 MWh North → South gas flow at 24,050 €/MWh

7. Generation of automatic orders (1/2) 7SG-meeting GRI NW – 25 November 2011 A market player is willing to buy 750 MWh at 24,050 €/MWh A market player is willing to buy A spread product corresponding to a 750 MWh North → South gas flow at 24,050 €/MWh Possibility to buy 750 MWh at 24,250 €/MWh

8. Generation of automatic orders (2/2) 8SG-meeting GRI NW – 25 November 2011 BuyerSellerBuyer Nord → SudSeller Nord → SudBuyer Seller quantityprice quantity price quantity price quantity 75024,050 24,2001 0007500,2000,30050075024,250 24,500 500 1 00024,000 24,2502501 0000,1500,5507501 00024,250 24,6001 000 500 23,950 24,4007501 0000,050 50024,200 24,700 2 000

9. Generation of automatic orders (2/2) 9SG-meeting GRI NW – 25 November 2011 BuyerSellerBuyer Nord → SudSeller Nord → SudBuyer Seller quantityprice quantity price quantity price quantity 75024,050 24,2001 0007500,2000,30050075024,250 24,500 500 1 00024,000 24,2502501 0000,1500,5507501 00024,250 24,6001 000 500 23,950 24,4007501 0000,050 50024,200 24,700 2 000

10. Generation of automatic orders (2/2) 10SG-meeting GRI NW – 25 November 2011 BuyerSellerBuyer Nord → SudSeller Nord → SudBuyer Seller quantityprice quantity price quantity price quantity 75024,050 24,2001 0007500,2000,30050075024,250 24,500 500 1 00024,000 24,2502501 0000,1500,5507501 00024,250 24,6001 000 500 23,950 24,4007501 0000,050 50024,200 24,700 2 000

11. Generation of automatic orders (2/2) 11SG-meeting GRI NW – 25 November 2011 BuyerSellerBuyer Nord → SudSeller Nord → SudBuyer Seller quantityprice quantity price quantity price quantity 75024,050 24,2001 0007500,2000,30050075024,250 24,500 500 1 00024,000 24,2502501 0000,1500,5507501 00024,250 24,6001 000 500 23,950 24,4007501 0000,050 50024,200 24,700 2 000

12. Generation of automatic orders (2/2) 12SG-meeting GRI NW – 25 November 2011 BuyerSellerBuyer Nord → SudSeller Nord → SudBuyer Seller quantityprice quantity price quantity price quantity 75024,050 24,2001 0007500,2000,30050075024,250 24,500 500 1 00024,000 24,2502501 0000,1500,5507501 00024,250 24,6001 000 500 23,950 24,4007501 0000,050 50024,200 24,700 2 000

13. Before the experimentation 13 SG-meeting GRI NW – 25 November 2011 Price of the N > S interconnection

14. First results of the experimentation Capacity used for market coupling : N → S in July & August S → N in September 5,6 GWh/d capacity used in average / 10 GWh/d capacity available for Market coupling (5% of firm capacity) Very low price for capacity (0,027 € / MWh) 14SG-meeting GRI NW – 25 November 2011 Available capacity N → S Available capacity S → N

15. First results of the experimentation Capacity used for market coupling : N → S in July & August S → N in September 5,6 GWh/d capacity used in average / 10 GWh/d capacity available for Market coupling (5% of firm capacity) Very low price for capacity (0,027 € / MWh) 15SG-meeting GRI NW – 25 November 2011 Used capacity N → S Used capacity S → N

16. First results of the experimentation Capacity used for market coupling : N → S in July & August S → N in September 5,6 GWh/d capacity used in average / 10 GWh/d capacity available for Market coupling (5% of firm capacity) Very low price for capacity (0,027 € / MWh) 16SG-meeting GRI NW – 25 November 2011 Spread N / S Selling price for interconnection capacity

17. Impact on liquidity 17 SG-meeting GRI NW – 25 November 2011

18. Impact on price convergence 18 SG-meeting GRI NW – 25 November 2011 N / S spread (End Of the Day) & selling price of N/S interconnection N/S Spread Selling price N/S interconnection

19. Conclusion & next steps 19 SG-meeting GRI NW – 25 November 2011 Confirmation of the positive impact on market liquidity & price convergence Limited amount of capacity needed for the experimentation (planned increase up to 15 GWh/d) – to be analyzed / recent development in the south market area in France (Fos Cavaou LNG terminal in operation) Importance of market players active on the gas exchange First results to be confirmed by analyses later on

20. Thank you for your attention 20 SG-meeting GRI NW – 25 November 2011