Flexnavet › WikiWiki ›Svk EPAD Auctions Q1 2026 and Trading Rules (2026)
Flexnavet
BläddraBrowse

Svk EPAD Auctions Q1 2026 and Trading Rules (2026)

Source Updated 2026-10-04 Cited by 1 page
Source details
Type
Report
Publisher
Svenska kraftnät
Published
2026

Two documents on Svenska kraftnät’s EPAD auctions (financial contracts that let market actors hedge price differences between Swedish bidding zones): (1) Svk’s quarterly summary for Q1 2026, an 11-slide Swedish deck; (2) the English trading rules for the auctions arranged by Svensk Kraftmäkling AB (SKM), valid from 19 December 2024. The quarterly deck’s charts carry no numeric values in the text (axes and series only), so only its written findings are used; the trading rules were read in full. Part of the quarterly deck’s charts (auction dates, participant counts, bid-to-cover, implicit tails) could therefore not be quantified here. The facts in these documents were first summarised in a single bullet on Flaskhalsinkomster; this page and EPAD Auctions carry the full account.

The programme

  • Since 7 February 2023 Svk has auctioned EPAD contracts equal to about 15% of the transmission capacity between SE2 and SE3 and between SE3 and SE4, for the bidding zones SE2, SE3 and SE4.
  • Purpose, in Svk’s words: to contribute to better hedging possibilities for market actors.
  • Products: monthly, quarterly and yearly EPAD contracts, listed at Nasdaq Oslo ASA (per the rules) and cleared at Nasdaq Clearing AB.
  • Q1 2026: six auctions, the first on 13 January 2026 (the charts show auction dates of 13 January, 10 February and 10 March).

Trading rules (valid from 19 December 2024)

  • Auctions are brokered by SKM (a broker of electricity derivatives authorised by the Swedish Financial Supervisory Authority); results are formalised at Nasdaq Oslo under the pre-trade-transparency exemption for block trades.
  • Who can take part: direct or indirect members of Nasdaq Clearing with a broker agreement with SKM and a broker appointment form lodged with Nasdaq, or a party that can show an agreement with a clearing member through which any allocated volume is cleared. Each participant must hold enough collateral at the time of the auction to cover its orders.
  • Orders: simple orders only; volume in 1 MW or multiples; price steps of 0.01 EUR/MWh; allocated volume in steps of 0.01 MW. The maximum order volume and maximum allocated volume per participant equal the volume Svk offers in the auction. Orders go to SKM by e-mail, Refinitiv Messenger or (exceptionally) phone, and are valid only with SKM’s confirmation.
  • Buy and sell auctions: in some auctions participants buy EPADs from Svk, in others they sell to Svk.
  • Coupled auctions: across each zone border (SE2–SE3, SE3–SE4) the auctions are coupled. Svk must buy at the same or a lower price than it sells at in the adjacent zone, and the volume Svk buys in one zone must exactly match the volume it sells in the adjacent zone, or the auction is not completed. If matches are possible in both directions only one direction is allocated: the one with the larger volume, or if equal, the larger price difference.
  • Pricing: marginal (pay-as-clear) pricing. Allocation is by price first; ties are broken by order timestamp (earlier first, unedited before edited), then pro rata among orders at the marginal price with the same timestamp.
  • Timing: orders accepted on the auction day from 08:00 to 10:00 CET (cancel or change until 10:00); results published at 12:00 CET on SKM’s and Svk’s web pages; clearing at Nasdaq Clearing before 12:00; confirmations from SKM after 16:00. The auction schedule (dates, products, volumes) is published in advance by SKM and Svk.
  • Fee: brokerage fee of 0.0075 EUR/MWh on allocated volume, for all participants including Svk; clearing fees apply separately.
  • SKM may postpone or cancel an auction in extraordinary circumstances; complaints must be made on the auction day. If the Swedish and English versions differ, the Swedish prevails.

Q1 2026 findings (Svk’s quarterly summary)

  • Participation: average of 25 participants per auction in Q1 2026, a positive long-run trend. Monthly contracts were the most popular all quarter, and the difference in interest between contract types grew.
  • Bid-to-cover ratio: for SE2/SE3 (snitt 2) it stays close to that for SE3/SE4 (snitt 4) and fell during the quarter. It is adjusted according to the auction terms and is not based on total order volume.
  • Implicit tails: the average long tails remain at a persistently high level, which Svk reads as more tactical bids: participants prioritising an allocation by bidding away from prevailing market prices. Svk’s quarter assessment: continued signs of tactical bids, but good price formation and high participation.
  • Move to Euronext: Svk says it could not fully analyse the continuous trading during the quarter because of the move to Euronext. (The trading rules above still name Nasdaq Oslo and Nasdaq Clearing; the rules version in hand predates the move.)
  • Market development, Cal-27 contracts (prices from Montel): higher volatility than the previous quarter; SE4 traded higher and SE2 lower at the end of the quarter. The SE2–SE4 spread fell early in the quarter and rose again in March, which Svk links in time to the war in Iran and higher LNG prices. 2025 ended with a slight narrowing and the year before showed an even spread.
  • Svk refers to its annual follow-up report on the EPAD auctions (published 2024) for the methodology behind tails and bid-to-cover; that report is not in the wiki.

Reading the numbers with care

  • The quarterly deck is a slide deck whose charts cannot be read as numbers from the text; only the stated findings above are reliable. The “six auctions” and the three auction dates on the chart axes are as stated, not reconciled (the deck does not say whether two auctions shared a date).
  • The rules are the December 2024 version; later amendments, including those following the move to Euronext, are not covered.
  • The attribution of the March spread rise to the Iran war and LNG prices is Svk’s own and is stated as a time association only.

Relevance to wiki topics

Cited by 1