The document introduces Guarantees of Origin (GOs) trading on the European Energy Exchange (EEX). It discusses: 1) EEX's efforts to standardize and introduce exchange-traded GO futures contracts to bring transparency to the market, with products bundled by region and technology. 2) The current characteristics of the opaque, bilateral GO trading market with fragmented rules and a lack of price transparency. 3) Perspectives on the future development of the growing 250 TWh GO market, including changes in national support regimes and disclosure rules that could impact prices.

1. Copyright 2014 – All rights reserved
Steffen Riediger – Senior Expert Product Development & Projects
Introducing GOs in the European
Commodity Market

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Contents
Page 2
1. EEX Group – a brief overview
2. Current characteristics of GO trading
3. Standardization of GO trading and introduction of exchange-
traded futures at EEX
4. Perspectives on the future development of the GO market

3. Copyright 2014 – All rights reserved
• The European Energy Exchange (EEX) develops, operates and connects
secure, liquid and transparent markets for energy and related products.
• EEX holds 50 percent of the shares in the Paris-based EPEX SPOT SE
which operates the Spot Market for power for delivery in Germany, France,
Austria and Switzerland.
• German and French power derivatives trading is concentrated within
EEX Power Derivatives GmbH, a majority-owned EEX subsidiary based
in Leipzig.
• Furthermore, EEX organises trading markets for natural gas, CO2 emission
allowances, coal and Guarantees of Origin.
• Clearing and settlement of all transactions is done by European Commodity
Clearing AG (ECC), the clearing house of EEX and its partner exchanges.
EEX at a glance

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Spot Market Derivatives Market
Trade Registration
for Clearing
Fully integrated clearing and cross-margining via ECC
Power (EPEX SPOT)
Day ahead auction (D/A, F, CH)
Intra-Day (D/A, F)
Power
Phelix-Futures
French/Dutch/Belgium Futures
Options on Phelix-Futures
Power
Corresponding products
Power Futures for Italy, Spain,
Switzerland,Scandinavia and Romania
Natural Gas
Day ahead and Within-day
(NCG, GASPOOL, TTF)
Emission Allowances
Secondary Market for EUA and CER spot
contracts
EUA Primary Auction Spot
Guarantees of Origin
Nordic Hydro
Alpine Hydro
Central Northern Europe Wind
Natural Gas
Physical Futures
(NCG, GASPOOL)
Emission Allowances
Secondary Market for EUA,
EUAA, CER and ERU Futures
EUA Primary Market Derivatives
Coal
Financial Coal Futures (ARA, RB)
Natural Gas
Corresponding products
NBP Gas Futures
Emission Allowances
Corresponding products
Guarantees of Origin
Corresponding products
Coal
Corresponding products
Euro-denominated futures (ARA,RB)
EEX Overview: Markets and Products

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Contents
Page 5
1. EEX Group – a brief overview
2. Current characteristics of GO trading
3. Standardization of GO trading and introduction of exchange-
traded futures at EEX
4. Perspectives on the future development of the GO market

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Current characteristics of GO trading -
What is a GO supposed to be?
Page 6
Guarantees of origin issued for the purpose of this Direc­tive have the sole
function of proving to a final customer that a given share or quantity of
energy was produced from renewable sources. A guarantee of origin can be
trans­ferred, independently of the energy to which it relates, from one holder to
another.
Directive 2009/28/EC, fig 52

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Increasing number of labels
Current characteristics of GO trading -
How does GO trading look like today
Page 7
Intransparent, bilateral trading
What is the fair price for a GO on wholesale level today?
Fragmented market (by region,
technology, plant age etc)
Different disclosure rules on
national level
Emergence of new business
models, e.g. ECOHZ GO2
Connection of GO and
physical power delivery

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Contents
Page 8
1. EEX Group – a brief overview
2. Current characteristics of GO trading
3. Standardization of GO trading and introduction of exchange-
traded futures at EEX
4. Perspectives on the future development of the GO market

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Standardization of GO trading –
EEX efforts to introduce GOs as commodities
Page 9
There is a demand for a transparent and trusted GO price on wholesale level.
EEX wants to shape the GO wholesale market by offering standardized GO
futures with commonly accepted reference prices.
A parallel can be drawn to the
Carbon market - another book and
claim mechanism - which is
standardized, liquid and transparent.
Trusted reference prices are
established at exchanges (EEX and
ICE).
In 2012 and 2013 EEX conducted a
survey among 40+ clients to identify a
common product specification for
exchange-traded GO futures.
The feedback and the clients
requests ranged from „one-fits-all“ to
„as diverse as possible“.

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Standardization of GO trading -
Bundling by region and technology
Page 10
 Nordic Hydro
 Alpine Hydro
 Continental Europe Wind

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Standardization of GO Trading -
GO Futures listed at EEX
GO Futures
Nordic Hydro Power
GO Futures
Alpine Hydro Power
GO Futures
Continental Europe Wind
Power
Tradable
maturities
December (up to 3 years ahead)
March (up to 3 years ahead)
Valid production
period
December expiry: January – December of current calendar year
March expiry: April – December of previous calendar year
Public Support Code 0 – no support Code 0 – no support Code 0, 1, 2, 3 or 4
Contract Volume 1.000 GO’s
Tick Size Three decimal digits after the point; this corresponds to € 0.001 per GO.
Minimum Price
Change
1,00 € per contract
Trading model Continuous trading with shortened trading hours (currently every Thursday 1:00pm – 4:00pm)
Fulfilment Delivery of GO’s via ECC account at Grexel Finland upon expiry
EEX is setting a new market standard for GO trading by grouping
countries, production periods and expiries to standardized products.

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Trading volumes of EEX GO Futures
Page 12
As of 28 February 2014

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Contents
Page 13
1. EEX Group – a brief overview
2. Current characteristics of GO trading
3. Standardization of GO trading and introduction of exchange-
traded futures at EEX
4. Perspectives on the future development of the GO market

14. Copyright 2014 – All rights reserved Page 14
 250 TWh were traded in 2013, the market is still growing and mature enough to
be standardized
 Change in national disclosure rules – Will Norway keep selling its hydro GOs to
Continental Europe in the future? Will we see a monthly disclosure cycle in the
future?
 Aland court case – will there be a fundamental change in national support
regimes?
 More countries joining the AIB hub – will we see even lower prices with more
GO volumes coming to the market?
 Discussion on using GOs for all energy sources (CEER, UBA…)
Market development perspectives

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EEX GO improvements in 2014
 As of February, 12 members are admitted to the EEX GO market. Additional
members are currently in admission process.
 EEX has introduced a new membership type “Environmental Markets” that
allows trading of GO Futures for an annual fee of 2.500 EUR only. The first
year of membership is free of charge.
 On the background of the significant drop of market prices, EEX wants to
support market participants by waiving the trading fees until end of 2014.
Trading participants will only have to pay clearing fees of 0.0025 EUR/MWh
EEX is committed to develop a liquid and transparent wholesale
market for Guarantees of Origin.

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Thank you for your attention.