OTE, a.s.

1. Overview on modifications in OTE-COMrelated to the upcoming go-live of the single intraday market OTE, a.s.

2. Overview on modifications in OTE-COM Obsah • Introduction • XBID Technical solution • Modifications in OTE-COM • Products • Block contracts • Modification of bids • Trading basket • ATC and H2H matrix • Batch matching • Financial security • Automated communication • Fallback IM market • Next steps Strana: 2

3. Overview on modifications in OTE-COM Introduction • Market Integration = Market Coupling = Implicit Allocation • Trading common for several market areas at the same time, without the need of explicit allocation of cross-border transmission capacity • Replacing the explicit allocation of cross-border transmission capacity • Leading to the foundation of the single European intra-day market with electricity – Single Intra-Day Coupling (SIDC), which is the main aim of the Commission Regulation (EU) 2015/1222 of 24th July 2015 on establishing a guideline on capacity allocation and congestion management (CACM) Strana: 3

4. Overview on modifications in OTE-COM Introduction • 2004 – Opening of the trading on the OTE‘s Intraday Market • 2012 – Launch of the XBID Project (Cross-Border Intraday Coupling) with the aim „to create joint cross-border implicit trading on intraday European market“ – more information about XBID Project available here. • 2016 – Implementation of the trading platform OTE-COM in the OTE‘s system in order to prepare for the second go-live of the single intraday market • 6/2018 – First go-live of the single intraday market (see the picture) • Q4/2019* – upcoming second go-live of single intraday market in which Bulgaria, Croatia, Poland, Romania, Slovenia and the Czech Republic connect their markets to market areas coupled already in the first wave • Countries already coupled • Countries preparing for the second go-live * Exact date will be announced in upcoming days Strana: 4

5. Overview on modifications in OTE-COM XBID Technical Solution • XBID technical solution is based on a common central IT system which aggregates bids from local trading systems operated by nominated electricity market operators (NEMOs), as well as available cross-border transmission capacities between bidding zones provided to the common XBID system by local transmission system operators (TSOs) • Traders insert their bids and participate in trading within the local trading system of each NEMO • OTE‘s local trading system (OTE-COM) • Shows available cross-border transmission capacities • Receives and validates bids • Presents available offers (not only from the CZ market area) • Manages matched trades • XBID System • Updates current available cross-border transmission capacities • Receives and validates bids from local trading systems • Generates information about available matches • Matches offers • Provides information about matched contracts to local trading systems • Market Participant • Access the intraday market • Submits bids to local trading system • Receives trading results Strana: 5

6. Overview on modifications in OTE-COM Modification in OTE-COM • The intraday electricity market in the Czech Republic will be still operated within the OTE-COM trading platform • IM will be organized: • As a primary IM allowing an implicit trading within SIDC, or • As a fallback IM only for the Czech bidding zone, i.e. without the implicit trading (see the slide 19) – in cases when the primary IM is not available and implicit trading cannot be performed • With the integration of the existing local intraday market to the interconnected European intraday market (SIDC), based on the XBID technical solution, cross-border transactions can be realized directly without the need to book cross-border capacities Strana: 6 * Do výše dostupné přeshraniční kapacity

7. Overview on modifications in OTE-COM Modification in OTE-COM • OTE-COM will now also display bids from foreign market areas* together with bids entered into the OTE system (without distinction of the market of origin) • Bids placed in the OTE system will be visible* in other foreign exchange systems. * Only up to a current available cross border transmission capacity Strana: 7

8. Overview on modifications in OTE-COM Modification in OTE-COM • Modifications in OTE-COM concern in particular the following areas: • Modifications in OTE-COM do not concern for example the following areas: • Interface of the OTE-COM • Log in to OTE-COM • Certificates needed for accessing OTE-COM • Registration in the OTE‘s system • Clearing of trades Strana: 8

9. Overview on modifications in OTE-COM Products • The following XBID Product will be defined and traded in the OTE-COM: • In case of unavailability of the primary market and activation of the fallback intraday market, there will be the so-called fallback IM products, which are defined in the same way as XBID products, but are matched only locally (see slide 21) * Modifications in comparison to the current version of OTE-COM Strana: 9

10. Základní přehled změn v OTE-COM Block contracts • It will be possible to define block contracts in the primary market, which: • stretch over two consecutive days of delivery, • have maximum length of 30 hours. • Block contracts will continue to be displayed in the „Block Contract Summary“ panel, as currently in OTE-COM 1. day of delivery 2. day of delivery = 28hour block contract (delivery from 1st hour of day 1 to 4th hour of the next day) Block contract 01-T04 Strana: 10

11. Overview on modifications in OTE-COM Modifications of bids/ Bulk management of bids • Generally the modification of bids is possible regardless of a status of a bid. It is possible to modify: • Type of a bid (from a limit bid to Iceberg and vice versa)* • Volume of a bid • Displayed quantity (in case of Iceberg bid) – limited on 5 MWh* minimum • Price • Change of price (in case of Iceberg bid) – limited on max. ±0,05 EUR/MWh* • Execution restriction (in case of a limit bid) • Time restriction (has to be filled in 5 minutes resolution) • In the case of a bid modification that affects the priority of a request (such as an increase in quantity, price change, execution restriction or bid activation) or when the bid is active, a new bid ID is issued(i.e. the original bid is cancelled and a new bid is automatically created with its own new ID). • The original bid ID will also be visible for a market participant * Modifications in comparison to the current version of OTE-COM Strana: 11

12. Overview on modifications in OTE-COM Basket • The system will allow for a bulk management of bids in a basket by execution restrictions defined for the whole basket: • Unlimited (NONE) • No execution restriction is applied • All bids in a basket will be executed as if they were entered into the basket separately • If one bid fails in the validation procedure other bids in the basket will not be affected • Linked bids (LINKED) • All bids in the basket must be traded immediately and in full after successful validation (FOK restriction) • If one bid of a given basket cannot be fully matched all other bids in the basket will be deleted • This restriction can only be set if the Iceberg bid has not been added to the basket (FOK restriction is not supported for Iceberg offers) • Valid bids (VALID) • Each bid needs to successfully undergo validation in order to have all bids added to the matching system Strana: 12

13. Overview on modifications in OTE-COM Basket Strana: 13

14. Overview on modifications in OTE-COM ATC matrix • ATC matrix displays the available transmission capacity values​​on individual transmission profiles between delivery areas for a given hour and a given delivery day • The data will be available to market participants in the “ATC Data” report in OTE-COM • The data in the matrix will be automatically updated as needed ATC = Available Transfer Capacity Strana: 14

15. Overview on modifications in OTE-COM Hub2hub matrix • The Hub2hub matrix displays the available transmission capacity values ​​between all interconnected market regions • the XBID system determines the data based on current ATC data and the interconnection topology of each connected region • The matrix will be available to market participants in OTE-COM, in the “Hub-to-hub matrix” set up • It will be possible to limit the number of displayed market areasin the matrix in OTE-COM • The data in the matrix is being automatically​​ constantly updated Strana: 15

16. Overview on modifications in OTE-COM Batch matching • Batch matching is implemented in the XBID technical solution for situations when transmission capacities on cross-border profiles increase and other suitable bids could be potentially traded through the extended cross-border profile • In these cases batch matching is launched automatically • Continuous matching is suspended during batch matching, new bids are aggregated in the queue and are handled according to standard continuous matching rules after finalization of batch matching • Pricing rules in batch matching are different from those in continuous matching, depending on the limit prices of bids entering into this "auction" and on the regional prices in which bids were placed • Resulting price applies for all trades matched during the session of batch matching • Market participant is informed about launch and finalization of batch matching in audit log Strana: 16

17. Overview on modifications in OTE-COM Financial security • As a result of integration of intraday markets financial collaterals will be managed biphasicaly in some cases: • The impact on financial security is re-evaluated with each new order issued by one market participant (such as bid submission, bid modification etc.) according to the following rules: • Should the new order increase the amount of available funds from the financial security, the change of utilization will not be made yet and the original version of the order will remain secured. The change of collateral takes place only upon the confirmation from the XBID system. • Should a new instruction reduce the amount of available funds from financial security, the change of utilization is made immediately. • Financial security for block contracts over one day (more than 24 hours) is managed specifically Strana: 17

18. Overview on modifications in OTE-COM Automated communication Testing with market participants • In relation to planned changes to the intraday electricity market a new specification of the automatic communication interface and automatic communication message templates will be published on the OTE‘s website in course of August 2019. • We will inform you in advance about the testing of the automatic communication channel, the availability of the testing environment and further details (see slide 22). Strana: 18

19. Overview on modifications in OTE-COM Organization of IM without implicit trading • In case of planned shutdowns or failures of the single intraday market, based on XBID system (primary market) OTE may apply various fallback procedures one of which is launch of a local fallback IM market • The fallback IM is governed by the same principles and rules described in Business Terms of OTE and in the User Manual as in the case of IM allowing implicit trading. • Compared to IM allowing implicit trading, the fallback IM does not provide all functionalities (see further) • Both markets, IM allowing implicit allocation and fallback IM, are available via OTE-COM Strana: 19

20. Overview on modifications in OTE-COM Fallback Intraday Market • Market participants will be informed about switching from primary to fallback IM market in the “Market overview” tab of the OTE-COM. • XBID disconnected – trading suspended (when the primary market connected to XBID is not available and fallback IM has not been launched yet) • XBID disconnected – fallback local IM products (when the fallback IM is activated) Strana: 20

21. Overview on modifications in OTE-COM Fallback Intraday Market • Fallback IM slightly differs from the primary market connected to XBID in several parameters: • When trading on the fallback IM market, bids can only be matched locally, i.e. it will not be possible to trade cross-border • The fallback local IM product, which is defined similarly to the "XBID product" (see slide 9) will be activated for the fallback IM market. • Block bids over two days of delivery cannot be placed on the fallback IM market, block bids can only be submitted within one delivery day, i.e. for a maximum of 24 hours • When the fallback IM is activated, the execution restriction “NONE” will be automatically set for the whole basket, i.e. no execution restriction will be set for the given basket. • When fallback IM is activated: • bids placed in the IM with implicit allocation cannot be managed, modified or cancelled any more • new bids will have to be submitted (using fallbeck IM products) • Batch matching is not performed on fallback IM • The financial security procedures for activation of the back-up market operate in a similar way as they have been until now. • More details on functioning of the Fallback IM will be provided during the training for market participants (see the following slide) Strana: 21

22. Overview on modifications in OTE-COM Next steps • More information can be also found on OTE‘s website, in Project XBID tab, or on the NEMO Committee website, in SIDC tab. • The exact date of second go-live will be specified in a near future in relation to results of currently ongoing functional tests and readiness of all parties. • During September, market participants will be informed about possibilities to test modifications in the OTE-COM and about the schedule for individual and joint testing. Strana: 22

23. Thank You for your attention… OTE, a.s. - Provider of comprehensive services for the Czech electricity and gas market: • Reliable processing and exchange of data and information in the energy sector through the Centre of Data and Information Services, 24 hours a day, 7 days a week. • Organization of the short-term electricity and gas market. • Clearance and financial settlement of imbalances between the contracted and the actual electricity and gas supplies and purchases. • Provision of technical and organizational backup for the change of the electricity and gas supplier. • Administration of the national registry for trading of greenhouse gas emission units and allowances. OTE, a.s. Sokolovská 192/79 Prague 8 Czech Republic Tel.: +420 296 579 160 www.ote-cr.cz market@ote-cr.cz xbid@ote-cr.cz