Q&A
Developing Pan-European Energy Markets
... With Dr. Hans-Bernd Menzel, CEO, European Energy Exchange (EEX)
The European Energy Exchange AG (EEX) is Europe’s leading energy exchange operating market platforms
for trading in power, natural gas, emissions and coal. This year, the exchange has continued to develop its product portfolio and established new indices and
information platforms with a push for many more, in particular in natural gas and emissions. The Exchange has also embarked on a new 5-year plan.
Guy Isherwood (GI) After a slight fall in derivatives trading activity in 2009 (especially by participants from the financial markets) how have volumes in traded and cleared products responded this year?
Dr. Hans-Bernd Menzel (H-BM) The financial market crisis had a visible impact
which naturally also affected the markets operated by EEX: 2009 was the first year in our history in which overall trading volumes declined slightly. However, while a lot of companies were in the ‘red’, due to key strategic measures put in place by EEX, we achieved a stable operating result in that year amidst demanding circumstances.
We now have more than 260 trading
participants from 21 countries admitted on EEX and EPEX Spot
In 2010, the EEX business has definitely picked up
speed again. We are systematically recording increased trade volumes and sales revenues across all markets – an increase which is mainly due to improved technical connectivity, successful product innovation, and extended trading services; but also in some respects to the return of confidence amongst financial institutions. Moreover, we see that the share of exchange traded volumes on the Power Derivatives Market has risen quite considerably.
GI: How has your membership developed this year and how has member connectivity improved? H-BM: We now have more than 260 trading participants from 21 countries admitted on EEX and EPEX Spot. What we observe is that existing participants increasingly seek to become active on more EEX markets such as in natural gas trading. The number of participants in the
38 December 2010
EEX gas market has risen to more than 90 from 76 at the beginning of the year. Our market participants use the EEX offering as a multi-commodity trading place and that is the direction we want to follow – towards a true energy exchange. On the technical side, we have made considerable
efforts to increase the overall connectivity of our trading system to match participants’ needs. In this respect, the measure of introducing a uniform GlobalVision interface [from Trayport] for both EEX spot and derivatives market was an important component.
GI: A strengthening of your human resources and a consolidation of structures was proposed. How is this developing? H-BM: At the end of this year we will have more than 100 employees. The basis for the next level development is therefore firmly in place – to invest more in strategic and customer relations issues, particular with regard to natural gas and emission rights.
GI: EEX’s business expansion strategy is underpinned on collaboration. How have existing and new alliances progressed in the last 12 months? H-BM: In the first half of 2010, cooperations – mainly clearing volumes at European Commodity Clearing AG (ECC) which derive from our partner exchanges – accounted for 20% of the overall turnover of the EEX Group. ECC has extended its clearing offer further: on the one hand by launching clearing and settlement for new partners such as the Hungarian Power Exchange, and on the other hand by expanding the product range of its existing partners. EEX will continue this co-operative approach. But, first
and foremost, we will concentrate on the development of our own markets and the competitiveness of our exchange products and services.
GI: Eurex customers have been able to trade and clear EEX Power Derivatives products through their existing infrastructure since last November. How has this affected your global trading network? H-BM: The extension of the product co-operation with our partner Eurex from emissions to power derivatives has widened the network of potential trading participants – in particular from the financial market sector. In terms of volumes we look forward to the forthcoming take-off and results yield.
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