Q&A
Developing Pan-European Energy Markets
... With Mikael Lundin, CEO of Nord Pool Spot
Nord Pool Spot runs the largest market for electrical energy in the world, offering both day-ahead and intraday markets to its participants. N2EX is the name of the UK power market
offering from Nord Pool Spot and NASDAQ OMX Commodities with NASDAQ OMX Stockholm AB the authorised clearinghouse.
The Nord Pool Spot group has offices in Oslo, Helsinki, Stockholm, Copenhagen, Tallinn and
London. 330 companies from 20 countries trade on the exchange.
Nord Pool Spot is owned by the Nordic transmission
system operators. In 2009 the group had a turnover of 288 TWh representing a value of EUR 10.8 billion
Guy Isherwood (GI) GI: After a slight fall in trading activity in 2009, Nord Pool Spot managed to increase its market share and remains the world’s largest energy exchange. How has trading developed this year?
Mikael Lundin (ML) ML: The day ahead trading at Nord Pool Spot has developed positively with a volume growth of 8% so far this year. The total volume traded in the Nordic market this year is closing in on 300 TWh. UK volume is also growing, and we are talking about 16 TWh in total volume traded (year to date). We are satisfied with these results, and expect to see further growth in 2011.
is important for us as part of our strategy, which has elements both of consolidation in our home markets and expansion into new regions.
GI: Since the launch in January you now have 19 members of N2EX. Has this met your expectations? ML: As of week 45, membership has grown to 21. We managed to attract the majority of main participants in the market at quite an early stage. This was essential in order to give new participants confidence that the major liquidity providers are committed to this market. We have seen a steady increase in membership, which has driven up volumes across both the auction and the prompt. We have spent 17 years building a market share
of more than 70% in the Nordic region and we are confident we will see N2EX grow substantially during 2011 and 2012. The market offering of a complete set of products (day ahead auction, prompt, spot and futures) will trigger further interest and help N2EX to capture larger parts of the market.
We have spent 17 years building a market share of more than 70% in the Nordic region and we are confident we will see N2EX grow substantially
GI: How has your membership developed this year and how has member connectivity improved? ML: 2010 has been a year of growth for Nord Pool Spot, despite the economic downturn in world markets. In addition to maintaining focus on the members of our Nordic home market, we have established new markets in Great Britain and Estonia. The growth in membership in Europe
46 December 2010
GI: The CWE price coupling combined with the CWE- Nordic Interim Tight Volume Coupling (ITVC) which took place last month was commuted successfully. What were your major challenges in this endeavour? ML: Nord Pool Spot has had a successful market coupling with Germany since last year, and the launch of the CWE-Nordic Interim Tight Volume Coupling did not imply any major changes for us. The next major change for us is the inclusion of NorNed in phase two, which will happen soon.
GI: Nord Pool Gas has been successful in the Danish and Swedish
markets. Tell us what is happening next? ML:
Energinet.dk and Nord Pool Spot intend Nord Pool Gas to become an important player in the European development and integration of gas markets. We recently hired a new CEO for the company who will lead Nord Pool Gas into a new phase of growth.
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