Developing Pan-European Energy Markets
Q&A ... with Peter Reitz, CEO, European Energy Exchange
European energy markets enjoyed a mixed year in 2011 amid slower economic growth and debt crises as the focus turned to renewed offerings for counterparty risk management and greater regulatory oversight. The European Energy Exchange (EEX) has been at the forefront of initiatives to develop products and markets as it continues its expansion towards a truly pan-European offering.
Guy Isherwood (GI – Editor, Commodities Now) Peter Reitz (PR)
GI: Peter, you were appointed CEO of EEX in August 2011. What attracted you to the role? PR: EEX and its business was not completely new to me. Before joining the management board I was already a member of the Supervisory Board, since 2007. The energy sector is a very dynamic industry, and the markets in which EEX operates are still relatively young, they are still developing. We operate in a very challenging external environment and that is part of what I found interesting about the role. In essence we can actually shape and influence the European energy trading and clearing landscape. To steer this strategy is very attractive and interesting for me.
GI: You have also decided to remain as a board member of Eurex, who are based in Frankfurt. How will you manage this personally, will you commute between Frankfurt and Leipzig? PR: I am currently in the process of moving from Frankfurt to Leipzig as ultimately I will spend most of my working week there. Of course, as a board member of Eurex, I will have a lot of work and responsibilities in Frankfurt and also in London, where a significant amount of our customers from the energy and financial industries are based. The multiplicity of my role fits in well with our overall objectives for all the organisations. On one hand I will use my experience gained in the financial sector, while on the other I can represent the interests of EEX in the parent company.
GI: What would you say are the key objectives of Eurex’s acquisition of EEX? PR: EEX had already been working closely with Eurex in emission allowances since December 2007. By becoming the majority shareholder of EEX, Eurex
was able to fulfil its overall objective which is to enter new asset classes and widen the traditional focus on financial market products. The financial and physical markets are growing together these days, particularly in derivatives trading. EEX’s broad portfolio of power,
natural gas, CO2, coal products and on the Spot and Futures markets, coupled with its Clearing offering, makes it well positioned within the energy landscape. Moving forward, EEX will handle all aspects of energy trading within the Eurex Group and Leipzig will continue to be the centre of excellence in energy trading and settlement.
GI: 2011 was another challenging year for the European energy sector in many respects. How would you define EEX’s performance? PR: In terms of sales and profit, 2011 was yet another record year for EEX. We succeeded in expanding and consolidating our position as the major energy exchange in Europe, despite a degree of uncertainty from our participants mainly due to the turnaround of German energy policy. In the various business sectors within EEX, we made significant developments in order to pave the way for our successes. The willingness to establish a long term position in the
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The financial and physical markets are growing together these days, particularly in derivatives trading
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uncertain energy trading environment declined and moved towards a more short term approach to power and gas trading. Due to a shift of trading activity towards shorter terms the total trading volume on our Power Derivatives Market went down. But in this market segment we gained 30 new trading participants and increased the share of exchange traded volumes to 46% as against 40% in 2010.
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