EEX Q&A
with us. Recently, we signed a Memorandum of Understanding with our Paris-based partner exchange Powernext to combine our natural gas market activities and create a unique Pan- European gas offering focused on the physical and financial needs of the trading community. Subject to the customary regulatory and competition approvals, we are planning to offer trading in location spreads between the Dutch, German and French gas contracts on one platform, backed by Trayport technology. During the year 2011, we also succeeded in getting liquidity on the exchange.
“ ...we see more active participants, more
bids in the order book, tighter spreads, and increasing volume in out-of-hours
Our measures included market alerts, new volume incentives, and improved connectivity to Trayport by bringing our GV Portal solution into the market. This has had positive effects: we see more active participants, more bids in the order book, tighter spreads, and increasing volume in out-of-hours. By offering new services, such as ‘Trading Agents’ for gas, we opened up continental 24-7 gas operations to participants who do not have their own shift- trading desks.
”
(GI): EEX’s influence in carbon markets has developed considerably over the last 18 months. Can you summarise this and tell us what further initiatives you have planned? (SK): During the past year, the primary market auctions have been a main driver of our CO2 business. We have attracted a number of other public clients such as Czech Republic, Hungary and Lithuania and EEX was awarded with the contracts for the transitory auctions for Phase III of the EU ETS on behalf of Germany, the European Commission and the participating Member States. The auctions have a positive impact on our secondary market. Driven by the auctions, we see a higher interest from participants to become active in our CO2 secondary trading market. This is reflected by the open interest which has steadily grown since the beginning of the year. In the last 3 months, 10 more companies have been newly registered for our emissions market. During the year, we started a number of initiatives to attract more business – such as new emission products (i.e. ERUs, EUAAs and new CER Spot contracts). We launched volume incentive schemes, we gained new market makers, and introduced specialized and low-cost memberships (such as “emissions only” for the CO2 trading community.
54 December 2012
Together, EEX and Eurex offer their participants a platform for trading in CO2 emission allowances and take part in auctions through their existing infrastructure with a simplified admission process.
(GI): How has the “Transparency in Energy Markets” platform progressed and which countries do you expect to join in the future? (SK): In 2012, CEZ Group joined as a new cooperation partner so that the platform now covers German, Austrian and Czech generation data. Our special focus was to further develop the technology of the platform so that it can be easily and quickly expanded with additional data. Making the platform more flexible helps us include new data and integrate new countries – such as Bulgaria. By reporting Bulgarian generation data, the participating companies use the platform to implement their publication requirements under REMIT under which market participants are required to disclose insider information which is relevant for pricing in power and natural gas trading. We offer market participants throughout Europe the opportunity to fulfil their publication requirements under REMIT by using the transparency platform. Another fact which underlines the support of the platform is that we won the 2012 Transparency Award issued by the Florence School of Regulation. The Transparency in Energy Markets Platform has shown over the last three years how important this kind of systematic, well organized data dissemination is for the efficient functioning of energy markets. It also shows the potential and usefulness of more systemic and sophisticated EU-wide market monitoring.
(GI): There seems to have been a change in strategy regarding the clearing services you provide [through ECC]. Can you explain these? (SK): Yes, there is a change. ECC offers its clearing services to other exchanges or trading platforms, for example to the Prague-based PXE which has concluded a cooperation agreement with us. In addition, we have begun to become involved outside of Europe also. Together with EPEX SPOT and local partners based in Brazil and Turkey, ECC offers it know-how and helps developing emerging power markets. The new story is that ECC will expand its OTC clearing services. We are seeing a trend towards centralised clearing – not least because of the regulatory development and the obligation to settle OTC derivatives via a clearing house. For this reason, we will now offer new clearing services for energy products which are not offered on EEX or on our partner exchanges which will increase our coverage to further regions and commodities.
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