European Energy Exchange AG

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European Energy Exchange
Image:EEXlogo.jpg
Founded 2002
Headquarters Leipzig, Germany
Key People Hans-Bernd Menzel holds the positions of chief executive officer of the European Energy Exchange AG (EEX) and managing director of the exchange.

Iris Weidinger holds the position of the group chief financial officer.

Products Spot and derivatives trading regarding power, natural gas, emission allowances and coal futures
Web site http://www.eex.com/en

The European Energy Exchange (EEX) is a fully regulated energy exchange offering spot and derivatives trading of power, natural gas, emission allowances and financially settled coal futures. Clearing and Settlement of the transactions is ensured by an independent clearing house – European Commodity Clearing AG (ECC AG) - an EEX subsidiary.

EEX and Powernext announced details of their cooperation in May 2008, bringing together two of Europe's top power markets. Under the agreement, power spot markets in Austria, France, Germany and Switzerland will be merged into a new entity based in Paris. Derivative markets for those countries will be run out of Leipzig, the current headquarters of EEX.[1] Clearing and settlement of all products will be done by European Commodity Clearing AG (ECC).

Contents

History

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  • With ECC AG - a subsidiary of EEX AG which was spun off in 2006 – EEX has a clearing house safeguarding a secure and professional settlement of the transactions. In this process, ECC also takes into account the effect to reduce the total of the margins to be furnished (e.g. cross margining).
  • On Feb. 27, 2008 Deutsche Boerse said it would increase its stake in EEX to up to 44 percent for as much as 55 million euros ($82.7 million). Deutsche Boerse's Eurex unit, which trades options and futures, planned to buy 3.5 percent of EEX from the power bourse for 9.15 million euros ($13.76 million). It also agreed to buy Nord Pool's stake of 17.4 percent for up to 46 million euros. Both transactions were expected to close in the second quarter of 2008.[5]
  • On May 30, 2008, EEX AG and Powernext SA held their first joint press conference in Brussels. On this occasion, EU Energy Commissioner Andris Piebalgs welcomed the intense cooperation between both exchanges: “I am pleased to stand here today and be a witness to an important agreement, which, I hope, also means great progress for the European electricity market. Efficient power exchanges are indeed an issue that the European Commission’s energy policy for Europe recognized as a key requirement for a well-functioning electricity market."[7]


Products and Services

Power

On every exchange trading day, auctions and continuous trading for power – with delivery in Germany, Austria and Switzerland on the next day – take place on the spot market. In September 2006, EEX launched intra-day trading, which takes place around the clock.

Intraday/Spot

In intraday trading on EEX, power contracts with delivery on the same or on the following day are traded. On account of an increased demand, trading participants buy additional capacities of electricity or sell excess capacities - trading participants can trade hourly deliveries of power up to 75 minutes before the beginning of the hour concerned. In this way, it is possible to take very short-term influences on the forecasted profiles into account and to avoid discrepancies in schedule management. This contributes to the minimization of balance energy costs.[8]

Day Ahead

On the day-ahead market, power is traded for the next day. The trading participants use the day-ahead market to optimize the procurement and sale of quantities of electricity in the short term. The bids of the hourly auctions allow different buy and sell quantities to be placed at different respective prices in the auction. In this case, the executed quantity depends on the auction price established. EEX offers day-ahead trading for two market areas: for Germany/Austria and for Switzerland.[9]

Phelix Futures

The Phelix Future is a financial futures contract which refers to spot market prices for power – more specifically to the EEX Index Phelix – of future delivery periods. On the EEX derivatives market, Phelix futures are traded for the current month, the next six months, seven quarters and six years. Base load and peak load futures are traded. The underlying security is either the Phelix Base Load or the Phelix Peak Load.[10]


Natural Gas

In July 2007 EEX launched natural gas trading on the spot and derivatives market.

Day Ahead

On the day-ahead market, natural gas is traded for the next and next-but-one day. The day-ahead market is used for the short-term optimization of the procurement and sale of gas quantities. EEX offers day-ahead trading for two market areas: BEB Natural Gas Day Contracts and EGT Natural Gas Day Contracts.[11]

Gas Futures

On the derivatives market, natural gas is traded for the current month, for the next six months, the next seven quarters and the next six calendar years. The derivatives market is used for medium-term optimization of the procurement and sale of quantities of gas. On every exchange trading day, continuous trading of BEB Natural Gas Futures Contracts takes place for the BEB market area. On every exchange trading day, continuous trading of EGT Natural Gas Futures Contracts takes place for the E.ON GT market area.[12]


Emission Allowances

Spot and Derivatives

Since 2005, EEX operates both spot and derivatives markets in emission allowances.[13]

EEX and Eurex Join Forces in CO2 Trading

Since December 2007, EEX and Eurex have been successfully cooperating in emissions trading. The alliance combines EEX’s energy market membership and connectivity to the European power trading community with Eurex’s financial market membership and global distribution network. The cooperation initially started with trading of the already available EUA Futures on EEX for the Kyoto phase 2008-2012.

Coal

Coal Futures

EEX offers exchange trading of coal futures and over-the-counter clearing of coal swaps. Amsterdam-Rotterdam-Antwerp and Richards Bay coal futures can be traded. Month futures are settled financially against the API 2 and API 4 indices.[14]

Key People

Since Nov. 1, 2002, Hans-Bernd Menzel has held the positions of EEX chief executive officer and managing director of the European Energy Exchange in Leipzig. Prior to his appointment, he was a managing partner of a well-known management consultancy in Frankfurt.

Iris Weidinger, who previously held the position of chief representative, is group chief financial officer (CFO) with the divisions of finance, controlling and human resources for the group. In August 2008, she was appointed to management board of the holding company.


References

  1. ↑ EU's Piebalgs greets EEX/Powernext deal as step towards well-functioning market. ThomsonReuters. Retrieved on June 5,2008.
  2. ↑ "Date Set For German Power Bourse Merger". Power Engineering International. Retrieved on March 1, 2008.
  3. ↑ Press Release. ECC. Retrieved on March 1, 2008.
  4. ↑ Press Release. Eurex. Retrieved on March 1, 2008.
  5. ↑ "UPDATE 1-Deutsche Boerse to buy Nord Pool's EEX stake". Reuters. Retrieved on March 18, 2008.
  6. ↑ Press Release. EEX. Retrieved on March 1, 2008.
  7. ↑ Press Release. EEX. Retrieved on July 16, 2008.
  8. ↑ Intraday. EEX. Retrieved on March 19, 2008.
  9. ↑ Day Ahead. EEX. Retrieved on March 19, 2008.
  10. ↑ Phelix Futures. EEX. Retrieved on March 19, 2008.
  11. ↑ Day Ahead. EEX. Retrieved on March 19, 2008.
  12. ↑ Gas Futures. EEX. Retrieved on March 19, 2008.
  13. ↑ EU Emission Allowances And EU Carbon Futures. EEX. Retrieved on March 19, 2008.
  14. ↑ Coal Futures. EEX. Retrieved on March 19, 2008.

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