European Energy Exchange AG
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| European Energy Exchange | |
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| Founded | 2002 |
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| Headquarters | Leipzig, Germany |
| Key People | Peter Reitz, Steffen Köhler, Iris Weidinger, Christoph Mura |
| Employees | 130 |
| Products | Spot and derivatives markets for power, natural gas and emission allowances; financial coal futures |
| Corporate Website | http://www.eex.com/en |
The European Energy Exchange (EEX) is a regulated energy exchange that operates spot and derivatives market platforms for trading in energy and energy-related products such as physical electricity, emissions and contracts on natural gas and coal.[1] The exchange is majority owned by Eurex.[2]
EEX uses the Eurex trading platform for its Derivatives Markets. The EEX Spot Markets are operated on the trading systems Xetra and ComXerv.
All exchange trades and OTC trades registered on the exchange are cleared and settled through the exchange's clearing house, European Commodity Clearing AG ECC. The ECC is a clearing house that specializes in the physical settlement of energy and clearing partner for six European exchanges.
Since 2008, the exchange works in partnership with the French Powernext. In the course of this cooperation the partners integrated the power spot and derivatives markets.
Contents |
History
- The current EEX emerged as a result of a merger between LPX Leipzig Power Exchange and the Frankfurt-based EEX in 2002.[3]
- With ECC AG - a subsidiary of EEX AG which was spun off in 2006 – EEX has a clearing house safeguarding 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 July 4, 2006, the European Energy Exchange AG (EEX) and the Amsterdam-based ENDEX European Energy Derivatives Exchange N.V. (today: APX-ENDEX Group) announced they would co-operate in the settlement of energy trading transactions.[4]
- In 2007, the power spot trading company of EEX was spun off into an independent company called EEX Power Spot GmbH, wholly owned by EEX. In 2008, the derivatives market has also been spun off into an independent subsidiary that is now called EEX Power Derivatives GmbH.
- On Oct. 10, 2007, EEX and international derivatives exchange Eurex announced a cooperation in the field of emissions trading.[5]
- On Dec. 11, 2007, the supervisory board members of the EEX AG approved the integration of the power spot and derivatives markets of EEX and French exchange Powernext into independent companies. While the Spot Market Company would be based in Paris, the Derivatives Market Company would be based in Leipzig. The clearing and settlement of all products from the spot and derivatives market would be provided by European Commodity Clearing AG (ECC) in Leipzig.
- On May 30, 2008, EEX AG and Powernext SA held their first joint press conference in Brussels. EEX and Powernext SA bring together two of Europe's top power markets. 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."[6]
- On Sept. 19, 2008 EEX and Powernext announced the incorporation of the new Spot Trading Company under the name EPEX Spot SE – European Power Exchange. Both partners hold 50 percent of the shares in the new Societas Europaea (SE), which has its registered offices in Paris. EEX and Powernext integrated their entire spot power trading activities into EPEX Spot SE."[7]
- On Apr. 2, 2009, European Commodity Clearing AG successfully concluded the transfer of the positions in Powernext Power Futures. EEX Power Derivatives, in which EEX holds 80 percent of the shares while the Paris-based Powernext holds the remaining 20 percent, continues power derivatives trading for France and this way completes the integration of the power derivatives markets. [8]
- On June 25, 2009, the EEX clearing house European Commodity Clearing AG (ECC) released a joint press statement with Vienna Stock Exchange and the Central European Gas Hub, stating that ECC will provide clearing and settlement for the new natural gas exchange in Austria. [9]
- As of Sept. 1, 2009, EEX Power Spot has been merged into EPEX Spot SE based in Paris as final step of the cooperation. An EPEX Spot branch in Leipzig will continue to support the German customers. The joint company EPEX Spot SE operates the short-term power trading activities for the market areas Germany/Austria, France and Switzerland. [10]
- As of Oct. 30, 2009, the website “Transparency in Energy Markets” was launched. In the framework of their commitment to transparency in European energy trading the European Energy Exchange AG (EEX) and the four German transmission system operators (TSOs), 50 Hertz Transmission GmbH (former: Vattenfall Europe Transmission GmbH), Amprion GmbH, TransnetBW (former: EnBW Transportnetze AG) and TenneT TSO GmbH (former: transpower stromübertragungs gmbh) have implemented a new central transparency platform for generation and consumption data. With this step publication requirements under the “Congestion Management Guidelines” (annex to the “EC Directive No. 1228/2003“) are implemented in this form for the first time in Continental Europe and, at the same time, they are integrated with the existing practice of voluntary publication. [11] Austrian TSO Austrian Power Grid AG has joined the platform as sixth member in December 2010 and started transmitting data for the APG control zone in July 2011. [12]
- EEX received the award as the ‘Energy Exchange of the Year’ in the prestigious Energy Business Awards, 2009. The awards 2009 were announced at the 25th Asia-Pacific Petroleum Conference (APPEC) in Singapore on the 5th of November.[13]
- From January of 2010 on, EEX will run the primary auction for European emission allowances (EUA) in Germany on behalf of the German Federal Ministry for the Environment. This is the result of an invitation to tender issued by the Ministry. The German government specified the framework conditions for the auctioning procedure in July 2009 in the Ordinance on the Auctioning of Emission Allowances 2012 (EHVV 2012). [14]
- June of 2010: EEX celebrates its 10th anniversary and starts the next decade with a new corporate design.
- On Aug. 19, 2010 the Federal Chancellor Angela Merkel visited the EEX together with a delegation comprising Federal Environment Minister Norbert Röttgen, Prime Minister of the Free State of Saxony Stanislaw Tillich and Mayor of the City of Leipzig Burkhard Jung. During her visit Merkel acquainted herself with the exchange on site. More information: [15]
- In February 2011, Deutsche Boerse announced that it aims to become a majority stakeholder in EEX, following the purchase of a 22.96 percent stake in the exchange from Landesbank Baden-Wuerttemberg (LBBW). According to Deutsche Boerse the deal would push its equity stake to 58.19 percent in EEX, from its prior 35.2 percent holding.[16]
- On Mar. 31, 2010, the EEX Supervisory Board approved the transfer of LBBW shares. Eurex Zürich AG is the new majority shareholder holding 56.14 percent of the shares in EEX AG.[17]
- In July 2011, EEX opened an office in London, UK, which is the first office outside of Leipzig, Germany. [18] With the new office EEX recognises the increasing importance of the UK market. In January 2012 EEX officially opened its political representation in Brussels.[19]
Product innovations and recent developments
- Since January 2010, EEX runs the primary auction for European emission allowances (EUA) in Germany on behalf of the German Federal Ministry for the Environment. This is the result of an invitation to tender issued by the Ministry. The German government specified the framework conditions for the auctioning procedure in July 2009 in the Ordinance on the Auctioning of Emission Allowances 2012 (EHVV 2012).
- On March 1, 2010 EEX launched Within-Day trading on its Natural Gas Spot Market. The Within-Day product enables the exchange participants to trade natural gas for the current gas delivery day for the GASPOOL and NCG market areas in the course of the day. This product constituted a further step towards the integration of control energy trading on the exchange.
- On March 29, 2010 EEX supplemented the product range of tradeable Phelix Futures on the Power Derivatives Market. Since then the trading participants can also trade financially settled futures on a weekly basis. The Phelix Week Futures is a financial derivatives contract which refers to the average Power Spot Market prices of future delivery periods.
- In June of 2010 EEX improved member connectivity to its exchange trading system. From 28 June 2010 the EEX spot and futures products are visible and tradeable for all participants via Trayport’s GlobalVision front-end.
- On June 30, 2010 EEX and Eurex expanded their offer of EUA Futures with contracts which will reach maturity from the third commitment period of the European Emission Trading System (EU ETS).
- From July 19, 2010 on the platform Transparency in Energy Markets also included data on solar energy. The reports on solar energy round off the fundamental data regarding energy generated from wind and other energy carriers (e.g. lignite, natural gas, run-of-river, hard coal, uranium, oil) which are already provided on www.transparency.eex.com
- On 27 January, 2011, EEX launched the European Gas Index (EGIX). This transparently established gas price index contributes to strengthening the importance of the price signal which the exchange sets for natural gas. This index is based on all exchange trades concluded in the respectively current front month contracts of the NCG and GASPOOL market areas on the Derivatives Market.
- In April 2011, EEX announced that it has been commissioned to continue to hold the Primary Market Auctions for the EU emission allowances (EUA) issued by Germany in 2012.
- On May 31, 2011 the European Energy Exchange (EEX) successfully launched 24/7 gas trading and, at the same time, expanded the GASPOOL and NCG market areas connected to exchange trading with the Dutch TTF market area. Since that day, short term gas transactions can be traded on EEX without any interruptions 24 hours a day and 7 days a week.
- EEX strengthens its position in CO2-trading: in September 2011 EEX was awarded the contract for the Dutch Primary Market Auction. Later on in November it was announced that EEX is also to carry out EU Emission Allowances (EUA) Auctions for Lithuania. Moreover, EEX was chosen as cooperation exchange for the NER30 program of the European Investment Bank (EIB).
- In February 2011, EEX has won the tendering procedure for the transitory auctioning platform for the EUA auctioned off by Germany for the third emissions trading period.
- EEX will offer emission allowances for the aviation industry (EU Aviation Allowances – EUAA) for trading. The EUAA Derivatives Market will be launched on 30 April 2012 together with new Futures on Emission Reduction Units (ERU) .
Exchange Products and Services
Spot Market Power
EEX AG and Powernext SA integrated their power spot markets into the joint exchange EPEX Spot SE which was incorporated in September of 2008. It is a company according to European law (Societas Europaea) based in Paris. EEX holds 50 percent of the shares in the Paris-based EPEX Spot SE which operates the spot market for power for Germany, France, Austria and Switzerland. EPEX Spot also operates intra-day trading for France and Germany.
Intraday/Spot
In intraday trading, power contracts with delivery on the same or on the following day are traded. EPEX members can trade hourly deliveries of power up to 45 minutes before the beginning of the hour concerned.
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. On every day of the week, EPEX SPOT operates day-ahead trading for three market areas: Germany/Austria, France and for Switzerland with physical delivery in the respective grid areas on the next day.
Phelix
The "Phelix DAy Base" (Phelix =Physical Electricity Index) is the daily average of all power prices for the hours 1 to 24 traded on the Spot Market for delivery in the German/Austrian market area.
Derivatives Market Power
EEX Power Derivatives operates the German and the French Power Derivatives Market and, hence, occupies a central position in power trading in Continental Europe. EEX trading participants can trade Phelix Futures and French Futures as well as Options on Phelix Futures.
Phelix Futures
The Phelix Futures is a financial futures contract which refers to spot market prices for power – more specifically to the EPEX 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.[20]
Since November 2009, Eurex customers are able to trade and clear EEX power derivatives via their existing Eurex access. Since December 2007, EEX and Eurex have already been cooperating in emissions trading.[21]
Natural Gas
In July 2007, EEX launched natural gas trading on the spot and derivatives market. Meanwhile, EEX offers exchange trading in natural gas for the GASPOOL, NetConnect Germany (NCG) and Title Transfer Facility (TTF) market areas.
Spot Market Natural Gas
On the day-ahead market, natural gas is traded for the next, the next-but-one day and the weekend. 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 three market areas: Gaspool Natural Gas Day Contracts, NCG Natural Gas Day Contracts and TTF Natural Gas Day Contracts. [22]
In 2011, EEX introduced 24/7 trading on the Natural Gas Spot Market. On the Spot Market, companies can trade natural gas on a continuous basis for the current day (within day), one day and two days in advance as well as for the following weekend. Since the launch of 24/7 trading EEX has also offered continuous trading with a minimum lot size of 1 MW (in addition to the 10 MW contracts).
Derivatives Market Natural Gas
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 natural gas. On every exchange trading day, continuous trading of GASPOOL Natural Gas Futures Contracts and of NCG Natural Gas Futures Contracts takes place for the respective market area. On the EEX Derivatives Market the Balance of the Month (BoM), the respective next six months, seven quarters and six years can be traded for each market area and, in addition, the respective next four seasons (summer and winter season) can be traded in the NCG market area. [23]
As of 27 January 2011 EEX publishes a new European Gas Index – EGIX – which is based on all exchange trades concluded in the respective current front month contracts of the NCG and GASPOOL market areas on the Derivatives Market.[24]
Emission Allowances
Spot and Derivatives
Since 2005, EEX operates both spot and derivatives markets in emission allowances.[25]
EEX and Eurex - Joint 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.
As of March 26, 2008, it is possible to trade CER Futures on the EEX (Certified Emission Reductions), global emission credits in accordance with the Kyoto Protocol. On 14 April 2008 EEX and Eurex launched trading of options on EUA Futures.
On Oct. 27, 2009, EEX and Eurex launched new emission rights contracts. In addition to the contracts already offered, EUA and CER Futures with a different maturity and delivery date were introduced. [26]
EEX awarded EU Primary Market Auction
Since January 2010 EEX AG runs the auctioning of the Emission Allowances issued by the Federal Ministry of the Environment. All trading participants admitted to trading in emission allowances on EEX are able to take part in the auction without any further preconditions regarding licensing. From the very beginning, this also included all trading participants taking part in the existing Eurex cooperation on the Derivatives Market.
In addition, EEX also carries out the EUA auctions for Lithuania (in 2011 and 2012) and the Netherlands (in 2011 and 2012). Furthermmore the European Energy Exchange (EEX) has won the tendering procedure for the transitory auctioning platform for the EUA auctioned off by Germany for the third emissions trading period in February 2012 and it was chosen as cooperation exchange for the NER30 program of the European Investment Bank (EIB).
As of 30 April 2012, emission allowances for the aviation industry (EU Aviation Allowances – EUAA) will also be offered for trading. Furthermore, Futures on Emission Reduction Units (ERU) will be launched at the end of April. In March, EEX extended the futures on Certified Emission Reductions (CER) for all maturities of the third trading period.
Coal
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.[27]
Key People
- Peter Reitz has been appointed the new CEO of EEX AG by the Supervisory Board on 11 July 2011. At the same time, the Supervisory Board of European Commodity Clearing AG (ECC) also appointed him as CEO of ECC AG. He has taken office in Leipzig in both of these functions on 1 August 2011. Peter Reitz will also retain his position on the Executive Board of the Eurex derivatives exchange.
- Steffen Köhler joined the management board on 1 March 2012. He assumes the position of the Chief Market Officer. In his former position at the Eurex derivatives exchange Köhler has reinforced the development of the cooperation between EEX and Eurex in the field of trading in emission allowances and power.
- Iris Weidinger, who previously held the position of chief representative, is group chief financial officer 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.
- Christoph Mura has been a member of the management board of EEX since Jan. 1, 2009. Prior to this appointment, Mura held the position of the sole director of boerse-stuttgart AG and managing director of boerse-stuttgart Holding GmbH. Mura began his professional career in a management consultancy for IT systems in securities trading of which he was a founding partner. Moreover, he was managing director and a member of the management board of agens, a consultancy group specializing in banks and insurance companies.
References
- ↑ EEX European Energy Exchange Spot and Derivatives Market. EEX.
- ↑ Deutsche Boerse unit buys majority in EEX. Reuters.
- ↑ "Date Set For German Power Bourse Merger". Power Engineering International.
- ↑ Press Release. ECC.
- ↑ Press Release. Eurex.
- ↑ Press Release. EEX.
- ↑ Press Release. EEX.
- ↑ Room/Press Release/press/45138 Press Release. EEX.
- ↑ Press Release. ECC.
- ↑ Press Release. EPEX.
- ↑ Press Release. EEX.
- ↑ Press Release. EEX.
- ↑ Press Release. Commodities Now.
- ↑ Press Release. BMU.
- ↑ EEX Press room. EEX.
- ↑ Deutsche Boerse unit buys majority in EEX. Reuters.
- ↑ Press Release. EEX.
- ↑ Press Release. EEX.
- ↑ Press Release. EEX.
- ↑ Phelix Futures. EEX.
- ↑ Phelix Futures. EEX.
- ↑ Website. EEX.
- ↑ Website. EEX.
- ↑ Website. EEX.
- ↑ EU Emission Allowances and EU Carbon Futures. EEX.
- ↑ EEX and Eurex expand cooperation to power derivatives – Phelix contracts also tradable for Eurex clients as of 25 November 2009. EEX.
- ↑ Coal Futures. EEX.
