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The European Energy Exchange (EEX) has seen a marked increase in its German power market share since mid-2012. During a press briefing in London on 17th October, Steffen Koehler, EEX’s Chief Operating Officer, commented that this gain in market share has largely been at the expense of energy brokers, with new regulation favouring trade-registration services offered by the German-based Exchange.
EEX achieved an all-time record for power derivatives volumes in September 2013, with a total of 177.9TWh traded, more than double 2012’s September figure. German power futures made up around 170.4TWh across the overall power derivatives volume in September, which is a 169 percent year-on-year increase.
Koehler went on to explain that EEX has been successful in attracting new members through development of its power derivatives market. The increase in the number of trading participants is also due to an ongoing strategy to make trading easier for its members. According to Koehler, this has been achieved through the lowering of legal entry barriers, improving functionality and investing heavily in improving technical connectivity.
Since mid-2012, EEX trading participants have increased from 215 to 236 and during the course of the briefing, Koehler made reference to the fact that an increasing share of EEX revenue now comes in from outside Germany, adding that: “new international trading participants are entering the market in response to the high liquidity.”
Commenting on renewables, Koehler said that although renewable power is not yet fully integrated into the market, its growing influence in Germany will lead to a change in risk profile for German power market participants.
Therefore, in response to this change in trading behaviour brought about by the increasing share of renewable power generation, EEX is considering offering weather derivatives in the future to cover these risk profiles. However, “we will have to discuss with the market what the agreed standards should be in order to make products referring to wind and sun tradable,” Koehler added.
