FTSE Mondo Visione Exchanges Index:
OM to Create First Independent Power Exchange in Britain
Date 07/06/1999
OM, the exchange operator and supplier of trading technology, today announced that it would create a new spot market (Power Exchange) for the trading of electricity in Britain. The Review of Electricity Trading Arrangements (RETA) programme being run by Offer, the electricity market regulator, has expressed an interest in market operators providing a power exchange for the trading of short-term physical electricity once the Electricity Pool of England and Wales is dissolved. The Pool is expected to cease operations in October 2000. Using its experience of deregulated power markets, proven electricity trading systems, and market operations, OM intends to provide the electricity industry with an efficient and anonymous marketplace for trading power. The market will also offer integrated clearing and settlement.
OM Technology has been a pioneer in the development of electricity trading exchange systems through its significant role in the Nordic Power Exchange - the world's first such exchange. In addition, OM has developed and deployed exchange systems for the California Power Exchange which is a defining market for deregulation in North America
In the UK, OM is also bidding as part of a consortium with Cap Gemini to supply systems and operations services for those parts of the RETA programme to be procured by National Grid Company. These include, among other things, a balancing mechanism for the co-ordination and balancing of electricity in the transmission system, and associated metering and settlement processes required to apportion costs for energy imbalances.
Commenting on OM's plan to create a power exchange in Britain, Dr Andrew Foster, Vice President of OM Technology Energy Systems, said: "We believe that the power exchange market could trade around 20% of the £8.5 billion electricity market in Britain. A number of companies have already expressed an interest in OM establishing a power exchange because of our unrivalled experience in such markets around the world. OM has begun a period of consultation with the electricity industry to ensure that the new power exchange provides the necessary market services and contracts to enable the industry to manage their trading operations efficiently and effectively in the post RETA period. Our market will operate from the day the Pool ceases to operate. Systems will be in place before this date to allow for training and trading simulations."
OM operates exchanges in London (the OM London Exchange, which is a Recognised Investment Exchange in the UK) and Stockholm. OM Technology is the world's leading provider of exchange technology with customers all over the world, e.g. the California Power Exchange, the Nordic electricity exchange Nord Pool, the Finnish electricity exchange EL-EX, the Australian Stock Exchange, the American Stock Exchange and the Toronto Stock Exchange. The parent company of the OM Group, OM Gruppen, is listed on the OM Stockholm Exchange.