In its last meeting of the year in Vienna on December 5, 2008 the exchange council of the European Energy Exchange (EEX) chaired by Dr. Günther Rabensteiner adopted a resolution regarding the reappointment of the managing directors of the exchange of EEX and, hence, expressed its confidence in their continued successful work. Dr. Hans-Bernd Menzel and Oliver Maibaum will take over the management of the energy exchange for a further term of five years. Both managing directors of the exchange have already completed one term of office each.
EEX launches spot trading in EUA
The exchange council agreed to the launch of spot trading in EUA on Xetra on Januar 16, 2009. The trading model corresponds to the one for the first commitment period: The EEX Spot Market for EU emission allowances comprises continuous trading with one intraday auction. After the end of the Spot Market auction EEX publishes the Carbon Index (Carbix) established on its internet site. Moreover, EEX also offers the registration of OTC transactions for clearing on European Commodity Clearing AG (ECC). The planned migration to the ComXerv system will be carried out at a later date. Prior to the launch of production a simulation of the trading and settlement processes will be carried out together with the trading participants.
Further development of the natural gas market
The exchange council approved the introduction of further maturities on the natural gas market and, hence, paved the way for the introduction of season contracts. Season contracts are half-year contracts for the winter and summer season. With the help of these contracts the gas business year can be represented by combinations of two products instead of four quarters and/ or random combinations of quarters and months.
The additional maturities will be implemented for the natural gas futures in the NCG (formerly EGT) market area during the first half of the year 2009. In addition, EEX presented the possibility of the introduction of an “intraday pricing window” to the exchange council with the aim of establishing a reference price in dayahead trading in natural gas. With this proposed solution EEX responds to the announcement by E.ON Energy Trading AG that it will discontinue the Choice Market. As a result, the E.ON Choice Market has successfully fulfilled the function for which it was originally designed – i.e. providing an initial spark for the German gas market.
Market model of EPEX Spot SE presented
The report on the status of the cooperation between EEX and Powernext constituted another important item on the agenda. The EEX Compliance Committee presented the market model for EPEX Spot SE, which has been prepared jointly and which was analysed intensively in the presence of Jean-François Conil-Lacoste, CEO of the Parisbased Powernext as a guest. The market model specifically also provides for an exchange council, which will adopt the rules and regulations, as well as for an independent market surveillance office for EPEX Spot SE. In the future, all Spot Market activities on power on both exchanges will be transferred to EPEX Spot SE, which is based in Paris. The exchange council expressly welcomed the level of quality of the market model, which takes the demanding objective of achieving a strengthening of the transparency and monitoring standards with the cooperation, which is pursued by both exchanges, into account.
Modification of the settlement price procedure
EEX will expand the procedure for the establishment of settlement prices which has been used so far. Up to now, the market values (so-called fair values) for the respective contracts are inquired directly from the trading participants in the event that the last price traded and contained in the order book of the exchange cannot be used. The settlement prices are then established on the basis of the average of the fair market values (chief trader procedure). In the future, EEX will employ a procedure using the prices traded and the mean value from the average of the best buy and sell offers during a given time window. Such an open procedure on the part of the system contributes to an increase in the transparency and reliability in the settlement price procedure of the exchange.
Presentation of the Market Surveillance Monitoring System
Furthermore, the new monitoring system of the Market Surveillance was presented during the meeting of the exchange council. This system is based on a specific database with the help of which trading data and further data (OTC data) can be processed with a high degree of complexity. It permits faster individual access to current and historical data, considerably more complex inquiries and automated reports to national supervisory authorities, such as the exchange supervisory authority, as well as international supervisory authorities. The “Market Surveillance Monitoring System“ is currently in the implementation stage and will be used as of January 2009.
The exchange council of EEX is a body of the exchange defined in the German stock exchange act. It consists of in total 23 members that adequately represent the different interest groups and business circles on the exchange: In addition to the trading participants with 18 representatives elected from within various groups (domestic as well as foreign transmission system operators – power trading companies, municipal utilities and regional suppliers, brokers and financial service providers as well as commercial consumers), four representatives of major associations (German Association of the Energy and Power Supply Industry, registered association (VIK), Federation of German Consumer Organisations, registered association (vzbv), German Association of Energy and Water Industries, registered association (BDEW) and the Federation of German Industries, registered association (BDI)) and Prof. Wolfgang Pfaffenberger, the investors’ representative, are members of the council.
