EEX Presents Integrated Concept For Spot Market And Futures Market - Spot Market For Electricity Will Be Launched This Summer - Futures Market Will Follow In Fourth Quarter - Xetra And Eurex As The Trading Systems - E-Commerce For Electricity Trading

"The European Energy Exchange is an exchange of the energy sector for the energy sector." This was how the Supervisory Board chairman of EEX AG, Otto E. Nägeli, described the new exchange at a press event presenting the integrated concept for the spot market and futures market for electricity in Frankfurt on Thursday. The spot market will be launched this summer on the Xetra trading system of Deutsche Börse. The futures market will be launched during the fourth quarter of this year. Trading in electricity futures products will be conducted through the system of Eurex, the derivatives exchange. The market participants will have access to the EEX systems via the Internet and via the telecommunications networks of the Deutsche Börse Group. EEX will offer spot market and futures market products for the two German electricity trading zones which were defined by the association agreement between energy producers and industrial consumers (the so-called "Verbändevereinbarung 2") in October 1999. The association agreement also laid the foundation to set up an electricity spot market. "With the integrated concept of spot market and futures market, we will be offering market participants access to the largest European electricity market from a single source," as the two EEX Executive Board members Christian Geyer and Hans E. Schweickardt pointed out. EEX enables market participants to optimize their electricity demand, they said, in combination with efficient risk management. "Close cooperation between energy suppliers, consumers, traders, grid operators and the exchange is the prerequisite for an optimal match between the exchange's products and systems and the market participants needs", they added. The energy sector's participation in the EEX capital makes EEX an energy exchange with a dual sense of identity: it is not just an exchange for the energy sector but also an exchange of the energy sector. EEX combines the tried-and-proven technology of the Xetra and Eurex trading systems with cost-efficient access via the Internet. Trading in the spot market at EEX will be realized on the Xetra system of Deutsche Börse, the futures market will be set up on the Eurex system of Eurex, the derivatives exchange. Two parallel means of access to the trading system will be established for the market participants, namely, via telecommunication lines and via the Internet. EEX is thus offering e-commerce solutions for electricity trading from the very beginning. Due to the Internet connection, the fixed costs for market participants and the exchange will be lower by comparison to traditional connections via telecommunications lines. Via the spot market, market participants can trade electricity as a physical commodity for the next day. The spot market enables trading in blocks and in single hours for each of the trading zones in Germany. Blocks can be traded on a continuous basis for base load and peak load. Individual hours are traded in an auction. Peak-load hours cover the period between 8:00 a.m. and 8:00 p.m. Mondays through Fridays on all workdays; base-load hours cover the period from midnight to midnight. The futures market enables risks to be hedged by trading with futures. Futures on base loads and peak loads are traded continuously for each trading zone. The delivery period is one month. The next 18 consequtive month are traded. Positions that are not closed out by the last trading day are settled by physical delivery.