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The European Energy Exchange (EEX) has confirmed the launch date for trading of the new Cap Futures and specified the product design in more detail. From 14 September 2015, trading participants on the EEX derivatives market can hedge against price peaks that may occur on the German intraday market.
The payment threshold for the Cap Future is fixed at a price of € 60 per MWh. This threshold (“Cap”) indicates the price as of which the buyer of a Cap Future receives a payment from the seller, for an hourly product traded on the German Intraday Market of EPEX SPOT. The amount of the payment corresponds to the difference between the market price, measured by the ID3-Price, and the amount of the cap. This new index is calculated on a daily basis for all delivery hours on the German intraday market and published by EPEX SPOT.
In specifying the payment threshold, EEX has used the historical price in the German-Austrian EPEX SPOT day-ahead auction as a benchmark. In 2014, approximately 1 % of the auction prices were higher than € 65 per MWh and approximately 2 % of the prices were higher than € 61 per MWh. With a threshold of € 60 per MWh, it therefore ensures that, on the one hand, the Cap Future only covers hours with high prices on the German intraday market, while, on the other hand, a regular payment from the Cap Future can be expected.
The “German Intraday Cap Future” is a financially settled derivatives contract which was developed against the backdrop of the increasing generation of renewable energies. These cannot be planned reliably in advance, which, in turn, means that an increasing number of price peaks can occur on the German Intraday Market. For example, the Cap Future enables marketers of wind energy to hedge against high prices for compensating purchases should the wind yield prove to be lower than expected. Operators of conventional, flexible power plants can hedge against the price peaks to be expected in advance and, therefore, secure the expected revenues from price peaks.
The European Energy Exchange (EEX) is the leading energy exchange in Europe. It develops, operates and connects secure, liquid and transparent markets for energy and commodity products. At EEX, contracts on Power, Coal and Emission Allowances as well as Freight and Agricultural Products are traded or registered for clearing. Alongside EEX, EPEX SPOT (incl. APX-Belpex), Powernext, Cleartrade Exchange (CLTX) and Gaspoint Nordic are also part of EEX Group. Clearing and settlement of trading transactions are provided by the clearing house European Commodity Clearing (ECC).
