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In the last meeting of the Exchange Council this year, which was chaired by Dr. Günther Rabensteiner in Vienna on 2 December 2010, the European Energy Exchange (EEX) presented its plans for the further development of the natural gas market.
The gas quantities traded on the Spot and Derivatives Market of EEX were increased in the course of the year with trading in control energy forming an important driver for liquidity on the Spot Market. With trading in control energy, which is supported by the new Within-Day product, and the improved technical connection, the EEX gas market has considerably gained in attractiveness. By now, more than 90 companies are registered for gas trading on EEX.
For the year 2011 EEX has planned comprehensive measures in order to establish trading in natural gas as a second pillar on a lasting basis in addition to trading in power. With this step EEX will promote both European energy trading and, in particular, trading in natural gas in Germany. The Managing Directors Exchange, Dr. Hans- Bernd Menzel and Oliver Maibaum, explained the central aspects for the expansion of gas trading as follows:
- From January of next year, EEX will expand the trading hours on the Spot and Derivatives Market for Natural Gas on the exchange. As a result, transactions on the Spot and Derivatives Market of the exchange can be entered and OTC transactions can be registered on the Derivatives Market from 8:00 to 18:00 (CET).
- The question of in how far the prices established in the gas-to-gas competition
will be accepted and used as reference prices for long-term delivery agreements is decisive for the future development of the liquidity of trading in natural
gas. A new gas price index, which is scheduled to be launched at the end of
January 2011, will provide a transparent representation of the market price for
natural gas trading in Germany. This index is based on the trading transactions
concluded in the respective current front month contracts on the exchange and
is published and calculated by EEX for Germany, GASPOOL and NCG.
- Subject to regulatory approval, EEX will also offer the Spot Market with all its existing products for the Dutch TTF market area from March 2011. The GASPOOL and NCG market areas, which are connected to trading on EEX, already constitute central European trading hubs for natural gas toIday.
- In May 2011 EEX will introduce 24/7 trading on the Spot Market for Natural Gas. As a result, physical trading in natural gas for delivery in the three market areas (GASPOOL, NCG and TTF) without interruption over 24 hours a day and on seven days a week will become possible.
“Not least on account of the central position and connection of the German market the EEX Gas Market has the potential to become the leading trading platform for all of Continental Europe. This is our aim“, Oliver Maibaum, Managing Director Exchange, emphasised during the discussion. As on other markets, EEX will once again assume the role of a driving force in the integration and harmonisation of the European partial markets on the gas market. The members of the Exchange Council supported the plans of the exchange for the gas market and approved the introduction of spot trading in the existing contracts for the TTF market area.
Furthermore, the Exchange Council was informed of a change in the primary market auction for European Emission Allowances (EUA). So far, continuous trading in emission allowances on the Derivatives Market is interrupted by the EUA Primary Market Auction. However, EEX is now planning to establish a separate product for the Primary Market Auction on the Derivatives Market. This means that, in the future, the participants will be able to continue continuous trading even during the EUA auction. Moreover, the continuous Derivatives Market in which the maturities of the second and third commitment period are to be brought together, enables the trading participants to trade in price differences between various maturities (time spreads) of EUA futures. The Exchange Council adopted a resolution regarding the amendment of the contract specifications. EEX will implement this amendment in the first quarter of 2011.
The Exchange Council of EEX is an official body of the exchange under the German Exchange Act. It consists of in total 24 members who adequately represent the various interest groups and business circles: In addition to the trading participants with 19 elected members from various sectors (transmission system operators and power trading companies, municipal utilities and regional suppliers, brokers and financial service providers as well as commercial consumers), four representatives from associations and one investors’ representative are members of the exchange. The tasks of the Exchange Council include, in particular, the adoption of the rules and regulations of the exchange and their amendments. In addition, its tasks comprise the appointment and supervision of the Management Board of the Exchange and the appointment of the head of the Market Surveillance Office.
