On 5 December 2013, the last meeting of the year for the Exchange Council of the European Energy Exchange took place in Vienna. The recent changes to the trading systems took centre stage at the meeting, which was chaired by Peter Heydecker.
In the first week of December 2013, EEX successfully switched its Derivatives Market trading system to “T7” technology. “T7” is a new derivatives market trading system developed by Deutsche Börse AG and replaces the current EUREX trading system. From now on, the EEX Derivatives Market for Power, CO2 Emission Allowances, Coal and Guarantees of Origin will operate on “T7”, which offers the trading participants a highperformance system, as well as new functionalities. In addition, EEX has more flexibility regarding the introduction of new products. “The new system will enable us to offernew specifications which we have not formulated yet – such as additional spread products“, explains Steffen Köhler, Chief Operating Officer of EEX.
As the Management Board of the Exchange further explained, EEX concluded the migration of its natural gas products to PEGAS at the end of November 2013. PEGAS is the joint gas trading platform of EEX and Powernext, and was launched at the end ofMay 2013. Since then, EEX has migrated its gas products, step-by-step, to the new trading environment. The introduction of 1 MW products on PEGAS on 28 November 2013 was the last stage of this migration phase. On the EEX Spot Market, the separateorder books for 1 MW and 10 MW products were combined into one order book. Furthermore, EEX opened a separate order book for 1 MW futures within the Trayport® Exchange Trading SystemSM.
The Exchange Council which had passed a resolution approving the introduction of “T7” at its last meeting welcomed the smooth launch of the trading system and the migration of the gas markets.
Against the backdrop of the report on the latest meeting of the EPEX SPOT exchange council and the current discussion regarding the future European Network Codes, the council also discussed the question of power market design. In this context, the EEX Exchange Council emphasised the need for the integrated German-Austrian price zone and its added economic value. “The German-Austrian price zone must be retained. The German/Austrian market area has largely proven itself in the wholesale sector – a division of this price zone does not only contradict the idea of European integration but alsoentails the risk that liquidity might be split and that individual market participants might become dominant”, emphasised Peter Heydecker, the Chairman of the Exchange Council.
The adoption of a resolution on the introduction of new products formed another focus of the meeting. For example, the members of the Exchange Council adopted a resolution on the expansion of futures on EU allowances (EUA) with further maturities. So far, the EUA future can only be traded with maturity in December of the respective year until December 2020. EEX will now expand the existing maturities with monthly andquarterly maturities. The Exchange Council approved the inclusion of the new maturities in the rules and regulations.
The offer for Trade Registration of Italian power futures (which was launched in October 2013) has received a positive response from the market. Until now, 374,059 MWh have been registered for clearing on ECC. EEX is now planning to offer Italian power futures as financial derivatives contracts directly for order book trading on the exchange and will present the contract specification for adoption at the next meeting of the Exchange Council.
Finally, the Exchange Council adopted a resolution on the adjustment of the contract specifications regarding Phelix Day and Weekend Futures. Because of technical restrictions, Phelix Day and Weekend Futures have so far been valued at EUR 0.01 per MWh even in the event of a negative Spot Market Index. From now on, the final settlement price of these Phelix Futures can also be negative. “This adjustment is extremely important for the traders since it cushions the risk between the Spot and the Derivatives Market and can, therefore, have a positive effect on the liquidity of the European Energy Exchange AG short maturities on the Derivatives Market, i.e. on the Day and Weekend Futures”, said Peter Heydecker.