Global Power Derivatives Newsletter July 2021
Time flies! We can’t quite believe it, but already, here we are, in the second half of the year. The whole team is crossing its fingers that the situation will improve and restrictions will further relax – which would enable us to meet you, our customers and partners, in person. It is safe to say that we are all very much looking forward to getting back "on the road” again.
H2 2021 brings exciting developments to our markets which we'd like to share with you in this newsletter. We're very happy to announce the expansion of our product range with new long-term Power Futures for three major markets: Germany, Italy and Spain. As of 27 September 2021, EEX will extend the number of tradeable Baseload Year Future maturities from the current 6 years to 10 years. We’ve seen strong demand from our clients to trade the full curve on EEX, in particular against the background of hedging renewable Power Purchase Agreements (PPAs) which grows more and more in importance. PPAs can run up to more than 10 years and we aim to make it easier for market players to manage their price exposure and credit risk from PPA contracts on the exchange and benefit from the advantages of clearing these products.
And finally, the date is set - looking forward to September!
EEX & Pexapark join forces to focus on renewables.
On our route to support the energy market transition with sustainable solutions for trading and clearing, EEX recently entered into a cooperation with Pexapark, a leading specialist for renewable energy sales and risk management. This cooperation addresses two key barriers to the growth of renewable energy assets in Europe, which are price transparency and risk management. Why now and why join forces with Pexapark?
The answer is simple! Pexapark are the experts when it comes to supporting energy players to buy, sell and manage renewable energy in post-subsidy markets. With more than 12,000 MW of renewable PPA transactions supported and 3,000 MW of risk reporting services provided across more than 17 markets, Pexapark has become a major player for software solutions and consultancy in the fastest growing part of the renewable energy market.
This cooperation has the clear focus on broadening our customer network with players from the renewable energy sector and bringing these companies closer to the wholesale market.
Interested to learn more?
Listen to our expert Viviana Ciancibello, Senior Business Developer at EEX, and Werner Trabesinger, Head of Quantitative Products at pexapark, who explain the background of our cooperation and what's in store for the future.
Spark Spreads are GO!
The launch of our new "EGSI" Financial Gas Futures on 28 June marked a significant strategic milestone for our natural gas derivatives business. What does EGSI stand for? It's the European Gas Spot Index, calculated by EEX, the most credible and liquid price reference on the gas spot market, and a strong underlying for financially settled futures.
So why are we talking about gas here? It's because these products create a bridge between our power and gas derivatives, opening up new trading opportunities and enhancing liquidity, on both sides. The new gas contracts, available for Austria (CEGH), Germany (NCG - soon THE) and the Netherlands (TTF), enable our customers to trade the price differential between both markets via Spark Spreads. After a successful launch on 28 June, EEX saw order book activity of about 30 members in the first two weeks, trading on a daily basis and with increasing volumes.
From now until December 2022, EEX is offering trading in EGSI futures free of charge in all membership packages. Initiators can trade for free in EGSI futures until 31 July 2022. For Spark Spread trades via the order book, only the Power leg will be charged. For more information please contact your Account Manager.
To find out how Spark Spreads work, check out our latest webinar:
We're pleased to report a continued strong market interest and growth in our youngest market - Japan Power!
In the first half of 2021, a volume of 3,519 GWh was traded in Japanese Power Future contracts – which is more than 5 times the volume traded in 2020 (May – December 2020: 587.2 GWh). We're so proud to say that EEX has firmly established itself as the leading venue for Japanese Power Futures trading, holding an 88% exchange market share between January and June 2021. Building up liquidity in this emerging market is a marathon task and certainly not something that can be accomplished in just 2-3 years. Throughout 2021, we have seen a marked increase in the number of players being active in this market and we expect this number to double by the end of the year. This development is supported by many new players who provide Japanese power retailers with market access - we're looking forward to further building this market, together with companies from Japan and around the world.
You've seen it already, haven’t you? So…are you in, running, cycling and swimming, for a good cause?
Our EEX Group 20k Challenge gives you the opportunity to get motivated and to connect with the EEX Group colleagues and partners during the summer months. Together with you, we want to collect 20,000 kilometres by running, swimming and cycling. For every kilometre achieved we will donate €1 to a good cause around the world.
Join the challenge and get active! In the last weeks, we collected 10,000 kilometres, but it’s not too late to join our Club on Strava to take part in this challenge.
> Join our Strava 20k Challenge Club
> Find more information here