Announcement of the Exchange Council: Leipzig, 4 July 2023
The Exchange Council of the European Energy Exchange (EEX) met for its second meeting this year on 28 June 2023, chaired by Dr. Bernhard Walter, Head of Market Design and Regulation at EnBW AG. The meeting focused on the introduction of new EEX products, in particular the Nordic zonal power futures, new natural gas futures and the merging of products in emission allowance trading, as well as the set-up of a new working committee on algorithmic trading.
EEX plans to expand its product offering for the Nordic power market later this year, with the introduction of local zonal power futures in Denmark, Finland, Norway and Sweden. The current EEX futures offering for the Nordic power derivatives market applies the "system price" logic, which means that market participants can hedge their production and consumption against the Nordic system price. The existing products will be expanded to include "zonal power futures" for the 12 Nordic bidding zones, a model that has proven to be a successful approach across much of Europe. Current EEX futures ("system price contracts") for the Nordic power market are to remain in place so that market participants can continue to use these contracts for hedging.
The Exchange Council expressly welcomed these plans and approved the inclusion of zonal Nordic Power Futures in the rulebook. The market launch is planned in the fourth quarter of 2023. The members of the Exchange Council were also informed about the recently announced agreement on the acquisition of the Scandinavian power business of Nasdaq, which is still subject to customary regulatory approvals.
Furthermore, EEX plans to introduce additional natural gas futures for the market areas NBP (United Kingdom), PEG (France), PSV (Italy), PVB (Spain), THE (Germany) and TTF (Netherlands). These financial fulfillment products will be quoted in $/MMBtu instead of €/MWh. With this move, the exchange aims to make its gas markets more international, opening them up to more market participants.
The Exchange Council also discussed changes to the EEX emissions trading markets. Currently, both EU Emission Allowances (EUA) and EU Aviation Allowances (EUAA) are available for trading on the exchange's secondary market. In the future, these are to be traded as one product (EUA), with EUAAs no longer traded on the secondary market and the instrument being phased out at a European level. The Exchange Council approved the corresponding rulebook changes and the delisting of the EUAA products.
In addition, EEX informed the Exchange Council about the first Working Committee meeting, which took place on 26 June, discussing "Algorithmic Trading". This means that there is now a dedicated forum, where EEX and market participants can exchange information on technical developments of the exchange as well as automated and algorithmic trading. The Exchange Council welcomed this cross-product exchange and emphasised the increasing importance of technical progress for the exchange.
As a standing item, the Exchange Council discussed the ongoing proposals on the energy market design, re-emphasising that these proposals must not negatively impact the well-developed, liquid long-term markets which are crucial for market participants to efficiently hedge their positions.
Finally, the Exchange Council welcomed Mr. Henri Domenach, ENGIE Global Markets SAS, who was elected as a new member to the Board and complements the group of "Energy Traders" (electoral group 1).
The Exchange Council of EEX is an official body of the exchange under the German Exchange Act. The Board consists of a total of 24 members, who are elected from among the trading participants in four electoral groups in order to adequately represent the various business communities. The Exchange Council mainly adopts the Exchange's rules and regulations and their amendments. In addition, the body appoints and supervises the Management Board of the Exchange and appoints the Head of the Trading Surveillance Office.
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