POWERNEXT CARBON: AN ORGANISED MARKET TO FIGHT CLIMATE CHANGE

Transcription

1 POWERNEXT CARBON: AN ORGANISED MARKET TO FIGHT CLIMATE CHANGE Jean-François Conil-Lacoste CEO, Powernext SA Paris 5 July 2007

2 KYOTO CREDITS: FROM A EUROPEAN MARKET TO AN INTERNATIONAL MARKET (/2) Kyoto Protocol established tools to reduce CO 2 emissions through three innovative market-based mechanisms known as: Emissions trading (allows countries with an emissions reduction target to trade with other countries) Joint implementation (JI) and Clean Development Mechanism (CDM): a country with an emissions reduction target can get credit by funding emissions-reducing projects in other countries Why market-based mechanisms? Stern Report (2006) mentions: Emissions trading schemes can: deliver least costly emission reductions by allowing reductions to occur wherever they are cheapest; generate automatic transfers between countries, while delivering the least expensive cost reductions; be used to introduce carbon pricing, without risking carbon leakage and competitive implications between participating countries; be therefore a very powerful tool in the framework for addressing climate change at an international level. 2

3 KYOTO CREDITS: FROM A EUROPEAN MARKET TO AN INTERNATIONAL MARKET (2/2) CERs (carbon credits of the Clean Development Mechanism) could be used by all Annex Parties to efficiently cut the cost of reaching the emissions reduction targets by investing in JI or CDM projects and participating in the IET scheme at the best economical value. Powernext and Caisse des Depôts will list such product as soon as possible. The new CERs spot contract will be integrated in the existing Powernext Carbon EUA market s infrastructure, and will benefit from the Delivery versus Payment (DVP) mechanism operated by Caisse des Dépôts since the beginning of Powernext Carbon. Paris-based energy exchange Powernext announced it is to launch a contract to trade secondary certified emissions reductions (CERs) as soon as the UN s international transaction log becomes functional Point Carbon, 4/03/2007 It is important to have a market platform where we can trade CERs with transparency and liquidity, to create a meaningful price signal," says Jerome Malka, managing director of Orbeo, a joint carbon trading venture between SG and Rhodia. "Orbeo will be a strong supporter [of the new contract]. Energy Risk 4/03/2007 3

4 POWERNEXT CARBON: HOW DOES IT WORK? (/2) Powernext aims at creating a CER spot contract based on the same principles as its EUA contract : Same IT structure: same allowance same cash Order SELLER Allowance Cash Same trading model: contract size : lot = 000t CO2 tick price : 0.0 tick volume : 000t trading session from 9am to 5pm Trade Transit allowance Transit cash trading via Global Vision (a new product listed on the carbon screen) CO2 Same legal and VAT status: CER is an immaterial asset [non financial instrument] Order BUYER Allowance Cash CER has the same VAT territorial rules that EUA 4

5 POWERNEXT CARBON: HOW DOES IT WORK? (2/2) Powernext Carbon will make possible the trade of Certified Emission Reduction (CER) issued by the Executive Board and accepted by EU Member States according to the Linking Directive, pending on ITL implementation. Members can trade (i) anonymously via a web-based platform or (ii) an OTC Registration service. TRADES Members can check the status of their trade and the DVP process on a personal follow-up interface that provides a range of information, including cash and allowance status checks, delivery and trading limits, debit and credit ). This interface is accessible via a secure web page (https). Trading screen Follow-up interface 5

6 POWERNEXT CARBON: A DIVERSIFIED MEMBERSHIP ABLY CARBON FORTIS ACCORD GAS NATURAL AEM GASELYS AMBRIAN COMMODITIES GAZPROM ASM ENERGY GREENSTREAM ATEL HEMLOCK BARCLAYS Bank IBERDROLA GENERACION BGC IRIDE Mercato BNP PARIBAS ITALCEMENTI BP GAS MARKETING JP MORGAN CALYON JPS GROUP CANTOR FITZGERALD LABEL 5 CARBON CAPITAL MARKETS MAN FINANCIAL CCIAG MARCEAU TRADE CEZ MERRILL LYNCH CLIMATE CHANGE CAPITAL MORGAN STANLEY CLIMATE CORPORATION NUON CM CAPITAL MARKETS ORBEO CONSUS PETUM CONSUS France POWEO CREPUSCULE PRAVDA CAPITAL DUBUS RWE TRADING E.ON SALES & TRADING SAGACARBON ECOPROGRESSO SEMPRA ENERGY ECOSUR SHELL TRADING ECO-WAY SOCIETE GENERALE EDF TRADING STATKRAFT MARKETS EDISON TRADING STX SERVICES EGL SYBELANE ELECTRABEL TOTAL GAS & POWER ELECTRICITE DE STRASBOURG TOTSA TOTAL OIL TRADING ENDESA France TRAFIGURA ENDESA GENERACION UNION FENOSA GENERACION ENDESA TRADING V & A CORPORATION ENERGY STOCK MARKET VEETRA ENEL TRADE VELCAN ENERGY ENERSOL VICAT EOS VOLTALIA FINANCIERE SAINT MERRI WIND TO MARKET 78 European members

7 POWERNEXT CARBON: A LEADING POSITION Thanks to a successful partnership with Caisse des Dépôts, a founding partner of Powernext Carbon in charge of the delivery versus payment function, Powernext is the leading EUA spot exchange with a market share of 60%. EU ETS Spot Markets 3% 3% 4% 0% % 59% LEBA (Brokers) EEX Nordpool Pow ernext Carbon Exaa Ne w V alue s 7

8 POWERNEXT: AN ENERGY AND ENVIRONMENTAL EXCHANGE Powernext is a Multilateral Trading Facility: stable and European shareholding with,5 M capital supervised by AMF and CRE cleared through LCH.Clearnet DVP with Caisse des Dépôts with solid market models and IT systems 5,0% 5,0% 5,0% 6,8% 7,0% HGRT 24,5% 6,8% 22,2% 53,3% 6,8% 6,8% 6,8% 34,0% Which provides several price references and indices: short term electricity to hedge balancing needs and volume risks: Powernext Day-Ahead since November 200and Powernext Day-Ahead Continuous and Intraday to be launched on July 2007 medium term electricity to hedge price risks: Powernext Futures since June 2004; CO2 allowances to hedge greenhouse gas emissions non-compliance risks: Powernext Carbon, since June 2005; in cooperation with Météo France, a full range of weather indices taking into the economic reality of the zones considered: Powernext Weather And a daily balancing gas market in partnership with GRTgaz (gas TSO): Powernext Balancing GRT 8

9 CONTACTS

10 0 Pavillon d Armenonville Thursday July 5 & Friday 6, 2007