8 th Annual APEx Conference October 2003 Cartagena de Indias, Colombia

Transcription

1 8 th Annual APEx Conference October 20 Cartagena de Indias, Colombia European Energy Exchange its development in Germany and Continental Europe Oliver Maibaum Head of Trading 1

2 Agenda EEX in Germany and Continental Europe EEX Spot Market EEX Futures Market EEX Clearing EEX Projects 2

3 EEX corporate profile => EEX has shareholders from 11 different countries 3

4 Located in the heart of Europe Germany has the largest energy consumption in the European Union 100% of the German customers are allowed to choose their supplier Located in the geographical center of the extended European Union Maximum number of international borders 4

5 112 participants from 12 countries non-german participants generate about 50% of the EEX Spot volumes respective number of participants 5

6 EEX in the center of a large price zone monthly average price for day-ahead base load 55 /MW => Austria, France and Germany form one price zone => arbitrage potential between Nord Pool and Continental Europe Powernext APX NordPool West-Denmark EEX EXXA

7 Product overview Trading & Clearing Futures Market OTC-Clearing Futures Forwards via EFP Closed Auction Hourly contracts Spot Market Continuous Trading Base Load Peak Load 7

8 Agenda EEX in Germany and Continental Europe EEX Spot Market EEX Futures Market EEX Clearing EEX Projects 8

9 Auction: Volumes and Prices Wh/Week % of German Consumption % of German Consumption

10 Sapri: Development of market participants participants participants leaving new participants Mai 00 Jun 00 Jul 00 Aug 00 Sep 00 Okt 00 Nov 00 Dez 00 Jan 01 Feb 01 Mrz 01 Apr 01 Mai 01 Jun 01 Jul 01 Aug 01 Sep 01 Okt 01 Nov 01 Dez 01 Jan 02 Feb 02 Mrz 02 Apr 02 Mai 02 Jun 02 Jul 02 Aug 02 Sep 02 Okt 02 Nov 02 Dez 02 Jan Feb Mrz Apr Mai Jun Jul Aug Sep => strategy shift from push and participant sales to pull and volume sales 10

11 Sapri: Participant classification German Interconnected Utilities and Electricity Trading Companies Non-German Interconnected Utilities and Electricity Trading Companies Municipal and Regional Suppliers Banks and Financial Service Providers Industrial Consumers 11

12 Agenda EEX in Germany and Continental Europe EEX Spot Market EEX Futures Market EEX Clearing EEX Projects 12

13 Positive Development after the Launch of the Phelix-Futures New Futures with the Phelix as underlying launched on 1 July Basis risk for the physical fulfilment of the Futures contracts eliminated to a great extent by linking to the Phelix. Positive development of the volume traded on the Futures Market. Fees for the physical fulfilment reduced. Additional service (Trading on Behalf, User Administration) offered. 13

14 Futures Market turnover 60 TWh/Monat exchange transactions OTC-Clearing % of the German consumption Jan- Feb- Mar- Apr- May- Jun- Jul- 14

15 Development of the Open Interest 60,0 50,0 OI in TWh 40,0 30,0 20,0 10,0 0,0 Jul- 02 Aug- 02 Sep- 02 Okt- 02 Nov- 02 Dez- 02 Jan- Feb- Mrz- Apr- Mai- Jun- Jul- Aug- 15

16 EEX Futures Market Development of market participants Number of participants Jul 02 Aug 02 Sep 02 Okt 02 Nov 02 Dez 02 Jan Feb Mrz Apr Mai Jun Jul Aug Sep participantst new participants particpants leaving 16

17 EEX Futures Market Participant classification German Interconnected Utilities and Electricity Trading Companies Non-German Interconnected Utilities and Electricity Trading Companies Municipal and Regional Suppliers Banks and Financial Service Providers Industrial Consumers 17

18 Agenda EEX in Germany and Continental Europe EEX Spot Market EEX Futures Market EEX Clearing EEX Projects 18

19 Clearing Clearing structure EEX AG as central counterparty Business relations GCM GCM Clearing banks (GCM) with high credit standing assume counterparty risk Trading participant Trading participant Trading participant Trading participants deposit securities with the GCM 19

20 Risk pyramid EEX AG Clearing Fund Clearing Bank Additional Margin 20

21 Clearing Advantages Trading volumes may be increased since the clearing house has a better credit standing and position limits with counter parties can be used more flexible. Transfer of the counterparty risks to the clearing house, significant reduction of the credit risks. Expensive credit assessment and credit watch of the counter parties become unnecessary. Mark-to-Market procedure daily reduces market price risks to zero. Reduced margin requirements due to central counterparty and Mark-to-Market procedure. Central counterparty and Mark-to-Market procedure allow real close-out. Cascading allows close-out of residual deliveries. Netting/close-out of positions from exchange and OTC trading. Uniform settlement price for all Futures Market transactions Highly efficient standard processes 21

22 Indirect participation through brokers Exchange Executing Broker conclusion of exchange contracts for a customer registration on OTC-trades for OTC-clearing for a customer OTC Broker mediation of OTC-trades for a customer Clearing Broker settlement of exchange trades and registered OTC-trades for a customer 22

23 Participation in exchange trading and OTC-Clearing Clearing & Executing Broker Executing Broker Bayerische Landesbank CARR Futures SNC Credit Suisse First Boston Deutsche Bank AG ING BHF-Bank AG Nordea Bank Finland PLC UBS Warburg APB Energy Tradition Financial Services OTC brokers for EEX Futures APB Energy Spectron Tradition Financial Services Prebon 23

24 Development of trading volumes in TWh 60,0 50,0 40,0 30,0 20,0 10,0 0,0 Jan- Feb- Mar- Apr- May- Jun- Jul- Aug Sep exchange trades OTC clearing 24

25 Agenda EEX in Germany and Continental Europe EEX Spot Market EEX Futures Market EEX Clearing EEX Projects 25

26 EEX Projects New products Options and CfD s Options EEX plans to launch options based on Phelix-Futures as soon as possible European styled option with delivery of Future positions (Cal s, Quarters and Months) after exercise Strong market demand particularly for OTC-Clearing of Options CfD s EEX would like to launch Contracts-for-Differences (CfD s) based on the Phelix The vision is to launch CfD s between Phelix and different liquid and reliable European wholesale power indices EEX is still in the process of investigating which CfD s are required in the market 26

27 EEX Projects Options EEX plans the inclusion of options in the clearing and trading procedure on the EEX Futures Market. The definition of the options orientates at the OTC options tradable at present. By EEX assuming the default risk, the market participants have free capacity in their trading limits for fresh orders. As a result, the option market is vitalized. Options are exercised in EEX Futures, this leads to an increasing trading activity in the Futures and the single hour auction. Cross-Margining effects result in the optimization of the participant s margin requirements (clearing house as central counterparty). An active use of the OTC Clearing services may be expected because of high Open Interest and current average monthly trading volume of approx. 40TWh in the OTC-Option market. Change Request regarding the adjustment of the Eurex system. 27

28 EEX Projects New markets Gas and emission Gas EEX has founded an internal working group Gas market The different interest groups shall be affected regarding a net access model eligible for the exchange Setting up of a working group with all market participants in order to develop exchange trading in gas Emission EEX has founded an internal working group Emission The different interest groups shall be affected regarding a market model eligible for the exchange Setting up of a working group in order to develop exchange trading in emissions 28

29 EEX Projects Additional activities Day and Week Futures Market Coupling between Western Denmark and Germany Balance Energy 29

30 Thank you for your attention! 30