European Energy Exchange expects growth to continue in 2019

[FRANKFURT] The European Energy Exchange (EEX) expects higher gas, carbon emissions and freight product trading volumes in 2019, having achieved record volumes last year.

The exchange, a subsidiary of Deutsche Boerse, plans to expand in its existing regions, enter new locations and add products, Chief Executive Peter Reitz said in a webcast from the company's Leipzig headquarters on Tuesday.

"The positive volume development in our power and natural gas markets in the first quarter of 2019 shows that we are on track for further growth," he said.

Traded volumes of flagship power futures increased 40 per cent year-on-year in the first three months to 1,031 terawatt hours (TWh), equal to more than twice Germany's annual power consumption alone.

The bourse is benefiting from an upturn in wholesale power prices after years of declines, triggered by strong global fuel demand and political intervention in the related EU carbon market to squeeze supply and prop up prices to spur emissions reductions.

Tighter financial market regulation is also pushing power market participants towards exchanges and away from over-the-counter trading.

The EEX platforms now serve more than 600 participants trading in energy, freight, metals and agricultural products.

Forays into North America and Asia have allowed global price arbitrage as well as clearing and registry services across all time zones.

Sales revenue in 2018 rose by 19 per cent to an all-time high of 267.7 million euros ($407.9 million), while earnings before tax grew by 24 per cent to 66.7 million euros, finance chief Iris Weidinger said.

In the CO2 markets, EEX runs primary market auctions for all EU countries except Britain and is widening its role in the secondary market for existing certificates.

It will launch a liquefied natural gas (LNG) contract on May 21, hoping to attract interest from key market participants who have entered the Asian spot markets in recent years. Closer to home it will expand power futures trading into Serbia, Bulgaria and Slovenia from June.

Reitz said EEX's market share was set to rise in Italian, Spanish and French power, while it had launched trucking freight futures on the Nodal Exchange, a US subsidiary, in March. 

REUTERS