recent issues in germany apex conference dr. hans-bernd menzel leipzig, october 11, 2004
TRANSCRIPT
Recent issues in Germany
APEx Conference
Dr. Hans-Bernd Menzel
Leipzig, October 11, 2004
2
EEX‘s participant base is international
2
3
10
1
2
3
18
2
1 61
120 participants from15 countries
108 Spot Market participants
48 Derivatives Market participants
51 OTC Clearing participants
9 General Clearing Member
5 Broker
5 Market Maker
4 Transmission grid operators
1
5
11
8
1
2
3
Liberalization of electricity market in Germany is achieved
Spot Market at EEX
Recognized price signal in Continental Europe
- By regulatory bodies
- By laws
- By bilateral contracts
- By derivative OTC-products
Hedging available on a long-term basis
Next steps: what is coming soon
4
The turnover of physical power on the spot market rises continuously
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.0002
4-0
0
31
-00
38
-00
45
-00
52
-00
07
-01
14
-01
21
-01
28
-01
35
-01
42
-01
49
-01
04
-02
11
-02
18
-02
25
-02
32
-02
39
-02
46
-02
01
-03
08
-03
15
-03
22
-03
29
-03
36
-03
43
-03
50
-03
05
-04
12
-04
19
-04
26
-04
33
-04
MWh
0
10
20
30
40
50
60
70
80
90
EURO
Volume/Auction Weekly average price
10% of the German electricity consumption
MWh per week Euro per MWh
5
Liberalization of electricity market in Germany is achieved
Spot Market at EEX
Recognized price signal in Continental Europe
- By regulatory bodies
- By laws
- By bilateral contracts
- By derivative OTC-products
Hedging available on a long-term basis
Next steps: what is coming soon
6
Not a German market anymore
EEX is in the center of a Central European price zone
10
20
30
40
50
60
70
80
90
100
Jan
. 02
Fe
b. 0
2
Mrz
. 02
Ap
r. 0
2
Ma
i. 0
2
Jun
. 02
Jul.
02
Au
g. 0
2
Se
p. 0
2
Okt
. 02
No
v. 0
2
De
z. 0
2
Jan
. 03
Fe
b. 0
3
Mrz
. 03
Ap
r. 0
3
Ma
i. 0
3
Jun
. 03
Jul.
03
Au
g. 0
3
Se
p. 0
3
Okt
. 03
No
v. 0
3
De
z. 0
3
Jan
. 04
Fe
b. 0
4
Mrz
. 04
Ap
r. 0
4
Ma
i. 0
4
Jun
. 04
France Netherlands West-Denmark Germany Austria Italy
€/MWh
monthly average price for day-ahead base load
7
Not a German market anymore
High correlation between Germany and France
Source: Powernext Website
8
Liberalization of electricity market in Germany is achieved
Spot Market at EEX
Recognized price signal in Continental Europe
- By regulatory bodies
- By laws
- By bilateral contracts
- By derivative OTC-products
Hedging available on a long-term basis
Next steps: what is coming soon
9
Risk hedging instruments available
... for the current month
Month1
Month2
Month3
Month4
Month5
Month6
Quarter1
Quarter2
Quarter3
Quarter4
Quarter5
Quarter6
Quarter7
Year1
Year2
Month0
Year 3
Year4
Year5
Year6
Base and peak load Futures:
... for the next 6 months in the future
... for the next 7 quarters in the future
... for the next 6 years in the future
10
EEX Futures are accepted
0
20
40
60
80
100
120
140
Jan. 03 Apr. 03 Jul. 03 Okt. 03 Jan. 04 Apr. 04 Jul. 04 Okt. 04
TWh
Open Interest: 120 TWh or more than 4.2 billion Euro
11
Liberalization of electricity market in Germany is achieved
Spot Market at EEX
Recognized price signal in Continental Europe
- By regulatory bodies
- By laws
- By bilateral contracts
- By derivative OTC-products
Hedging available on a long-term basis
Next steps: what is coming soon
12
Risk Hedging Instruments are available
price of underlying
future (Euro/MWh)
profit
strike price
Premium
example: buyer of a Call-Option (Long Call)
loss
Options will be launched:
on November 8, 2004
13
CO2-emissions trading
The energy intensive industry
represents about two thirds of all certificates
is already connected to EEX‘s trading and clearing system
has the trained personnel already in house
seeks low transaction costs and low process risk
14
CO2-emissions trading
EEX will launch a market for CO2-emissions certificates
on its Xetra trading system
- integrated with electricity market
- no additional effort for electricity traders
- low costs through usage of existing infrastructure
- Short time-to market
lauch will be early January 2005
15
Integration of Spot Market in February
One screen for power and CO2
One software
One connection
One training and admission process
Synergies in clearing&settlement