This morning, the European Energy Exchange (EEX) invited the Exchange Council, an exchange body which represents the EEX market participants, to an extraordinary meeting to discuss the situation on the power derivatives market and in particular Germany.
The participants debated the price developments over the past week and the significant price increases on Friday, 26 August. On this day, the power future for baseload delivery for the following year (the front year Cal 23), which is the benchmark contract for power in Europe, was settled at a price of 985.00 Euro/MWh. The contract experienced an intraday upward price movement of almost 200 Euro/MWh.
EEX’s Management Board of the Exchange confirmed that the prices were formed properly and that a temporary stop on the market would therefore not be necessary. The current market situation is constantly checked by the exchange. The Exchange Council agreed to this and gave a clear rejection to stop trading on the EEX.
Steffen Köhler, Managing Director Exchange and COO of EEX, says: "The exchange as an organised and supervised market is essential for security and price transparency, especially in such critical situations. Stopping exchange trading would lead to a shift in trading, but it would not change the price development and would even cause more uncertainty overall.”
The exchange emphasises that clearing and settlement of the exchange transactions is still ensured and that all margin claims of the clearing house have been serviced by the clearing members.
Nevertheless, the Exchange Council warned that the continued high liquidity requirements could also lead to further reluctance to trade, in particular on the sell side. Therefore, the members of the
Exchange Council consider it very important that companies receive support in financing collateral (margins) not only from Germany as so far, but also from other member states or the EU.
Finally, the Exchange Council expressly supports the previous measures taken by EEX to provide trust and security in the current market situation and refers to the extensive FAQ document that EEX publishes to inform market participants.
The European Energy Exchange (EEX) is the leading energy exchange in Europe which develops, operates and connects secure, liquid and transparent markets for energy and related products. As part of EEX Group, a group of companies serving international commodity markets, EEX offers contracts on Power, Natural Gas and Emission Allowances as well as Freight and Agricultural Products. EEX also provides registry services as well as auctions for Guarantees of Origin, on behalf of the French State. https://www.eex.com
European Commodity Clearing (ECC) is a central clearing house which specialises in energy and commodity products. ECC assumes the counterparty risk and guarantees the physical and financial settlement of transactions, providing security and cross-margining benefits for its customers. As part of EEX Group, ECC provides clearing services for EEX, EEX Asia and EPEX SPOT and for the partner exchanges HUPX, HUDEX, NOREXECO, SEEPEX and SEMOpx. For more information, please visit www.ecc.de.
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