Powernext on track for Spot and Futures PEGs
The final version of the Powernext® Gas market model, as well as products specifications, contracts, systems, clearing processes and membership procedures were presented last week during two meetings in Paris and London by the Powernext team along with the representatives of the clearinghouse (ECC) and the two French gas TSOs (GRTgaz and TIGF). More than 180 market participants from 66 different companies attended these meetings. This confirms the strong interest in the French gas market and the Powernext’s gas initiative. Discussions are also at an advanced stage with 8 potential quotation providers that would support the development of the liquidity on the exchange.
These events follow the one held in Paris on June 11th where 43 companies attended the presentation of the initial market model. Volunteer trading companies then formed a Gas Exchange Expert Committee over the summer to help Powernext in designing a service meeting the market requirements.
The developments for the Powernext® Gas Spot and Powernext® Gas Futures markets are well under way and the launch should take place by the end of the year (target is mid-November) as initially planned, subject to members’ readiness and regulatory approval. On 1st January 2009, the French gas transportation system will be greatly simplified (reduction from 5 to 3 balancing zones), creating the conditions for the development of a liquid trading zone in France. The new North zone of GRTgaz will represent an annual consumption of 280 TWh, strongly connected with LNG terminals and all other main European gas hubs.
Powernext SA, incorporated in 2001, manages several complementary, transparent and anonymous energy markets : Powernext® Day-Ahead facilitates, 365 days a year, the hourly balancing of physical power delivered the following day on the French hub; Powernext® Futures provides electricity price risk hedging for a period ranging between one month and three years; Powernext® Balancing GRTgaz allows the Transmission System Operator GRTgaz to progressively cover its daily balancing needs through a market based mechanism. Powernext® Carbon, the leading spot EUA market, was sold to NYSE Euronext in December 2007. At the same time, Powernext and EEX, the German energy exchange, have decided to merge their spot and derivatives power activities into new dedicated companies.