Powernext Gas: fast-growing activity in 2010
Powernext Gas, which celebrated its second anniversary this past November, achieved a strong activity growth in 2010 on its Spot and Futures segments within a context increasingly favourable to the development of the French gas market.
The volume negotiated on Powernext Gas reached 40.9 TWh which represented a gain of almost 120% compared to 2009 (18.6 TWh). On the Spot segment, the traded volume shot up to 13.8 TWh in 2010, an increase of over 300% compared to 3.2 TWh traded in 2009. On the Futures segment, a total volume of 27.1 TWh was reached in 2010, which represented a 77% gain compared to 15.3 TWh traded in 2009.
As a complement, Powernext Gas successfully launched an OTC Clearing service in October 2010. Three of the main brokerage firms (GFI, Spectron, and Tullett Prebon) joined this service.
While Powernext Gas counted 24 members at the end of 2009, this number went up to 39 participants as of 5 January 2011, with the arrival of financial institutions such as Deutsche Bank, JP Morgan Securities, Macquarie Bank and Société Générale. The other companies which joined Powernext Gas in 2010 were: A2A Trading, Altergaz, Antargaz, BP Gas Marketing, ConocoPhillips UK, EGL, Enovos Luxembourg, ExxonMobil Gas Marketing Europe, Gunvor International (Geneva Branch), Lumius and Société Valmy Défense 17.
The increase of traded volumes was completed within a context increasingly favourable to the French gas market. The launch of the Fos Cavaou LNG terminal during the 4th quarter of 2010 was significantly instrumental to the development of the market. France can now claim to be one of Europe’s LNG entry points. Other projects are under study and could reinforce the market liquidity. Moreover, during the last two years, a fast development of combined cycle gas turbine (CCGT) plants has been observed. Approximately 5000 MW of CCGT will be available by the end of Summer 2011 in France, thus greatly contributing to the development of market liquidity.
The ‘Access France’ measures have also eased up the access to the French gas market. Starting on 1st October 2010, in response to the demands of the European Commission, the incumbent utility has allowed access to long term capacities on the network and the LNG terminals of Montoir and Fos Cavaou. If not all these capacities have been taken at long term, most of it has been claimed.
The market price level has also been favourable to the development of the different hubs and the retailers are indexing these prices in their offers. Moreover, the market indices are widely used by the French infrastructure operators (Elengy, GRDF, GRTgaz, Storengy, TIGF).
Powernext Gas has put itself at the market actors’ disposal in order to play a crucial role in the development of the French gas market. Its market model evolves constantly to adapt its available services (launch of an OTC Clearing service, new instruments such as a Within-Day contract on the PEG TIGF, a Weekend contract negotiable at D-2, etc.).
Powernext remains committed to the development of the gas markets in France and in Europe.
Powernext SA, incorporated in 2001, manages several complementary, transparent and anonymous energy markets: Powernext Gas Spot and Powernext Gas Futures were launched on November 26, 2008 in order to hedge volume and price risks for natural gas in France from Within-Day to the next three gas seasons. Since 1st December 2009, Powernext Gas Spot also allows the Transmission System Operator GRTgaz to progressively cover parts of its daily balancing needs on the market. EPEX Spot, based in Paris and owned equally by Powernext and by EEX, the German energy organized market, was launched on January 1st 2009 and facilitates, 365 days a year, the hourly balancing of physical power delivered the following day on the French, German/Austrian and Swiss hubs. In April 2009, Powernext contributed the French power derivatives to EEX Power Derivatives, a company dedicated to European power derivatives, based in Leipzig, against a 20 percent equity stake in this company.