Annual EEX Group Workshop 2014 Introduction

Transcription

1 Annual EEX Group Workshop 2014 Introduction June 5 th, 2014 Marriott Hotel Leipzig

2 Agenda Time Room 1 Room 2 Room General Welcome/Introduction Speech Lunch Break EPEX Market Review Current product design developments Status and planning of the European coupling projects PEGAS An update on growing volumes Introduction of NBP and Zee market areas REMIT Disclosure of insider information Reporting of fundamental data (ACER/ENTSO-E) Reporting of transactional data under REMIT and EMIR Coffee Break European Power Market Outlook Introduction to latest products New initiatives Cleartrade Introduction of Cleartrade Exchange The Cleartrade Platform EEX/Cleartrade Exchange Partnership Coffee Break ECC New markets / new partner Product innovations Improvements connectivity (STP) Outlook Limit infrastructure Technology How to connect to EEX Current available Front ends Regulatory CCP Implementation of EMIR requirements Segregation models Reporting of transactional data GoO Market Developments Initiatives Roadmap Page 2

3 EEX at a glance The European Energy Exchange (EEX) develops, operates and connects secure, liquid and transparent markets for energy and related products. EEX holds 50 percent of the shares in the Paris-based EPEX SPOT SE which operates the Spot Market for power for delivery in Germany, France, Austria and Switzerland. German and French power derivatives trading is concentrated within EEX Power Derivatives GmbH, a majority-owned EEX subsidiary based in Leipzig. Furthermore, EEX organises trading markets for natural gas shared together with Powernext in the Pegas cooperation, CO 2 emission allowances, coal and guarantees of origin. Through its majority shareholding in Cleartrade Exchange (CLTX), EEX additionally offers the markets for freight, iron ore, fuel oil and fertilisers. Clearing and settlement of all transactions is done by European Commodity Clearing AG (ECC), the clearing house of EEX and its partner exchanges. Page 3

4 Corporate Structure European Energy Exchange AG 50% 80% 98.5% 100% 100% 52% EPEX SPOT SE EEX Power Derivatives GmbH European Commodity Clearing AG 100% EGEX European Gas Exchange GmbH Global Environmental Exchange GmbH Cleartrade Exchange Pte Ltd. Further shareholdings 12% 20% European Commodity Clearing Luxembourg S.à.r.l. Storage Capacity Exchange GmbH European Market Coupling Company GmbH Page 4

5 PEGAS one Platform for one European Gas Market 29 May 2013: Launch of the natural gas cooperation of EEX and Powernext Both partner exchanges create a pan European market for natural gas trading. German, French and Dutch natural gas products and related spreads are bundled on one platform. PEG Nord TTF NCG GAS POOL Harmonization of trading and processing trough the use of a common system and clearing via ECC PEG TIGF PEG Sud Page 5

6 Benefits of the cooperation 1. Access to all EEX and Powernext products on a single trading platform, based on Trayport technology 2. Trading of location spread is possible, therefore potential for higher liquidity in the cooperation markets 3. Improved customer relations through coordinated teams 4. Harmonization of trading processes in all cooperation markets 5. Facilitation of membership from one exchange to the other Page 6

7 EEX Shareholders Overview As of 31 December % Eurex Zürich AG Saxon Shareholders 11.90% 62.57% Pool of minor shareholders from industrial, energy and financial companies Page 7

8 EEX Shareholders List 01 50Hertz Transmission GmbH D 4.31% 02 Alpiq AG CH 4.50% DB Energie GmbH e&t Energie Handelsgesellsch aft m.b.h. E.ON Global Commodities SE EDF Électricité de France D 0.50% A 0.50% D 3.48% F 0.67% 07 Edison S.p.A. I 0.76% 08 EnBW Energie Baden- Württemberg AG D 3.30% 09 Eurex Zürich AG CH 62.57% Freistaat Sachsen Iberdrola Generación, S.A.U. LVV Leipziger Versorgungsund Verkehrsgesellsc haft mbh Morgan Stanley Capital Group Inc. D 4.51% E 0.50% D 7.38% UK 0.50% 14 MVV Energie AG D 0.99% 15 RWE Beteiligungsgesel lschaft mbh D 4.35% 16 Stadt Leipzig D 0.01% 17 SWU Energie GmbH D 0.25% 18 UBS AG CH 0.25% 19 VERBUND Trading GmbH A 0.67% As of 31 December 2013 Page 8

9 EEX Trading Participants In total 249 trading participants from 25 countries: participants Power Derivatives Market 150 participants Natural Gas Market 192 participants Emissions Market 135 participants Coal Market As of 30 April 2014 Page 9

10 ECC - A clearing house serving the European Energy markets EEX order book(s) OTC registration Partner Exchanges French and Dutch Natural Gas Phelix Futures & Options, French / Dutch / Belgian Power Futures, GOOs, Emissions Derivatives and Spot, Coal Futures (USD), Coal and Power for OTC Registration German, French, Austrian, Swiss Power Spot, Trilateral Market Coupling EMCC, CWE, NWE Gas Derivatives and Spot Czech / Slovakian / Hungarian Power Czech natural gas Hungarian Power available for EEX Trade Registration Austrian Natural Gas EEX order book launch and Trade Registration Page 10

11 Overview: Markets and Products Spot Market Power EPEX SPOT Day ahead auction (D/A, F, CH) Intra-Day (D/A, F) Natural Gas Physical Futures (NCG, GASPOOL) Emission Allowances Secondary Market for EUA and CER spot contracts EUA Primary Auction Spot Derivatives Market Power EEX Power Derivatives Phelix-Futures French/Dutch/Belgian/Italian-Futures Options on Phelix-Futures Natural Gas Physical Futures (NCG, GASPOOL) Emission Allowances Secondary Market for EUA, EUAA, CER and ERU Futures EUA Primary Market Derivatives Guarantees of Origin Nordic Hydro Alpine Hydro Central Northern Europe Wind Trade Registration for Clearing Power Corresponding products Power Futures for Switzerland, Italy, Scandinavia, Romania and Spain Natural Gas Corresponding products NBP Gas Futures Emission Allowances Corresponding products Guarantees of Origin Corresponding products Coal Financial coal futures (ARA, RB) Coal Corresponding products Euro-denominated futures (ARA,RB) Fully integrated clearing and cross-margining via ECC

12 Advantage: X-Margining High potential for margin savings Positions in EEX Spanish Power are fully integrated in the Cross-Margining of ECC Level 1 Combined commodities: Netting of Futures and Options with the same underlying Level 2 Perfect Spreads between products with perfect overlapping delivery period and profile: A year against its 4 quarters Baseload against peakload and offpeak of the same delivery period Level 3 Spreads between all possible combinations of two products with different: Commodities Delivery area Delivery profile Delivery period Maturity Netting efficiency 100% Netting efficiency 99% Netting efficiency 0% - 99% In a simplified portfolio with 1 front month base French Power (long) and 2 front month base Italian Power (short), initial margins would be reduced by 51% through crossmargining 51% Page 12

13 Recent Initiatives & Changes EEX 249 EEX admitted members as of May 1 st The number of active companies is higher due to indirect market access Access EEX Products Access Liquidity Around 800 Trayport screens issued to traders Over 80% of OTC trade registration volume is through STP services Introduction of new EEX front-end to be announced soon Trade Registration Bundle extended to cover Spanish market Italian offering extended to include screen. Excellent volume developments Milan, Madrid and planned Zurich and Geneva (gas) trader events Planned introduction for Polish power Successful coal clearing re-launch commenced in May Liquidity Providers signed up for Italian power Options workshop underlines forthcoming changes to the market offering Big improvements in the Phelix spreads Calendar Harmonization of the EEX trading calendars New calendar published at Page 13

14 Market Structure Power Derivatives Comparisons Competitor comparison European Futures & Forwards (TWh) Power Futures - France (TWh) Power Futures - Italy (TWh) % 18% 15% 13% % 12% 10% 8% % 30 6% % 20 4% % 10 2% 10 3% 0 0% 5 05/ / / / / % 0 05/ / / / /2014 EPD IT market IT* (sec. Axis) IDEX IT ms EPD 05/ / / / /2014 EPD APX/ENDEX ICE NASDAQ OMIP market EPD ms EPD mov avg Shares are linked to righthand axis Shares are linked to righthand axis Volumes/ deviation vs. prev. month in Apr 2014 (TWh/ %): Volumes in Apr 2014: Volumes in Apr 2014: EPD 107,5/ -16,6 NASDAQ 129/ -18,3 EPD 3,5 TWh market 59,6 TWh EPD IT 7,2 TWh IDEX 1,6 TWh ICE 13,9/ 9,2 OMIP 5,6/ -37,6 Power Futures - Netherlands + Belgium (TWh) Power Futures - OTC bundle excl. Italian Futures (TWh) / / / / /2014 EPD NL/BE APX/ENDEX ICE 0,90 0,80 0,70 0,60 0,50 0,40 0,30 0,20 0,10 0,00 05/ / / /2013 EPD 04/2014 Volumes in Apr 2014: Volumes in Apr 2014: EPD NL/BE 0,1 TWh ICE 13,7 TWh EPD 0,2 TWh *Market is defined as LEBA plus exchange volume (incl. trade registration). Late reporting volumes are added to previous months. Market volumes are the volumes published by London Energy Broker Association and cover the volumes of Evolution Markets, GFI Brokers, ICAP Energy, Marex Spectron, Traditional Financial Services and Tullet Prebon Energy. Page 14

15 Typical Stages of Commodity Markets Mature Market Description Immature Market Few market participants Little standardization Focus on bilateral trading Developing Market Focus on physical OTC trading, brokers entering market Higher standardization of products and procedures Financial participants without physical interest (banks, brokers) Indices evolving Strong trading of standardized exchange products in addition to OTC trading Significant participation of financial players Strong transparency in prices and volumes through recognized reference products and indices Churn Rate > 3 Trigger Breaking up of vertically integrated monopolies, e.g. through third party access to power/gas grid Lower relevance of transportation costs Necessity of financial risk management Sufficient establishment of physical benchmarks with defined characteristics (e.g. quality, delivery location) Pressure on transparency and further standardization through regulators and market participants Italian Gas Serbian Power Italian Power GASPOOL Gas TTF Gas PHELIX Page 15

16 Business Opportunities in developing markets International power markets Power Market Maturity State controlled Market Vertically integrated public companies Regulated end-user tariffs Extensive cross-subsidies Transforming Market Privatization and unbundling Independent regulator Eligible consumers free to choose suppliers Power Exchange setup Strong growth of OTC market Evolving Day-Ahead Market Physical futures Mature Market Full end-user liberalization Participation of purely financial players Speculative trading motivations Financial Futures, Options Liquid Intraday Market International energy markets show significant variations in market maturity, influencing probability of success for various market entrance models Page 16

17 When is a market mature? Market Physical Volume (TWh) Unregulated Market (TWh) Assumed Market Churn Rate Deregulation (2014) started in China 4, United States 3,886 3, Russia 1, Japan 1,006 1, India Canada France Brazil Nordic Markets United Kingdom Italy Spain Turkey Australia Poland Ukraine Argentina Chile Kazakhstan Czech Republic Colombia Romania Bulgaria Hungary New Zealand Slovakia Serbia Croatia Slovenia Physical market size of most emerging countries growing at tearing speed End-user liberalization often only for industrial consumers, but share of unregulated customers catching up in most markets Sustainable liberalization process is often diluted and delayed from regulated end-user prices, crosssubsidies and close-to-government regulation Market design largely driven by fundamental indicators, such as supply structure, international connections, population density or political culture Page 17

18 Implications for EEX offering Market Needs Participant Interest EEX to-do Immature Market First clearing Offering Stable Platform Local platform Politics Integrate local partners, especially in highly politicized markets Concentrate on clearing offering first Developing Market Liquidity Pool Non-discriminatory access, anonymity Harmonization New Participants Transparency Market Rules Mitigate counterparty risks Concentrate on order book volumes Leverage EEX reputation as transparency provider and supervised market Investment into Market Makers Mature Market Efficiency Financial Players Internationalization Harmonization Link to bigger markets Ensure competitive price offering Leverage liquidity in existing markets Page 18

19 ct/mwh ct/mwh Transaction cost for EEX Power futures Total costs of trading from an EEX client perspective (trading and clearing fees plus 50% bid/ask spread in 4/2014): Trading Clearing 50 % B/A Spread Phelix Front Year 0 Week Month Quarter Year Week Month Quarter Year Week Month Quarter Year Italy French PHELIX Market Maturity Trading and Clearing Fees are of relatively low importance in immature markets, but gain importance at increasing market maturity. Page 19

20 Lunch Page 20