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RWE Shifts Some Carbon Trading to EEX, Curbing Volume at ECX
2010-07-23 12:24:35.973 GMT
By Mathew Carr
July 23 (Bloomberg) -- RWE AG, Europe's biggest emitter,
shifted some of its carbon trading to the European Energy
Exchange, boosting a rival to the European Climate Exchange.
EEX, based in Leipzig, Germany, will enable RWE to
trade power and European Union carbon allowances on the
same exchange, said Mats Ahl, head carbon trader for RWE Supply
& Trading, a unit of Germany's second-largest utility.
"The services EEX is offering made us rethink our model,"
Ahl said today in a phone interview. "We are trading more and
more on EEX. We are natural sellers of power and natural buyers
of carbon."
The EEX, the EU's biggest bourse for power trading, cut
fees for emissions trades by 10 percent starting July 1. The
company, which started offering carbon contracts last month for
delivery in 2013 and 2014, is gaining a bigger share of Europe's
carbon market, the world's biggest.
The EEX handled 779,000 metric tons of December carbon
dioxide futures, the emissions-trading benchmark, in the past 20
business days, according to exchange data. That's 6.2 percent of
the average handled by ECX, which was acquired earlier this
month by Intercontinental Exchange Inc. In the 20 days through
May 31, EEX had 0.7 percent of ECX's volumes on average for that
benchmark.
Richard Sandor agreed to sell ECX parent company Climate
Exchange Plc to ICE in April, exiting the biggest carbon market
before he could establish a global mechanism for curbing
greenhouse gas. The deal valued Climate Exchange at 395 million
pounds ($610 million).
Carbon permits fell 1.1 percent to 14.10 euros ($18.29) a
ton, EEX data show as of 2:20 p.m. in Leipzig. They have jumped
12 percent so far this year.
Margin Expenses
Traders need to pay a so-called margin to the exchange as a
cover for when prices move against their trades. Carbon and
power prices generally track each other. "So it makes sense to
put these trades on the same exchange," Ahl said.
Electricity trading in western Europe's seven biggest
markets rose to a fifth consecutive record in 2009 as banks and
utilities including Barclays Capital and E.ON AG bought and sold
amid a 40 percent drop in power prices.
Volumes in Germany, the Nordic region, Britain, France, the
Netherlands, Spain and Italy increased to 9,944 terawatt-hours
from 9,929 terawatt-hours in 2008, London-based consultant
Prospex Research Ltd. said in a report scheduled to be released
today. They have advanced 21 percent since 2005, the data show.
RWE said in April it would shift some of its near-term U.K.
power trading focus from over-the-counter deals to Nasdaq OMX
Group Inc. and Nord Pool Spot AS's N2EX electricity market. The
utility generates as much as 10,000 megawatts, or 8 percent of
U.K.'s generation, from its fossil-fueled stations.
For Related News and Information:
Emission market news NI ENVMARKET <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
--With assistance from Catherine Airlie and Lars Paulsson in
London. Editors: Mike Anderson, Randall Hackley.
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
