carbon doing barely anything...feel free to generate some excitement folks
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Mathew Carr, emissions markets, energy reporter. London Bloomberg News ph +44 207 073 3531 yahoo ID carr_mathew
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German Power for 2013 Surged to Record Trading Volume on EEX
2010-10-06 12:18:27.611 GMT
By Mathew Carr
Oct. 6 (Bloomberg) -- Trading volumes in baseload German
power for 2013 surged yesterday to a record, which may signal
more hedging demand for carbon dioxide permits and fuel futures,
according to Tschach Solutions GmbH.
The volume traded was 2.8 million contracts, up 65 percent
from the previous record of 1.7 million contracts on Sept. 7,
the Leipzig, Germany-based, European Energy Exchange said on its
website. Records began in 2007, according to the website. Open
interest in 2013 German power rose 4.2 percent yesterday to
2,651 megawatts.
"It could be a sign that utility hedging has really
started," Ingo Tschach, managing director of Tschach Solutions
in Karlsruhe, Germany, said today by phone. Tschach Solutions
provides data and risk-management services for carbon markets.
German power for 2013 fell 0.3 percent today to 53.55 euros
a megawatt hour, its lowest price since April 8. It is down 11
percent this year, and carbon for 2013 delivery is up 17 percent
in the same period.
CO2 allowances for December this year fell 13 cents today
to 15.55 euros a metric ton, according to data from the European
Climate Exchange in London at 1 p.m.
"If you start to see greater power demand, you are going
to see higher carbon prices, which will impact on power," Mark
Lewis, an analyst in Paris for Deutsche Bank AG, said today by
phone. He said in a Sept. 28 research note that German power
demand will recover "only modestly from the 2009 low."
'Demand Led'
The profit made by German power utilities on 2013 futures
when burning coal would be about 4.82 euros a megawatt hour
today, according to the so-called dark-spread calculator on
Bloomberg. That is near the 4.41-euro record low reached on
Sept. 8.
Power utilities will need to lock in contracts for 2013
because of their operating policies despite the low profit
margins, Tschach said. "Maybe some industrials are securing
their power. Utilities just have to sell."
The German power market is a "demand led" market, said
Deutsche Bank's Lewis.
For Related News and Information:
U.K. power-market stories TNI UK PWRMARKET <GO>
Today's top energy news ETOP <GO>
U.K. electricity prices ELEU <GO>
Natural-gas markets menu NATG <GO>
--Editors: Mike Anderson, Rob Verdonck.
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 on +44-20-7073-3520 or sev@bloomberg.net
