* Initial trade higher than expected
* Hopes high for liquidity to rise
(Adds trader, analyst comments)
LONDON, Jan 12 Britain's new N2EX wholesale
power exchange launched succesfully on Tuesday, with initial
trade volumes higher than expected, the market operators said.
Nasdaq Commodities, a business arm of Nasdaq OMX (NDAQ.O),
and Norway's Nord Pool Spot officially opened the long-awaited
exchange for trading physical UK power contracts.
"After an intensive year of development and preparations
with the UK market participants, we are very pleased with the
day-ahead auction results and the volumes currently being traded
on the first day of the prompt market," Hans Randen, director
trading in Nord Pool Spot, said.
"The total traded volume on the day-ahead auction which
closed at 1030 CET (0930 GMT) was 6,987 MWh (megawatt hours).
The prompt market is still open for trading and so far traded
volumes have exceeded expectations."
Some UK power traders said they hoped it would succeed in
providing a reliable reference price for trading derivative
Good volumes traded on the platform on its first day and
there appeared to be enough participants to increase liquidity,
"I think it's reasonably well supported," a trader at a
"I think it was pretty good, and we've had generally
favourably reports on it."
Hopes are high that the N2EX, backed by a number of big
utility firms including E.ON (EONGn.DE) and RWE (RWEG.DE), will
increase liquidity in Britain's splintered power market.
"It has the scope to be the most successful exchange as
several big utilities and players are backing it, however only
time will tell how popular it is and therefore how much impact
it has on the liquidity of UK power," Nick Campbell, Inenco
energy market analyst, said.
The N2EX launch had been delayed by 24 hours to allow more
people to participate in the first day of trade, following a
month of market trials in December. [ID:nLDE60A1YZ]
With no single trading platform winning the backing of all
the large power generators, liquidity has been low in Britain's
power market in the past few years. Other exchanges and broker
screens are provided by APX Group, Spectron, and Tullet Prebon.
(Reporting by Kwok W. Wan; editing by James Jukwey, Anthony
Barker and Daniel Fineren)