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FRANKFURT, May 16 (Reuters) - The European Energy Exchange (EEX) said it will launch power future contracts for Austria's electricity market on June 26 in response to the planned split of the German-Austrian price zone approved by regulators from Oct. 1, 2018.
* The new product range will include baseload and peakload contracts with monthly, quarterly and annual maturity, to be financially settled, allowing hedges against price changes in Austria alone.
* The long-discussed measure to split the currently unified zone, announced on Monday, settled controversies between transport companies, producers and consumers in the two countries and with German neighbours to the East, who had to deal with unwanted surplus production.
* The move now agreed aims at allowing greater traffic at lower cost and fewer technical risks.
* The EEX on April 25 already protectively launched monthly, quarterly and annual base and peak power futures for Germany only, ahead of the latest finalisation of the move.
* Its statement on Tuesday said that on June 26, along with the Austrian products, it will offer day and week contracts for Germany on top of that, having consulted market participants about their requirements.
* Options on German futures will be made available from June 28.
* The trigger for the zone split had been oversupply from northern German wind parks, whose power flows do not go straight to southern industry, due to new grids being years behind implementation.
* This caused costs, stress on equipment and disruption risks on Polish and Czech grids that received "loop flows".
* The EEX exchange, which offers power contracts for a raft of European countries, along with gas and carbon, said it had not agreed with the regulators' suggestions that splitting the joint market zone was the ideal solution to deal with the congestion problems.
* It nevertheless wants to support the market with product solutions for future dealings.
* Until the split becomes effective, the new German and Austrian futures will be settled against the common German-Austrian day-ahead auction price. Thereafter, they will be settled against the two respective, separated, day-ahead prices. (Reporting by Vera Eckert; editing by Ed Osmond)