ESSEN, Germany (Reuters) - The European Energy Exchange (EEX) expects to expand power trading in Serbia, Bulgaria and Slovenia this year, having raised power futures volumes in 2018 across Europe by 19 percent, Chief Executive Peter Reitz said.
“Their power markets are so mature that they can use derivative markets in order to take the next steps within their market development process,” Reitz said in an interview on Tuesday during the E-World of Energy fair in Essen.
Inclusion of the three markets will mean EEX will cover 20 power trading zones in Europe altogether, he added.
When EEX bought Prague rival PXE in 2016, it saw Czech wholesale power volumes in the following two years more than double each year.
This was thanks to scaling effects, for example as its core market participants in western Europe moved into the new products on offer.
“It showed that the networking effects our platform offerings do work,” Reitz said.
EEX and Bulgarian peer IBEX already signed in December a cooperation deal to introduce Bulgarian electricity futures on the German exchange in the first half of 2019.
Trading volumes in EEX’s flagship European markets rose to 3,346.9 terawatt hours (TWh) last year, the bulk of which was traded in core markets such as Germany.
The EEX, part of Deutsche Boerse, has benefited from a sustained upturn in wholesale prices, led by strong global fuels demand and political intervention in the European Union’s carbon market.
Reitz also said market share was going up in Italy, Spain and France.
The bourse was also looking into the burgeoning market for risks around Power Purchase Agreements (PPAs), where renewable energy buyers and sellers strike bilateral deals for over 10 years to hedge volume risks for the producer and guarantee the buyer 100 percent green power.
The EEX could imagine offering clearing services for long PPA run-times, Reitz said.
In Germany, which accounts for half its power futures trading alone, bourse trading only held a 40 percent market share of the wholesale market, with 60 percent over-the-counter (OTC) handled between traders.
“There is still potential for us to grab share from OTC, which we have made one of our resolutions for 2019,” he said.
Reporting by Vera Eckert, editing by David Evans