EEX Group unveils solutions for future energy and commodity markets
EEX Group outlined a programme of innovations for the energy and commodity markets of the future at the E-world energy & water conference in Essen.
Four of the Group’s Chief Executive Officers (CEOs) took part in the press event discussing how EEX Group’s series of innovative projects meets the challenges and opportunities posed by the increasing importance of decarbonisation, digitalisation and decentralisation.
“As EEX Group we are committed to providing our customers with tailor-made solutions that help to shape the future. Our series of innovations is shaped by the major trends of decarbonisation, decentralisation and digitalisation, which will undoubtedly transform the energy markets of the future on a local, regional and global level,” said Peter Reitz (pictured), CEO of EEX.
“Two aspects which EEX Group is currently working on are the even more intelligent use of data and the emergence of technologies such as blockchain.”
To support the digital transformation in the energy market, EEX recently set up the joint venture enermarket together with innogy and Süwag. enermarket is a B2B platform that enables customers to compare offers from power and gas providers online. This platform will support smaller and medium-sized enterprises by providing a quick and independent price comparison for their power and gas tariffs. While there are a number of platforms in Germany that enable price comparison for power and gas in the retail sector – this is a completely new approach for the B2B sector. Going in a similar direction, targeting a special customer group, namely municipalities, is the PXE procurement platform (PARC) which offers auctions for Czech power and gas.
On the subject of blockchain, Reitz outlined that EEX Group discusses with customers new ideas as to how the blockchain technology can be applied in exchange and clearing business and whether these ideas are fit for the market; “We see this new technology as a real opportunity to further improve our business and in doing so, enhance the overall customer experience,” Reitz says.
Jean-François Conil-Lacoste, Chairman of the Management Board of EPEX SPOT, presented the plans of EPEX SPOT to open markets to local flexibility providers. “We are part of the ENERA project, an initiative exploring the full potential of local flexibility markets, with around 30 partners coming from various sectors.” In the framework of ENERA, EPEX SPOT along with its partners aim to launch new locational order books in order to solve grid congestions, a growing issue across the network which is likely to prevail in times of growing renewable shares. “The idea is to develop a market-based congestion management mechanism, which will ease the growing tensions on the grid,” adds Conil-Lacoste.
EPEX SPOT is also involved in the application of the blockchain technology through a partnership with LO3 Energy, a US-based energy-tech company with whom the Exchange has signed a Memorandum of Understanding in December 2017. Both parties commit to sharing their complementary expertise to develop solutions which connect local microgrids, as set up by LO3, with the wholesale market operated by EPEX SPOT, using the blockchain technology. A first realisation of this partnership involves pilot projects in Germany. Egbert Laege, President of Powernext and CEO of CLTX, elaborated further on how EEX Group is committed to developing new products that facilitate and enable the integration of renewables into the market which further promote decarbonisation.
EEX Group has been at the forefront of this initiative having launched a series of Energy Transition Products in recent years such as the Cap Futures and Wind Power Futures in addition to a number of 15 minute contracts on the power spot market. Furthermore, Powernext operates the registry for Guarantees of Origin and of White Certificates in France. Both are market instruments which enable the consumer to actively take part in the energy transition, by tracking the origin of energy provided to the consumer and by giving incentives to save energy.
Laege also outlined the global activities of EEX Group. Having launched the Global Commodities business in 2014, EEX Group now provides services across three time zones and in various regulatory jurisdictions; “With commodity markets becoming more global in character and interconnected both intra-regionally and within supply chains, our customers now require exchanges which do not specialise in a single product set but instead offer a much broader range of trading possibilities in a single marketplace,” says Laege.
Paul Cusenza, Chairman and CEO of Nodal Exchange and Nodal Clear, took the opportunity to introduce the US based exchange and clearing house within the framework of EEX Group. The derivatives exchange which holds almost a third of the market share of open interest of the US power futures market, enables its participants to trade power futures and options on over 1,000 listed contracts covering hundreds of hub, zone, and node locations across seven organised power markets in North America.
The Nodal CEO also outlined their latest innovative solution for the North American derivatives market which focuses on the US trucking market which currently achieves annual revenues of over USD700 billion: “Together with TransRisk and DAT solutions, we are currently working on developing a market to list the first and only trucking freight futures and options on futures contracts,” says Cusenza. “With the planned introduction of trucking freight contracts in late 2018, Nodal Exchange is meeting market needs by helping to mitigate the volatility that exists in the market for organisations that are exposed to market rates like brokers and shippers.”