EEX gains new members with the addition of more OTC trading
The European Energy Exchange EEX is expecting a strong volume increase in 2025, as more market players join the exchange to hedge renewables or use the clearing functions. This was stated by its CEO at the E-World trade show.
Peter Reitz, CEO of the exchange, said that in a recent interview, it had seen a 37% increase in its European power futures volumes in January. These have grown by 63% over 2024.
Reitz stated that there are two main drivers for the growth of the exchange: new members, and a shift in market volume from over-the-counter markets (OTC).
He noted that increasing digitalisation has led to algorithmic trading.
In 2024, 60 new companies will be added to the EEX. This brings the total number of 950.
Reitz is the head of the 25-year old wholesale trading platform that contributes 10% to the revenue of its parent company, Deutsche Boerse. He stated that EEX would widen its lead in the over-the counter business.
Reitz stated that "there is a shift to the Deutsche Boerse Clearing House, away from cleared brokerage trades...I expect the trend to continue."
He said that the EEX has increased its market share of German power futures from 81% a few years ago to 85% by 2024, and the rest is OTC.
Since the 2008 Financial Crisis, OTC clients have increasingly turned to regulated markets to comply with European Union rules on financial transactions, reduce counterparty risk, and save money by bundling fees across products and geographical regions.
Reitz stated that EEX is planning to offer "Mon-Sun Peak Power Futures", in Spain, later this month. This will take into account the increasing solar power generation in southern Europe.
EEX's overall electricity trading volume increased by 43% to 12,371 terawatt-hours (TWh) last year. Volumes in January were up 37%, at 1,188 TWh.
Reitz refused to provide a volume forecast, citing the difficulty of estimating geopolitical risk and the variety of energy mix. Vera Eckert reported, Jane Merriman edited.
(source: Reuters)
