FRANKFURT (Reuters) – The European Energy Exchange said on Monday the bourse would remain open in its transparent price-setting role following significant power price volatility since the end of last week.
Concerns that Russia will further curb gas flows to Europe, technical and weather-related issues at French nuclear plants, as well as drought hitting coal deliveries have played havoc with European wholesale power.[EL/DE][NG/EU]
German baseload, a benchmark contract for European electricity futures for annual delivery in 2023, on the exchange was 20.8% down from an intraday high of 1,050 euros a megawatt hour (MWh) at 775 euros/MWh at 1420 GMT.
That high was 6.6% above Friday’s already exorbitant close while the latest price is 11 times what it was a year ago and is mirrored in the equivalent contract in the wider OTC market.
EEX said in a note that it kept constantly checking the current market situation. Its council that represents market participants met on Monday and decided against a trading halt.
“Stopping exchange trading would lead to a shift in trading, but it would not change the price development and would even cause more uncertainty overall,” said Chief Operating Officer Steffen Koehler.
The EEX, part of Deutsche Boerse, stressed that clearing and settlement of exchange transactions remained ensured and that all margin claims of the clearing house have been serviced by the clearing members.
However, it warned that high liquidity requirements resulting from sky-high prices, could lead to a reluctance on the side of sellers. Operators must place trade margins with the EEX clearing house, ECC.
Therefore, it was important that companies receive support in financing their collateral from Germany as well as other member states of the European Union, the EEX said.
The EEX offered a link to a recent Q+A document on a potential futures market suspension.
(Reporting by Vera Eckert, editing by Tomasz Janowski)