Published by Global Banking and Finance Review
Posted on February 12, 2025
By Vera Eckert
ESSEN, Germany (Reuters) - European energy exchange EEX expects strong volume growth in 2025 as more market participants join to hedge renewables and tap into the exchange's clearing functions, its chief executive said during the E-World trade fair.
The exchange recorded 37% year-on-year growth in volumes of its flagship European power futures in January, which had grown 63% across 2024, CEO Peter Reitz said in an interview with Reuters.
"There are two drivers: new members and more over-the-counter (OTC) market volumes shifting to the exchange," Reitz said.
He said that the volatility of wind and solar electricity production was creating short-term supply risks, and thus hedging needs, also noting increasing digitisation resulting in algorithmic trading.
Some 60 companies joined the EEX in 2024 to make a total of 950.
Reitz heads the 25-year-old wholesale trading platform which contributes 10% to the turnover of its parent Deutsche Boerse. He said EEX will widen its lead over the over-the-counter business.
"There is a move to the Deutsche Boerse clearing house, away from uncleared brokerage trades...I see the shift continuing," Reitz said.
The EEX increased its market share in German power futures to 85% in 2024 on the exchange from 81% a year earlier, with the remainder OTC, he said.
Since the 2008 financial crisis, OTC customers have been turning more to regulated marketplaces to comply with European Union financial rules, reduce counterparty risks, and try to save money on fees bundled across products and regions.
EEX will offer new "Mon-Sun Peak Power Futures" in Spain later this month to account for southern Europe's rising solar generation, Reitz said.
EEX overall electricity trading volumes rose 43% last year to 12,371 terawatt hours (TWh). January volume was up 37% at 1,188 TWh.
Asked for a volume forecast for 2025, Reitz declined, pointing to hard-to-gauge geopolitical risks and varying energy mixes.
(Reporting by Vera Eckert, editing by Jane Merriman)
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