U.K. Power Market Needs ‘Single Unified’ Auction, E.ON Says
The U.K. power market would benefit from having a “single unified” auction as APX BV and Nasdaq OMX Group Inc.’s N2EX compete to offer day-ahead electricity, according to E.ON AG, Germany’s biggest utility.
The two daily auctions of U.K. power operated by APX and N2EX, the exchange run by Nasdaq OMX and Nord Pool Spot AS, need to work out a mechanism to calculate one reference price for the U.K., Tom Sargent, director of power and emissions trading at E.ON Energy Trading SE, said in an interview in Dusseldorf.
N2EX started its daily auction in January and has members including E.ON and Centrica Plc, Britain’s largest energy supplier. The exchange yesterday handled 18,052 megawatt-hours of power contracts for today. Trade is likely to increase on APX’s auction next year as the exchange plans to offer market coupling across BritNed, allowing traders to buy and sell power and capacity across the 1,000-megawatt cable that will link the U.K. with the Netherlands from next April.
“The market would benefit from a single unified auction,” Sargent said. “That’s not to say they can’t manage the two auctions separately, but there needs to be one mechanism to calculate one price.”
There haven’t been trades on APX’s auction, started in December 2008, since September last year. The auction on N2EX will be used as a price signal to build a futures market to trade financial contracts on the exchange.
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