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N2EX to Offer U.K. Power Station Margin Futures by June

Nasdaq OMX Group Inc. and Nord Pool Spot AS’s N2EX exchange plans to offer futures contracts based on the profitability of U.K. power stations by the end of June.

The futures, known as sparks, are based on the profitability of burning natural gas for power generation and will be made available once the exchange develops an index trusted by the market, Geir Reigstad, head of Nasdaq OMX Commodities Europe, said in an interview in London today. The platform currently publishes a benchmark based on natural-gas prices submitted by its members and the power price achieved in its daily auction.

N2EX is in talks with energy price-reporting companies including ICIS Heren, Platts and Argus, about gathering information to help create a sparks index, Reigstad said.

N2EX handled 196 gigawatt-hours in its auction for next-day power today. Baseload power rose 0.2 percent to 46.84 pounds a megawatt-hour in the sale, which ends at about 10 a.m. in London. Baseload power traded at 46.20 pounds in the over-the- counter markets before the auction cleared, broker data on Bloomberg show.

Nordic banks are among members of Nasdaq that will have access to the U.K. power market from March 5, after the exchange starts its new trading platform, Reigstad said.

To contact the reporter on this story: Catherine Airlie in London at cairlie@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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