RWE Expands to Trade U.S. Power, Plans to Grow in Australia

RWE AG (RWE), Germany’s second-largest utility, started trading U.S. electricity and plans to expand into Australian power as commodities markets become more global.

James Hall has been appointed head trader for U.S. power and cross-commodities and Sam Lundqvist a senior trader, Hall said yesterday by telephone from Essen, Germany. Hall previously bought and sold mainland European power and Lundqvist traded carbon at RWE Supply & Trading GmbH. Syam Mohan joined as an analyst from Exelon Corp. (EXC) and Jim Rouiller was hired as a meteorologist from Planalytics Inc.

“The increasing influence of renewables and the future impact of shale gas and oil and the U.S. coal markets will be relevant factors for the future European markets,” he said.

Germany is considering the introduction of a capacity market mechanism to pay power generators to keep unprofitable electricity plants running. The nation needs to secure backup power as it builds wind farms and solar parks, which are subject to irregular output as the weather changes. Capacity markets are already established in many U.S. regions.

Hall and Lundqvist started trading U.S. power in June while Mohan and Rouiller began on Oct. 1. The team will be based in Essen but will work most of the U.S. trading day, Hall said.

“We are focusing on the East coast market, where liquidity is more than comparable with the German market,” Hall said.

EON AG, Germany’s largest utility, started trading U.S. power in November 2009 and U.S. gas in May 2010.

RWE Supply & Trading is planning to enter the Australian power market in the next two quarters, Peter Krembel, the company’s head of continental European power, said by e-mail on Oct. 1.

To contact the reporter on this story: Rachel Morison in London at rmorison@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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