FRANKFURT/OSLO June 20 (Reuters): The European Energy Exchange and Nasdaq said on Tuesday they have reached an agreement under which the US exchange operator will transfer its European power trading and clearing business to EEX.
The transaction will involve the transfer of existing open positions in Nasdaq's Nordic, French, and German power futures as well as European carbon emission allowance futures (EUAs) to EEX's clearing house - European Commodity Clearing (ECC), the company said in a statement.
They did not provide financial details, and the deal is still subject to regulatory approvals.
EEX, Europe's leading electricity and natural gas exchange which serves 800 participants, is expanding core products as well as carbon, freight, agricultural and hydrogen products, hoping to benefit from synergies in the different markets.
Sweden's Nasdaq Clearing AB will not be a part of the sale and it will continue to own and operate services for Nordic equity derivatives, fixed income derivatives and other European financial derivatives contracts.
"We see the transaction as an opportunity for us to better align our core strengths and strategic priorities with evolving client needs," a Nasdaq spokesperson said.
EEX European power futures trading in Jan-April 2023 totalled 1,373 terawatt hours (TWh), 3.0 per cen less than a year earlier and Nordic power futures within that accounted for 7.1 TWh, 42 per cent off from comparable 2022.
Meanwhile, Nordic power trading volumes at Nasdaq have been steadily declining the last years and totalled 110.4 TWh for the Jan-Apr 2023 period, down from 169.4 TWh the previous year.
EEX said it will change the current Nordic power market structure and replace the Electricity Price Area Differential (EPAD) contracts currently offered by Nasdaq with zonal futures contracts, in line its continental European offering.
The Nordic power market consists of 12 bidding zones, but financial contracts are settled against a Nordic system price. EPAD contracts allow participants to hedge price differences between a bidding zone and the system price.
An EEX press spokesperson would not immediately expand on the press release, which also stated that Nasdaq will inform the market about the timing of the transfer of existing open position to EEX once required approvals are received.
