* Takes European power trade expertise to Japan
* Expands in geographies, products
* U.S. subsidiary Nodal saw 79% volume rise in 2019
* To launch European green power hedges later this year
By Vera Eckert
ESSEN, Germany, Feb 11 (Reuters) - The EEX European energy bourse in 2020 will pursue growth in Japanese and U.S. power as part of a push to offer producers risk hedging and international energy operators access to new markets, Chief Executive Peter Reitz said on Tuesday.
The 20-year-old EEX, a subsidiary of Deutsche Boerse and continental Europe’s leading electricity and natural gas exchange, has started acquiring rivals and offering clearing services across all time zones in recent years.
The Japanese clearing service, which opens on May 18, will help power companies involved in wholesaling, generation and distribution with risk management while opening avenues for the EEX network of trading members, access providers, brokers and clearing banks.
“There is a lot of interest in Japan. Its power usage is around double that of Germany ... Its regulatory stage is that of the German market 20 years ago,” Reitz told Reuters in an interview during the E-World trade fair.
“We are in for the long haul. It does not matter whether there is a high volume within a month, or whether it takes one or two years before all new market participants adjust to the new possibilities.”
He said there could potentially be interest from players such as oil firms BP and Shell, brokers and European utilities like RWE, Uniper, Enel , or EdF.
EEX platforms serve more than 600 participants trading energy, carbon, freight, metals and agricultural products.
Nodal, a futures exchange based in Virginia that launched in 2009, offers 1,000 power and gas contracts for 100 locations.
EEX bought it in 2017 and in 2019, Nodal traded 79% more volume year on year.
Reitz said Nodal had reached 45% U.S. market open interest, a liquidity measure, and was aiming to cross the 50% hurdle maybe this year, as its clearing function helped customers reduce security margin outlays.
In Germany, the EEX bourse- and over-the-counter trade clearing activities has reached a 42% share of all power wholesaling versus 58% of clearing services handled between traders, up from a 31% share of bourse clearing in 2018.
The bourse would also tap into the burgeoning market for risks around Power Purchase Agreements (PPAs), where renewable sellers strike bilateral long-term deals with buyers to guarantee them 100% green power.
“We will provide (PPA) products later this year to hedge an entire decade in the German, Italian, and Spanish markets,” Reitz said. (Editing by David Evans)