February 14, 2018 / 4:08 PM / 6 months ago

Pegas trading platform keen to introduce temperature products

FRANKFURT, Feb 14 (Reuters) - European gas trading platform Pegas said it is developing temperature products, which if approved could go live next year and help energy operators hedge weather risks.

* “A final plan will be presented to the exchange’s top management in the third quarter,” Sirko Beidatsch, a natural gas expert at Pegas, said. “There is a lot of interest from traders and utilities.”

* Utilities and their customers were seeking more standardisation and transparency in a market so far dominated by reinsurers, Beidatsch said.

* Pegas, operated by French energy bourse Powernext which is a subsidiary of Deutsche Boerse’s EEX Group, presented plans during an energy trade fair in Essen last week for two purely temperature-based futures contracts and for two tailored to gas buyers and consumers, he said.

* The latter entail one physically delivered volume hedge, which tracks the difference between temperatures and standardised gas consumer contracts, and a financial swap contract that would reflect the difference between temperatures and gas prices.

* Pegas offers spot and futures for major European gas hubs as well as trading location spread and time spread products for much of continental Europe and Britain.

* Weather conditions influence gas prices heavily and hence the likely income and losses for, for example, municipalities delivering heat to households and industry.

* Details are available at: here (Reporting by Vera Eckert, editing by Susan Fenton)

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