Business as usual for UK’s N2EX auction as prompt and intraday markets set for revamp

Trading on the UK N2EX prompt and intra-day markets will be suspended from 1 April 2014 pending the launch of a new intra-day market on the platform and resume before the end of the year, a spokesman for Nord Pool Spot, the exchange’s owner, said on Wednesday.

The suspension of the prompt and intraday markets will not impact the day-ahead power auction, where most of the liquidity on the exchange is concentrated. “[It’s] business as usual on N2EX day-ahead,” said the spokesman.

Nord Pool Spot, an operator of European power markets and part owner of N2EX, announced on Tuesday that continuous trading will be suspended from next month as delivers a “new and improved intra-day platform”, designed to align with Europe-wide initiatives to make it possible to trade intra-day power across larger regions.

The news came as Nord Pool Spot announced it will assume complete ownership of the N2EX platform by buying out its partner NASDAQ OMX’s share.

The spokesman said the aim is to deliver the new market platform before the end of 2014. Asked whether the launch would coincide with the expected completion of ownership by 1 October, the source said it would be “there or thereabouts.”

The day-ahead auctions on the platform have absorbed a big portion of the short-term buying activity in the UK market since their launch.

Over the last fortnight, six day-ahead auctions have featured more than 400GWh being sold in one session.

Liquidity on intra-day and prompt markets on the N2EX exchange has been diminishing for some time, with minimal volumes currently traded on a daily basis ( see EDEM 4 October 2012 ).

Rival exchange APX also attract relatively low volumes on both to its UK prompt and auction platforms. Over the last week, daily prompt volumes have exceeded 10,000MWh just once on APX.

One trader said the upgrade of the N2EX trading platform will raise the stakes in the battle between N2EX and APX to secure the business of market participants.

“We now have the same price on both exchanges, so the question is who will win or survive,” the source said.

Nord Pool Spot, which currently operates the physical markets on N2EX, will take over NASDAQ OMX’s current clearing responsibilities for the short-term physical market as part of the change in ownership.

NASDAQ OMX will continue to develop the financial power market, where members are able to trade UK futures contracts indexed on the N2EX day-ahead auction price. Henry Evans