European power trading volumes rise as markets adapt

New report from ICIS shows stronger liquidity and shifting trends with renewable energy

08 March 2016

 

Scenario StudyLondon, ICIS - Trading on the over-the-counter (OTC) European power markets increased in 2015 year on year, while the expansion of renewable energy has led to a shift in trading patterns. Germany remains the largest electricity market in Europe, and traded volumes have begun to grow again, despite ongoing low prices.

However, French market participation has increased, and it has now overtaken the UK to become Europe’s second most liquid power market.

Another trend is the move towards trading contracts for shorter and more immediate delivery. Wind and solar generation accounts for more of Europe’s generation mix than ever before. The uncertainty over supply has created a greater need to trade. “Growing trading volumes are good news, while more short-term trading shows the markets are adapting to new generation,” says Zoe Double, head of power at ICIS. “The more trading in European power markets, the stronger the price signal, and the more responsive companies can be in allocating resources and spreading their risk.” European energy policy promotes energy trading, but slower economic growth across Europe in previous years and consequent lower demand has affected the amount of electricity changing hands in the markets.

Falling energy prices have also played a part – with lower prices and less volatility, some liquidity providers have chosen to focus on other areas for trade, pulling out of many European markets.

Most European power is still traded ‘over-the-counter’ in most power markets, although individual markets vary significantly. The European Power Trading Report uses ICIS’ expertise in providing data, news and analysis to give insight into 14 different European power markets, both established trading centres and emerging markets. The report is freely available from the ICIS website.

About ICIS

ICIS is the world's largest petrochemical market information provider and has fast-growing energy and fertilizer divisions. Our aim is to give companies in global commodities markets a competitive advantage by delivering trusted pricing data, high-value news, analysis and independent consulting, enabling our customers to make better-informed trading and planning decisions. We have more than 30 years' experience in providing pricing information, news, analysis and consulting to buyers, sellers and analysts.

With a global staff of more than 800, ICIS has employees based in Houston, Washington, New York, London, Montpellier, Dusseldorf, Karlsruhe, Milan, Mumbai, Singapore, Guangzhou, Beijing, Shanghai, Yantai, Tokyo and Perth. Some 350 of ICIS’s staff are journalists engaged in reporting market prices and news, and ICIS is fully committed to upholding the highest journalistic principles of verification, corroboration and authentication. ICIS has a compliance framework that along with its methodologies and business processes adheres to the requirements of the IOSCO PRA Principles.  

ICIS is a division of Reed Business Information, part of RELX Group.


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