Cantor Fitzgerald and eSpeed have joined with energy industry participants to form TradeSpark, an electronic marketplace for the multi-billion dollar energy industry.
The new venture, which has the backing of Coral Energy, Dominion, Koch Energy Trading, TXU Energy Trading, Williams Energy Marketing and Trading Company, Dynegy, and Entergy, will create electronic marketplaces for natural gas, electricity, coal, weather derivatives, nitrogen oxide and sulphur dioxide emission credits.
TradeSpark will be fully operational on 2 October, employing approximately 50 personnel with access to eSpeed's electronic trading platform. Shortly following the launch, TradeSpark will offer three possible points of access to one pool of liquidity – over the Internet, through eSpeed's private network and through TradeSpark voice brokers at Cantor Fitzgerald.
TradeSpark spokesperson Harry Fry says the company aims to provide an end-to-end marketplace and trading solution that includes real-time and auction-based transaction processing, risk management tools and back-end processing systems.
Forrester Research predicts that by 2004, online sales of natural gas will reach $166 billion, representing 25 percent of all natural gas sales. Forrester projects online sales of electricity reaching $101 billion by 2004, an 11 percent share of all electricity sales. For the last quarter 2000, the TradeSpark partners, together with Dynegy and Entergy, estimate they together traded roughly 20 percent of all gas and power in North America.
Today's announcement comes three months after eSpeed, Dynegy and Williams Energy Services closed a deal where the three companies agreed to develop electronic marketplaces. As part of the same deal, Dynegy and Williams each purchased a $25 million equity stake in eSpeed.