The Minister of Industry and Trade, Mr Martin Ríman together with the CEO of Prague Stock Exchange, Mr Petr Koblic and CEO of the Power Market Operator, Mr Jirí Štastný introduced a new price—making system for electricity.
The newly established Commodity Exchange will soon be worth of deals of domestic power plants electricity.
"As a Minister I can not influence the height of electricity price, the lowering of which I would like to experience in the same way as the most of citizens and businessmen do. I decided, however, to find the way how to make the existing price construction of power electricity more transparent which is more than one half of the price for the end user. The result of it is a project of new Commodity Exchange, being prepared by the Prague Stock Exchange and the Electricity Market Operator. Exactly this project faces the demand of a higher transparency of price—making system for electricity," said the Minister, Martin Ríman.
The power electricity prices are currently set by so called virtual power stations. It concerns an auction into which CEZ places a part of its production to be sold in the next year. The final price is to be calculated as per the weighted average of the highest offers. A small percentage of the production offered in this way leads to a higher demand, which pushes the price of power electricity upwards.
The Prague Stock Exchange with support of the Ministry of Industry and Trade and after consultation with the Czech National Bank will establish the Commodity Exchange serving as a platform for organised electricity business. The Prague Commodity Exchange will use a commercial, communication and control system of the Prague Stock Exchange while pursuing this business. The company UNIVYC, a subsidiary of the Prague Stock Exchange will do the business settlement.
"The electricity business will be the pilot project of the new Commodity Exchange. It is crucial to link together financial and commodity markets which is a trend of the whole Europe and I am glad to be this time really among the pioneers," said the Prague Stock Exchange CEO, Mr Petr Koblic. "We wish the new Commodity Exchange to become a significant regional player in a short period of time, following up the good reputation of the Prague Stock Exchange. Its capital background and transparent property will ensure a desired stability for maintaining the energy market in the territory of the Czech Republic."
During December and January the Commodity Exchange status will be put together and an allowance application will be submitted to the Ministry of Industry and Trade accordingly. As of the beginning of the next year a preparation of Exchange rules and regulations will be launched followed by regulation of business and communication systems, so that in March it is possible to start off testing operations. The business on the new Commodity Exchange will start in June 2007.
"Objective of the Electricity Market Operator will be to manage a necessary short—term market and to settle futures contracts in energy whereas the Prague Stock Exchange and UNIVYC will manage financial settlement," stated CEO of the OTE, Mr. Jirí Štastný.