N2EX, the UK power market set up by Nasdaq OMX Commodities and Nord Pool Spot, has decided on a launch date of January 11, 2010 for its market in cooperation with The Transitional Market Council (TMC).
The N2EX market design has been tailored to the requirements of the UK power market with the goal of creating UK's premier energy exchange.
The new power market is being developed in close cooperation with the Futures and Options Association (FOA) and UK market participants. It will launch its day-ahead auction market on January 11, and trading and clearing for the prompt market will begin the following day. The platform will be live in mid-December and it is expected that participants will use the platform for clearing ahead of the market launch date as part of their testing.
N2EX will later establish a cash-settled derivatives power market, with a full range of clearing services and cross-commodity netting opportunities. The derivatives market will be based on the physical reference price.
"We are proud to deliver the N2EX market solution to the UK power market. The agreed launch date will secure market readiness," commented Geir Reigstad, vice president, NASDAQ OMX Commodities.
"Our aim is to establish a physical reference price based on the physical power market and to build market liquidity, efficiency and transparency," said Hans Randen, acting CEO of Nord Pool Spot.
"Together we have established state-of-the-art solutions adapted to our specific requirements. The market trials have shown that N2EX has every opportunity to be a very useful instrument for the UK power market," said Paul Beynon, chairman of the Power Trading Forum of FOA.
Dynamic price and volume information will also strengthen the transparency for UK consumers, allowing them to understand the price mechanisms in the wholesale market. This will lead to increased competition, to the benefit of end users.
Nord Pool Spot has a long-term experience in operating power markets dating back to 1993. NASDAQ OMX Commodities provides significant experience with its knowledge of clearing the Nordic power market in addition to being a supplier of exchange technology to more than 70 financial marketplaces in over 50 countries.