Nasdaq OMX Commodities, a business unit of The Nasdaq OMX Group (Nasdaq:NDAQ), and Nord Pool Spot today announced the successful launch of N2EX, its marketplace for physical UK power contracts.
The launch included a day-ahead auction and a prompt market.
"After an intensive year of development and preparations with the UK market participants, we are very pleased with the day-ahead auction results and the volumes currently being traded on the first day of the prompt market. The total traded volume on the day-ahead auction which closed at 10:30 CET was 6,987 MWh. The prompt market is still open for trading and the so far traded volumes have exceeded expectations," said Hans Randen, director trading in Nord Pool Spot.
"The good start for the N2EX market solution in the UK power market bodes well for the later launch of the derivatives market," commented Geir Reigstad, head of NASDAQ OMX Commodities.
N2EX will establish a reference price based on the physical market. The reference price will be the basis for its planned derivatives market.
N2EX is the result of a market initiative to inject liquidity back into the UK power market. In 2008, the Futures and Options Association (FOA) selected a consortium bid from Nord Pool Spot AS and NASDAQ OMX Commodities as a result of their extensive expertise. Nord Pool Spot runs the largest physical power market in the world, while NASDAQ OMX Commodities provides access to the world's largest power derivatives exchange and one of Europe's largest carbon markets, together with Nord Pool ASA.