ANNUAL REPORT JUNE 2010
FEDERATION OF EURO-ASIAN STOCK EXCHANGES
The U.K. experience
The U.K. power market is almost as large as
the Nordic countries combined, yet has
suffered from a lack of transparency and
liquidity. Volumes have failed to increase in
spite of the general surge in other
commodities trading, and new entrants have
tended to avoid the market.
Britain’s Futures and Options Association
(FOA) chose the combination of Nord Pool
Spot and NASDAQ OMX Commodities to
establish the new U.K. power market, N2EX,
based on the companies’ vast experience
from Nordic physical and financial electricity
trading and the proven systems expertise of
NASDAQ OMX in international power
derivatives and clearing services.
FEAS region
Other markets are learning from the Nordic
experience. NASDAQ OMX Advisory Services
has incorporated the former Nord Pool
Consulting group, which provides strategic
and management consulting services within
the power business worldwide. The group has
been involved in projects in more than 65
countries and has conducted more than 20
major studies since 2002 including projects in
FEAS member nations Albania, Bosnia and
Herzegovina, Bulgaria, Croatia, India,
Kazakhstan, Romania, Serbia, Turkey and the
Former Yugoslavian Republic of Macedonia
and Montenegro.
Advisory Services for the
power industry
NASDAQ OMX Advisory Services provides
strategic and operational guidance to
exchange industry clients around the globe.
NASDAQ OMX Advisory Services partners
with its clients and often gets involved in the
very early stages of market development.
Core offerings to the power industry include:
NASDAQ OMX also offers a wide range of
system solutions for global energy markets.
The core commodities market system,
CONDICO, combines full functionality with a
low total cost of ownership and is the perfect
solution for marketplaces that want to keep
technology investments in line with growth.
There are also other system solutions
available to handle more high intensity
markets with special needs. Besides the
Nordic and U.K. energy markets, NASDAQ
OMX technology today powers energy
markets in India, Poland, Romania and
Southern Africa.
Building on the success in the Nordic region,
NASDAQ OMX Advisory Services offers a
wide range of services to the power industry.
As an example, we recently completed
studies on developing regional wholesale
electricity markets in both South East (SEE)
and Central East (CEE) Europe. We recently
participated in a stakeholder workshop in the
CEE region to provide high level design and
business recommendations, and we will work
with several of the countries as they take the
initiatives to the next level.
In the SEE study, the proposed first step is for
Bulgaria, Romania and Serbia to establish
national power exchanges and a regional day-
ahead auction market linking the countries’
electricity prices with implicit auctions. Other
SEE countries will join as they are ready.
While each region is unique, there are
similarities. Member countries within each
region want to meet European Union
requirements to maintain a market-based
method for buying and selling electricity.
Each needs price transparency in order to
attract investors. And, while the individual
countries want to maintain a national power
infrastructure, their markets are generally not
large enough to generate needed
competition.
In addition to creating competition, regional
cooperation reduces the risk of fragmentation,
creates diversity of power supply, potentially
lowers costs, increases security of supply,
and promotes more efficient utilization of
generation capacity. By interconnecting a
larger system, pricing stabilizes, reducing the
risks for investors. So, in the long run, regional
cooperation should also attract new investors
to the region.
All Advisory Services power industry clients
are directly or indirectly involved in
restructuring power markets and may include
authorities, system operators, marketplace
operators, marketplace participants, R&D
institutes, banks, investors and system
vendors. All recognize the need for
transparency, liquidity and efficiency in the
world’s power markets and the need for open,
electronic marketplaces for trading and
clearing.
• Feasibility studies: Experts assess critical
issues prior to development of a competitive
power market or within an already existing
market. • Training: Update and advance clients’ in-
house competence in power market concepts
and improve market participants’ skills via
interactive training.
• Infrastructure and market design: Help
design and develop an entire power market
including roles, responsibilities and interfaces,
ending with a complete framework for the
market including regulations. • Market simulation: Computer-based price
formation analysis and evaluations of price
level and power flow in a competitive physical
delivery market using the SAPRI market
simulator.
• IT implementation: Ensure the successful
specification, selection and implementation of
required IT software and systems. For additional information, please go to
nasdaqomx.com/commodities.
CONTACT INFORMATION
Contact Name Mr. Henri Bergström
E-mail [email protected]
Website www.nasdaqomx.com
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