European power trading volumes fell 1 pct in 2014 – Prospex

(Reuters) by Vera Eckert – European wholesale power trading volumes in 2014 fell 1 percent on the year, to be 22 percent below 2010’s peak, as over-supply reduced price volatility and limited chances for big profits, research company Prospex said. In an analysis of markets in Germany, the Nordic region, Britain, Italy, Spain, France and the Netherlands, Prospex found trading volumes on exchanges and the over-the-counter market slipped to 8,517 terawatt hours (TWh), down from the historic peak of 10,924 TWh in 2010. The report, due to be published in full on Tuesday, said a rise in renewable energy capacity had increased liquidity in the short-term markets, but those contracts were still for relatively small volumes compared with the overall market. Added to conventional capacity, renewables were helping create permanent oversupply, eroding volatility, Prospex said, adding that: “the unpredictability of renewables and changing policies in this field have made longer-term business more difficult.” That means fewer opportunities to make big profits on trading bets, which has driven some banks out of the market since 2012, and rising interest from commodity trading houses has not offset that. EU regulations, in areas such as trade reporting, clearing and equity capital requirements , … continue reading

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