E.ON plans 1st German spot market for natural gas
Aug. 30, the country's Federal Network Agency rejected estimates by E.ON and RWE AG, the country's two biggest utilities, of the cost of operating their power and gas grids, bringing pressure on them to cut prices. „We want to actively boost gas trading in Germany,” Jochen Weise, a member of E.ON Ruhrgas's board, said yesterday at the press conference. „Gas trading offers the prospect of achieving greater price transparency on the market and thus countering a key criticism directed against our industry.” Weise presented a model for an internet trading platform that E.ON would use to administer the choice market. Trading on the platform is scheduled to begin in October, depending on the response from gas traders, he said. E.ON will offer to buy or sell gas at a fixed time for a published, uniform price to facilitate trading, in a process known as a choice market. The market will also offer spot trading and deals by telephone for week-ahead and month-ahead gas supplies. Regional utilities and other traders will be able to buy the gas. They must provide for its transport themselves, Weise said. He said transport capacity is limited, and the company may work to increase it. E.ON expects to shut down its platform as soon as enough trading volume is present to support trading on other platforms. Weise said the company is in talks with European Energy Exchange AG and is willing to „actively support” gas trading at exchanges. (Bloomberg)
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