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EEX runs first Japanese power clearing trades in Asian expansion

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FRANKFURT (Reuters) - Tohoku EPCO Energy Trading and ENGIE Global Markets became the first users of a new clearing service for power trading on the Japanese wholesale futures market offered by energy exchange EEX on Monday.

European Energy Exchange Chief Executive Peter Reitz said in a statement that the Japanese product was the first Asian market on the EEX online platform and the first EEX group product specifically designed for Asia.

EEX, which is expanding its presence in the Asian time zone, said its new trade registration service had run for the first time after two years of preparation.

Designed to help companies in wholesaling, generation and distribution with their risk management, the contract's first trade totalled 11,040 megawatt hours (MWh) and was brokered by Japanese firm enechain Corporation, EEX said.

The Japanese government opened the country's power market, the world's fourth largest, to more competition in the wake of the Fukushima nuclear disaster in 2011.

It allowed new entrants, encouraged renewable energy and supported market-based trading of power rather than bilateral sales by utilities, much like Europe which started the process more than 20 years earlier.

EEX provides power contracts trading and, outside the bourse, clearing services for over-the-counter (OTC) trades just like the one in Japan in its core markets in Europe and increasingly also in North America.

Reitz said the move would open up new trading avenues for EEX's members, who apart from utilities and brokers include clearing banks and other intermediaries.

"We know it will take time to develop liquidity over the coming months and years," he added.

(Reporting by Vera Eckert; Editing by Alexander Smith)

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