EEX Group: Five years of successful development of CSEE power markets

EEX Group looks back on five years of successful development of power markets in the Central and South Eastern European (CSEE) region. Five years ago today, on 15 June 2017, EEX extended its product portfolio to Central and Eastern Europe by adding power derivatives products for the Czech Republic, Slovakia, Hungary, Poland and Romania. This step became possible after the integration of the Prague-based Power Exchange Central Europe (PXE) which joined EEX Group in mid-2016.

Within four years after the migration, power futures volumes increased more than 9-fold to peak at 278 TWh in 2020. In 2021, volumes remained at a high level, reaching 214 TWh in total. In particular, the Hungarian power market has established itself as the main trading hub in the region, with a total volume of 157 TWh in 2021.

Steffen Köhler, COO of EEX comments: “Together with our customers, the PXE team and local partners in the countries we jointly brought liquidity in the CEE markets to a new level. Offering a wide range of European market areas for trading on a single platform with clearing services from one central counterparty, European Commodity Clearing (ECC), was the key to achieve substantial growth in these markets.”

David Kučera, CEO of PXE adds: “We are grateful for the trust and the continuous support of all customers and partners, which helped to achieve the growth over the past years. Together with the trading community, we have continuously expanded the EEX product offering for the CSEE region and attracted new trading participants from all over Europe.”

In 2019, EEX launched cash-settled power futures for the Bulgarian, Slovenian and Serbian market areas in cooperation with the respective local power spot exchanges. The three markets saw a combined trading volume of 4.4 TWh in 2021. In 2021, the Group’s offering for Poland was further extended by EPEX SPOT which launched Day-Ahead auctions for Poland, followed by the Polish Intraday market in early 2022.

Together, EEX, PXE and EPEX SPOT plan to further develop the power markets in Central and South Eastern Europe and thereby increasing liquidity. In short-term trading EPEX SPOT is working with Hungarian, Slovenian and Serbian TSOs to establish the first regional power exchange (“ADEX”) for Central and South-Eastern Europe.

In long-term trading, EEX signed a cooperation agreement with the CROATIAN POWER EXCHANGE Ltd. (CROPEX) to introduce Power Derivatives for the Croatian market. The start of trading for these products is planned for the first quarter in 2023. For the start of the Croatian Power Futures on EEX, it is intended to begin with the setup of the basic long-term Future curve (comprising Week, Month, Quarter and Year Futures) with a base and peak profile and to successively expand the product range with increasing market interest. This stepwise approach has proven to be a successful strategy for the joint development of new markets.

Silvio Brkić, CEO of CROPEX, adds: "After successful recent completion of full integration of spot markets at Croatian EU borders into the internal EU market we’re looking forward to implement our cooperation with EEX to offer financial instruments derived from CROPEX Day-Ahead price for all EU market participants. Establishing reliable long-term reference prices for the Croatian power market will certainly contribute to the further development and robustness of the EU market overall.”