An electricity market is a system that enables the exchange of electrical energy, through an electrical grid. Historically, electricity has been primarily sold by companies that operate electric generators, and purchased by consumers or electricity retailers.
In finance, a futures contract is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset transacted is usually a commodity or financial instrument. The predetermined price of the contract is known as the forward price or delivery price. The specified time in the future when delivery and payment occur is known as the delivery date. Because it derives its value from the value of the underlying asset, a futures contract is a derivative.
The spark spread is the theoretical gross margin of a gas-fired power plant from selling a unit of electricity, having bought the fuel required to produce this unit of electricity. All other costs must be covered from the spark spread. The term was first coined by Tony West's trading team on the trading floor of National Power Ltd in Swindon, UK during the late 1990s and quickly came into common usage as other traders realised the trading and hedging opportunities.
Eurex Exchange is an international exchange which primarily offers trading in European based derivatives. It is the largest European futures and options market. The products traded on this exchange vary from German and Swiss debt instruments to European stocks and various stock indexes. All transactions executed on Eurex Exchange are cleared through Eurex Clearing, which functions as a central counterparty (CCP) for multi-asset class clearing of the above-mentioned exchange-traded product range as well as over-the-counter traded products.
The European Climate Exchange (ECX) managed the product development and marketing for ECX Carbon Financial Instruments, listed and admitted for trading on the ICE Futures Europe electronic platform. For a time it was a subsidiary of the Chicago Climate Exchange, but eventually became a sister company. Both companies as well as IFEX were owned by Climate Exchange Plc, a holding company listed on the London Stock Exchange's Alternative Investment Market, founded by Richard Sandor. A chief executive was Patrick Birley, son of archaeologist Robin Birley. While products were listed on the London Stock Exchange, the sales and marketing team was initially based in Amsterdam, the Netherlands, under its first CEO, Peter Koster, before moving to London in 2007. Climate Exchange Plc was bought in April 2010 by Intercontinental Exchange.
The European Union Emissions Trading System is a carbon emission trading scheme which began in 2005 and is intended to lower greenhouse gas emissions by the European Union countries. Cap and trade schemes limit emissions of specified pollutants over an area and allow companies to trade emissions rights within that area. The EU ETS covers around 45% of the EU's greenhouse gas emissions.
The Regional Greenhouse Gas Initiative (RGGI, pronounced "Reggie") is the first mandatory market-based program to reduce greenhouse gas emissions by the United States. RGGI is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia to cap and reduce carbon dioxide (CO2) emissions from the power sector. RGGI compliance obligations apply to fossil-fueled power plants 25 megawatts (MW) and larger within the 11-state region. Pennsylvania's participation in the RGGI cooperative was ruled unconstitutional on November 1, 2023, although that decision has been appealed. North Carolina's entrance into RGGI has been blocked by the enactment of the state's fiscal year 2023–25 budget.
Intercontinental Exchange, Inc. (ICE) is an American company formed in 2000 that operates global financial exchanges and clearing houses and provides mortgage technology, data and listing services. Listed on the Fortune 500, S&P 500, and Russell 1000, the company owns exchanges for financial and commodity markets, and operates 12 regulated exchanges and marketplaces. This includes ICE futures exchanges in the United States, Canada, and Europe; the Liffe futures exchanges in Europe; the New York Stock Exchange; equity options exchanges; and OTC energy, credit, and equity markets.
NASDAQ OMX Commodities Europe is a trade name of NASDAQ OMX Oslo ASA, the single financial energy market for Norway, Denmark, Sweden and Finland. Before 1 November 2010, it was known by the name Nord Pool. As of 2008, Nord Pool was the largest power derivatives exchange and the second largest exchange in European Union emission allowances (EUAs) and global certified emission reductions (CERs) trading.
EU Allowances (EUA) are climate credits (or carbon credits) used in the European Union Emissions Trading Scheme (EU ETS). EU Allowances are issued by the EU Member States into Member State Registry accounts. By April 30 of each year, operators of installations covered by the EU ETS must surrender an EU Allowance for each tonne (1,000 kg) of CO2 emitted in the previous year. The emission allowance is defined in Article 3(a) of the EU ETS Directive as being "an allowance to emit one tonne of carbon dioxide equivalent during a specified period, which shall be valid only for the purposes of meeting the requirements of this Directive and shall be transferable in accordance with the provisions of this Directive".
The Chinese national carbon trading scheme is an intensity-based trading system for carbon dioxide emissions by China, which started operating in 2021. This emission trading scheme (ETS) creates a carbon market where emitters can buy and sell emission credits. The scheme will allow carbon emitters to reduce emissions or purchase emission allowances from other emitters. Through this scheme, China will limit emissions while allowing economic freedom for emitters. China is the largest emitter of greenhouse gases (GHG) and many major Chinese cities have severe air pollution. The scheme is run by the Ministry of Ecology and Environment, which eventually plans to limit emissions from six of China's top carbon dioxide emitting industries. In 2021 it started with its power plants, and covers 40% of China's emissions, which is 15% of world emissions. China was able to gain experience in drafting and implementation of an ETS plan from the United Nations Framework Convention on Climate Change (UNFCCC), where China was part of the Clean Development Mechanism (CDM). China's national ETS is the largest of its kind, and will help China achieve its Nationally Determined Contribution (NDC) to the Paris Agreement. In July 2021, permits were being handed out for free rather than auctioned, and the market price per tonne of CO2e was around RMB 50, far less than the EU ETS and the UK ETS.
LCH is a financial market infrastructure company headquartered in London that provides clearing services to major international exchanges and to a range of OTC markets. The LCH Group includes two main entities: LCH Limited based in London and LCH SA based in Paris.
Nord Pool AS is a pan-European power exchange. Nord Pool has a main office in Oslo and further offices in Stockholm, Helsinki, Tallinn and London. The company is owned by the European exchange operator Euronext as well as TSO Holding, which represents the continental Nordic and Baltic countries' transmission system operators. Nord Pool has two subsidiaries, Nord Pool AB and Nord Pool Finland Oy.
BlueNext was a European environmental trading exchange, considered the largest CO2 permit spot market, with headquarters in Paris, France. On October 26, 2012, BlueNext announced that it would close permanently its spot and derivatives trading operations as of December 5, 2012.
APX Group (APX) is an energy exchange operating the spot markets for electricity in the Netherlands, the United Kingdom, and Belgium. Established in 1999, APX provides exchange trading, central clearing and settlement, and data distribution services as well as benchmark data and industry indices. APX has over 180 members from more than 15 countries. In 2014, a total volume of 92 TWh of energy was traded or cleared by APX.
Danske Commodities (DC) is an energy trading house. The company is an international trader of energy-related commodities such as electric power, gas and climate market products with activities in 40 countries.
European Power ExchangeSE is a European electric power exchange operating in Austria, Belgium, Denmark, Finland, France, Germany, Great Britain, Luxembourg, the Netherlands, Norway, Poland, Sweden and Switzerland.
Flett Exchange is an environmental commodity exchange and brokerage firm based in Hoboken, New Jersey. The company is specialized in trading of Solar Renewable Energy Certificates (SRECs) in the United States.
European Commodity Clearing (ECC) is the leading clearing house for energy and commodity products in Europe and the central clearing house for the Global Commodity Exchange, EEX Group. ECC assumes the counterparty risk and guarantees the physical and financial settlement of transactions, providing security and cross-margining benefits for its customers. As part of EEX Group, ECC provides clearing services for EEX, EEX Asia and EPEX SPOT with additional services provided to Power Exchange Central Europe (PXE). In addition, ECC also provides clearing services for the partner exchanges HUPX, HUDEX, NOREXECO, SEEPEX and SEMOpx.
