Recent issues in Germany

1
Recent issues in Germany

• APEx Conference
• Dr. Hans-Bernd Menzel
• Leipzig, October 11, 2004

2
EEXs participant base is international
11
120 participants from15 countries
2
108 Spot Market participants 48 Derivatives
Market participants 51 OTC Clearing
participants 9 General Clearing Member 5 Broker 5
Market Maker 4 Transmission grid operators
3
5
10
61
1
8
2
2
18
3
1
1
3
Liberalization of electricity market in Germany
is achieved

• Spot Market at EEX
• Recognized price signal in Continental Europe
• By regulatory bodies
• By laws
• By bilateral contracts
• By derivative OTC-products
• Hedging available on a long-term basis
• Next steps what is coming soon

4
The turnover of physical power on the spot
market rises continuously
MWh per week
Euro per MWh
10 of the German electricity consumption
5
Liberalization of electricity market in Germany
is achieved

• Spot Market at EEX
• Recognized price signal in Continental Europe
• By regulatory bodies
• By laws
• By bilateral contracts
• By derivative OTC-products
• Hedging available on a long-term basis
• Next steps what is coming soon

6
Not a German market anymore

• EEX is in the center of a Central European price
  zone

7
Not a German market anymore

• High correlation between Germany and France

Source Powernext Website
8
Liberalization of electricity market in Germany
is achieved

• Spot Market at EEX
• Recognized price signal in Continental Europe
• By regulatory bodies
• By laws
• By bilateral contracts
• By derivative OTC-products
• Hedging available on a long-term basis
• Next steps what is coming soon

9
Risk hedging instruments available
Base and peak load Futures
... for the current month
... for the next 6 months in the future
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month0
... for the next 7 quarters in the future
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Quarter 5
Quarter 6
Quarter 7
... for the next 6 years in the future
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
10
EEX Futures are accepted
Open Interest 120 TWh or more than 4.2 billion
Euro
11
Liberalization of electricity market in Germany
is achieved

• Spot Market at EEX
• Recognized price signal in Continental Europe
• By regulatory bodies
• By laws
• By bilateral contracts
• By derivative OTC-products
• Hedging available on a long-term basis
• Next steps what is coming soon

12
Risk Hedging Instruments are available
example buyer of a Call-Option (Long Call)
profit
Options will be launched on November 8, 2004
price of underlying future (Euro/MWh)
Premium
strike price
loss
13
CO2-emissions trading

• The energy intensive industry
• represents about two thirds of all certificates
• is already connected to EEXs trading and
  clearing system
• has the trained personnel already in house
• seeks low transaction costs and low process risk

14
CO2-emissions trading

• EEX will launch a market for CO2-emissions
  certificates
• on its Xetra trading system
• integrated with electricity market
• no additional effort for electricity traders
• low costs through usage of existing
  infrastructure
• Short time-to market
• lauch will be early January 2005

15
Integration of Spot Market in February

• One screen for power and CO2
• One software
• One connection
• One training and admission process
• Synergies in clearingsettlement