©ICIS HEREN - Traders mull BSP's liquidity surge and money issues
As activity on southeast European energy exchange BSP SouthPool more than quadrupled in May, some traders say that the Slovenian government is helping to raise liquidity in fear of loosing the platform over financial woes. According to some traders, Slovenian-based BSP SouthPool is in danger of losing several of its participants and some of its liquidity if Serbia forms its own power exchange. The exchange is now on the look-out for more investors and has approached traders for funds, the sources said. "[The] Slovenian government got the Slovenian transmission system operator [TSO] ELES to use BSP SouthPool for grid-loss volumes, increasing its liquidity, which is how the exchange has managed to form an hourly price index," one trader said. Other traders pooled by ICIS Heren pointed out that the government's intent to buy energy on the exchange was well-documented in official government and ELES statements. In April, BSP SouthPool and ELES issued a joint statement saying the TSO's membership on the exchange is just one of the steps to make balancing purchases more transparent and effective. "With our activities on the BSP SouthPool, we aim to optimise our electricity buying costs and support the growth of the liquidity on the energy exchange," ELES said in the statement. In June, BSP said it has managed to form a price index for each hour for the Slovenian hourly market, as spring trading activity has increased greatly (see EDEM 1 June 2010), but added the boost is down to a move to hourly auctions. Will Serbia move? The Serbian government was unavailable for comment on Thursday (24th June) on its plans for a power exchange. Most traders were cautious, saying reports over possible new state-owned exchanges in the region emerge every now and then but are mainly unfounded. "Of course rumours over a possible Serbian exchange do pop up here and there, but I don't think there's any actual intent behind them. Almost every government wants its own energy exchange, but as far as I know, no decisions have been made," one market participant said. Money woes One participant said BSP SouthPool was asking traders for funds that would keep the exchange running for another two years, but most refuted those claims. "Slovenia is not the wild wild east. I have not heard of any fishy dealings taking place, in fact, I'd say it's all quite transparent," one said. At the same time, BSP SouthPool said finding new shareholders or investors has been a part of their strategy since the beginning. BSP SouthPool was launched in January 2008 and is owned by Slovenian electricity market operator Borzen, which holds a 34% stake, and European derivatives exchange Eurex, which owns 66%. Eurex also has a 25% stake in the German power exchange, EEX. (THE ICIS HEREN REPORTS - EDEM 14.120 / 24 June 2010)

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