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©ICIS HEREN - Hungary’s delayed power exchange has successful start
2010-07-20
Traders active on the Hungarian market have welcomed the launch of the local power exchange HUPX, which saw a hive of activity during the first day. A total of 2,278MWh of baseload power for Wednesday (21st July) delivery changed hands, with the settlement price at €47.80/MWh. The equivalent contract on the OTC market traded at €53.50/MWh. On the Peaks side there were 1,105MWh traded at an average price of €55.37/MWh - €8.13/MWh less than on the OTC. "I congratulate them for the good start," one trader said. "If they can keep up this volume for the next few days, I think the exchange and OTC prices should get closer," he added. However, another market participant wondered whether the traded volumes published on the HUPX website were accurate. "Liquidity on the OTC market didn`t change to justify the volumes on HUPX," the participant said. "The difference in prices can give some arbitrage to traders," he explained. But another trader rebuffed the claims, insisting that the liquidity on the OTC was unlikely to be affected by the launch of the exchange. "In general there are around 150-200MWh going through. Today there were 170 [MW]. There is a bigger amount trading over the phones between people for hourly profiles.... and it looks like that is going to move to the exchange," he added. Setbacks The exchange has suffered a number of setbacks related to development issues and licensing since it was announced in 2007. But last December, it linked up with EPEX, the regional spot exchange of France, Germany and Switzerland, for a Hungarian spot market venture (see EDEM 17 December 2009). Western European utilities EDF, GDF SUEZ, RWE, and Czech incumbent ČEZ, plus three other companies, have also sent letters of intent to sign up to HUPX (see EDEM 12 May 2010). In May, Prague-based exchange PXE joined hands with Austria`s EXAA to launch a rival platform, sparking a bitter rivalry between the two hubs. Following the launch of HUPX on Tuesday (20th July), a PXE spokesman said: "We see the only difference between HUPX and the PXE platform in [the] support the former gets from the large Hungarian power producer, MVM. Just how crucial this support will be is about to show in [the] upcoming weeks." HUPX was unavailable to comment. (THE ICIS HEREN REPORTS - EDEM 14.138 / 20 July 2010)

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