Biggest Power Exchange Urges European Governments To Aid Traders
The European Energy Exchange AG said that traders need more government support to guarantee their buying and selling.
(Bloomberg) -- The European Energy Exchange AG said that traders need more government support to guarantee their buying and selling.
Billions of euros put up as collateral for trades are sapping liquidity and making prices even more volatile, trading houses have warned. German energy giant Uniper SE sought to extend a government credit line to 13 billion euros ($13 billion) to ensure its short-term survival.
Electricity prices for next year surged above 1,000 euros per megawatt-hour earlier on Monday, before plunging more than 20% on EEX, Europe’s biggest marketplace for power contracts.
Uniper Seeks $13 Billion Credit Line as Energy Crisis Grows (1)
The bourse’s exchange council, made up of market participants, said in a statement that it is “very important that companies receive support in financing collateral (margins) not only from Germany as so far, but also from other member states or the EU.”
The front-year contract surged as much as 31% on Friday as the market spiraled out of control. However, the EEX management board said prices had been formed properly and there was no need to halt trading.
In a sign of how fast capital requirements are increasing, Uniper’s parent Fortum Oyj said earlier Monday said that its collateral requirements rose by 1 billion euros in the past week to 5 billion -- and that’s for the Nordic power market alone.
Fortum’s Power-Market Collateral Climbs $1 Billion in a Week
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