NASDAQ OMX Commodities offers market participants possibility to trade derivatives linked to the electricity price on Nord Pool Spot power exchange. Trading derivatives helps to manage the risk of price fluctuations of power prices. NASDAQ OMX Commodities, which currently offers products linked to electricity prices in the Nordic countries and Estonia, is considering launching derivatives linked to electricity prices in Latvian and Lithuanian bidding areas. In addition to Nordic power contracts, NASDAQ OMX Commodities offers trading and clearing in German, Dutch and UK power contracts, as well as Electricity Certificates, Carbon, Natural Gas, Freight, Fuel Oil, and Seafood.
By cooperating with other energy companies and transmission system operators of Baltic States as well as NASDAQ OMX, Lietuvos Energijos Gamyba seeks to contribute to the development of liquid electricity derivatives market.
“Developing liquid electricity derivatives market will not only enable market participants to hedge against fluctuations of power prices on Nord Pool Spot power exchange but also will let anyone to publicly see the aggregated expectations of market players about the future power prices,” says Vidmantas Salietis, head of the Wholesale Electricity Department of Lietuvos Energijos Gamyba.
Lietuvos Energijos Gamyba views joining NASDAQ OMX Commodities as a strategic move showing both the importance of NASDAQ OMX in the establishment of a well-functioning regional power market in the Baltics as well as the determination of Lietuvos Energijos Gamyba to become its active member.
Welcoming Lietuvos Energijos Gamyba as a new DCM, Georg Aasen, Vice President NASDAQ OMX Commodities, said: “We are very pleased that Lietuvos Energijos Gamyba has joined NASDAQ OMX Commodities. This shows the competitiveness of our offering, our broad reach outside the Nordics and contributes to strengthen NASDAQ OMX Commodities’ position as the most liquid and efficient power market in Europe. We are looking forward to Lietuvos Energijos Gamyba contribution going forward.”
The development of a properly functioning and integrated energy market and the creation of necessary energy infrastructure, which would ensure that the created regional energy market is competitive, sustainable and secure, is the key objective of the Baltic Energy Market Interconnection Plan (BEMIP). According to this plan, the development of a fully-functioning integrated electricity market requires a derivatives market that would help market participants to manage the risk of price fluctuations of power prices.