Company News

Datum: 29.08.2008

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After a tough start in 2002, EXAA is now in a position to look back on a positive development of its business activities. When the Austrian Power Exchange EXAA was established in 2001, the market was considered comparatively small for such an undertaking. After decades of state regulation, Austria then literally went on overnight to start trading electricity. “The creation of liquidity or, in other words, the creation of trade volume available to be traded on a day to day basis was an extremely long and difficult process”, explains Jürgen Wahl, member of the Executive Board of EXAA.

EXAA has been on the path to success for the past two years
It is particularly with regard to its trade volume that EXAA has been able to enjoy considerable success since 2006. The trading volume rose from 1.6 to 2.4 TWh (corresponding to almost 4% of Austria’s annual electricity consumption) and the number of trading participants increased from 29 to 44 in the last two years. In 2006, various restructuring measures were implemented and the office was moved from Graz to Vienna. The integration into the CISMO Group resulted in the achievement of various synergy effects such as the sharing of office space and equipment as well as part of its personnel. This was the reason why, in 2006, EXAA could achieve a break-even result for the first time. One year later, EXAA made a profit amounting to EUR 122,203. “ We are on course for the current financial year during which turnover as well as profits are set to increase”, a confident Jürgen Wahl explains.

The three most crucial success factors for the path pursued are the following
1) Successful expansion into the German market and acquisition of new traders
2) Specialisation in spot trading by means of a simple, safe and highly user-friendly trading system that had been internally developed
3) Cost efficiency alongside simultaneous increase in quality of service

Overall, PwC Traders’ Survey paints a highly positive picture of EXAA

• EXAA offers the most user-friendly and safest trading system
• EXAA is the fastest of all when it comes to the admission of new clients
• EXAA offers the most attractive trading fees

“The results of the survey conducted by PwC tell us that the strategy set out two years ago to position EXAA as a cost-efficient and service-oriented electricity trading platform within the region was the right one. At the same time, however, the survey also shows us that we still have some challenges ahead when it comes to market transparency, increase in liquidity and product development”, says Wahl.

• Market transparency: Traders wish to be provided with more information on trading data and producer details.
• Further increase in liquidity: EXAA will continue to pursue the same path towards acquiring further trading participants. This year, four new trading participants have been admitted to trading on EXAA and three further participants will have been listed by the end of the year.
• Development of new products: EXAA is currently developing two new products which are to be presented at the beginning of 2009. These products include a sales tool for auctioning balancing energy and the expansion of its training programme, which EXAA intends to offer not only to potential electricity traders but also to the entire industry.

EXAA as a regional player
Electricity is traded on numerous electricity exchanges throughout Europe. While the energy markets of the original 15 EU Member States are highly developed and have sufficient liquidity, there is still much to catch up on in the new Member States and the EU candidate countries in Central and South Eastern Europe. The reason for this is that these markets are still largely regulated by the state and the respective EU directives have not yet been implemented and enforced as appropriate. The number of potential electricity traders is therefore relatively low.

As there are practically no physical hindrances affecting the exchange of electricity between Austria and Germany, both electricity trading and EXAA have experienced positive developments. At present, a third of EXAA’s turnover comes from Austria, a third from Germany and a third is generated by the remaining countries. Owing to Austria’s geographical situation and its sufficiently liquid energy market, it is in an ideal strategic position to further the development of physical electricity trading between eastern and western markets.

EXAA fulfils an important bridging function between various markets
“EXAA intends to perform a bridging function between the various markets because, on the one hand, we are well established in the Western European electricity market while, on the other hand, by bringing together the markets, we also have the potential to make available means to our not so well-off neighbouring countries in order to stimulate their own markets”, explains Wahl.

For this reason, EXAA does not regard the other electricity exchanges primarily as competitors, but instead would rather strive towards stronger cooperation in the future. “The real competitor of electricity exchanges is the OTC market”, Wahl claims. The OTC market is an external exchange of trading at bilateral level between companies which, contrary to exchange trading, is a less transparent process because the price quotations and volumes traded with are typically not subject to disclosure.

The development of electricity trading and electricity exchanges is therefore moving towards closer cooperation. Successful cooperation models have recently been introduced between France, Belgium and the Netherlands. This development will continue in Central and Eastern European countries. “In the medium term, this will inevitably lead to the establishment of a European network of electricity trading exchanges, thereby guaranteeing the secure and transparent trading of electricity in Europe. The advantage of this is that such a network of electricity trading exchanges ensures competition with regard to the offering of various services, which stimulates the market, guarantees quality and prevents price monopolies”, concludes Jürgen Wahl

Jürgen Wahl
Jürgen Wahl was born in 1968 and is a graduate of the Vienna University of Natural Resources and Applied Life Sciences. He also studied international business management at the Vienna University of Economics and Business Administration as well as at the Carlson School of Management at the University of Minnesota, USA. As an expert in energy and environmental matters, he worked for a number of institutions, including the Federation of Austrian Industry (Industriellenvereinigung). He was also with the Ministry of the Environment for five years. In 2002, Wahl changed to the international project development business. He was a management consultant and project manager with Verbundplan GmbH (now Pöyry Energy). Further business activities have since included the co-development of a gas trading company and being involved in the setting up of OeMAG Abwicklungsstelle für Ökostrom AG, a clearing agency for renewable energy.

Since July 2006, Jürgen Wahl has held the position of Member of the Executive Board of EXAA.