Centrica plc announces that it has signed an agreement with N2EX to sell at least 30% of the company's generation in the N2EX day-ahead auction.
Centrica plc, the parent company of British Gas, announced today that it has signed an agreement with N2EX, the UK power exchange run jointly by Nord Pool Spot and NASDAQ OMX Commodities, to sell at least 30% of the company’s generation in the N2EX day-ahead auction.
The generation and supply businesses of Centrica already trade their positions separately in the open market. In 2011, British Gas purchased 80% of its volumes from external counterparties. This new initiative will bolster the N2EX exchange and strengthen the industry’s drive to increase liquidity and improve market transparency.
The development of an effective day-ahead auction is delivering a series of benefits for the market. It facilitates short-term trading for all market participants and creates a robust basis for market coupling within Europe, which is due to be implemented by the end of the year. In addition, greater confidence in the day-ahead auction will produce a robust reference price against which financial derivatives can be settled, which will, in turn, lead to improved liquidity for financial products with longer maturities.
Mark Hanafin, Managing Director, said "Centrica is leading the way with energy market reform, from transparent bills to simplified tariffs. This agreement represents another step towards greater power market liquidity, facilitating trading opportunities for all market participants.”
Mikael Lundin, Chief Executive Officer at Nord Pool Spot, commented: “Centrica has been an active participant in our UK operation N2EX since the market was launched in January 2010. We are pleased that they have decided to formalise their long standing commitment to supporting the N2EX day-ahead auction and we are confident that this will help accelerate the development of, and build confidence in, the UK power market.”