THE NORDICS’ FIRST WHOLESALE ELECTRICITY MARKETPLACE OPENS IN FINLAND

EnCoHub has launched the first open OTC marketplace in the Nordics focused exclusively on wholesale electricity trading. This new marketplace enables electricity buyers and sellers to easily engage in bilateral physical power trading without the high collateral requirements of traditional exchanges.

The new platform allows wholesale trading at fixed prices, even for smaller market participants

Traditionally, wholesale electricity trading has been limited to two main options: the physical spot market, where trading is conducted on an hourly basis for the next day’s electricity delivery (Nord Pool), and the financial market, where future purchase and sales prices are hedged using derivative contracts (Nasdaq). “The tightened collateral requirements of these marketplaces, which have risen to hundreds of millions of euros, have created significant challenges for electricity wholesalers, even driving some companies into bankruptcy. This has led to a mass exodus from exchanges to bilateral trading,” explains EnCoHub CEO Jan Landén.

The new marketplace, EnCoHub OTC Marketplace, provides buyers and sellers with an affordable and secure way to trade electricity transparently without the burden of high collateral requirements. The platform also allows trading in smaller volumes, such as joint offers or joint purchases. This makes wholesale trading at fixed prices accessible to market participants of all sizes.

Finland has Europe’s most volatile electricity market

Rapid growth in wind power production, insufficient cross-border transmission capacity, and recurring production disruptions have made Finland’s electricity market highly unpredictable since the energy crisis. This unpredictability is evident in the spot market as price spikes and frequent negative prices, affecting both producers and consumers. “Our marketplace enables trading at fixed prices, improving predictability. Stable electricity prices contribute to a sustainable economic environment, ultimately benefiting society as a whole,” summarizes Landén.

“With the energy crisis driving extreme price fluctuations, electricity market participants have been incentivized to seek alternative ways to secure future purchase and sales prices through bilateral physical contracts. So far, this type of trading has required separate discussions between all individual counterparties. EnCoHub’s marketplace is a bold and innovative development that brings buyers and sellers together and makes their bids and offers for standard power deliveries openly visible. Pohjois-Karjalan Sähkö wants to be among the first to take advantage of this opportunity,” says Antti Rautiainen, Risk Manager at PKS

FREE TRIAL AVAILABLE

Read more and ask for a free trial.

The free trial is available to organizations that operate as registered wholesale market participants (ACER) in Finland.