NASDAQ OMX to launch UK power market on Jan 11

LONDON Nov 24 (Reuters) - Nasdaq OMX (NDAQ.O) said on Tuesday it will launch on Jan. 11 the N2EX, Britain's new power exchange which backers hope will cure the liquidity problems that have dogged the market over the last few years.

"The market trials have shown that N2EX has every opportunity to be a very useful instrument for the UK power market," said Paul Beynon, chairman of the Power Trading Forum of Futures and Options Association (FOA), in a statement.

The N2EX wholesale and clearing services from Nasdaq OMX and Nord Pool Spot will start its day-ahead auction on January 11 and trading and clearing for the prompt market will begin the following day, Nasdaq OMX said.

It will later establish a cash-settled derivatives power market, with a full range of clearing services and cross-commodity netting opportunities, it said. The derivatives market will be based on the physical reference price.

"Our aim is...to build market liquidity, efficiency and transparency," said Hans Randen," acting CEO of Nord Pool Spot.

It remains to be seen whether Britain's big six power generators will offer enough electricity to ensure liquidity. [ID:nLP350972]

Previous attempts to increase liquidity have failed as no single platform had won the backing of all the big vertically-integrated utilities in Britain.

But Britain's Future & Options Association (FOA), whose members include Scottish and Southern Energy (SSE.L), Centrica (CNA.L), RWE npower, EDF Energy (EDF.PA), E.ON UK (EONGn.DE), and Iberdrola's IBD.MC Scottish Power, chose Nasdaq and Nord Pool to run the N2EX and helped design the exchange themselves.

(Reporting by Nao Nakanishi) ((Reuters Messaging, nao.nakanishi.reuters.com@reuters.net +44-207-542-6079)