The Power Trade Forum which is chaired by RWE trading manager Paul Beynon is to look at ways in which liquidity can be improved within the power market. The key areas which they are to look at is the creation of a true reference price, the abolision of the EFA calendar, the re-jigging of the GTMA. In effect the PTF is suggesting that in order for the market to increase in volume they need to move power away from a physical market and make it much more financial. There is no doubt that for many years there has been a need for players to trade financially, and it would good to separate out physical power trading perhaps a way in which players can hedge volume risk from financial power trading a way which players can hedge price risk.

However, Beynon is in danger of cutting his nose off, because the banks and hedge funds will start to dominate the financial markets and the utilities will left playing in the physical market. In short returning to the old days of pre-pool. As Beynon himself was instrumental in bringing traded markets to the utilities in the first place it is unlikely that he would want this to be the overall outcome. The key to this market is to get a balance number of buyers and sellers, in the past the market has lacked sellers and those that are long have been reluctant to actively market make. The one player most in a position to market make is RWE however, as they run their power book as spread book on gas, it is no surprise that th market making role is limited.