Members of the market design steering group have agreed to clear all their day ahead trades through a clearing platform as yet to be designed and agreed. This is a first step to an index.

The UK power market has never managed to achieve an index this is mainly because under NETA the market tended to migrate to physical delivery. Power companies have no options in the way of storage and also have a pure commmodity (i.e. no grade differential, unlike oil and gas (to a lesser extent)). The result was that the UKPX (now APX) created a half hour trading index based upon a weighted average of trades but this often reflected a price from a stranded buyer or seller and was/is not representative of the market.

A good index should not be manipulatable and should have a number of buyers and sellers that contribute to it. Clearly with the big six major utilities looking to start this and encouraging the financial institutions to look at it closely, the start of a proper index should ensue.