The CTRM Blog

Late last year, I spoke at and chaired a roundtable discussion at the Energy Risk Conference in Prague, Czech Republic. One of the roundtable participants was Mr. David Kučera, General Secretary of the Prague Power Exchange (Power Exchange Central Europe, a.s.) and I was fascinated to learn something of the challenges and hurdles he and his colleagues had gone through (and may yet still face) in working to create an exchange here in Central and Eastern Europe. As a result, I asked him if he could spend some time again with me answering some questions that I thought would be of interest to our readers. He readily agreed and here is the core of that interview.

Dr. Gary Vasey: How did the Power Exchange get started and what were the objectives behind its formation?

Mr. David Kučera: The power exchange was founded by the Prague Stock Exchange (“PSE”). PSE was looking for opportunities to diversify its business and the power sector seemed to be such an opportunity. PSE originally had talks with several market participants and based on the received feedback, the PXE was formed.

Dr. Vasey: What products and services do you offer?

Mr. Kučera: PXE offers primarily futures with physical delivery. The products range from months, quarters to years both in busload and peak load profiles with physical delivery in the Czech Republic, Slovakia and Poland. In the Czech Republic, PXE recently introduced financially settled futures with a similar product structure. On top of that, PXE offers spot trading in the Czech Republic (in cooperation with the local market operator-OTE) and in Hungary.

Dr. Vasey: How do companies participate?

Mr. Kučera: Potential market participants must possess power trading licenses in the respective country with the exception those who want to trade with financially settled futures only furthermore, they have to enter into a contract with the clearing bank and sign the necessary legal documentation with PXE. As the trading is fully electronic, PXE provides for all participants a trading platform which they can use or we can also provide an interface and the market participant can develop its own software solution.

Dr. Vasey: What impact do you think the Exchange has had on Central European Energy Trading?

Mr. Kučera: We believe that the PXE has had a positive impact on CEE market. We believe that the platform’s appearance attracted new market participants to Central and Eastern Europe and that market liquidity was increased as a result. We also believe that we had a significant role in making the market more transparent as the electricity prices became available to the public.

Dr. Vasey: How do you see the Exchange evolving over time?

Mr. Kučera: We would like to build PXE into an international transparent platform with a high level of liquidity which would also be the leader in market development in the CEE region. We would like to be seen as a place where buyers, sellers and investors in power would meet and make their transactions at fair and transparent conditions in a user friendly way. We would like these market players to see PXE as their market place.

Dr. Vasey: What other initiatives do you see as important for market development in the region?

Mr. Kučera: The CEE market is very fragmented. There are several relatively small national markets, none of them working ideally because of their magnitude. We see the integration of these markets into one common liquid CEE market as the most needed market development. This multilateral market coupling project is the obvious task but there are still many things to be done to achieve this vision.

About David Kučera Mr. Kučera was appointed to the position of General Secretary of the POWER EXCHANGE CENTRAL EUROPE in the spring of 2007. Mr. Kučera has a great deal of experience with electricity trading, which he acquired while serving as Finance Director and Member of the Board of Directors at the Swiss firm Atel Energy AG (originally Entrade AG), where he began working in May 2000, practically from the very founding of this company. Prior to his arrival at Entrade/Atel Energy AG, Mr. Kučera worked in the Corporate Finance Department at Patria Finance, a.s. Mr. Kučera is a graduate of the Electrical Engineering Department at Czech Technical University; he earned his MBA in the United States at Clemson University. In addition to Czech, he speaks fluent English, as well as German and Russian at an intermediate level. Mr. Kučera is married and devotes his free time to his family and sports activities.

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