Old Mutual plc Energy Fund Investment Launches UK Power Exchange


LONDON, March 26, 2001 (PRIMEZONE) -- A UK power exchange has been launched by PowerEx, a wholesale market exchange for the power and gas markets, which is part-owned by Gerrard Energy Ventures, the energy fund launched last month and sponsored by Old Mutual plc (LSE:OML).

Launch of the new exchange follows approval from the Securities & Futures Authority (SFA) on March 8, and is ahead of the go-live date of the New Electricity Trading Arrangements (NETA) on Tuesday (March 27).

Many market participants' systems are not yet ready for NETA go-live, and PowerEx plugs a critical gap in the NETA infrastructure. The majority of market participants have now agreed to trade across the exchange, and are preparing for a potential 'big bang' start to liquidity upon NETA Go-Live.

PowerEx supports spot and forward contracts and provides third party volume notifications to the central systems (ECVNA) to facilitate electricity delivery. It is the only exchange designed and developed specifically for the NETA electricity market, and the first internet-based power exchange to pass the rigorous SFA tests.

The PowerEx system was built in parallel with NETA implementation over the last 18 months, with input from over 300 energy traders and risk managers from 40 market participants. It is the only power exchange designed and developed specifically for the NETA electricity markets.

SFA Authorization was only secured after several months of independent testing by one of the top four accounting/consulting firms against rigorous SFA technology requirements, including security and disaster recovery.

PowerEx is the only internet-based power exchange to pass the rigorous tests, which SFA requires before it authorizes e-commerce investment businesses. This justifies the time and capital invested by PowerEx in developing a technology solution to the highest quality specifications, including security, reliability, performance, functionality, and disaster recovery.

PowerEx is currently owned by iVentures Capital Limited, which in turn is owned by Gerrard Energy Ventures (GEV) and management. GEV is currently seeking to raise $150M to invest in the European gas and electricity sector. The GEV Board includes energy industry leaders such as John Devaney and Clare Spottiswoode.

The founders of PowerEx, Derek Myers and Henry Willder, both have backgrounds in the electricity and financial markets. The Chairman, Bob Bruce, is a veteran in European energy markets.


PowerEx is the only power exchange that covers all of the NETA trading requirements within one seamlessly integrated interface, including:

 -- Physical forwards markets including, daily, weekly, monthly,
    quarterly, seasonal, and annual contracts
 -- Spot market out six days from delivery
 -- Contract notification service (ECVNA), performed automatically for
    PowerEx trades and with a trade matching process for non-PowerEx
 -- In addition, it provides a Dow Jones news service, risk management
    and integrated back office functionality.

PowerEx is an anonymous, bilateral trading exchange, which avoids the unnecessary margining complexity and cost associated with traditional clearing services, required by other power exchanges. Internet technologies have been used to take advantage of the associated cost and efficiency benefits:

 -- Browser technology requires no cumbersome client end software,
    permitting changes and upgrades to take place only at the PowerEx
    servers, thereby avoiding interruption of service during upgrades
 -- Highly secure, as all communication takes place under the latest
    data encryption technology, compatible with firewalls.
 -- Reliable, as there are no client end software issues, and the
    system relies on quality ISP's with private peering arrangements,
    avoiding the routing uncertainty associated with the public
    internet network
 -- 'Trader friendly' screens, designed by traders, for traders, to
    minimize complexity and allow customization, thus maximizing the
    relevant information available on one screen and minimizing trader
    error. The trading interface is based upon the real world trading
    floor environment and interactions.


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