TradeSpark has proven it is not being left behind in the energy e-commerce battle with EnronOnline and IntercontinentalExchange (ICE). TradeSpark reported that its energy trading marketplace, which is powered by eSpeed technology, has transacted $100 billion (notional value) in energy products since its launch in October 2000. The phenomenal growth is similar to that seen by EnronOnline in its first year of trading in 2000.
TradeSpark, midway through its third quarter, has already transacted $29 billion, compared to $41.9 billion transacted during the entire second quarter ending June 30, 2001. The company attributes the increase in trading volume in part to the significant headway it has made in the West Coast and ERCOT power markets, which were added to the platform in April 2001. In addition, effective Sept. 4, West Coast hourlies will be available on the platform. TradeSpark was averaging about 2.5 million MW/d in power volume on the system in the second quarter.
“I expect that we will continue to see growth from various points of view,” said TradeSpark COO Robert Hayes. “Gaining market share is one way that I think we can obtain additional growth. Adding additional products to the marketplace is another way that we can continue to build growth.
“We believe in the fact that we will have people transact on our marketplace due to the positive incentives where market participants and partners can earn value by participating. We don’t have any requirements as far as minimum trading activity. We don’t require that people do X% of their business over our platform. We feel as though we have a model where people will want to participate. I think we reported in the last quarter that we had as much participation from non partners as from partners.”
Hayes said one advantage TradeSpark has over some of its competitors is that it does not have large technology investment costs because of its association with eSpeed, which operates the TradeSpark electronic marketplace through a fully integrated network and over the Internet. “It gives us a great deal of comfort that we are in the market and can stay in the market and don’t have this black hole of technology costs that make us continually worry about funding, expansion into different market places, the need for additional functionality. These are the things that eSpeed brings through its 46 markets that it deals in. It has built an effective trading platform that we are reaping the benefits from. I think we’re positioned very well in the marketplace to deal with the consolidation and to be in a position to be one of the top platforms that continue to exist as this market develops.”
TradeSpark calls itself a “many-to-many” electronic trading platform that brings multiple buyers and multiple sellers to one neutral, anonymous marketplace to trade natural gas, electricity, coal, nitrogen oxide and sulfur dioxide emission credits. TradeSpark offers three modes of access to its electronic trading platform: through a dedicated private network that guarantees response times for all trades; through voice brokers; or through the Internet.
TradeSpark’s energy partners include Coral Energy, Dominion, Entergy-Koch Trading LP; TXU Energy Trading, and Williams Energy Marketing and Trading. Dynegy Inc. will be a future member in the TradeSpark partnership. TradeSpark was launched on Sept. 25, 2000 and began live trading on Oct. 2.
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