Nord Pool signs seven-year clearing deal with OM

Nordic Electricity Clearing House (Nech), the clearing subsidiary of Nordic energy exchange Nord Pool, has signed a seven-year contract with Swedish technology and derivatives exchange company OM to supply its clearing services.

Nech chairman Torger Lien told RiskNews that OM was selected over other vendors due to its technological competence and broad business relationships with other energy markets around the world.

OM was one of the two parties that developed Nech’s existing clearing infrastructure though a venture with Norwegian technology provider Nos called Power Clearing Systems (PCS). In the latest deal, OM will work solely with Nech, and the financial terms of the contract are linked to increases in trading flows on Nord Pool. The new OM 'secure' system should go live on January 1, 2004, when the existing contract with PCS expires.

Lien said OM should ensure a smooth migration of clearing services for the euro, help Nech to offer intra-day clearing and aid it in developing new products and services, such as gas trading. He added that OM’s links with other energy markets increased Nord Pool’s “strategic scope” for future international expansion.

Nord Pool is a co-owner of German power exchange European Energy Exchange and acts as a systems provider and adviser to French power exchange Powernext.