Total Global Steel, a London-based trader, will start handling U.K. and French power contracts this month, potentially boosting volume in both markets.

Started as a trader on the London Metal Exchange in 1999, Total Global Steel signed up to join Amsterdam-based APX-ENDEX, and Nasdaq OMX Group Inc. and Nord Pool Spot AS’s N2EX platform, Martin Lonergan, the company’s chief executive officer, said in a telephone interview.

Total Global traded German power contracts for the last two months and plans to trade power across U.K., French and German power cables starting in April.

It will focus on forward power contracts within this calendar year, Lonergan said. Total Global will trade power contracts over-the counter and on the
exchanges, he said in an interview this week. N2EX held its first U.K. power auction in January.

British regulators are pushing electricity auctions as a way of improving transparency and attract new entrants. The U.K’s energy market is dominated by six large suppliers, Centrica Plc’s British Gas, Scottish & Southern Energy Plc, Electricite de France SA, E.ON AG’s U.K supply business, RWE AG’s Npower and Iberdrola SA’s Scottish Power. The U.K. energy regulator Ofgem is seeking ways to encourage smaller companies to enter the market and boost competition.

Ofgem, the U.K.’s Office for Gas and Electricity Markets, proposed a range of measures this year and forced power generators to provide more details about revenue from their various businesses after a probe into market competition.

Trading in the U.K. market is low compared with other European markets including Germany and the Nordic region, which are the most actively traded.

‘Impossible to Enter’

“The electricity supply market is almost impossible to enter” Lonergan said. “It’s taken us 18 months of climbing over walls, hurdles and squeezing through tunnels,” he said, referring to the compliance and regulatory procedures. “It’s manipulated by the major generators, and the last thing that they want is small, competitive, low-cost base trading houses getting involved.”

N2EX gives Total Global the opportunity to break into the market, Lonergan said. “Exchanges provide transparency to the market. That allows small companies to be able to stand on an even footing with the larger companies.”

Total Global may eventually set electricity supply contracts in the U.K. with metals companies such as Corus Group Ltd., Lonergan said. The company has a license to supply natural gas in the U.K and would require permission from Ofgem before starting a power supply business.

The company is “still nine months to a year” away from entering the supply market, Lonergan said.