While the US and Europe have shifted their sources of power generation from fossil fuels to natural gas and renewable energy, many developing countries still rely on coal to keep their economies going. Paul Cusenza, chairman and CEO at Nodal Exchange, says that needs to change for the sake of the future of the planet.
Speaking at FIA’s commodities forum in Leipzig at the end of June, Cusenza said coal as a source of power generation has rapidly declined in the two regions, while natural gas has become much more prominent. The US is also the largest LNG exporter to Europe, a trend Cusenza expects to continue under the current administration. In addition, renewable energy is growing, particularly in the wind arena.
“These are good changes and positive to see. However, if I look on a global basis, a significant portion of the power generation last year in countries including India and China is coal-generated,” he said.
“I would love to see geopolitical action where we help the Global South and developing countries build renewable energy, because that is where the most leverage is for the planet to improve. Right now, climate change is going to get worse unless we stop what we're doing. But by the same token, you cannot tell countries that are developing still that they cannot have cheap energy sources, because they need it,” he acknowledged.
Noting the NATO summit last month at The Hague, where allies reached a decision to invest 5% of GDP in defence, Cusenza said spending a fraction of that money in helping other countries around the world develop clean energy would offer a strong step towards combating climate change.
“It saddens me that there are realities that we have to address. Security and safety are certainly important, but the money that we need to be spending is helping countries build clean energy,” he said.
Power of derivatives
Cusenza’s comments came as he discussed the growth in volumes at Nodal Exchange, which offers power, natural gas and environmental futures contracts in the North American market.
In 2024, traded volumes on EEX Group's global power markets – including Nodal Exchange – grew by 43% compared to 2023, driven by financial traders entering the market, a trend that Cusenza sees continuing. Volumes in German power specifically grew 63%.
“The Ukraine situation caused massive price volatility, which brought a lot of financial traders from the gas and oil areas into trading power. We are starting to see that happen in the United States as well, where our power futures volumes have doubled since 2020. There's a lot of room to grow,” he said. “Power is how we're going to consume energy in the future. Fast forward 50 years, and it will be a lot less gas and oil. Electric power will be the mechanism.”
In its environmental futures and options markets, Nodal Exchange posted total volume of 402,364 lots for the first half of 2025, up 48% from a year earlier. Total open interest ended June 2025 with 410,510 lots, up 17%.
In May, its environmental markets posted record volume of 51,747 lots, up 62% from a year earlier, and record open interest of 362,282 lots, up 28%. This was despite President Trump issuing an executive order in April on "state overreach in climate policy", which singled out California’s cap and trade program, a move that sent environmental markets sharply lower immediately after.
“Environmental contracts in the United States are state-driven, not federal-driven. While there has been a lot of concern about what the current administration is doing in this area, there has been pushback by the states,” said Cusenza. “Prices climbed back very quickly after a few days, reinforcing the perspective that environmental programs are state-driven and fairly solid.”
Besides the changing energy mix, the price of power is influenced by many forces, including consumer demand, the rising use of AI and geopolitical events. These events create uncertainty, but the listed derivatives markets play a vital part in risk management, Cusenza said.
“When you look at what's happening in the world today, whether Ukraine or the Middle East or the tariffs or climate change, they lead to a lot of uncertainty, which creates anxiety for businesses,” he said.
“Futures and options contracts exist so that people can hedge future price risk. Our clearing function provides credit risk protection, and we have marketplaces to trade, which addresses liquidity risk. The reason we exist is for risk management. The services that we provide are needed perhaps more than ever,” he said.
