Definition
A kraftmegler (power broker) is a market participant that facilitates the buying and selling of electrical power between producers, electricity suppliers and large industrial consumers - without owning the power that is traded. Power brokers operate in the OTC (over-the-counter) market and assist clients in entering into financial power contracts, hedging agreements and fixed-price contracts. Many large power brokers are affiliated with financial institutions or energy companies. Power brokers contribute to market liquidity and price discovery outside the exchange.