Trading volumes in the futures market also increased significantly to 69% of the underlying spot market.

Carl Hansen, Chief Executive commends this milestone. “Electricity futures contracts provide retailers with a tool to manage wholesale price risk. It’s good to see companies now have more ‘skin in the game.’”

“The market also provides an avenue for retailers to enter the market without first being a generator. This new level of trading activity could help smaller retailers enter or expand in the market, which is ultimately a good thing for New Zealand consumers.”
“We are continuing to look for further enhancements for the futures market.”

The futures market is more formally known as the ASX electricity futures and options market. It provides a robust mechanism for companies with interest in or exposure to the New Zealand electricity market to anonymously manage their price and counterparty risks.

The additional benefit of these recent increases are that they provide a more accessible and robust forward price to inform electricity market participants who are trading in the over the counter hedge market.

Exchange-traded open interest

Enlarge
Exchange-traded open interest

 Source:  www.emi.ea.govt.nz/r/5wrg3(external link)

 

For more information:

Leah Chamberlin
Communications Adviser
021 073 7777

Nicky Chilton
Communications Manager
021 321 831