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News: Hedging


Wholesale Market Review

By Greg Sise, January 18, 2022

The frequency of blog posts fell off last year after October as we found ourselves in an early Christmas rush period. We hope to be more consistent this year. First up, our submission on the Electricity Authority’s wholesale market review.

Electricity market, Hedging


Electricity Contract Indexes December 2021, Issue 153

By Greg Sise, December 20, 2021

CFD index went down, FPVV index went up, so no change to the overall index this month, which stayed at 11.1 c/kWh ($111/MWh)

Electricity market, Hedging


Electricity Contract Indexes November 2021, Issue 152

By Greg Sise, November 22, 2021

The main index fell by 7.6% this month, mainly the result of a fall in the FPVV sub-index. This month the data showed six new long-term contracts of ten year terms, following on from the three that appeared last month.

Electricity market, Hedging


Hedging Fundamentals Part 5 - The role of forecasting in hedging

By Paul Chapman, August 31, 2021

Forecasts of spot prices are an important tool in the hedging toolkit, and this post provides an overview of the role of forecasts in hedging.

Hedging


Hedging Fundamentals Part 4

By Paul Chapman, May 28, 2021

“Are there any risks in using CFDs to hedge wholesale electricity prices?”    

Hedging


Hedging Fundamentals Part 3

By Greg Sise, May 16, 2021

In New Zealand the contract-for-differences (aka CFD) is the most common off-exchange method for hedging the price of electricity traded on the wholesale market for a specified quantity and time period. In other words, the CFD is a fundamental tool in the hedging toolbox.

Hedging


Hedging Fundamentals Part 2

By Paul Chapman, April 18, 2021

 This blog post follows on from Hedging Fundamentals Part 1 and answers "Why are spot prices in the NZ wholesale electricity market so volatile?"

Hedging


Hedging Fundamentals Part 1

By Paul Chapman, March 19, 2021

This blog post breakdown the fundamentals of hedging and provides an answer to the question "What is a hedge?".

Hedging


The three most important issues for the 2020s - #2, The Hedge Market

By Greg Sise, June 10, 2019

This is the second in a series of three posts on what I see as the most important issues for the electricity market for the 2020s.  The first issue was disclosure in the gas market, which has as much impact on electricity as it has on gas, and is woefully inadequate.  The second issue, and the topic of this post, is the electricity hedge market:  how it is not working for new retail

Electricity market, Hedging


Issue 100 of the Electricity Industry's Best Kept Secret

By Greg Sise, July 19, 2017

The majority of direct and indirect participants in the electricity market, from generators and retailers through to large consumers, aren’t aware that there is an essential piece of market intelligence available free on this very web site. And this month we publish it for the 100th time.

Electricity market, Procurement, Hedging


Energy Link’s January 2017 Price Path

By Greg Sise, December 22, 2016

This week we released our latest quarterly Price Path, a long term forecast of spot prices, to our subscribers. 2016 has indeed been an uneventful year on the spot market, a function of a warm winter and lots of rain for generation and for pastures. However, the last quarter delivered up some very significant news on the gas front.

Electricity market, Procurement, Hedging


Futures Efficiency and 100% Renewables at the OERC Symposium

By Greg Sise, November 17, 2016

The 10th annual Symposium of the Otago Energy Research Centre (OERC) was held in Dunedin on 10th and 11th November. I presented at the conference, and Fergus Bevin-McCrimmon gave a presentation of the results of his research on the efficiency of electricity futures markets. Energy Link was very pleased to sponsor the prize for the best student presentation, won by PhD candidate Paul Crane for his presentation titled “Helping Support Energy Management Systems at the University of Otago”.

Electricity market, Hedging


Is the Electricity Futures Market Liquid?

By Greg Sise, October 13, 2016

This is the third and final post in a series which draws on research undertaken in collaboration with the Department of Accountancy and Finance at the University of Otago.  In the first post, we looked at evidence for premia in electricity futures prices.  In the second post we found some surprising drivers of premia observed in futures prices.  In this post we look at liquidity in the futures market, how it has evolved, and what developments or events caused it to change.

Electricity market, Hedging


Energy Trendz Monthly - September 2016, Issue 90

By Greg Sise, September 21, 2016

In a very quiet month, the index decreased 0.1 c/kWh to 7.9 c/kWh at Haywards, on a volume of only one CFD (hedge) contract.

Electricity market, Hedging, Procurement


Energy Link’s October 2016 Price Path

By Greg Sise, September 21, 2016

Yesterday we released our latest quarterly Price Path, a long term forecast of spot prices, to our subscribers.  It was an uneventful quarter since publishing our last Price Path update in July, but this update included some significant revisions of probabilities on extreme scenarios, and a large section on the viability of the thermal fleet.By Greg Sise, 21 September 2016

Electricity market, Procurement, Hedging

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