“Are there any risks in using CFDs to hedge wholesale electricity prices?”
By Paul Chapman, May 28, 2021
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.
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?"
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?".
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
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.
By Greg Sise, May 28, 2017
I was privileged to speak at the Energy Management Association of NZ (EMANZ) annual conference in Wellington last week and showed how market reforms over the last two decades, and now the Internet, are working together to disrupt the retail electricity market.
By Greg Sise, May 26, 2017
After a long period of low spot prices and low volatility in spot prices, hydro storage lakes are emptying out and it’s a timely reminder that the hydro situation can change very quickly. But it raises the question: when spot prices start to rise, should I stay on a spot pricing plan, or should I switch to a fixed price plan?
By Greg Sise, May 5, 2017
The charges for delivery of electricity (a.k.a. lines charges) include the cost of providing local networks and the transmission grid, and are published by local network companies, typically from 1 April for the year ahead. Now that the dust has settled from the most recent round of price adjustments, let’s take a look at what’s happening to line charges in major centres around the country.
By Greg Sise, March 12, 2017
Since launching in August 2016, the Energy Exchange has run reverse auctions covering a range of site types and sizes, proving its ability to deal with the wide range of needs typical of many larger electricity consumers.
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.
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”.
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.
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.
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