Sharemarket operator NZX Ltd said it is working through key milestones to establish an electricity hedge market that meets the requirements of a ministerial review of electricity market performance.EnergyHedge Ltd and NZX announced jointly today that they
Sharemarket operator NZX Ltd said it is working through key milestones to establish an electricity hedge market that meets the requirements of a ministerial review of electricity market performance.
EnergyHedge Ltd and NZX announced jointly today that they were engaged in discussions regarding the establishment of an exchange traded and centrally cleared electricity derivatives market.
EnergyHedge was established by the five large generators, Contact Energy, Genesis Energy, Meridian, Mighty River Power and Trustpower, to develop the electricity hedge market.
The generators have until June 1 to establish a new hedge market for electricity trading. The Government wants standardised, tradeable contracts, a clearing house to act as a counter-party for all trades, low barriers to participation and low transaction costs, and market makers offering buy and sell prices with a maximum spread, to provide liquidity.
Businesswire reported last year that NZX was not currently able to offer a clearinghouse facility. Its arch rival, the Australian Securities Exchange was an alternative operator for the new local hedge market, although EnergyHedge itself could also seek to establish clearinghouse facilities.
NZX runs the current Energyhedge platform under a contract it assumed when it bought the MCo electricity trading business.
EnergyHedge Ltd and NZX said they were, as a first step, working through key milestones and market design, without giving details.
