Consultation on ASX Australian Peak Load Electricity Futures Contract Specifications
Wed 7 Feb 2024
As per Notice 0108.24.02 ASX is consulting on changes to the contract specifications of the Australian Peak Load Electricity Futures Contract (Peak Load Contract) in response to the changing generation and demand profile in the National Electricity Market (NEM). The proposed change involves changing the existing definition of the Peak Load Profile (7am to 10pm, Business Days). ASX invites formal feedback from Market Participants on the proposed changes to the Peak Load Contract and implementation approach, expressing support for or raising any concerns regarding the change.
The Peak Load Contract has been listed since 2002 and was designed to provide Market Participants with a mechanism to hedge their exposure to peak periods of high operational demand and prices in the NEM. The increase in renewable energy, particularly solar-led generation, has resulted in a material change to the energy generation mix and operational demand profile in the NEM. This has resulted in a decrease in the effectiveness and usefulness of the Peak Load Contract as a hedging tool for energy Market Participants. This has impacted both volume and Open Interest in the Peak Load Contract as the ability to hedge peak demand using the existing contract has declined due to the changing energy generation mix.
The consultation paper can be found here. The formal consultation period closes on 22 March 2024.
ASX welcomes feedback from all market participants and kindly requests only one submission per organisation.
What do I need to do by when?
Market Participants are encouraged to provide written feedback to on the proposals set out in the attached consultation paper or if they have other feedback or concerns regarding the proposed changes.
The consultation period will remain open until 22 March 2024. A follow up Market Notice will be published to confirm the outcome of the consultation and any next steps.
Need more information?
Issued by
Natasha van der Kolff
Product Manager, Commodities
commodities@asx.com.au
or
Investor Support
(02) 9338 0000