Sydney Futures Exchange to launch new electricity futures, July 2002

Fri 12 Sep 2003


Sydney, Australia – SFE Corporation Limited and d-cypha Limited (a subsidiary of Transpower Limited – owner and operator of the New Zealand national electricity grid) have announced that new ‘Australian Electricity Futures’ products are to be listed at the Sydney Futures Exchange on Tuesday, 3 September 2002.

The d-cypha SFE partnership draws upon the relative expertise of both organisations.

d-cypha will provide underwriting capital, industry knowledge and business development expertise, whilst SFE provides the full range of exchange management services.

The new products, which will replace the existing ‘SFE Electricity Futures’ products, will provide market participants with a wider range of more flexible trading options.

They result from extensive consultation with market participants, including traders and specialist energy brokers, electricity retailers and generators. The ongoing development of the new electricity futures market will draw upon d-cypha’s in-depth knowledge and expertise in energy markets.

The eight new futures products will be based on both Base Load and Peak-Period energy bought and sold over a calendar quarter in the National Electricity Market (NEM) in New South Wales, Victoria, South Australia and Queensland.

The contract unit will be 1 Megawatt of electrical energy per hour. The products will be available up to 15 quarters, or 3 3/4 years, out.

“The partnership with d-cypha has proved invaluable in getting this new offering to market,”said Mr Peter Hiom, SFE General Manager, Strategy and Business Development.

“d-cypha’s decision to underwrite the development of an electricity futures market at no upfront cost to market participants, together with the introduction of long-dated electricity futures contracts, represents a long term and serious commitment to the development of the Australian electricity sector”, he said.

The SFE/d-cypha offering also optimises energy traders’ access to the market and the trading mechanisms available to participants. Direct access to SFE’s trading engine (SYCOM®) via dedicated terminals or Internet browsers is available from many of SFE’s Full Participants.

SFE will provide dedicated strip products for the trading of calendar year and financial year exposure, with the SYCOM® custom market available for other trading strategies.

SFE’s Exchange for Physical (EFP) and Block Trading (large volume off-market trades) mechanisms will be particularly important for market participants seeking to ‘lock in’ large trading positions and clear credit lines for additional OTC trading.

The SFE Clearing guarantee and novation services, together with the anonymity that futures markets provide, should bring significant benefits to the electricity sector.

“We are also fortunate that most of those who wish to trade in electricity futures are already SFE Participants or clients of Participants. This means that for these organisations there will be a seamless transition to the new contracts”, he added.

d-cypha will establish, and operate, its Australian operation under the name d-cyphaTrade.