ERM Power has launched an innovative solar risk management product that bridges the gap for renewable energy developers in a changing energy industry.
The solar product is the first of a new generation of financial instruments that respond to the rapidly evolving Australian renewables market.
The first trade was finalised within days of the product being released to the market.
ERM Power executive general manager wholesale markets David Guiver said the new product brought much-needed price discovery and transparency to renewables.
“This supports corporate investment in renewables by providing fixed price certainty for organisations wanting to hedge solar generation production,” he said.
ERM Power developed the new product in response to strong demand from renewable project developers and corporate customers.
“The intermittent nature of solar generation can provide challenges to organisations seeking price certainty on their renewable project output, or on their corporate power purchase agreements,” Mr Guiver said.
Environmental markets broker Tradition Financial Services (TFS) facilitated the first trade in the new product, with ERM Power being matched in a Victorian market transaction.
TFS manager of renewable energy and environmental markets Chris Halliwell said it was pleasing to introduce the new opportunity into the wholesale energy market.
“This coincides with the upcoming launch of our new wholesale Renewable Energy Hub – a marketplace platform to firm, standardise and transact with wholesale renewables and energy buyers,” Mr Halliwell said.
Mr Guiver said the rapid shift away from traditional generation sources is driving the need for new products and services.
“Liquid financial markets bring price transparency to Australian energy markets and are vital for the effective management of risk,” he said.