The Electricity Authority issued a consultation paper on hedge market enhancements market making to ensure market making arrangements are fit for purpose over time.
In the consultation the Authority outlined a number of approaches and evaluated the models against trade-off criteria and sought industry feedback.
The Association in its submission noted that it considers the most efficient hedge market arrangement is one driven by commercial incentives which would include payment to market makers for services that reflects the cost and benefits of market making.
NZWEA supported the commercial option identified for market making but with a mandatory backstop arrangement also being defined to incentivise the achievement of a commercial arrangement.
The Association also reiterated the importance of continuing to enhance the hedge market by extending the duration and introducing new products such as a cap offering.
The Association’s submission can be viewed here: