Forwards and Liquidity

The European legislation that is the main driver for the new I-SEM market requires systems and processes to be put in place that allow for the trading of electricity both over varying timeframes and over a longer period.  This will result in an increase in the volume and types of energy trading activity.  By creating the opportunity for more trading options, the I-SEM will help to deliver increased innovation and competition. 

The Forwards and Liquidity work stream looks at further measures that can be taken in order to increase the options for, and volume of,  trading over longer term periods.  It also looks at options for hedging the price of electricity across borders via the use of interconnectors.

The Energy Trading arrangements work stream provides more detail on how energy will be traded.

In February 2015, the SEMC published a discussion paper detailing the overall approach the Forwards and Liquidity work stream would take.  They have also published a Financial Trading Rights consultation paper which discusses the proposed ways electricity prices may be hedged via the interconnectors.