The new contracts, the IPE UK Electricity futures contract: Baseload Contract and the IPE UK Electricity futures contract: Peakload Contract, will be physically deliverable and are based on the Electricity Forward Agreement (EFA) calendar, with Month, Quarter and Season contracts being available to trade concurrently. At launch, the first traded Month will be November-04; the first Quarter, Q1-05 and the first Season, Summer-05.
The contracts, which will be available for trade on WebICE via the Exchange’s electronic trading platform, the Interchange®, will be deliverable and cleared through LCH.Clearnet, with a minimum trading size of 10MW. In addition, the normal EFP, EFS and block trade facilities provided by the IPE will be available, and margin offset arrangements will be granted against other IPE contracts, including IPE Natural Gas futures.
The trading, registration and clearing of the contracts will have a simple and very competitive fee structure of 0.225p/MWh inclusive.
IPE Chief Executive, Richard Ward said, “I am confident that the new EFA-based contract will attract and suit market participants. The Exchange has worked hard to consult with the industry and design the product offering accordingly. In particular, by foregoing the need to be a party to the Balancing and Settlement Code, the contract will for the first time allow non-physical players access to the UK power market.”
