Risk management solutions from Eastern

Companies trading in the UK Electricity Pool will be able to manage their exposure to risk more effectively now that Eastern Group`s trading arm, Eastern Power & Energy Trading (EPET) have unveiled a new range of risk management products.

EPET has produced the package to encourage liquidity in the electricity market when new electricity trading arrangements in the Pool (RETA) are introduced in April 2000.

Concerns exist throughout the industry that the RETA changes will either inhibit or encourage market liquidity, dependent on which route any given trader takes. Eastern is keen to see the development of a liquid traded market for both paper and physical electricity over all time horizons, and is working through the RETA programme to enable this process.

The new risk management package introduces two options. The first is an innovative short-term product range aimed at addressing risk intra month. It offers a new level of flexibility to the management of exposures within the England and Wales Pool, and the scope to redress the balance of weather and short-term generation plant risk exposure.

The second is aimed at tuning medium- and longer-term positions and addresses the risks faced as retail customer bases become more transient. Both packages will be traded bilaterally or as principal through the brokered market on standard EFA terms.

Eastern is keen to highlight that it will continue to offer longer-term CfD`s and other risk management arrangements alongside the new packages.