North American Windpower: U.S. Futures Exchange Introduces Wind Power Futures Contracts

U.S. Futures Exchange Introduces Wind Power Futures Contracts

by NAW Staff on Friday 29 June 2007

Chicago-based U.S. Futures Exchange (USFE) will begin listing futures contracts on NORDIX Financial Wind Indexes that measure deviations from average wind speeds used in wind power generation. The contracts provide a financial hedging vehicle for wind resource owners, developers, financiers and consumers of wind energy and will begin trading this summer, according to USFE.

The NORDIX Financial Wind Indexes consist of deviations from 20-year historical wind speed averages compared with present daily figures. USFE explains that initially, it will list seven index futures contracts based on two wind regions in New York and five wind regions in Texas as defined by the National Oceanic and Atmospheric Administration's (NOAA) National Center for Environmental Prediction.

These contracts are the first listed exchange products designed to reflect the needs of the greater renewable energy community, USFE adds. Contracts for other forms of renewable energy are planned for later development.

"USFE's futures contracts exemplify the kind of financial vehicles that further validate the financial merit of wind power as an option for many, if not most, utility companies' power generation portfolios," says Michael Eckhart, president of the American Council on Renewable Energy (ACORE). "We believe the ability to hedge against future profit variability will encourage businesses to take steps toward adopting renewable energy."

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