Forward and Futures Market

On the forward and futures market, electricity is traded between four years and one month before delivery.

Forwards and futures are financial products, which are settled against spot market prices of future delivery periods. While futures are standardized contracts on power exchanges, forwards are traded bilaterally (over the counter) and are not standardized. The forward and futures market is important for many large producers, large consumers, suppliers, Balance Responsible Parties (BRPs) or traders who trade power bilaterally to hedge electricity prices for a certain period of time. Hedging of prices gives these parties financial certainty that they will be able to purchase or sell a certain volume for a pre-agreed price.