Nexant iHedge Selected for New Zealand’s Electricity Financial Transmission Rights Market System

Apr 4, 2012
Company Will Partner With Transpower to Deliver Comprehensive FTR Market Operations Solution

SAN FRANCISCO – Nexant, Inc. announced today that New Zealand’s national grid operator, Transpower NZ Ltd., has selected Nexant’s iHedge® as the core operating system to run the country’s financial transmission rights (FTR) auction market. Nexant will work with Transpower’s Energy Market Services (EMS) group—the FTR manager service provider to the New Zealand Electricity Authority—to implement the new system.

“We have selected the fully integrated iHedge system from Nexant, the world leader in FTR systems, to control and administer the FTR market, allowing accredited users to participate in the FTR auctions,” said Kevin Duckworth, EMS Director. “Nexant’s iHedge system is also fully capable of accommodating any future development on a very flexible basis.

Nexant is recognized as the only market system vendor able to deploy and maintain a series of complex market systems with a common core infrastructure and easy configuration that supports a variety of FTR markets—each having its own business rules and other unique characteristics.

As the primary service provider, EMS will develop the FTR Allocation Plan in consultation with the market participants.  The Allocation Plan will cover key market elements, including design of the FTRs, the FTR auctions, and the FTR grid. Once the Electricity Authority approves the Allocation Plan, Nexant will implement the iHedge FTR system in conjunction with EMS.

“We are excited about working with Transpower and the Electricity Authority to develop New Zealand’s first FTR market system,” said Narasimham Vempati, Vice President, Nexant Transmission and Markets Software. “This system will enable participants to submit bids for the purchase and sale of FTRs via a secure web interface and receive auction clearing results. They will also be able to simulate auction scenarios in advance of the actual auction. The system will allow Transpower to run the calculations that clear each auction and provide the information required for financial settlements, while enabling market analysts to conduct critical FTR allocation studies.”

“In addition to deploying FTR systems, Nexant supports and trains market participants to develop risk management policies incorporating FTRs,” Vempati said. “We also help them forecast congestion cost exposure, develop monthly bidding strategies, and track ongoing congestion rent and FTR revenue.”