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Power Up Your Hedging: Using CFDs to Grow Your Energy Business

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Hedging 101 - Green Tiger Markets Learning Academy (Jan.2024)

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Green Tiger Markets Learning Academy: Introduction to ISDA Documentation (Nov.2023)

**<u>First Trade on Green Tiger Markets</u>**

It has been an incredibly exciting month for the Green Tiger Markets team. We are thrilled to announce that we have successfully completed our first trade on the GTM Marketplace, matching a Generator and a RES for August through December Luzon Around the Clock (RTC). This achievement represents a significant milestone for the Philippines Electricity Market and we are honored to be the first and only marketplace to arrange a financially settled CFD for Philippines Energy. It has taken a tremendous amount of effort and patience to reach this point, but we are now one step closer to our ultimate goal of making hedging electricity more efficient. The positive sentiment surrounding this transaction in the media has been truly delightful. 

[LINK TO MARKET WATCH ARTICLE](https://www.marketwatch.com/press-release/green-tiger-markets-announces-its-first-trade-in-philippines-electricity-523ae5b3?reflink=mw_share_email)

We have been inundated by a wave of renewed interest from clients who are eager to register for GTM. As a result, we are diligently processing applications and conducting KYC. We are thrilled to continue expanding our client base across a wide range of products and actively collaborating with several counterparties' due diligence teams. If your firm has not yet engaged with us to join Green Tiger Markets, we encourage you to reach out without hesitation.
 
Carlos and I will be in Metro Manila this week and next, meeting with clients and hosting a highly anticipated industry drinks event tonight at Tipsy Pig in BGC from 5-7pm. This event has been gaining popularity and presents a wonderful opportunity to forge new connections within the industry and reconnect with old acquaintances. We eagerly look forward to seeing each and every one of you tonight.
 

**<u>Current Orders</u>**

Mostly, the market is interested in knowing what we have working at the moment.  We continue to see substantial interest in hedging Around the Clock (RTC) power blocks, both new hedges and replacement power blocks. We also have interest in hedging 1-10 years out from both consumers and producers.  Key orders that we have been working:
- Luzon RTC Balance of the year - Market is 6000@7500
- Luzon RTC September - Offered at 6000
- Luzon RTC September for 1 Year - Market is 6000@7000
- Luzon RTC September Week 1 and Week 2 - Looking for an Offer
- Luzon RTC September-October - Looking for a Bid (indicatively 5000 bid)
- Luzon RTC November-December - Looking for an Offer (indicatively 7000 offered)
- Luzon RTC Cal24 - Looking for a Market (indicatively 6500 offered)
- Luzon RTC Cal25-34 - Looking for an Offer (indicatively 6500 offered)
- Luzon Solar Cal25-26 - Looking for a Market (indicatively 6500 offered)
- Luzon Solar Cal25-Cal34 - Offered at 5000

Final settlements for July are out, and early indications, based on RTD data, show prices trending lower for the beginning of August. 

 
**<u>Market Data and Commentary</u>**

**Luzon Prices for Q3**

Power prices, while elevated on a historic basis, have been trending lower and cleared well below Q4 prices.  Seasonally, we would expect prices to be softer for the next few months as rainy season kicks in and Hydro becomes a more impactful portion of the stack.  Below is a plot of Luzon RTC prices with Green being daily prices, Blue being weekly, and Orange being monthly prices.

![Price Chart Luzon.webp](https://storage.googleapis.com/gtm-strapi-gcs/Price_Chart_Luzon_c641d80eb3/Price_Chart_Luzon_c641d80eb3.webp)


**Fuel Prices**

Newcastle coal, plotted below, seems to have found some near term support, trading as low as $120, currently trading $142.50/ton. However, it is still roughly double the average price from pre-pandemic levels.  Given rising extraction costs, and strong demand in Asia, coal prices should stabilize here for the time being and could end up ticking higher next year.  Glencore just posted a fantastic quarter and has a bright future ahead of it.

![Newcastle Coal.webp](https://storage.googleapis.com/gtm-strapi-gcs/Newcastle_Coal_d074fceb1f/Newcastle_Coal_d074fceb1f.webp)

Based on where the forwards are trading for Newcastle coal right now, expect dry season Luzon RTC prices to clear between 6000 and 7500.  Below are Newcastle forwards through summer 2025.
![Coal Forwards for Newcastle.webp](https://storage.googleapis.com/gtm-strapi-gcs/Coal_Forwards_for_Newcastle_e82849be5e/Coal_Forwards_for_Newcastle_e82849be5e.webp)

**Spot Market Settles**

Moving on from coal prices....  Final LWAP settles are out for July.  Prices were generally weaker than last month and the evening hours continue to spike relative to the morning hours.
![Luzon settles.webp](https://storage.googleapis.com/gtm-strapi-gcs/Luzon_settles_71f6b06c1a/Luzon_settles_71f6b06c1a.webp)
![Visayas Settles.webp](https://storage.googleapis.com/gtm-strapi-gcs/Visayas_Settles_0240a6e666/Visayas_Settles_0240a6e666.webp)

For the month of July, we generally saw Peak trend stronger vs RTC.  Solar continued to price at a premium to RTC, but still discount to Peak and evening hours.  Note the clear downtrend of Solar vs. Peak over the last year.  We expect this to continue as more and more solar gets delivered into the market.  There are several projects coming later next year and in 2025. 
![Luzon Ratios.webp](https://storage.googleapis.com/gtm-strapi-gcs/Luzon_Ratios_6e6417bda1/Luzon_Ratios_6e6417bda1.webp)

Given the push into renewables, and the price signal indicating midday prices are at a premium to Baseload, Solar has been the primary focus for RE developers for the Philippines.  As an analogy, in the US, and California in particular, installed solar capacity has skyrocketed.  The added midday generation has stressed the system and caused midday prices to collapse, but evening prices to move significantly higher, particularly on hot days.  Below is the experience from Calfornia and the famous "Duck Curve".

![Duck Curve.webp](https://storage.googleapis.com/gtm-strapi-gcs/Duck_Curve_c9db9081c0/Duck_Curve_c9db9081c0.webp)

Prices by hour continue to encourage moving consumption to the early hours of the day and the construction of storage.  A spread of 5000 php/mwh from morning prices to evening prices is quite substantial. It makes a lot of storage start to look economically positive.

![Prices by hour chart.webp](https://storage.googleapis.com/gtm-strapi-gcs/Prices_by_hour_chart_cc44273159/Prices_by_hour_chart_cc44273159.webp)

We are anxiously awaiting the next few months of prices given the forecasted shortfall in generation relative to demand.  Volatility should be high, which should encourage market participants to lock in prices now for their generation or consumption and eliminate that risk.

 

 As always, I highly recommend reaching out to other market participants who have not yet joined our platform. This is the most effective way to enhance liquidity on Green Tiger Markets. If there is a specific firm that you believe would be a valuable addition to our platform, a warm introduction can go a long way.


Stay safe and thank you for your business!
 
-John
 
 
 If you are interested in learning more about our data analysis, please don't hesitate to contact us at info@greentigermarkets.com.  

 
The views contained in this newsletter are my own opinion and should not be considered investment advice or relied upon to make investment decisions.

Green Tiger Markets PH Electricity Update

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Green Tiger Markets completed the first trade on its forward marketplace for Philippines electricity. This marks the first time commercial parties in the country secured future electricity prices through an independent platform. The transaction took place between two participants in the Luzon electricity grid at 6800 Pesos per megawatt hour for wholesale electricity from August to December. The platform offers an alternative to long-term contracts, providing a quick and easy way for commercial participants to contract forward electricity prices with qualified counterparties. Green Tiger Markets aims to promote transparency, price discovery, and liquidity in the energy market to facilitate a sustainable energy future in the region.

Here's the full article from Business Wire:

https://www.businesswire.com/news/home/20230706439067/en/Green-Tiger-Markets-announces-its-first-trade-in-Philippines-Electricity?utm_campaign=shareaholic&utm_medium=copy_link&utm_source=bookmark

from Yahoo Finance

https://finance.yahoo.com/news/green-tiger-markets-announces-first-155000833.html

from Marketwatch

https://www.marketwatch.com/press-release/green-tiger-markets-announces-its-first-trade-in-philippines-electricity-523ae5b3?mod=mw_more_headlines

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Green Tiger Markets announces its first trade in Philippines Electricity

**Lower Electricity Prices Through Transparency | Green Tiger Markets**


It has been widely reported that the cost of electricity in the Philippines is high compared to its neighbors as well as the world as a whole.

(Retrieved from GlobalPetrolPrices.com. Data includes all items like distribution charges, energy costs, environmental and fuel costs, and taxes)
![gtm-article-5.png](https://storage.googleapis.com/gtm-strapi-gcs/gtm_article_5_001e6f0b34/gtm_article_5_001e6f0b34.png)

### **Is There A Way to Lower Electricity Prices Soon?… Yes!**
One solution to lowering electricity prices is to have a well functioning marketplace to hedge the forward price risk of electricity. In layman’s terms, this is a marketplace where participants in the electricity market (i.e., electricity suppliers (generators), distribution utilities, retail electricity suppliers, and large commercial and industrial consumers) purchase or sell electricity for some time period in the future.

The marketplace has a set of electricity products known as “Forward Contracts”. By standardizing the terms of these contracts, the only variable is price, which streamlines the purchasing and selling between the participants. A first generation of this type of marketplace will be viable in the next few months! (greentigermarkets.com)

### **How Does This Marketplace Lower Electricity Costs?… By Reducing Uncertainty!**
No one knows the future. Fuel prices could drop precipitously causing electricity production costs to fall. On the other hand, electricity demand could outstrip supply causing electricity prices to skyrocket.

(Retrieved from greentigermarkets.com/market-data)
![gtm-article-6.png](https://storage.googleapis.com/gtm-strapi-gcs/gtm_article_6_e1986eed34/gtm_article_6_e1986eed34.png)

Between February and September 2020, the monthly load-weighted average price (LWAP) of electricity ranged from 1,336 to 3,543 PHP/MWh. On average, the monthly LWAP varies by more than 800 PHP/MWh.

A transparent marketplace, where all participants have access to the same liquidity, allows each firm to hedge their price risk and plan more effectively. In effect, firms are locking in the price they are either paying or receiving for electricity in the future. Generators know how much they are making on their investments. They could also sell forward contracts that mimic a new power plant and use this to secure financing. This would assist in accelerating the development of additional electricity supply. Large Industrial and Commercial Consumers can purchase a variety of forward contracts that mimic their expected load needs. By locking in the forward price of electricity, firms will be able to free up capital to invest in growth.

### **We Can Do It!**
The Philippines economy and all Filipinos would greatly benefit from supporting a business-to-business platform where participants can hedge the forward price of electricity.

The early adopters of this marketplace would quickly feel the benefits described in this article. The impact to the Philippines economy will increase as the power industry as a whole adopts this proven tool to manage price risk.

Learn more at greentigermarkets.com or email info@greentigermarkets.com to set up a demonstration.

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How to Lower Electricity Costs for All Filipinos

![gtm-article-2.png](https://storage.googleapis.com/gtm-strapi-gcs/gtm_article_2_0892532c08/gtm_article_2_0892532c08.png)

Hedging Strategies for Electricity Suppliers | Green Tiger Markets Simply put, the goal of an Electricity Supplier is to maximize the return of their asset — the generation plant. To do this, they want the plant to run for as long and consistently as possible. They also want to be able to sell everything they produce at a good price.

So how can a business-to-business platform that facilitates the forward hedging of electricity prices help maximize returns?

### **1. Locking in Future Prices**
Since the beginning of 2020, the monthly load-weighted average price for electricity has fluctuated between 1,336 to over 3,500 PHP/MWh. Selling power into the market leaves the Generator open to wide swings in revenue.

Electricity Generators can join the Green Tiger Markets (GTM) platform, which is a Business to Business platform that facilitates the forward financial hedging of electricity prices by matching platform participants who have opposing price risk management needs. Participants (who are either “buyers” or “sellers”) enter into Forward contracts with other Participants (who are either “sellers” or “buyers”).

GTM publishes the market transaction data so Participants have transparency into the transactions as well as the bids/offers of other GTM Participants.

The Generator can sell contracts representing their plant’s generation and thereby lock in its price so they are hedged against price fluctuations. Standard hedging practice is to offer between 70% and 85% of a plant’s capacity through monthly contracts for the next few years. Throughout the current month, the Generator can watch the activity in the daily and weekly contract markets and dynamically buy or sell into the market at favorable prices.

Optimizing Planned Maintenance | 
![gtm-article-3.png](https://storage.googleapis.com/gtm-strapi-gcs/gtm_article_3_6311d03f6f/gtm_article_3_6311d03f6f.png)

### **2. Optimizing Planned Maintenance**
Plant maintenance has a significant financial impact. There is the cost of the maintenance, the ramp down/up cost, and of course, the lost revenue from not running. Determining the best time to take down a plant for maintenance is largely based on schedules and plant performance.

With a Forward market for electricity, all Participants can see the future prices for electricity. A Generator can minimize their lost revenue by choosing to have their planned maintenance during a month where the price is lower.

Another strategy a Generator could employ is when it has already sold Forward contracts at a good price but now the current price for the month’s contract is lower. The Generator could buy sufficient contracts to cover their short position resulting in a net hedge position of zero for the month. The Generator can schedule its maintenance and receive revenue from the difference between the sale price and the purchase price of the contract.

### **3. Managing Unplanned Maintenance**
Unplanned plant interruptions can happen for any number of reasons. The impact of these unplanned events are the same as for planned maintenance except they are — hopefully — for a shorter duration.

Given this shorter duration, the Generator could buy daily or weekly contracts to cover its position. This locks in the financial impact of the unplanned event but means the Generator doesn’t have to unwind his whole position for the month.

### **Conclusion**
The Forward hedging of electricity prices offered by the Green Tiger Markets’ platform can help Electricity Suppliers maximize their returns. The marketplace allows Generators to lock in prices to better manage revenue and minimize the impact of both planned and unplanned maintenance. As time progresses, Generators can dynamically manage their hedge positions based on prevailing market conditions.

Learn more at greentigermarkets.com or email info@greentigermarkets.com to set up a demonstration.

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Hedging Strategies for Electricity Suppliers

Green Tiger Markets is excited to announce the Beta software release of its proprietary software platform.

GTM is a Business to Business platform that facilitates the forward hedging of electricity on a financial basis by matching platform participants who have opposing price risk management needs.

Participants (who are either “buyers” or “sellers”) enter into forward contracts with other participants (who are either “sellers” or “buyers”). GTM provides matching services, reports market and transaction data, and calculates amounts payable or receivable between parties for transactions entered into on the GTM platform.

The Beta release includes improvements to the Company and User account set up, the Central Limit Order Book for placing and matching bids and offers, as well as enhancements to several risk management and order management features.

Products on the GTM Platform The standardized forward electricity contracts that participants will buy or sell reference the Luzon spot market.

To support participants in managing their load shape risk, GTM created Round the Clock, Peak, and Renewable forward financial products. Each of these products have monthly, weekly, and daily contracts so participants can manage their price risk for different time periods in the future.

GTM Platform Improvements The most exciting feature to be released is the Central Limit Order Book (CLOB). Prior to this release, participants would execute through a Block Trader who negotiates price and quantity and then inputs the transaction onto the GTM Platform on behalf of the buyer and seller.

With the release of the CLOB, participants can place bids and offers on their own behalf for forward contracts directly onto the GTM platform. The Focus Depth Chart feature allows participants to see all of the open bids and offers for each contract. If a participant wants to accept a bid or offer already listed, they can complete the transaction in just a few clicks.

Another way Green Tiger Markets enhances transparency is with the Market Activity feature that displays the Product, Price, and Quantity for all completed transactions.

gtm-b2b-platform © 2020 Green Tiger Markets. Image of business-to-business platform for buyers and sellers.

We are excited to bring the Green Tiger Markets platform to the energy sector of the Philippines.

If you have any questions, please contact info@greentigermarkets.com.

About Green Tiger Markets Green Tiger Markets (GTM) was formed by experts in commodities price risk management and technology development to bring Transparency, Liquidity, and Stability to the Philippines electricity market. GTM is building a world class Business to Business platform that facilitates the forward hedging of electricity prices on a financial basis by matching platform participants who have opposing price risk management needs.

Participants (who are either “buyers” or “sellers”) enter into Forward contracts with other Participants (who are either “sellers” or “buyers”). GTM provides matching services, reports market and transaction data, and calculates monies payable or receivable between parties for transactions entered into on the GTM platform.

GTM is not a participant in the wholesale physical electricity market in the Philippines, nor is it an exchange or a clearinghouse.

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Green Tiger Markets Successfully Completes Beta Software Release

![gtm-article-generic.png](https://storage.googleapis.com/gtm-strapi-gcs/gtm_article_generic_5df304eff0/gtm_article_generic_5df304eff0.png)

Press Release: Green Tiger Markets (GTM) today announced the launch of its pilot for its derivative marketplace platform. The pilot marketplace will allow business participants to buy and sell forward contracts for Philippines energy to hedge their price risk exposure in a simulated, “test trade” environment.

The business participants engaging in the pilot include electricity producers, distribution utilities, retail electricity suppliers, and other participants in the wholesale electricity market. GTM has onboarded 5 participants for the pilot, and is scheduled to add another 6 companies by the end of the month. These pilot participants represent, on a wholesale basis, approximately:

40% of the Philippines electricity generation capacity, and 65% of the Philippines electricity consumption. The GTM platform is built with the latest technology to provide light-weight, flexible solutions that fit the specific needs of each product and market. This platform was designed to support GTM’s mission of bringing the benefits of an open derivatives marketplace to underserved markets and products. This configurable design allows the market participants to add new functionality and services over time as the market matures.

“Our product design approach is about offering best in class tools for risk management in a configurable format that supports the lifecycle of a commodity - from a new product in an underserved market to a well-established product and market,” says Carlos Korten, President of Green Tiger Markets.

Features and benefits of GTM’s marketplace include:

Ability to quickly list new products for trading, in support of underserved products and markets. Flexible solutions, including broker-only trading, bi-lateral trading, and trading through a central limit order book. Innovative risk management solutions. It is no surprise that the pilot is for Philippine energy contracts. The GTM Leadership team has deep ties to the region and developed a deep understanding of the market and its unique difficulties.

“We are excited to launch our pilot in support of the Philippines. We know that bringing transparency and price discovery to Philippines energy will help to reduce the price volatility that Filipinos experience,” says John Knorring, CEO of Green Tiger Markets. “It will also give wholesale producers and consumers of electricity the tools to better manage their price risk and their investment in existing and new generation capacity.”

Mr. Knorring also noted that GTM is working on a Singapore Renewable energy contract as the firm’s next market.

If you are interested in joining the pilot or want to learn more, please contact Matthew Kelber at matt.kelber@greentigermarkets.com.

About Green Tiger Markets: Green Tiger Markets (GTM) develops and operates derivatives marketplaces that facilitate the forward hedging of price on a financial basis. Marketplace participants buy or sell Forward contracts with other participants who have opposing price risk management needs.

GTM’s mission is to support the growth and development of underserved markets through transparency and price discovery. In support of this mission, GTM built an innovative and flexible proprietary platform that allows new products to be launched quickly and the market to be configured based on the needs of the market participants.

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Green Tiger Markets (GTM) Launches Pilot for Philippines Energy Contracts

Singapore: Green Tiger Markets Pte Ltd (GTM) today announced its partnership with SSY Futures Ltd to act as the exclusive broker to its leading-edge, over-the-counter electricity marketplace for Philippines and Singapore electricity forwards.

Green Tiger Markets is delighted to be working with SSY Futures Ltd, the leading brokerage for Asian electricity, to support Singapore and Philippine market participants in this fast-growing area. Green Tiger Markets is committed to bringing the benefits of an open derivatives marketplace to new and underserved markets.

John Knorring, CEO of Green Tiger Markets commented – “Green Tiger Markets is thrilled to partner with SSY Futures Ltd. We are confident that the combination of our innovative platform and SSY - Asia’s leading electricity broker - will not only accelerate the growth of both the Philippines and Singaporean energy markets, but will also have a meaningful, long-lasting impact on these economies.”

Head of SSY Energy Derivatives, James Whistler added – “SSY is delighted to be partnering with Green Tiger Markets to help the Philippines develop its electricity and wider energy markets. We strongly believe the ability to transact in a competitive and transparent marketplace will help participants effectively manage their risks and be of substantial value to the Philippine economy.”

For more information regarding Green Tiger Markets, please contact Matthew Kelber. +1-917-992-7826 matt.kelber@greentigermarkets.com

For further information regarding SSY please contact James Whistler. +65 6854 7126 energy@ssysingapore.com

About Green Tiger Markets

Green Tiger Markets Pte Ltd. (GTM) develops and operates a derivatives marketplace that facilitates the forward hedging of price risk on a financial basis. Marketplace participants buy or sell Forward contracts with other participants who have opposing price risk management needs.

GTM’s mission is to support the growth and development of new and underserved markets through transparency and price discovery. In support of this mission, GTM built an innovative and flexible proprietary platform that allows new products to be launched quickly and the market to be configured based on the needs of the market participants.

**About SSY Futures Ltd**

SSY Futures Ltd is one of the largest Dry Bulk and Freight derivatives brokerages in the World, with brokers in London, Singapore and Stamford. SSY Futures specialises in the steel complex and base metals derivatives as well as Forward Freight Agreements, with a new energy business targeting gas and power contracts. SSY Futures is a wholly owned subsidiary of Simpson Spence Young.

About Simpson Spence Young

Established in 1880, Simpson Spence Young (SSY) is the world's largest independent shipbroker. Our 400 employees cover each major market including dry cargo chartering, tanker chartering, LNG chartering and projects, ship sale and purchase, chemical chartering, consultancy and research, futures and towage.

SSY has a global reach, with offices in London, Singapore, Houston, Shanghai, Stamford - USA, Sydney, Geneva, Bergen, Hong Kong, New York, Mumbai, Madrid, Oslo, Sao Paulo, Copenhagen, Tokyo, Vancouver, Dubai, Varna and Zug.

Green Tiger Markets Pte Ltd Announces Partnership with SSY Futures Ltd

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Green Tiger Markets Pte Ltd and Project School Textblast launched the Bulig Financial Literacy Course for Year 12 students yesterday. Students from 20 public schools on Mindanao island of the Philippines will receive training through SMS and online videos on the key principles to managing personal finances. The program launched at Koronadal National High School in Koronadal City.

"We are delighted to be able to partner with Project School Textblast to bring financial literacy education to students across the Philippines. In the same way that Green Tiger Markets' products facilitate our clients in managing their company's financial resources in the future, we are thrilled to be able to help individual students to manage their personal finances in the future too." said Green Tiger Markets Head of Asia-Pacific, Oliver Pearson.

"Kaalaman sa pinansya, malaki ang ganansya! Financial literacy leads to better income. With Green Tiger Markets support of our Bulig Financial Literacy (BFL), we are able to train hundreds of senior high school students from different public schools in the Mindanao area of the Philippines to apply different financial skills effectively, including personal financial management, budgeting, and saving. BFL initiative of Green Tiger Markets will be highly effective because teaching young people about financial management at an early age will impart them with vital knowledge and skills that will surely assist them to make informed decisions as they journey towards life. From the bottom of our hearts, thank you. Maraming salamat po." said CEO of Project School Textblast, Andrie "Doc Andrie" Udal.

If you are interested in learning more about the Bulig Financial Literacy Course or Green Tiger Markets, please contact Oliver Pearson at oliver.pearson@greentigermarkets.com.

**About Green Tiger Markets**

Green Tiger Markets Pte Ltd. (GTM) develops and operates a derivatives marketplace that facilitates the forward hedging of price risk on a financial basis. Marketplace participants buy or sell Forward contracts with other participants who have opposing price risk management needs.

GTM’s mission is to support the growth and development of new and underserved markets through transparency and price discovery. In support of this mission, GTM built an innovative and flexible proprietary platform that allows new products to be launched quickly and the market to be configured based on the needs of the market participants.

Market Spotlight