On June 24th, OMIP, the Iberian Energy Derivatives Exchange, announced the launch of electricity futures, forwards and swaps in the Iberian markets with maturities extending up to 8, 9 and 10 years.
On July 2nd, the first virtual 10-year PPA was announced. It consists of 3x “SPEL Base Futures” yearly contracts from 2021 to 2030, each one comprising the delivery of baseload electricity at a constant power of 1MW during all hours of the delivery periods at a price of 40,40 EUR/MWh, for a total supply of 263GWh throughout the 10-year term. These contracts are marked-to-market daily, and cleared and settled at OMIClear, the Iberian Energy Clearing House.
This is a very interesting move that provides Iberian generators with an additional tool to reduce price volatility and increase predictability of project cash flows, facilitating access to sources of long-term finance.