CME Group plans to launch financially-settled Wind Power futures and options

​CME Group announced plans to launch financially-settled Wind Power futures and options in the fourth quarter, pending regulatory review, extending its energy product suite with tools designed to help market participants manage wind generation risk.

The contracts will track and settle against indices provided by Vaisala Xweather, using independent datasets that model projected wind power output at designated locations. The five contracts cover four key global power regions: Germany, UK, Australia VIC, and U.S. Texas ERCOT.

"As wind power accounts for a growing share of electricity generation, hedging renewable energy markets has never been more important," said Peter Keavey, Managing Director and Global Head of Energy Products at CME Group. "Our new Wind futures and options contracts will provide market participants with a standardized, exchange-cleared solution to manage their exposure to fluctuating wind production impacting the power stack – all on the same platform as Natural Gas, Power, and Weather."

David Whitehead, general manager of insurance sales at Vaisala Xweather, said the collaboration brings independent, rigorously modeled data to wind power, giving traders, utilities, and renewable operators a standardized way to manage the financial effects of an increasingly extreme weather environment. Wind power generation grew by approximately 8% last year, according to the International Energy Agency.

The new contracts will be listed on and subject to the rules of NYMEX.