The Gateway to Algorithmic and Automated Trading

TriOptima's energy compression cycle breaks previous record by 110%

First Published 29th September 2014

TriOptima's latest triReduce energy compression cycle breaks previous record by 110%, eliminating $12.1 billion notional.

New York and London - TriOptima, the provider of OTC derivative post trade services, has announced that the notional eliminated in the latest triReduce energy cycle grew to $12.1 billion (single-counted), a 110% increase over its previous all-time high cycle in March 2014. Line items eliminated similarly grew by 65%.

Managing credit risk, opening up trading lines and reducing operational risk offer major incentives to energy firms and others to join the compression cycles while reducing capital costs is an additional goal for financial institutions.

With 14 participants, including energy firms and financial institutions, the terminated trades covered a broad spectrum of energy swaps: The $12.1 billion notional translates into 182 million MWh in power both physical forwards and financial swaps terminated, 458 million MWh of natural gas physical forwards terminated, and 5.3 million in MT of coal financial swaps eliminated.

The categories included the following transaction types:

• Power (physical forwards): Amprion (Germany), CEPS (Czech), ELIA (Belgium), MAVIR (Hungary), NGrid (UK), PSEO (Poland), SEPS (Slovakia), SwissGrid (Switzerland), RTE (France), TenneT (Netherlands), and TERNA (Italy)

• Power (financial swaps): Nordpool System Price, OMEL (Spain), PUN (Italy)

• Natural Gas (physical forwards): CEGH (Austria), Gaspool (Germany), NBP (UK), NCG (Germany), PEG-N and PEG-S (France), PSV (Italy), TTF (Netherlands), and Zeebrugge (Belgium)

• Coal (financial swaps): API#2, API#4, Newcastle GlobalCoal

"This latest compression cycle saw a major increase in participation and results." said Mattias Palm, TriOptima's business manager for commodities. "We are seeing strong support grow among commodities market participants as they realize the risk management benefits of triReduce compression. Since 2011 we have terminated $41.2 Billion in commodity swaps, 29% of that in the last cycle."