Both the CFD and FPVV indexes eased off this month bringing the main index down by 0.6 c/kWh to 15.0 c/kWh, a fall of 3.8%, which partially offset the spiking rise of 11.4% in last month's index.The change in the CFD index was the more significant driver as it fell by 2.5 c/kWh on 3 traded contracts. The fall was most likely due to the substantial inflows into hydro lakes and the resultant drop in spot and futures prices.

Five FPVV contracts were traded over the last month, with their index value falling by 0.3 c/kWh.

The CFD index is more reactive to the spot and futures market than the FPVV index. The fact that on a six-month rolling average basis, the FPVV index has tracked lower than the CFD index in most months since November 2020, paints a clear picture of the volatility and uncertainty that has been seen in the market over the past few years.

However, the CFD index has been lower than the FPVV index three times in the last four months, and the recent fall in the CFD index bought the gap between the six-month rolling averages to 0.4 c/kWh (0.75 c/kWh last month). Given the slower response of the FPVV index, we may see relatively high FPVV pricing for some time to come.