Hydro Tasmania has struck the first-ever deal for the trade of stored energy, introducing a new type of financial contract that is expected to be popular with electricity retailers wanting to handle escalating price risk and should also help spur new pumped hydro projects.

Under the contract, signed with Macquarie Group and Shell, Hydro Tasmania sells the rights to power stored in its system during the highest-priced part of the day and buys energy to charge its plant when prices are low, taking advantage of the swings in daytime prices that have become typical in the electricity market due to weather-dependent renewable energy.