FRANKFURT, Dec 8 (Reuters) - Nasdaq Commodities said on Tuesday it has launched German wind index futures contracts that will allow power producers, utilities and investors to hedge risks from inconsistent output.

The Oslo-based exchange operator’s Nasdaq Commodities arm |introduced a German wind index in September, NAREX-WIDE, to give the market a chance to see how the index calculates how hard the wind blows.

The index futures contract can be used to hedge such risks as too little wind and offset the cost of having to buy power on the market to meet demand.

“The launch of our German Wind Index Futures gives wind power producers, utilities, investors and insurers attractive new trading instruments to hedge risks from wind production in the long and short-term perspective,” said Bjoern Sibbern, Global Head of Nasdaq Commodities.

Nasdaq aims to introduce more complex products and extend them to other countries and regions, if the German derivatives are successful.

Germany, Europe’s biggest power consumer and wind power producer, derived almost 9 percent of its demand from wind turbines in 2014.

NAREX shows the daily utilisation of the country’s installed wind capacity of 40,000 megawatts, based on weather predictions and a production model developed by Meteogroup Deutschland.

European exchange-based electricity trading, in which Nasdaq competes with rivals such as CME and EEX, is in a state of transition.

Liquidity is moving into short-term markets due to a rise in renewable energy capacity, and draining out markets for conventional capacity based on fossil fuels.

Adding to conventional capacity, renewables are helping to create permanent oversupply, eroding volatility and opportunities to make big profits on trading bets, which has driven some banks out of the market for monthly, quarterly and annual power delivery.

But because renewables contracts still have relatively small volumes, there is growth potential in traded products.

This is already being exploited by the EEX, which launched a renewable contract in September, and is due to set up a wind power contract in the first quarter of 2016.