Note 52 – Financial instruments (continued) (g) Energy price risk management The consolidated entity is exposed to energy price risk associated with the purchase and/or sale of electricity, gas and environmental products. The consolidated entity’s risk management policy for electricity price risk is to hedge forecast future transactions for up to five years into  the future. Exposures to fluctuations in the wholesale market electricity prices are managed through the use of various types of derivative  fi n a n c i a l i n s t r u m e n t s . The consolidated entity manages energy risk through an established risk management framework consisting of policies to place appropriate  risk limits on overall energy market exposures and transaction limits for approved energy commodities, requirements for delegations of  authority on trading, regular reporting of exposures and segregation of duties. It is the policy of the consolidated entity to actively manage the electricity price exposure arising from both forecast electricity generation  and retail customer electricity load. The consolidated entity enters into contracts on both the Sydney Futures Exchange and with individual  market participants achieving a fixed price for specific volumes of electricity. This hedging portfolio consists predominantly of swaps and  caps. Any unhedged position exposes the consolidated entity to the potential volatility of the regional spot prices in the Australian National  Electricity Market. The following table details the fair value of electricity derivatives outstanding at the end of the reporting period: 2011 2010 $m $m Energy derivative financial assets – current Electricity derivatives – cash flow hedges  22.7 2.3 Electricity derivatives – economic hedges  222.2 136.6 244.9 138.9 Energy derivative financial assets – non-current Electricity derivatives – cash flow hedges  51.2 3.6 51.2 3.6 Energy derivative financial liabilities – current Electricity derivatives – cash flow hedges  123.2 175.7 Electricity derivatives – economic hedges  259.5 405.5 382.7 581.2 Energy derivative financial liabilities – non-current Electricity derivatives – cash flow hedges  3.1 35.7 3.1 35.7 Electricity derivatives – cash fl ow hedges Derivative financial instruments are used by the consolidated entity in the normal course of business in order to hedge exposure to fl uctuations  in electricity prices. The aggregate notional volumes of the outstanding electricity derivatives at 30 June 2011 were 101.3 million MWh (2010:  73.6 million MWh). Electricity derivatives are either designated in cash flow hedge relationships or remain non-designated. The hedged anticipated electricity purchase and sale transactions are expected to occur continuously over the next five years from the end  of the reporting period consistent with the forecast demand from customers over this period. The effective portion of changes in the fair value of electricity derivatives that are designated and qualify as cash flow hedges is recognised  in other comprehensive income. The gain or loss relating to the ineffective portion of the hedge is recognised immediately in profit or loss as  part of gain/(loss) in fair value of electricity derivatives. Amounts previously recognised in other comprehensive income and accumulated in  equity in the hedging reserve are reclassified to profit or loss and included in cost of sales in each period in which the underlying purchase or  sale transactions are recognised. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately to profit or loss.  During the year, no hedges were de-designated and all underlying forecast transactions remain highly probable to occur as originally forecast. Electricity derivatives – economic hedges The consolidated entity has entered into certain derivative instruments for economic hedging purposes under the Board-approved risk  management policies, which do not satisfy the requirements for hedge accounting under AASB 139  Financial Instruments: Recognition and  Measurement . These derivatives are therefore required to be categorised as held for trading and are classified in the statement of financial  position as economic hedges. Changes in the fair value of derivative instruments that do not qualify for hedge accounting are recognised  immediately in profit or loss as part of gain/(loss) in fair value of electricity derivatives. During the year a net fair value gain of $219.1 million (2010: loss of $154.4 million) was recognised in profit or loss by the consolidated entity. 126 Consolidated  Notes to the  Financial  Statements