Articles by Risk Staff
The politics of betting
Using markets to forecast political events may not be as strange an idea as it seemed in July, when a terrorism futures scheme collapsed. But there is still scepticism as to whether such an approach would be ethical or effective. By Maria Kielmas
Energy firms face “crunch time” for accounting compliance
Professional services firm PricewaterhouseCoopers (PwC) says time is running out for energy and utility companies to get to grips with the pending implementation of the International Financial Reporting Standards (IFRS).
The great gas price divide
US natural gas prices may be volatile, but is there a real need to worry? Some participants blame the New York Mercantile Exchange for price spikes and worry about the future, while others see no problem with the market’s health. By Paul Lyon
Eyeing the pricing
US energy regulators are keeping an ever-more-watchful eye on gas and power price reporting – but are they finally flexing their muscles appropriately? Paul Lyon reports
Profiting from gas prices
Rachel Jacobson of energy information and software provider Fame looks at how natural gas prices are likely to rise and what firms can do to protect against them
Getting it together
Data consolidation is now a vital foundation to any successful risk management implementation, as Dave Rose and Stuart Cook of The Structure Group report
Farms weather power shortages
Farmers in both hemispheres are struggling to cope with heat waves and droughts while pondering the prospect of future power supply disruptions, finds Maria Kielmas
Enron files complaint against six of its former banks
Houston-based Enron last month filed a court complaint against six of its former banks, claiming they gave bad financial advice that contributed to its demise in late 2001. As a bankrupt company, Enron is required to try to recover as much as it can for…
Switching off to save cash
High electricity price volatility over the European summer has raised awareness of interruptible power contracts, finds James Ockenden
US body calls for electricity reliability organisation
The Edison Electric Institute (EEI) says the creation of an electricity reliability organisation with regulatory oversight is vital for developing and enforcing mandatory reliability rules and standards for US power sector participants.
Pieter Verberne
Pieter Verberne, Amsterdam PowerExchange’s (APX) chief operatingofficer, is a busy man. The Dutchexchange is finalising the technologyupgrading of its recent acquisitions, naturalgas exchange Enmo and Automated PowerExchange, both based in the UK. It is…
Barrier to entry
Bank of America and UBS are still trying to overcome obstacles that could prevent them entering physical power trading in the US. Federal Energy Regulatory Commission regulations represent the biggest obstacle. Paul Lyon reports
Chicago Mercantile Exchange to list European weather contracts
The Chicago Mercantile Exchange (CME) has started offering European weather derivatives, referenced on five cities’ temperatures.
Calpine completes project financing in Wisconsin
California power company Calpine Corp has completed a $230 million non-recourse project financing for its 600-megawatt (MW) gas-fuelled electricity-generating Riverside Energy Center in Beloit, Wisconsin.
Breaking down the model
Brett Humphreys and Andy Dunn outline a method to help energy companies minimise potential model risk and thereby avoid costly errors in valuing deals
Power to the European gas markets
Interesting developments in theEuropean gas markets mean that 2003proving to be a good year.Luca Baccarini, managing director ofGaselys and market expert, looksforward to profitable times
US gas squeeze hits power
Tight natural gas supplies in the US are adding to worries over reliability of electricity supplies, says Richard McMahon of the Edison Electric Institute
Gas supply problems persist
Natural gas prices are likely to remain high, as the Bush administration’s efforts to open up new sources of supply continue to face opposition. Kevin Foster reports
To store or not to store
Here we describe the optimal operation and valuation of gas storage based on a real option methodology. Using Zeebrugge gas prices as a practical example, Cyriel de Jong and Kasper Walet clarify the optionality in gas storage, analyse its valuation and…
All talk, no action
Cancelled power plant auctions and the complexities of asset debt structures are bad news for the boutiques set up to acquire power assets. The boutiques talk a good business plan – but execution may prove troublesome, as Paul Lyon discovers
Tennessee’s valley of debt
Tennessee Valley Authority’s power plant financing arrangements should be measured as debt, says the US General Accounting Office, thereby putting further pressure on its politically sensitive and federally restricted debt levels. Paul Lyon reports
LNG could rescue the US
Sandy Fielden of energy market specialist Logical Information Machines looks at a potential solution to the US natural gas supply crisis: liquefied natural gas
WRMA to campaign on data and against normalisation
Lynda Clemmons, president of the US Weather Risk Management Association (WRMA), is to sit on an American Meteorological Society (AMS) panel to address issues in the weather industry involving weather data and public-private partnerships.
A true test for value-at-risk
The three classic approaches for measuring portfolio value-at-risk do not compare like with like, argues Richard Sage. Here he presents a test portfolio to highlight the differences between calculation methods