Electricity
The LMP supermodel
With Ferc’s standard market design (SMD) seeking a shift from zonal power pricing to nodal pricing, the concept of locational marginal pricing (LMP) has become a key policy issue. Henwood Energy’s Vikram Janardhan proposes 10 key modelling features to…
Seam shifts in central Europe
Gordon Feller looks at the changing coal economies of Bulgaria, the Czech Republic and Slovenia and the effect of electricity sector moves in the region
Climbing the competition Pole
The Polish government hopes to boost competition in the electricity market through a controversial securitisation plan that it will use to buy out long-term contracts between generators and the transmission grid operator. Maria Kielmas reports
Exchanges gradually gain pace
After much talk of new trading solutions for German power, only one platform – EEX – has made significant progress, although the new clearing solution from Clearing Bank Hannover seems to be picking up steam. James Ockenden reports
The bigger they come…
The German market is at the heart of the European power business, but it has stuttered since its early promise, and has yet to set the pace for the region as a whole. From a new entrant’s point of view, this is only to be welcomed, argues Ben Tait
Option pricing for power prices with spikes
European power prices are very volatile and subject to spikes, particularly in German and Dutch markets. Ronald Huisman and Cyriel de Jong examine the impact of spikes on option prices by comparing prices from a standard mean-reverting model and a regime…
Standardising electricity contracts
Electricity contracts have come and gone, but a new trio of financially settled futures contracts aims to widen the electricity market, reports James Ockenden
The Power Sector Model
David Soronow, Mike Pierce and King Wang, of Financial Engineering Associates, introduce the firm’s Power Sector Model as the next step in derivatives pricing
Making sense of the new power market
Bank of America’s Rogers Herndon and David Mooney examine expectations in the energy and power markets before and after the collapse of Enron and outline their predictions for the future
Power price discovery in Europe
Logical Information Machines’ Sandy Fielden compares different price discovery mechanisms in European electricity markets
Entergy-Koch reaps the benefit
While its quiet discipline made Entergy-Koch Trading one of the less glamorous energy trading houses during the Enron boom years, its steady business model is now paying off, as James Ockenden reports
Out of the zone: nodal pricing takes hold
Congestion-constrained US electricity markets are likely to find relief with the arrival of a new pricing regime, reports Catherine Lacoursière
Risk and reward at the speed of light: a new electricity price model
Samuel Bodily and Michel Del Buono propose a new electricity price model. The mean-reverting proportional volatility model matches important characteristics of power price dynamics where others, such as geometric Brownian motion, fall short