Feature
Good neighbours
Spanish and Portuguese energy market participants are hopeful that a joint Spanish-Portuguesepower market is imminent. But how competitive will the Portuguese side of themarket be? Joe Marsh reports
Iberdrola’s inroads
Spanish utility Iberdrola supplied almost a third of its home country’selectricity in 2003. And with a joint Iberian energy market scheduled to startin March, the firm has plans for further expansion into Portugal. By Joe Marsh
A history lesson
Abstract: The size of bid/ask spreads in electricity options has both valuationand credit implications. Here, Ted Kury of The Energy Authority shows how toderive theoretical spreads using historical option price data so they can beused as liquidity…
A fresh landscape
Prebon Energy’s Kevin McDermott says that much has changed in the electricitybroking world post-Enron. And it’s all for the better. By Paul Lyon
The matrix
Abstract: Portfolio-wide risk management requires a model that accounts correctlyfor the volatility of, and the correlations between electricity forward products.In this paper Kjersti Aas and KjetilK°aresen discuss a joint model for electricityforward…
Teething troubles
Following decades of cloistered state control and the exit of a number of largeUS players, the Australian power market is going through a period of hiccups. Paul Lyon reports on the outlook for the country’s electricity sector
Covering all the bases
Abstract: Many articles have discussed constructing models for either spot orforward prices. Yet none cover the whole process of constructing a joint modelfor both. Here, Andreas Huber and MonikaKrca develop a multi-factor model thatcaptures both the…
Buyouts are back
Private equity funds have been making bold inroads into energy markets in the past year – the number of deals has doubled since 2003, and the acquisitions are getting bigger. CatherineLacoursiere reports
Worth 1,000 words
There’s little point in spending time and money on extensive risk analysisif your audience is likely to switch off when you show your results. BrettHumphreys shows that sometimes, risk managers need to be able to telltheir stories well
Auction advances
The Commonwealth of Virginia in the US has just completed an innovative auctionof nitrogen oxide emissions credits thanks to advice from Amerex and George MasonUniversity. Paul Lyon reports
Storing up trouble
Utilities have become active hedgers against today’s high natural gas prices.In recent years, there has been a notable increase in both physical and financialhedging. Catherine Lacoursiere looks at whether storage is still a viable hedge
Pulp friction
In the latest of Energy Risk’s series of profiles featuring energy users’ riskmanagement and hedging strategies, Paul Lyon talks to Swedish pulp and papercompany SCA about how it deals with its sizeable energy exposures
Singing in the rain
Melbourne-based Southern Hydro Partnership signed its first precipitation hedgelast year – a landmark deal that paved the way for a number of other contractsto protect itself from the risk of low rainfall. Paul Lyon reports
Following the trend
The analysis of historical meterological data is vital for structuring weatherderivatives. But how should weather traders deal with the trends that may existsin the data? Steve Jewson and JeremyPenzer investigate
Weather wrap-up
Energy Risk’s inaugural weather derivatives survey shows that traders and end-users appearto be confident about the state of their business, despite high-profile exitsfrom the industry in recent years. Paul Lyon analyses the results
Accepting responsibility
Alex Schippers heads ABN Amro’s weather team – arguably one of the most innovative desks in Europe. Here he talks to Paul Lyon about the state of the global weather risk market
Raining information
Weather data is becoming increasingly accessible and more detailed, and – in Europe at least – publicly available data looks set to become less costly. Joe Marsh reports oncurrent developments in the weather risk market
Looking to the east
Can power market operators in the new EU member states in eastern Europe gainthe liquidity they need to challenge either bilateral electricity contracts orthe established exchanges? Joe Marsh reports
Putin’s endgame
The geopolitical premium on oil prices is rising as Russia pursues its ‘oligarchs’. Catherine Lacoursiere reports on the wider effects of Russian oil giant Yukos’ collapse
All systems go
More than 450 of you voted and voiced your concerns in Energy Risk’s inaugural User Choice Awards. Below we show which suppliers you voted for as top of their field in the energy business this year
Huberator’s hopes
APX and Fluxys subsidiary Huberator are planning to launch a gas exchange forthe Zeebrugge hub in early 2005. But is an exchange really needed by the tradingcommunity? Paul Lyon reports
Viva lost vegas
Brett Humphreys discusses the problems of calculating true value-at-risk on aconcentrated options portfolio – in particular, the various pitfalls thatcan befall a risk manager in ignoring vega risk – and considers ways ofhandling these issues
Vertical take-off
As UK supplier Centrica narrows its focus to fund an asset acquisition spree, James Ockenden finds the ‘asset-light’ utility model has finallybeen buried and a move towards ‘vertical integration’ is now thestrategy of choice
Building load links
In the third article in this series, Les Clewlow , ChrisStrickland and MichaelBooth show how the Monte Carlo techniques used in previous articles can accuratelyhighlight the crucial relationship between price and load – a complex correlationaffecting the…