Risk management
EEX to launch spot carbon contract
German-based electronic exchange European Energy Exchange (EEX) is to launch a spot contract to trade EU carbon emissions allowances in January 2005.
European emissions trading on track
The EU emissions trading scheme is on track to start in January 2005, with the European Commission having approved 16 out of 25 of the EU member National Allocation Plans that lie at the heart of the scheme, said Peter Vis, acting head of the Industrial…
Ten years at the top
A decade of commodity rankings has seen many players come and go – but as James Ockenden finds, the top two investment banks, Morgan Stanley and Goldman Sachs, have been solid all the way
Taking cover
US energy companies are increasingly taking out terrorism cover, even though none has yet made a claim. This is partly because the cost of policy premiums is falling. But this trend may be under threat. Joe Marsh reports
Agree to disagree
Volatility in the dry freight market has led to the use of derivatives such as forward freight agreements and the development of other innovative products. But will they have a lasting impact on the energy markets? By Hann Ho
Risky liquidations
It is all too easy to go for the simplest solution when liquidating an energy portfolio of different positions. Brett Humphreys discusses some of the problems with appropriately calculating the VAR associated with liquidating a portfolio
A popular punt
Experts remain bullish about the flow of new money into catastrophe cover. But an influx of hedge funds backed increasingly by institutional capital has led to worries of a “domino effect”. By Maria Kielmas
A legal rollercoaster
US-based Polygon wants to see a better restructuring deal for British Energy’sshareholders. But the hedge fund faces a struggle to prevent the UK nuclear powergenerator from delisting. Joe Marsh reports
Pressure on Puhca
The US General Accounting Office is to investigate whether the SEC has been lax in its oversight of the Public Utility Holding Company Act. How will this affect firms subject to Puhca requirements? By Paul Lyon
Bilateral collateral
Until recently, there was little legal protection from foreign investment risk.But the past few years have seen the rise of the bilateral investment treaty(BIT). Matthew Saunders shows how BITs can benefit the energy sector
Found in translation
While risk managers have become focused on value-at-risk and similar risk metrics,these may not be the best way of communicating risk to stakeholders. BrettHumphreys discusses how to improve communications
The windy city rules
The Chicago Climate Exchange is going from strength to strength if its new initiatives,new members and volumes are anything to go by. Here PaulLyon talks to CCX founderRichard Sandor about the exchange’s future
Oneok gets new $1bn financing and agrees to buy US gas co
Oklahoma-based energy company Oneok has obtained a five-year, $1 billion credit line from a group of banks to fund asset purchases. The company has also agreed to buy pipeline operator Northern Plains Natural Gas Company from asset acquisition company…
Dominion forward-sells shares to obtain equity on demand
Virginia-based energy company Dominion has forward-sold 10 million shares of its common stock in a block trade to JP Morgan Securities. The deal was done in connection with a forward-sale agreement between Dominion and investment bank Merrill Lynch. It…
Shaping the curve
A shaped forward curve is important for both trading and risk management. Here, Giorgio Cabibbo and Stefano Fiorenzani provide a model for shaping electricityforward curves that is consistent with both financial theory and market practice.Here, they…
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
SunGard acquires ASP pioneer Kiodex
SunGard has acquired New York based Kiodex, a supplier of web-based risk management, financial reporting, FAS 133 compliance and market data solutions for companies exposed to commodity price risk.
Tractebel opts for PowerCosts
Tractebel Energy Marketing, a subsidiary of energy company Tractebel, has signed up to use risk trading technology provided by PowerCosts Inc (PCI).
Allegheny sells West Virginia gas ops for $228m
Monongahela Power Company, a subsidiary of Pennsylvania-based Allegheny Energy, is to sell its natural gas operations in West Virginia for $141 million in cash and $87 million in assumed long-term debt to a private investment partnership.
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
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