Risk management
Searching for sellers in 2003
High volatility and rising prices in 2003 clearly above fundamental levels signal the need for improved guidelines from legislative institutions andeasily accessible information
The future of ETRM
As generation, trading and retailing companies come out from under the dark cloud to prepare for what looks to be a brighter future, one issue has become critical – the need to upgrade outdated ETRM systems with 21st century architecture, portfolio…
Creative challenges in customer-driven risk management
Shell Trading’s Ken Gustafson and Jemmina Gualy shed light on the environment in North America for customers and dealers in risk management, and look at the opportunities ahead for the business
Weathering the problems
Weather derivatives can reduce or eliminate the potential economic disastersthat extreme weather can provoke. Ross McIntyre of Deutsche Bank examines thevarious ways in which weather can affect key industries and reviews the benefitsof weather derivatives
A dark futurefor clearing
Clearing was the energy buzz word of early 2003. But as Clearing Bank Hannover goes into liquidation and the future of EnergyClear’s business remains uncertain, it seems energy clearing has lost its appeal. By Paul Lyon
JP Morgan Chase plans electricity trading foray
JP Morgan Chase is planning to enter power trading, just as the US energy regulator overturns its onerous stock-holding limit rule. PaulLyon reports
The credit charge
Brett Humphreys describes a simple method for charging traders for the credit risk embedded in a contract, using an example based on an oil purchase agreement. Such a charge creates proper incentives for traders with regard to credit risk
Gas prices hit fertiliser industry
North American fertiliser producers are struggling for survival, thanks to the high cost of natural gas. Some have turned to hedging and pre-purchasing their gas, but such measures may not be sufficient. Paul Lyon reports
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
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
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
How to be top of the class
Brett Humphreys discusses the attributes that combine to create a best-in-class market risk management division within an energy company
The trouble with normalisation
Weather derivatives practitioners say normalisation agreements between regulators and utilities in the US are posing a threat to their industry. Kevin Foster investigates
A secure base
Long praised as pioneers in the energy derivatives space, US energy firms are now looking to make their overall risk management practices more robust. And, as Paul Lyon discovers, these companies have several innovations up their sleeves, such as…
Lessons in loaning
Lenders and borrowers alike are becoming ever more innovative at a worrying time for energy company financing. But will the new ideas catch on? Paul Lyon reports
Scaling the credit cliff
How are designers of credit risk software reacting to the new credit realities of the energy trading sector? Kevin Foster talks to some leading companies to find out
Standing out from the crowd
Credit risk management groups can differentiate themselves from their competitors through their different capabilities. Randy Baker and Brett Humphreys explain how
Trying to model reality
Quantitative credit risk models are a must-have in today’s energy industry. But human judgement is still needed, as Maria Kielmas discovers
Energy firms find succour
US energy company debt has reached critical levels, with nervous investors and banks working hard to keep these companies afloat. But Paul Lyon finds the secretive hedge fund industry could also lend a helping hand
Buying your way out of trouble
UK high-street retailer Littlewoods has saved £1.5 million through an energy risk management and procurement programme. Utilyx’s Nigel Cornwall looks at how other companies can reduce energy costs through purchase programmes
Cross-border conundrums
Analysts at rating agency Standard & Poor’s Lee Munden and Paul Lund look at the future of cross-border trading in Europe, given the credit crises of 2002
Power asset prices plummet
The energy price boom may be over, but bargain hunters beware: the predicted sale of US generation assets is yet to occur. Kevin Foster reports
Own, sell or restructure
UK and US utilities are presently saddled with a lot of debt, thanks to overcapacity and low power prices. But what’s the best way for these firms to deal with the power plants they don’t need? By Jessica McCallin
The case for financially settled contracts
Banks and hedge funds have shied away from trading electricity due to fear and ignorance of the physical nature of the market. But, as Todd Bessemer of Accenture points out, financially settled contracts can avoid the complexity of physical delivery and…