Electricity Market, Energy Economics and Strategic Planning Course
Electrical and Power Engineering
Select Other "city & date"
Electricity Market, Energy Economics and Strategic Planning Course
Introduction:
In economic terms, Electricity (both Power and Energy) is a commodity capable of being bought, sold, and traded. An Electricity Market is a system for effecting purchases, through bids to buy; sales, through offers to sell; and short-term trades, generally in the form of financial or obligation swaps. Bids and offers use supply and demand principles to set the price. Long-term trades are contracts similar to power purchase agreements and generally considered private bi-lateral transactions between counterparties.
Course Objectives:
This program is intended to immerse the participants in learning about Electricity Power Markets: How they can be developed, planned, and implemented. By the end of the training, participants will be able to:
- Understanding the Planning and Operating Process
- Understanding the Financial and Economic issues
- Ability to deal with the risks associated with Market Uncertainties.
Who Should Attend?
This course is intended for Practitioners Trading Power, Power System Engineers, Managers, Engineers, and Planners related to Energy and Power Market.
Course Outlines:
Risk Management
- Sustainability; the capacity for continuity into the long term future
- Risk Framework/Metrics
- Examples of Regulatory Risks
- Types of Instruments
- Futures (NYMEX, Amsterdam Exchange)
- Strategies: Vanilla and Exotic Options
- Design of Contracts (ISDA, EEI, OTC, NYMEX)
- Typical Trades - Futures, SWAPS, OPTIONS
- Choice of Hedges
- Real-life Examples
- Types of Trades - Useful to the Producer
- Types of Trades - Useful to the Load
- Advantage/Disadvantage of different Tools
Lessons Learned from other Jurisdictions
- North America Market (FERC)
- FERC white paper on Transmission Policy
- Challenges of Scale, Scope, and Timing
Elements of Risks (Strategic Issues)
- Basel Committee for Banking Supervision
- Market Locational Risk
- Operational Risk
- Credit Risk/ Liquidity Risk
- Physical Risk of Generating Assets
- Legal and Regulatory Risks
- Trading Controls and Best Practices
- Independent Risk Management
- Front to Back Office Case Studies:
- Enron’s Price Maximization
- Quantitative / Qualitative Risks
Concepts of Derivatives Part I
- Forward Contracts: Contango, Backwardation
- Futures Contracts
- Contract Standardization
- Energy Futures contracts
- Arbitrage Pricing Theory
- Convenience Yield
- Swaps
Concepts of Derivatives Part II
- Option Contracts
- Strategies Involving Options
- Basic Options Strategies
- Call-Put Parity
- Daily Options, Monthly, Spreads
- Spark Options on 2 Commodities
- Spark Options on 3 Commodities
- Volumetric or Swing Options
- Real Options: Power and Physical Constraints
Option Valuation
- Valuation of Option Strategies
- Closed-Form Solutions (Black Scholes)
- The Binomial Tree Approach
- Monte Carlo Valuation of Options
- Examples of Hedging
Quantitative Financial Models
- Quantitative Financial Models
- Stochastic Factors: Production and Demand
- Mean Reversion Model, Jumps
Market Economics
- Day-Ahead Market
- Unconstrained Price
- Constrained Price
- Bidding Strategy
- Locational Marginal Price
- Energy Price Cap
Portfolio Analysis
- Demand & Supply
- Demand & Supply Equilibrium Price
- Value AT Risk
- Strategic Planning
- Multiyear Plan
- Multi-Area Forecasting
- Budget
- Forward Prices
Financial Transmission Rights
- Transmission Pricing
- Congestion Management
- Auction
CASE STUDY: Weather Derivatives
- Weather Risk
- Description of Weather Contracts
- Weather Risk Management Instruments
Market Economics (Best Practices)
