Hedging Electricity
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Early payment discount is only available if the course fee is paid in full on or by the indicated early payment discount date below.
Objective: To provide a practical introduction to the hedge market (which includes the market for all larger consumers whether or not they have hedge or fixed-price variable volume contracts), and to techniques and methods for hedging price risk in electricity markets, with an emphasis on developing skills in working with and applying common forms of hedge contract.
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Hedging Electricity Wellington 21st Oct 2010 |  | Price:$1,275.00 Early Discount:$1,147.50 (special ends 11 Oct 2010) | |
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Objective: To provide a practical introduction to the hedge market (which includes the market for all larger consumers whether or not they have hedge or fixed-price variable volume contracts), and to techniques and methods for hedging price risk in electricity markets, with an emphasis on developing skills in working with and applying common forms of hedge contract. Prerequisites: EL0, with ELNP1 also being useful background. Alternatively, familiarity with key elements of the electricity supply system including the Grid, metering and various types of generation. Some familiarity with the behaviour of prices from the spot market is also useful.
NB: Course material may vary from the above on the day.
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Prerequisites: EL0, with ELNP1 also being useful background. Alternatively, familiarity with key elements of the electricity supply system including the Grid, metering and various types of generation. Some familiarity with the behaviour of prices from the spot market is also useful.
- Introduction
Electricity supply contracts – ‘contracts for differences’, ‘fixed price variable volume’
Volatility in the electricity spot market
Sources of risk, correlations between risks
Attitudes to risk, risk premiums - Hedging Electricity
Derivatives as hedges
Physical and financial contracts
Contracts for differences
Options and swaptions
Location factor risk
Location factor hedging - The Hedge Market
The hedge market in New Zealand
Forward curves
The role of price forecasts
Hedge pricing and risk premiums - Buying and Selling Hedges
How supply and hedging arrangements are structured
The ISDA agreement
Fair value and hedge accounting - Hedging Strategy
Adjusting for location factors
Optimum generation with hedges in place
Timing of hedge transactions
Building a “hedge book”
NB: Course material may vary from the above on the day.
