Objective: To provide a practical introduction to the hedge markets, and 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.

The course includes a number of rounds of our hedging game which challenges participants to develop and manage a hedging strategy for a large consumer or a generator.

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.

Video:  Prior to the course, participants should watch this short video on "hedging concepts". 

 

  1. Introduction
    What is a hedge?
    Volatility in the electricity spot market
    Sources of risk
    Attitudes to risk, risk premiums
  2. Hedging Electricity
    Financial Markets Conduct Act
    Contracts for differences
    Swaps and options
    Futures and swaptions
    The spot market’s ‘losses and constraints excess'
    Financial transmission rights (FTRs)
  3. Hedging Strategy
    Location factor adjustments
    Optimum generation with hedges in place
    Using FTRs
    Building a “hedge book”
    The forward curve
    The role of forecasts
    Pricing and valuing futures, swaps and options
    Modelling hedge strategies
    Stress testing
  4. The Hedge Market
    The hedge market in New Zealand
    Hedge market liquidity
  5. Miscellaneous
    The ISDA agreement
    Front, middle and back offices
    Fair value and hedge accounting

NB: Course material may vary from the above on the day.

Prices shown below are GST exclusive

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Hedging Electricity Course Schedule

Date Location Price Early Payment Date Seats
24 Mar 2021
Dunedin$1,095.00 $985.50 Earlybird!19 Mar 2021
7 Jul 2021
Dunedin$1,095.00 $985.50 Earlybird!2 Jul 2021
29 Sep 2021
Dunedin$1,095.00 $985.50 Earlybird!24 Sep 2021