Course description
This Classroom based training course, delivered over two days, will provide participants with a comprehensive knowledge and understanding of the UK and European electricity markets. It will explore the complexity of the markets and provide insight into the risks and opportunities that these markets provide.
Upcoming start dates
1 start date available
Suitability - Who should attend?
- New or experienced emissions, oil, gas, power and coal traders or brokers
- Technical and financial staff in companies with an emissions exposure
- Managers with responsibility for trading desks
- Senior managers, lawyers, accountants and auditors who need to understand compliance with emissions regulations.
Training Course Content
Day 1
- Global Electricity Markets in Transition
- Current status and future developments
- Organisation of the electricity markets
- Players Power Market
- Relationship Power and Carbon Market
- Centralized vs. Decentralize generation
- Role renewables
- Role Paris Agreement and COP 26 Glasgow
- Role Subsidies and Power Purchase Agreements
- Flexibility: Storage and Demand Response
- Power Price Dynamics
- Non-storability
- Price Drivers; supply and demand, weather and others
- Evolution of volatility in energy markets
- Comparing spot with forward volatility: spikes and mean-reversion
- Seasonality
- Causes of seasonality
- Correlations
- Exercise: Electricity Pricing
- Electricity Value Chain and its risks
- The electricity value chain
- Fuels, Generation, Transmission & Distribution, Wholesale, Carbon and retail
- Portfolio of Contracts
- Forward sales, retail supply, fuel, CO2, Freight, hedges etc.
- Sources of Risk
- Market, Credit ,Operational, Legal and regulatory , Business ,Strategic and Reputation Risk
- Electricity Markets: Physical and Financial Trading
- Spot and forward trading of electricity
- Exchange vs. OTC Trading
- Understanding the generation stack
- Forward curves for electricity and CO2
- The Power Day Ahead Market
- Exercise: Electricity Forward Curves
Day 2
- Physical Electricity Trading Markets
- The different timeframes
- Day Ahead
- How to develop a bidding strategy for the power exchange
- How the portfolio can be managed
- Intraday
- Balancing
- Forwards
- Capacity
- Ancillary Services
- Exercise: Spot Market: Producing a sample bid on the spot market for a generator
- Electricity Trading and Risk Management
- Trading profit opportunities and risk sharing
- Hedging
- Risk management
- Cash flow, counterparty and commodity risk
- Optimisation
- Arbitrage
- Cross-regional optimisation
- Cross commodity optimisation
- Timing decisions
- Proprietary trading
- Trading gas, oil and other commodities to improve performance
- Trading electricity contracts: margin requirements, clearing, liquidity, information advantages.
- Exercise: MGM Hedging disaster
- Electricity Forwards, Futures and Swaps: The Basics
- Forwards and futures
- Swaps
- Definitions
- Hedging with futures and forwards
- Hedging with swaps
- Exercise: Electricity Forwards , Futures and Swaps
- Basics of Electricity Options
- Calls and Puts
- Difference between buying and selling options
- Terminology
- Cap, floor
- Premium Reduction
- Collars
- Hedging applications
- Spread Trading
- Different Spreads
- Spread trading strategies
- Clean Spark vs. Clean Dark Spreads
- Tolling Agreements
- Final Exercise: Asset and Portfolio Trading
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ICE Education
5th Floor, Milton Gate, Chiswell Street
EC1Y 4SA London
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