Single Electricity Market (SEM) and interaction with EMIR. Central Bank of Ireland

Size: px
Start display at page:

Download "Single Electricity Market (SEM) and interaction with EMIR. Central Bank of Ireland"

Transcription

1 Single Electricity Market (SEM) and interaction with EMIR Central Bank of Ireland 11 th July 2014

2 About EAI

3 Overview of SEM and its Participants The market is a gross mandatory pool and consists of generators and suppliers, some of whom are vertically integrated. All generators & suppliers above a de minimus level trade via the pool. EirGrid and SONI (TSOs) operate the transmission network on the island. The wholesale pool price is set in each half hour effectively by the most expensive generator required to run to meet demand in that half hour. Demand is estimated daily by the TSOs on an all-island basis. On a daily basis, generators bid their short run marginal costs (mostly fuel related operating costs) into the pool for each half hour of the trading day (which runs from ). The System Market Operator (SEMO a joint venture of Soni/Eirgrid) will try to keep the pool price low by picking the cheapest bids first, until it has sufficient electricity to meet demand in that half hour. This determines the pool price or Single Marginal Price (SMP) All suppliers buy from the pool & pay the same pool price as the generators.

4 SEM Market Physical & Financial PHYSICAL POOL GENERATOR SUPPLIER Financial Contracts FINANCIAL

5 Setting the Pool price - Principle In advance of this ½ hour period all Generators offer prices and volumes to the TSO who stacks them in merit order to meet the demand System Demand MW Generator 4 Price 60 Generator 3 Price 50 Generator 2 Price 40 Generator 1 Price 30 Time of Day Generator 4 sets the Pool price for this ½ hour period

6 Financial Contracts CFDs

7 Daily Price Profile /MWh Pool Price = Load curve Generators on load receive Pool Price Suppliers taking load pay Pool Price Time of Day

8 The Purpose of a Contract For Difference Unpredictability of Pool price exposes trading entities to a volatile revenue stream / cost base A CFD is a fixed price agreement between a generator and a supplier in order to avoid the risk associated with the pool price A CFD is a financial contract independent of the pool Fixing Fuel, CO 2 and fixing the pool price allows the generator to lock down profit margin CFDs enable the supplier to offer predictable, stable prices to end consumers

9 Price Financial Contract For Difference CfD Generator gets pool price and pays supplier the difference between pool price and CfD strike Generator gets pool price and receives from supplier difference between CfD strike and pool price CfD strike Financial Contract

10 Two-way CFDs /MWh 19.00= 62 Generator pays Supplier (62-47) = 15 Contract Strike Price = 25 Supplier pays Generator (47-25) = Time of Day Generator must be able to forecast availability + to set strike price Generator must run to afford CfD cash payments to supplier under CfD

11 Price Volatility creates uncertain Gross Margin No financial Contracting Using Financial Contracting gross margin SMP SMP Sell power CfD stable gross margin Fuel Fuel Buy fuel swap Pool s Single Marginal Price (SMP) follows gas much more so than any other fuel Hedging power income and fuel costs = > stable gross margin => price stability Gross Margin = Power Sales Income Fuel costs

12 Overall approach to Power Contracting and fuel hedging

13 Energy Margin Volatility Generator s revenue driven by volatile SMP Energy Margin 95% worst case expected Energy margin Generator s cost driven by volatile fuel prices portfolio risk (EMaR) portfolio energy margin distribution Highly variable fuel prices and resulting variable power prices (System Marginal Price (SMP)) variable energy margin, large energy margin at risk

14 Contracting to Reduce Energy Margin Volatility Sell fixed price power financial power contracts against forecast production 95% worst case expected energy margin Buy matching volumes of fixed price fuel contracts portfolio risk (EMaR) Generator/Supplier reduces energy margin at risk by locking in a margin. It does this by: Selling/buying power Contracts for Differences (CfD) Hedging fuel, foreign exchange and carbon associated with these power CfDs.

15 Approach to Power Contracting

16 Types of CfDs Directed Contracts Example CfDs used in SEM As part of their market power mitigation strategy, the Regulatory Authorities instruct ESBPG (and NIE PPB if applicable) to sell Directed contracts The price and volume of DCs are decided by the RAs Suppliers are apportioned the right to subscribe to DCs by the RAs Non-Directed contracts ESB and a small number of other entities auction NDCs via Tullet Prebon platform Reserve price, volumes and product structures determined by the entity selling on Tullet PSO supported contracts ESB acts as an agent for the CER and facilitates the process of selling and settling these PSO CfDs, but it does not make any money from this process Market participants may also utilise other exchanges and broker platforms to hedge their commercial risks

17 Summary Hedging plays a specific and defined purpose in SEM to manage day-to-day commercial and treasury risks Need to recognise role of RAs/ACER in monitoring energy markets EAI considers Information Sheet and external audit sign-off should be sufficient Would welcome cooperation with CBI in developing proposed Information Sheet

18 Additional info

19 How SEM CfDs are priced Directed Contracts Price based on formula determined by Regulatory Authorities based on their own computer models Non-directed Contracts Average forecast SMP is determined from computer models Model inputs include: Gas Prices, Carbon Prices, System Demand, Plant availability, Wind production forecasts A risk premium is then added to determine reserve prices, taking account of market assessment CfDs are auctioned with this reserve price and the price achieved (clearing price) can be higher if sufficient market demand

20 CfD product Types Baseload means at the same Contract Quantity and Settlement Quantity for all Settlement Periods during the Contract Period. Mid-Merit ( ) means at a Contract Quantity which has the same value during all Settlement Periods during the Contract Period, and where the Settlement Quantity is equal to:100% of the Contract Quantity in all Settlement Periods beginning at 07:00 and ending at 23:00 on Business Days; 80% in all Settlement Periods beginning at 07:00 and ending at 23:00 on Non-Business Days; and zero at other times. Mid-Merit 2 ( ) means at a Contract Quantity which has the same value during all Settlement Periods during the Contract Period, and where the Settlement Quantity is equal to: 100% of the Contract Quantity in all Settlement Periods beginning at 07:00 and ending at 19:00 on week days; zero at other times. Peak ( ) means at the same Contract Quantity for all Settlement Periods arising during the Contract Period, and where the Settlement Quantity is equal to: 100% of the Contract Quantity in all Settlement Periods beginning at 17:00 and ending at 21:00 on all days during the Months of October, November, December, January, February and March during the Contract Period; zero at other times.

Domestic Customer Tariff Breakdown - RoI Note this is approximate due to tariff and consumption variations

Domestic Customer Tariff Breakdown - RoI Note this is approximate due to tariff and consumption variations Guide to Electricity price formation in Ireland and Northern Ireland The numbers The average household consumes 4,300 kwh 1 of electricity per annum in Ireland and 4,100 in Northern Ireland. At an average

More information

Response by NIE Energy (PPB)

Response by NIE Energy (PPB) NIE Energy Limited Power Procurement Business (PPB) Review of K factors & Supply Margins and Tariff Structure Review Consultation Paper CER-09-093 Response by NIE Energy (PPB) 11 September 2009. Introduction

More information

The Integration of Electricity Markets in Ireland under the ISO Model

The Integration of Electricity Markets in Ireland under the ISO Model The Integration of Electricity Markets in Ireland under the ISO Model Paul Conlon ESB International 1. Introduction In November 2004 the respective governmental departments of Ireland and Northern Ireland

More information

The UK Electricity Market Reform and the Capacity Market

The UK Electricity Market Reform and the Capacity Market The UK Electricity Market Reform and the Capacity Market Neil Bush, Head Energy Economist University Paris-Dauphine Tuesday 16 th April, 2013 Overview 1 Rationale for Electricity Market Reform 2 Why have

More information

Working Paper No. 374. The Effect of REFIT on Irish Electricity Prices

Working Paper No. 374. The Effect of REFIT on Irish Electricity Prices Working Paper No. 374 www.esri.ie February 2011 The Effect of REFIT on Irish Electricity Prices Conor Devitt and Laura Malaguzzi Valeri Abstract: This paper evaluates the likely effect of REFIT, the Irish

More information

A new electricity market for Northern Ireland and Ireland from 2016 - Integrated Single Electricity Market (I-SEM)

A new electricity market for Northern Ireland and Ireland from 2016 - Integrated Single Electricity Market (I-SEM) A new electricity market for Northern Ireland and Ireland from 2016 - Integrated Single Electricity Market (I-SEM) Non-technical summary High level design Draft Decision Paper SEM -14-047 June 2014 1 INTRODUCTION

More information

Electricity Prices & Competition

Electricity Prices & Competition CER Presentation on Electricity Prices & Competition SEAI Conference, July 2010 Agenda Who is the CER and what are our functions? What are the electricity price drivers? Recent fuel price trends and SEM

More information

Reliability Options in Ireland and Northern Ireland Obligations and Penalties

Reliability Options in Ireland and Northern Ireland Obligations and Penalties Reliability Options in Ireland and Northern Ireland Obligations and Penalties European Commission Technical Working Group on Energy: Subgroup on generation adequacy 14 April, Brussels Background Single

More information

How To Trade Electricity Derivatives

How To Trade Electricity Derivatives CEEM Specialised Training Program EI Restructuring in Australia Derivative Markets and the NEM Iain MacGill and Hugh Outhred Centre for Energy and Environmental Markets School of Electrical Engineering

More information

ELECTRICITY MARKET REFORM (EMR) & THE ENERGY BILL INENCO OVERVIEW

ELECTRICITY MARKET REFORM (EMR) & THE ENERGY BILL INENCO OVERVIEW ELECTRICITY MARKET REFORM (EMR) & THE ENERGY BILL INENCO OVERVIEW February 2014 ELECTRICITY MARKET REFORM (EMR) & THE ENERGY BILL The Energy Bill is the government s flagship energy policy. There have

More information

Regulatory Briefing. Capital Markets Day. 17 October 2013

Regulatory Briefing. Capital Markets Day. 17 October 2013 Regulatory Briefing Capital Markets Day 17 October 2013 Agenda Andrew Koss Director of Strategy Damien Speight Head Trader Renewables Obligation Contracts for Difference Levy Control Framework Capacity

More information

npower EMR Explained Session The Energy Event 10 th & 11 th September 2013

npower EMR Explained Session The Energy Event 10 th & 11 th September 2013 npower EMR Explained Session The Energy Event 10 th & 11 th September 2013 Welcome Chris Billing, Head of Indirect Sales, npower Agenda > 13.30 Welcome & introduction Chris Billing EMR Pulse Survey Results

More information

Pass Through Costs for Business Electricity Customers from 1 st October 2015

Pass Through Costs for Business Electricity Customers from 1 st October 2015 Pass Through Costs for Business Electricity Customers from 1 st October 2015 DOCUMENT TYPE: Information Note REFERENCE: CER 15/226 DATE PUBLISHED: 22 nd September 2015 The Commission for Energy Regulation,

More information

The Regulatory Framework for Energy Prices

The Regulatory Framework for Energy Prices The Regulatory Framework for Energy Prices Fergus O Toole - Analyst Thursday 7 th October 2010 Who are the CER? The Commission for energy Regulation Ireland s independent energy regulator CER regulates

More information

Disclaimer: All costs contained within this report are indicative and based on latest market information. 16 th March 2015

Disclaimer: All costs contained within this report are indicative and based on latest market information. 16 th March 2015 Disclaimer: All costs contained within this report are indicative and based on latest market information 16 th March 2015 FD SUMMARY The make up of the electricity bill is changing, with non-commodity

More information

Making CfDs work for renewable generators

Making CfDs work for renewable generators Making CfDs work for renewable generators This is in two parts. 1 st a brief introduction to the Green Power Auction Market. 2 nd gives more detail on the structure and follows on. We consider this a critical

More information

ESRI Research Note. The Irish Electricity Market: New Regulation to Preserve Competition Valeria di Cosmo and Muireann Á. Lynch

ESRI Research Note. The Irish Electricity Market: New Regulation to Preserve Competition Valeria di Cosmo and Muireann Á. Lynch ESRI Research Note The Irish Electricity Market: New Regulation to Preserve Competition Valeria di Cosmo and Muireann Á. Lynch Research Notes are short papers on focused research issues. They are subject

More information

Global Settlement the Residual Meter Volume Interval Proportion

Global Settlement the Residual Meter Volume Interval Proportion Global Settlement the Residual Meter Volume Interval Proportion DOCUMENT Consultation Paper TYPE: REFERENCE: CER 11/079 DATE PUBLISHED: CLOSING DATE: RESPONSES TO: 29 th April 2011 26 th May 2011 smacanbhaird@cer.ie

More information

Version 2.0. 7 October 2013 SEM-13-067

Version 2.0. 7 October 2013 SEM-13-067 TRADING & SETTLEMENT CODE HELICOPTER GUIDE TRADING & SETTLEMENT CODE HELICOPTER GUIDE Version 2.0 7 October 2013 SEM-13-067 TABLE OF CONTENTS 1. INTRODUCTION 1 1.1 Purpose 1 1.2 Disclaimer 1 1.3 The TSC

More information

ABOUT ELECTRICITY MARKETS. Power Markets and Trade in South Asia: Opportunities for Nepal

ABOUT ELECTRICITY MARKETS. Power Markets and Trade in South Asia: Opportunities for Nepal ABOUT ELECTRICITY MARKETS Power Markets and Trade in South Asia: Opportunities for Nepal February 14-15, 2011 Models can be classified based on different structural characteristics. Model 1 Model 2 Model

More information

Solver Choice in the SEM: A Comparative Study of Lagrangian Relaxation vs. Mixed Integer Programming

Solver Choice in the SEM: A Comparative Study of Lagrangian Relaxation vs. Mixed Integer Programming Solver Choice in the SEM: A Comparative Study of Lagrangian Relaxation vs. Mixed Integer Programming. Page 1 Contents 1 Executive Summary... 3 2 Study Overview... 5 3 A Comparison of the MIP Timeout Settings...

More information

Annex B: Strike price methodology July 2013

Annex B: Strike price methodology July 2013 July 2013 URN 13D/189 Contents Introduction... 3 Overview of methodology for deriving a CfD strike price... 3 Strike Prices during the cross-over period with the RO (2014/15 2016/17)... 4 Comparison of

More information

CER Response to Government Consultation on Green Paper on Energy Policy in Ireland

CER Response to Government Consultation on Green Paper on Energy Policy in Ireland Commission for Energy Regulation CER Response to Government Consultation on Green Paper on Energy Policy in Ireland Regulating Water, Energy & Safety in the Public Interest The CER welcomes an opportunity

More information

Energy, Trade & Commodities Alert

Energy, Trade & Commodities Alert Energy, Trade & Commodities Alert If you have questions or would like additional information on the material covered in this Alert, please contact the author, or the Reed Smith lawyer with whom you regularly

More information

Concepts and Experiences with Capacity Mechanisms

Concepts and Experiences with Capacity Mechanisms Concepts and Experiences with Capacity Mechanisms Manuel Baritaud, International Energy Agency Conference Capacity Mechanisms: Experiences in Various European Countries Bundesministerium fur Wirtschaft

More information

CAPACITY MECHANISMS IN EU POWER MARKETS

CAPACITY MECHANISMS IN EU POWER MARKETS CAPACITY MECHANISMS IN EU POWER MARKETS Can we progress to bilateral energy options? Simon Bradbury Ultimately, European renewable targets mean that prices and dispatch patterns will be dictated by wind

More information

ESB NATIONAL GRID RESPONSE TO CER/03/266 INTERCONNECTOR TRADING PRINCIPLES IN THE MAE

ESB NATIONAL GRID RESPONSE TO CER/03/266 INTERCONNECTOR TRADING PRINCIPLES IN THE MAE ESB NATIONAL GRID RESPONSE TO CER/03/266 INTERCONNECTOR TRADING PRINCIPLES IN THE MAE ESB NATIONAL GRID PAGE 1 EXECUTIVE SUMMARY There are a number of considerations to be made in relation to interconnector

More information

IMPACT OF GB S ELECTRICITY MARKET REFORM ON INTERCONNECTIONS, CONSEQUENCES ON NORDIC MARKET Michel Martin, 3 April 2014

IMPACT OF GB S ELECTRICITY MARKET REFORM ON INTERCONNECTIONS, CONSEQUENCES ON NORDIC MARKET Michel Martin, 3 April 2014 IMPACT OF GB S ELECTRICITY MARKET REFORM ON INTERCONNECTIONS, CONSEQUENCES ON NORDIC MARKET Michel Martin, 3 April 2014 PÖYRY MANAGEMENT CONSULTING ENERGY Pöyry offices (c) grafikdienst.com Pöyry Management

More information

This seeks to define Contracts for Difference (CfDs) and their relevance to energy related development in Copeland.

This seeks to define Contracts for Difference (CfDs) and their relevance to energy related development in Copeland. Contracts for Difference and Electricity Market Reform LEAD OFFICER: REPORT AUTHOR: John Groves Denice Gallen Summary and Recommendation: This seeks to define Contracts for Difference (CfDs) and their

More information

MANITOBA [IYDRO. Corporate Risk Management Middle Office Report Sept 2009

MANITOBA [IYDRO. Corporate Risk Management Middle Office Report Sept 2009 MANITOBA [IYDRO Corporate Risk Management Middle Office Report Sept 2009 A. Credit On-going review and advisory support continued to be provided to PS&O (Power Sales and Operations) credit function to

More information

Consumer Cost Effectiveness of CO 2 Mitigation Policies in Restructured Electricity Markets. Jared Moore and Jay Apt.

Consumer Cost Effectiveness of CO 2 Mitigation Policies in Restructured Electricity Markets. Jared Moore and Jay Apt. Consumer Cost Effectiveness of CO 2 Mitigation Policies in Restructured Electricity Markets Jared Moore and Jay Apt Supporting Data Consumer Cost Effectiveness of CO 2 Mitigation Policies in Restructured

More information

EAI Response to ISEM Draft Decision

EAI Response to ISEM Draft Decision EAI Response to ISEM Draft Decision SEM-14-045 Electricity Association of Ireland Markets Committee Status: Submitted Date: 25 th July 2014 127 Baggot Street Lower Dublin 2 EU Transparency Register No:

More information

Inquiry into Business Electricity Tariffs in Northern Ireland

Inquiry into Business Electricity Tariffs in Northern Ireland Inquiry into Business Electricity Tariffs in Northern Ireland A Report by the Utility Regulator March 2010 Table of Contents Executive Summary... 3 Glossary... 6 1 Introduction and Background... 7 1.1

More information

Single Electricity Market. Principles of Dispatch and the Design of the Market Schedule in the Trading and Settlement Code

Single Electricity Market. Principles of Dispatch and the Design of the Market Schedule in the Trading and Settlement Code Single Electricity Market Principles of Dispatch and the Design of the Market Schedule in the Trading and Settlement Code SEM Committee Decision Paper 26 th August 2011 SEM-11-062 EXCECUTIVE SUMMARY The

More information

Foratom event 29 April 2015

Foratom event 29 April 2015 Foratom event 29 April 2015 New nuclear in the UK and Electricity Market Reform Colin Parker Head of European Liaison - EDF Energy 1 April 2015 EDF Energy plc. All rights reserved. EDF Energy A UK energy

More information

NIRIG response to EMR: Consultation on Proposals for Implementation

NIRIG response to EMR: Consultation on Proposals for Implementation 90% NIRIG response to EMR: Consultation on Proposals for Implementation 23 rd December 2013 The Northern Ireland Renewables Industry Group (NIRIG) is a joint collaboration between the Irish Wind Energy

More information

POWER NI 2014 PRICE REVIEW: FINANCEABILITY AND ITS IMPLICATIONS FOR A REQUIRED PROFIT MARGIN

POWER NI 2014 PRICE REVIEW: FINANCEABILITY AND ITS IMPLICATIONS FOR A REQUIRED PROFIT MARGIN POWER NI 2014 PRICE REVIEW: FINANCEABILITY AND ITS IMPLICATIONS FOR A REQUIRED PROFIT MARGIN March 2013 Final report Submitted by: Cambridge Economic Policy Associates Ltd CONTENTS Executive summary...

More information

Power NI: tariff methodology

Power NI: tariff methodology Research and Information Service Paper 12/14 23 September 213 NIAR 640-13 Aidan Stennett Power NI: tariff methodology 1 Introduction The following paper supplements Northern Ireland Assembly Research and

More information

Electricity Market Reform - How government electricity market reform could impact supply companies

Electricity Market Reform - How government electricity market reform could impact supply companies Electricity Market Reform - How government electricity market reform could impact supply companies Robert Groves Chief Executive Officer SmartestEnergy Limited Suppliers Forum, London 12 th October 2011

More information

An Introduction to Alberta s Financial Electricity Market

An Introduction to Alberta s Financial Electricity Market An Introduction to Alberta s Financial Electricity Market TABLE OF CONTENTS PAGE EXECUTIVE SUMMARY...1 1 INTRODUCTION...1 2 FINANCIAL ELECTRICITY MARKET...4 2.1 Trading Platforms of the Financial Electricity

More information

Quarterly Wholesale/Retail Price Report

Quarterly Wholesale/Retail Price Report Quarterly Wholesale/Retail Price Report February 29 Contents Overview 3 Summary of analysis 1. Customer bills, wholesale costs and margins 5 Electricity Gas 2. Scenario analysis: Impact of retail price

More information

Progress on market reform: EMR, the I-SEM and the TEM

Progress on market reform: EMR, the I-SEM and the TEM Progress on market reform: EMR, the I-SEM and the TEM David Newbery Electricity Market Reform Belfast 28 th March 2014 http://www.eprg.group.cam.ac.uk 1 Disclaimer Although I am an independent member of

More information

Business Area Markets

Business Area Markets Business Area Markets Stefan Dohler Head of Business Area Markets Vattenfall Capital Markets Day, Solna, 27 May 2015 Facts and figures Business Area Markets Our Mission We commercially optimise Vattenfall

More information

Consultation on Global Settlement in the SEM for Northern Ireland

Consultation on Global Settlement in the SEM for Northern Ireland Consultation on Global Settlement in the SEM for Northern Ireland 1 Table of Contents 1. Purpose of this Paper... 3 2. Introduction... 3 3. Background... 5 4. Residual Volume... 6 5. Drivers for Change...

More information

Chapter 16: Financial Risk Management

Chapter 16: Financial Risk Management Chapter 16: Financial Risk Management Introduction Overview of Financial Risk Management in Treasury Interest Rate Risk Foreign Exchange (FX) Risk Commodity Price Risk Managing Financial Risk The Benefits

More information

Electricity Market Reform. Consultation by DECC. Response by E.ON. Summary

Electricity Market Reform. Consultation by DECC. Response by E.ON. Summary Electricity Market Reform Consultation by DECC Response by E.ON Summary We recognise that Government needs to provide stronger incentives to build new low carbon generating capacity to meet the UK s specific

More information

The Nordic Electricity Exchange and The Nordic Model for a Liberalized Electricity Market

The Nordic Electricity Exchange and The Nordic Model for a Liberalized Electricity Market The Nordic Electricity Exchange and The Nordic Model for a Liberalized Electricity Market 1 The market When the electricity market is liberalized, electricity becomes a commodity like, for instance, grain

More information

DISCLOSURE NOTES. How the accounts are presented. Generation

DISCLOSURE NOTES. How the accounts are presented. Generation DISCLOSURE NOTES As a result of changes in SSE s management and reporting structure in 2011/12 and in the interests of improved transparency, SSE s financial statements for the year ending March 2012 were

More information

A report to the Commission for Energy Regulation and the Utility Regulator. February 2011 DAY-AHEAD MARKET COUPLING OPTIONS FOR THE SEM

A report to the Commission for Energy Regulation and the Utility Regulator. February 2011 DAY-AHEAD MARKET COUPLING OPTIONS FOR THE SEM DAY-AHEAD MARKET COUPLING OPTIONS FOR THE SEM A report to the Commission for Energy Regulation and the Utility Regulator DAY-AHEAD MARKET COUPLING OPTIONS FOR THE SEM Contact details Name Email Telephone

More information

The financial market. An introduction to Nord Pool s financial market and its products. Bernd Botzet

The financial market. An introduction to Nord Pool s financial market and its products. Bernd Botzet The financial market An introduction to Nord Pool s financial market and its products Bernd Botzet Introduction to Nord Pool s financial market Financial products Case: Forwards Contracts for difference

More information

Electricity Market Reform: Catering for smaller players and onsite generation under EMR. REA 27 March 2013 Chris Hemsley, DECC

Electricity Market Reform: Catering for smaller players and onsite generation under EMR. REA 27 March 2013 Chris Hemsley, DECC Electricity Market Reform: Catering for smaller players and onsite generation under EMR REA 27 March 2013 Chris Hemsley, DECC Overall objectives and the role of independent renewables The Government s

More information

How To Create A Power Market In European Power Markets

How To Create A Power Market In European Power Markets THEMA Report 2011-15 ISBN no. 978-82-93150-07-7 Market design and the use of FTRs and CfDs A report prepared for Energy Norway September 2011 CONTENT 1 SUMMARY AND CONCLUSIONS...3 2 INTRODUCTION...4 3

More information

BUSINESS RULES FOR CHAPTER VII DAILY IMBALANCE CHARGES

BUSINESS RULES FOR CHAPTER VII DAILY IMBALANCE CHARGES BUSINESS RULES FOR CHAPTER VII DAILY IMBALANCE CHARGES 1. General 1.1. The TSO shall publish its imbalance charge methodology and update it accordingly as any changes are made. This methodology must contain:

More information

Forward Risk-Hedging Products PC_2012_E_13

Forward Risk-Hedging Products PC_2012_E_13 Answer to public consultation Petteri Haveri 26.10.2012 1(5) Agency for the cooperation of energy regulators consultation2012r08@acer.europa.eu Forward Risk-Hedging Products PC_2012_E_13 The Finnish Energy

More information

Workshop B. 11:15 a.m. to 12:30 p.m.

Workshop B. 11:15 a.m. to 12:30 p.m. Workshop B Advanced Energy Management Tools: Benefitting from the Competitive Electricity Marketplace Beyond the Fixed Rate & Key Issues to Understand when Comparing Electricity Quotes 11:15 a.m. to 12:30

More information

FACT SHEET. NEM fast facts:

FACT SHEET. NEM fast facts: (NEM) operates on one of the world s longest interconnected power systems, stretching from Port Douglas in Queensland to Port Lincoln in South Australia and across the Bass Strait to Tasmania a distance

More information

Options for coordinating different capacity mechanisms

Options for coordinating different capacity mechanisms Options for coordinating different capacity mechanisms Håkan Feuk, Chair of EURELECTRIC Working Group on Wholesale Market Design Brussels, 12 December 2013 Generation adequacy measures have clear cross-border

More information

UK: Energy Briefing. February 2013

UK: Energy Briefing. February 2013 UK: Energy Briefing February 2013 Contents Introduction 01 The statutory regime 02 The objectives of wholesale market 02 liquidity The ʺsecure & promoteʺ generation 03 licence condition The ʺmandatory

More information

REGULATOR S 2012 NATIONAL REPORT TO THE EUROPEAN COMMISSION COMMISSION FOR ENERGY REGULATION (CER) - IRELAND JULY 2012 CER/12/120

REGULATOR S 2012 NATIONAL REPORT TO THE EUROPEAN COMMISSION COMMISSION FOR ENERGY REGULATION (CER) - IRELAND JULY 2012 CER/12/120 REGULATOR S 2012 NATIONAL REPORT TO THE EUROPEAN COMMISSION COMMISSION FOR ENERGY REGULATION (CER) - IRELAND JULY 2012 CER/12/120 Table of Contents 1. Foreword from CER Commissioners... 3 2. Overview of

More information

NERA Analysis of Energy Supplier Margins

NERA Analysis of Energy Supplier Margins 7 December 2009 NERA Analysis of Energy Supplier Margins By Graham Shuttleworth Even though wholesale energy prices have fallen recently, gas and electricity suppliers are earning very little margin on

More information

SINGLE ELECTRICITY MARKET COMMITTEE

SINGLE ELECTRICITY MARKET COMMITTEE SINGLE ELECTRICITY MARKET COMMITTEE Integrated Single Electricity Market (I-SEM) SEM Committee Decision on High Level Design Impact Assessment SEM-14-085b 17 September 2014 Table of Contents 1 SUMMARY...

More information

Electricity Supply Board

Electricity Supply Board Electricity Supply Board Investor Presentation 2012 Interim Results December 2012 Disclaimer Forward looking statements: This presentation contains certain forward-looking statements with respect to ESB

More information

REGULATION OF THE GAS SUPPLY MARKET FREQUENTLY ASKED QUESTIONS

REGULATION OF THE GAS SUPPLY MARKET FREQUENTLY ASKED QUESTIONS REGULATION OF THE GAS SUPPLY MARKET FREQUENTLY ASKED QUESTIONS Why is it necessary to regulate gas supply in a free market? Manx Gas has a natural monopoly in the Isle of Man gas supply market. Given the

More information

Energy Productivity & Pricing

Energy Productivity & Pricing Energy Productivity & Pricing Markets for energy, renewable energy and carbon Dr Jenny Riesz February 2014 2 Average electricity retail prices Electricity price rises CSIRO Future Grid (2013) Change and

More information

Market reference prices

Market reference prices Market reference prices CfD Expert Group workshop 27 September 2013 Agenda Introduction / aims of the session Quick overview (10.00 11.30) Setting the intermittent reference price Setting the baseload

More information

2. Executive Summary. Emissions Trading Systems in Europe and Elsewhere

2. Executive Summary. Emissions Trading Systems in Europe and Elsewhere 2. Executive Summary With the introduction of CO 2 emission constraints on power generators in the European Union, climate policy is starting to have notable effects on energy markets. This paper sheds

More information

CFD Options Trade and Margin Examples

CFD Options Trade and Margin Examples CFD Options Trade and Margin Examples Example Trades Buying a call Market: UK 100 (current price 6330) View: UK 100 to rise before mid June. Instrument: UK100 Jun Call 6600 (current price 30) Position:

More information

XIV. Additional risk information on forward transactions in CFDs

XIV. Additional risk information on forward transactions in CFDs XIV. Additional risk information on forward transactions in CFDs The following information is given in addition to the general risks associated with forward transactions. Please read the following information

More information

Guide To Foreign Exchange Policy

Guide To Foreign Exchange Policy Guide To Foreign Exchange Policy Silicon Valley Bank 3003 Tasman Drive Santa Clara, California 95054 408.654.7400 svb.com May 2011 Companies planning to operate in the global marketplace should prepare

More information

Electricity Costs White Paper

Electricity Costs White Paper Electricity Costs White Paper ISO New England Inc. June 1, 2006 Table of Contents Executive Summary...1 Highlights of the Analysis...1 Components of Electricity Rates...2 Action Plan for Managing Electricity

More information

Consultation on Forward Risk-Hedging Products and Harmonisation of Long-Term Capacity Allocation Rules

Consultation on Forward Risk-Hedging Products and Harmonisation of Long-Term Capacity Allocation Rules Deres referanse Vår referanse Dato PC_2012_E_13 N 26.10.2012 ACER Trg Republike 3 1000 Ljubljana, Slovenia Consultation on Forward Risk-Hedging Products and Harmonisation of Long-Term Capacity Allocation

More information

ELECTRICITY SECTOR 1

ELECTRICITY SECTOR 1 ELECTRICITY SECTOR 1 Some Insights from New Zealand and Australian Experiences Infratil has deep operational experience in electricity in New Zealand and Australia - also in the CEOs of the businesses

More information

INNOVATION FOR GENERATIONS

INNOVATION FOR GENERATIONS INNOVATION FOR GENERATIONS Annual Report and Accounts 23 esb.ie 2 ESB Annual Report 23 - Innovation for Generations ABOUT ESB ESB was established in 1927 as a corporate body in the Republic of Ireland

More information

DERIVATIVE ADDITIONAL INFORMATION

DERIVATIVE ADDITIONAL INFORMATION DERIVATIVE ADDITIONAL INFORMATION I. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES A. Definitions and Concepts 1. Derivative Instrument A "derivative instrument" is a financial instrument that "derives"

More information

3 Electricity financial

3 Electricity financial 3 Electricity Thomas Lohnes (Getty Images) Spot price volatility in the National Electricity Market can cause significant risk to physical market participants. While generators face a risk of low prices

More information

Financial Transmission Rights in the Nordic Electricity Market

Financial Transmission Rights in the Nordic Electricity Market Financial Transmission Rights in the Nordic Electricity Market 2 What is the purpose of issuing FTRs FTRs allow market parties to hedge the area price spread risk => This makes it potentially easier for

More information

Understanding the Capacity Market

Understanding the Capacity Market Understanding the Capacity Market The Capacity Market What is The Capacity Market? The Capacity Market is a mechanism introduced by the Government to ensure that electricity supply continues to meet demand

More information

EMR Update Hedging Your Bets

EMR Update Hedging Your Bets New Balls Please The UK Government s overarching energy policy intent centres on the need to decarbonise the economy in an affordable manner while maintaining a sufficient degree of energy security. The

More information

Guide to managing commodity risk

Guide to managing commodity risk Guide to managing commodity risk October 2012 ISBN: 978-1-921742-33-0 CPA Australia Ltd ( CPA Australia ) is one of the world s largest accounting bodies representing more than 139,000 members of the financial,

More information

HOW DOES BILATERAL TRADING DIFFER FROM ELECTRICITY POOLING?

HOW DOES BILATERAL TRADING DIFFER FROM ELECTRICITY POOLING? HOW DOES BILATERAL TRADING DIFFER FROM ELECTRICITY POOLING? EGHEOSA ONAIWU ABSTRACT: Bilateral trading and electricity pooling represent two different models for generators and buyer to trade in electricity.

More information

RISK DISCLOSURE STATEMENT PRODUCT INFORMATION

RISK DISCLOSURE STATEMENT PRODUCT INFORMATION This statement sets out the risks in trading certain products between Newedge Group ( NEWEDGE ) and the client (the Client ). The Client should note that other risks will apply when trading in emerging

More information

Unlocking Electricity Prices:

Unlocking Electricity Prices: Volume 2 A BidURenergy White Paper Unlocking Electricity Prices: A White Paper Exploring Price Determinants by: Mark Bookhagen, CEP pg. 2 Written by Mark Bookhagen, CEP Introduction In order to be classified

More information

VALUING FLEXIBILITY 20 May 2014 Florence Forum Stephen Woodhouse, Director, Pöyry Management Consulting

VALUING FLEXIBILITY 20 May 2014 Florence Forum Stephen Woodhouse, Director, Pöyry Management Consulting VALUING FLEXIBILITY 20 May 2014 Florence Forum Stephen Woodhouse, Director, Pöyry Management Consulting THE NEED FOR FLEXIBILITY IS GROWING With new forms of generation. prices and dispatch patterns will

More information

Electricity market reform: policy overview

Electricity market reform: policy overview Electricity market reform: policy overview May 2012 Contents Introduction... 3 Electricity Market Reform... 6 The Move to EMR... 21 Costs and Benefits of EMR... 24 EMR in the Devolved Administrations...

More information

Environment and energy briefing from Burges Salmon published in the March 2014 issue of The In-House Lawyer:

Environment and energy briefing from Burges Salmon published in the March 2014 issue of The In-House Lawyer: Environment and energy briefing from Burges Salmon published in the March 2014 issue of The In-House Lawyer: Electricity market reform: an update on contracts for difference Electricity market reform:

More information

The Liberalized Electricity Market

The Liberalized Electricity Market 1. The market When the electricity market is liberalized, electricity becomes a commodity like, for instance, grain or oil. At the outset, there is as in all other markets a wholesale market and a retail

More information

Changes in regulated electricity prices from 1 July 2012

Changes in regulated electricity prices from 1 July 2012 Independent Pricing and Regulatory Tribunal FACT SHEET Changes in regulated electricity prices from 1 July 2012 Based on Draft Determination, 12 April 2012 The Independent Pricing and Regulatory Tribunal

More information

Energy Future Holdings Reports First Quarter 2013 Results

Energy Future Holdings Reports First Quarter 2013 Results News Release FOR IMMEDIATE RELEASE Energy Future Holdings Reports First Quarter 2013 DALLAS May 2, 2013 Energy Future Holdings Corp. (EFH) today reported consolidated financial results for the first quarter

More information

Western Australia and the Northern Territory are not connected to the NEM, primarily due to the distance between networks.

Western Australia and the Northern Territory are not connected to the NEM, primarily due to the distance between networks. Australia has one of the world s longest alternating current (AC) systems, stretching from Port Douglas in Queensland to Port Lincoln in South Australia and across the Bass Strait to Tasmania a distance

More information

J. Gaspar: Adapted from Jeff Madura, International Financial Management

J. Gaspar: Adapted from Jeff Madura, International Financial Management Chapter5 Currency Derivatives J. Gaspar: Adapted from Jeff Madura, International Financial Management 5. 1 Currency Derivatives Currency derivatives are financial instruments whose prices are determined

More information

Contracts for Differences (Swaps): Concepts after the Dodd Frank Act

Contracts for Differences (Swaps): Concepts after the Dodd Frank Act Contracts for Differences (Swaps): Concepts after the Dodd Frank Act WSPP Operating Committee Training New Orleans, October 2010 Kolby Kettler Citigroup Energy Inc. 713-752-5254 Arnie Podgorsky Wright

More information

gasnetworks.ie Methodology for forecasting gas demand

gasnetworks.ie Methodology for forecasting gas demand gasnetworks.ie Methodology for forecasting gas demand 1 Contents 1 Introduction 2 1.1 Scope of the report 3 1.2 Use and publication of the forecasts 4 1.3 Structure of the document 5 2 Conceptual background

More information

Priority Dispatch in Real Time Operation. Marie Hayden

Priority Dispatch in Real Time Operation. Marie Hayden Priority Dispatch in Real Time Operation Marie Hayden Presentation Reasons for dispatching units with Priority Dispatch Changes in approach with SEM-62 Who has Priority Dispatch Today? Unit Type MW Interconnector

More information

Risk Disclosure RISK DISCLOSURE

Risk Disclosure RISK DISCLOSURE RISK DISCLOSURE RISK DISCLOSURE IronFX Global UK Limited ("IronFX UK" or the Company ) is authorized and regulated by the Financial Conduct Authority ( FCA formerly the FSA) under Registration No 585561,

More information

ina Crisis - Italy's Electricity Market Regulation

ina Crisis - Italy's Electricity Market Regulation Electricity Regulation in the United Kingdom AIIFL Working Paper No. 10 April 2013 Asian Institute of International Financial Law Faculty of Law The University of Hong Kong www.aiifl.com April 2013 the

More information

FI/RU electricity exchange area setup

FI/RU electricity exchange area setup FI/RU electricity exchange area setup Daily routines at Nord Pool Spot Time (CET) Action 9:30 Transmission capacities published on NPS web Daily at 9:30 CET the relevant TSOs submit the available transmission

More information

SUPPLEMENTAL INVESTOR INFORMATION. Fourth Quarter 2012

SUPPLEMENTAL INVESTOR INFORMATION. Fourth Quarter 2012 SUPPLEMENTAL INVESTOR INFORMATION Fourth Quarter 2012 Kevin Bryant Tony Carreño VP Investor Relations and Strategic Director Investor Relations Planning & Treasurer 816-556-2782 816-654-1763 anthony.carreno@kcpl.com

More information

Contracts for Difference (CFDs) Daily margined exposure to blue-chip shares

Contracts for Difference (CFDs) Daily margined exposure to blue-chip shares Contracts for Difference (CFDs) Daily margined exposure to blue-chip shares CFDs - Defined Unlisted financial contract encompassing an agreement between a buyer and seller to exchange the difference in

More information

PRICING & SCHEDULING FREQUENTLY ASKED QUESTIONS

PRICING & SCHEDULING FREQUENTLY ASKED QUESTIONS PRICING & SCHEDULING FREQUENTLY ASKED QUESTIONS CONTENTS What is Pricing & Scheduling?... 3 What is Merit Order?... 3 How does the market run each day?... 4 Introduction... 4 Before the Trading day...

More information

Managing Risks and Optimising an Energy Portfolio with PLEXOS

Managing Risks and Optimising an Energy Portfolio with PLEXOS Managing Risks and Optimising an Energy Portfolio with PLEXOS Tom Forrest, B.Com. (Hons) Senior Power Market Consultant - Europe 1 Introduction Energy markets inherently exhibit far greater risk compared

More information