Course Summary

By looking at the commonalities and differences between trading multiple energy commodities, this five-day intensive course provides delegates with a clear understanding of trading power and natural gas commodities internationally, as well as offering a practical view of the day-to-day activities and problems. Principles of Power and Gas Trading gives essential insights into the interaction of physical and financial energy markets and the issues of power and gas logistics. The content is reinforced with interactive syndicate work and a dynamic business game that runs throughout. After the course, delegates will have gained an in-depth appreciation of the activities and issues of the power and gas trading markets and an understanding of the principles, drivers and tools available.

Who Should Attend?

• Organisations dealing with traded markets in the electricity and gas industry, including supply and trade groups of integrated energy companies
• Transitional traders from other commodities or financial products
• Energy related government staff and regulators
• Company buyers in large industrial players
• Interested parties from energy markets in EU accession countries, CEE, SEE, Middle East, SE Asia, Japan, Southern Africa etc.
• Gas storage operators
• Balance market operators
• Emerging market and new entrant players
• Power and gas companies in transition

Course Contents

• The Global Market Context
  • Liberalisation and regulation, opportunities to trade
  • Market trends
  • Global liquidity
  • Geopolitics
  • What the future holds

• The European Market Context
  • Current issues - take or pay and restructuring
  • Motivation economic and monetary union
  • Liberalisation and regulation in Europe
  • The growth of markets, supply and demand
  • Storage and security of supply
  • Where trading is possible and cross border issues
  • EU accession possibilities and challenges

• Trading and Shipping - The Impact of European Market Changes
  • Market liquidity across Europe
  • Increased price risk
  • Market transactions balancing, hedging, spot
  • Inadequacies in market standards
  • Market and trading regulation
  • Complexity in transportation and shipping
  • Taxation issues

• Trading within Organisations
  • The integrated energy company
  • Unbundling
  • Transportation and storage businesses
  • Trade and supply
  • The independent trader
  • Independent system and market operators
  • Alternative company structures

• Aspects of Trading
  • Reasons to trade
  • Trading physical commodity
  • Hedging of price and volume
  • Short term balancing

• The Demand Side
  • Demand impact on trading,
  • Forecasting, volatility, sensitivity and predictability
  • Sources of data and availability
  • Demand side management
  • Customer types and profiles

• The Supply Side
  • Selling or Trading
  • Filling up the demand curve
  • Confidence in forecasts
  • Types of contract and available products
  • Spreading the risk
  • Market liquidity and supply diversity

• Links to the Physical
  • Transportation networks, scheduling and shipping
  • Third party access
  • Operational balancing - penalties
  • Electricity versus gas
  • Losses and shrinkage
  • Capacity issues and storage
  • Cross border interconnectors

• Portfolio Balancing and Trading
  • Contractually matching supply and demand
  • Management tools for forecasting and portfolios
  • Spot markets and exchanges
  • Trading problems
  • Hedging against the unknown
  • Arbitrage - local and international

• Risks and Risk Management
  • Identification and quantification of risk
  • Counter party and credit risk
  • Typical trading strategies and their associated risks
  • Main sources, scale and timing of risk
  • Static reporting and dynamic management
  • Risk/reward strategies
  • Risk mitigation strategies