commodity trading introduction to markets · commodity trading introduction to markets 7.3.2011...
TRANSCRIPT
![Page 1: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/1.jpg)
Commodity TradingIntroduction to Markets
7.3.2011
Mittwoch, 9. März 2011
![Page 2: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/2.jpg)
Transportation
Physics: Higher Voltage Transportation – Less Energy Loss
Mittwoch, 9. März 2011
![Page 3: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/3.jpg)
Transportation• Physics: Higher Voltage
Transportation – Less Energy Loss• 1950s: International (Cross Border)
Grids (CH-I / CH-D-F)• 1967 Grids of F-D-CH merge
(technically) on 220 kV Level. „UCPTE1“ 14 more countries join
• 2005 EU allows Cross Border Auction
Mittwoch, 9. März 2011
![Page 4: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/4.jpg)
Different Grid Levels (Voltage)
Refining
Wholesale:Multidirectional Market
Unidirectional Market
Mittwoch, 9. März 2011
![Page 5: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/5.jpg)
Storage: Electricity as such is NOT storable – Flexible
Mittwoch, 9. März 2011
![Page 6: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/6.jpg)
Retail Price Composition
Mittwoch, 9. März 2011
![Page 7: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/7.jpg)
Demand StructureCommerce
Industry
Households
France
Germany
Switzerland
Commerce
Industry
Households
Commerce
Industry
Households
31%
39%
30%
26%
42%
32%
23%
51%
26%
Commerce includes Public AdministrationMittwoch, 9. März 2011
![Page 8: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/8.jpg)
Demand Determined by• Economic Growth• Temperature• Daylight / Daytime• Day in Week
• Generally Inelastic
Mittwoch, 9. März 2011
![Page 9: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/9.jpg)
9
POLPXUKPX
Liberalized MarketsPartly liberalized MarketsNo Liberalization
OTE
APX/ENDEX
Powernext
OMEL
Belpex/ENDEXEEX
Nordpool
EXAA
IPX
Electricity Exchanges in Europe (2008)
Mittwoch, 9. März 2011
![Page 10: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/10.jpg)
Trading Volume increases, but less than one third at exchanges
10
* Messbares Handelsvolumen an Börsen und über elektronische Brokerplattformen OTC
Mittwoch, 9. März 2011
![Page 11: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/11.jpg)
11
Demand (aggregated Bids) Supply (aggregated offers)
Temperatur Import/Export Streik Wirtschaft Wind Wasser AusfälleTagestyp Tageslicht …
Volumen [MWh]
Preis [EUR]
Wind Wasser AusfälleWind Wasser
At exchange the aggregated supply and demand matches for the highest traded volume
Mittwoch, 9. März 2011
![Page 12: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/12.jpg)
11
Demand (aggregated Bids) Supply (aggregated offers)
Temperatur Import/Export Streik Wirtschaft Wind Wasser AusfälleTagestyp Tageslicht …
Volumen [MWh]
Preis [EUR]
Wind Wasser AusfälleWind Wasser
At exchange the aggregated supply and demand matches for the highest traded volume
Mittwoch, 9. März 2011
![Page 13: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/13.jpg)
11
Demand (aggregated Bids) Supply (aggregated offers)
Balance Price (MCP*)
Temperatur Import/Export Streik Wirtschaft Wind Wasser AusfälleTagestyp Tageslicht …
Volumen [MWh]
Preis [EUR]
Wind Wasser AusfälleWind Wasser
At exchange the aggregated supply and demand matches for the highest traded volume
Mittwoch, 9. März 2011
![Page 14: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/14.jpg)
11
Demand (aggregated Bids) Supply (aggregated offers)
Balance Price (MCP*)
Temperatur Import/Export Streik Wirtschaft Wind Wasser AusfälleTagestyp Tageslicht …
Volumen [MWh]
Preis [EUR]
Wind Wasser AusfälleWind Wasser
At exchange the aggregated supply and demand matches for the highest traded volume
Mittwoch, 9. März 2011
![Page 15: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/15.jpg)
11
Demand (aggregated Bids) Supply (aggregated offers)
Balance Price (MCP*)
Temperatur Import/Export Streik Wirtschaft Wind Wasser AusfälleTagestyp Tageslicht …
Volumen [MWh]
Preis [EUR]
Wind Wasser AusfälleWind Wasser
At exchange the aggregated supply and demand matches for the highest traded volume
Mittwoch, 9. März 2011
![Page 16: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/16.jpg)
11
Demand (aggregated Bids) Supply (aggregated offers)
Balance Price (MCP*)
Temperatur Import/Export Streik Wirtschaft Wind Wasser AusfälleTagestyp Tageslicht …
Volumen [MWh]
Preis [EUR]
Wind Wasser AusfälleWind Wasser
At exchange the aggregated supply and demand matches for the highest traded volume
Mittwoch, 9. März 2011
![Page 17: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/17.jpg)
12
Markets OTC (Contracts/ Broker) Exchanges
Stansard Products Day Ahead Week Ahead Front Months Front Quarters Front Years
Spot
Term or Forward
Market and Products
Mittwoch, 9. März 2011
![Page 18: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/18.jpg)
Price Developement 5Y
Mittwoch, 9. März 2011
![Page 19: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/19.jpg)
Conventions• X buys 10 MW „Cal 2012 base“ RWE
Grid at 52€ from Y means:
Y delivers from 1.1.2012 0am till 31.12.2012 12pm 10 MW for X into the RWE Grid.
X pays (monthly 20 bd after end of month) the exact amount energy (in MWh) delivered times 52€. I. e. all
Mittwoch, 9. März 2011
![Page 20: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/20.jpg)
Hourly price week of 18. to 24.12.09
Hour
Price
Mittwoch, 9. März 2011
![Page 21: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/21.jpg)
Hourly price week of 25. to 31.12.09
Hour
Price
Mittwoch, 9. März 2011
![Page 22: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/22.jpg)
17
0
20
40
60
80
100
120
140
160
Dez 00 Dez 01 Dez 02 Dez 03 Dez 04 Dez 05 Dez 06 Dez 07
EUR/
MW
h7- Days Average EEX Spot Prices (base) tell the history
Mittwoch, 9. März 2011
![Page 23: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/23.jpg)
17
0
20
40
60
80
100
120
140
160
Dez 00 Dez 01 Dez 02 Dez 03 Dez 04 Dez 05 Dez 06 Dez 07
EUR/
MW
h
Enron Insolvency
Irak War
7- Days Average EEX Spot Prices (base) tell the history
Mittwoch, 9. März 2011
![Page 24: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/24.jpg)
17
0
20
40
60
80
100
120
140
160
Dez 00 Dez 01 Dez 02 Dez 03 Dez 04 Dez 05 Dez 06 Dez 07
EUR/
MW
h
Enron Insolvency
Hot Summer: High demand / less Nuclear Supply
Irak War
7- Days Average EEX Spot Prices (base) tell the history
Mittwoch, 9. März 2011
![Page 25: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/25.jpg)
17
0
20
40
60
80
100
120
140
160
Dez 00 Dez 01 Dez 02 Dez 03 Dez 04 Dez 05 Dez 06 Dez 07
EUR/
MW
h
Enron Insolvency
Hot Summer: High demand / less Nuclear Supply
Gas and CO2 Price surge
Irak War
7- Days Average EEX Spot Prices (base) tell the history
Mittwoch, 9. März 2011
![Page 26: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/26.jpg)
17
0
20
40
60
80
100
120
140
160
Dez 00 Dez 01 Dez 02 Dez 03 Dez 04 Dez 05 Dez 06 Dez 07
EUR/
MW
h
Enron Insolvency
Hot Summer: High demand / less Nuclear Supply
Gas and CO2 Price surge
Windy – warm
Jan / Feb
Irak War
7- Days Average EEX Spot Prices (base) tell the history
Mittwoch, 9. März 2011
![Page 27: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/27.jpg)
17
0
20
40
60
80
100
120
140
160
Dez 00 Dez 01 Dez 02 Dez 03 Dez 04 Dez 05 Dez 06 Dez 07
EUR/
MW
h
Enron Insolvency
Hot Summer: High demand / less Nuclear Supply
Gas and CO2 Price surge
Windy – warm
Jan / Feb
Record cold March
Irak War
7- Days Average EEX Spot Prices (base) tell the history
Mittwoch, 9. März 2011
![Page 28: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/28.jpg)
17
0
20
40
60
80
100
120
140
160
Dez 00 Dez 01 Dez 02 Dez 03 Dez 04 Dez 05 Dez 06 Dez 07
EUR/
MW
h
Enron Insolvency
Hot Summer: High demand / less Nuclear Supply
Gas and CO2 Price surge
Windy – warm
Jan / Feb
Record cold March
Low Water on Rhine
Irak War
7- Days Average EEX Spot Prices (base) tell the history
Mittwoch, 9. März 2011
![Page 29: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/29.jpg)
17
0
20
40
60
80
100
120
140
160
Dez 00 Dez 01 Dez 02 Dez 03 Dez 04 Dez 05 Dez 06 Dez 07
EUR/
MW
h
Enron Insolvency
Hot Summer: High demand / less Nuclear Supply
Cold WinterGas and CO2 Price surge
Windy – warm
Jan / Feb
Record cold March
Low Water on Rhine
Irak War
7- Days Average EEX Spot Prices (base) tell the history
Mittwoch, 9. März 2011
![Page 30: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/30.jpg)
17
0
20
40
60
80
100
120
140
160
Dez 00 Dez 01 Dez 02 Dez 03 Dez 04 Dez 05 Dez 06 Dez 07
EUR/
MW
h
Enron Insolvency
Hot Summer: High demand / less Nuclear Supply
Cold WinterGas and CO2 Price surge
CO2 price collapse after Publishing of data
Windy – warm
Jan / Feb
Record cold March
Low Water on Rhine
Irak War
7- Days Average EEX Spot Prices (base) tell the history
Mittwoch, 9. März 2011
![Page 31: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/31.jpg)
17
0
20
40
60
80
100
120
140
160
Dez 00 Dez 01 Dez 02 Dez 03 Dez 04 Dez 05 Dez 06 Dez 07
EUR/
MW
h
Enron Insolvency
Hot Summer: High demand / less Nuclear Supply
Cold Winter July Record Heat
Gas and CO2 Price surge
CO2 price collapse after Publishing of data
Windy – warm
Jan / Feb
Record cold March
Low Water on Rhine
Irak War
7- Days Average EEX Spot Prices (base) tell the history
Mittwoch, 9. März 2011
![Page 32: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/32.jpg)
17
0
20
40
60
80
100
120
140
160
Dez 00 Dez 01 Dez 02 Dez 03 Dez 04 Dez 05 Dez 06 Dez 07
EUR/
MW
h
Enron Insolvency
Hot Summer: High demand / less Nuclear Supply
Cold Winter July Record Heat
Gas and CO2 Price surge
CO2 price collapse after Publishing of data
Windy – warm
Jan / Feb
Mild Winter & CO2 collaps
Record cold March
Low Water on Rhine
Irak War
7- Days Average EEX Spot Prices (base) tell the history
Mittwoch, 9. März 2011
![Page 33: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/33.jpg)
17
0
20
40
60
80
100
120
140
160
Dez 00 Dez 01 Dez 02 Dez 03 Dez 04 Dez 05 Dez 06 Dez 07
EUR/
MW
h
Enron Insolvency
Hot Summer: High demand / less Nuclear Supply
Cold Winter July Record Heat
Gas and CO2 Price surge
CO2 price collapse after Publishing of data
Windy – warm
Jan / Feb
Mild Winter & CO2 collaps
Record cold March
Low Water on Rhine
Coal- Rallye
Irak War
7- Days Average EEX Spot Prices (base) tell the history
Mittwoch, 9. März 2011
![Page 34: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/34.jpg)
17
0
20
40
60
80
100
120
140
160
Dez 00 Dez 01 Dez 02 Dez 03 Dez 04 Dez 05 Dez 06 Dez 07
EUR/
MW
h
Enron Insolvency
Hot Summer: High demand / less Nuclear Supply
Cold Winter July Record Heat
Gas and CO2 Price surge
CO2 price collapse after Publishing of data
Windy – warm
Jan / Feb
Mild Winter & CO2 collaps
Little Wind and Nuke Outage
Record cold March
Low Water on Rhine
Coal- Rallye
Irak War
7- Days Average EEX Spot Prices (base) tell the history
Mittwoch, 9. März 2011
![Page 35: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/35.jpg)
Market Players in GermanyLarge
Utilities(RWE / E.ON)
Green Energy
Producer
Foreign Generation
&Imports
(Verbund)
Grid Operators
„Stadtwerke“
Large Consumer
(Audi)
End User
Traders
Mittwoch, 9. März 2011
![Page 36: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/36.jpg)
Value Chain of Electicity
Generation
Transmission
Transition
DistributionLarge Utilities
Stadtwerke
Mittwoch, 9. März 2011
![Page 37: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/37.jpg)
Market Players in GermanyLarge
Utilities(RWE / E.ON)
Green Energy
Producer
Foreign Generation
&Imports
(Verbund)
Grid Operators
„Stadtwerke“
Large Consumer
(Audi)
End User
Traders
Too S
mall
Regu
lated
Regu
lated
Mittwoch, 9. März 2011
![Page 38: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/38.jpg)
Interest of Large Utilities• RWE or E.ON produce each ca. 200
TWh p.a. in Germany• Income according Market Price, i.e. for
each €/MWh more, income and EBT goes up 200m€ (roughly 5%)
• 1. Interest in high prices• 2. Interest in middle term hedging
(next 2-3 years)
Mittwoch, 9. März 2011
![Page 39: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/39.jpg)
Hedging: Sell the Electricity (or Fix Prices) the next years to an
2012
2013
2014
2015
2016
TIME
TODAY
Mittwoch, 9. März 2011
![Page 40: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/40.jpg)
Price Building: Cost of
Investment Cost(Interest and Amortisation)
Operation & Maintenance
Fuel Costs (times efficiency)
Emission Costs
Long TermMarginalCosts InvestmentDecisions
Short TermMarginal CostsOperation Decision
Gas ca. 70%Nuke ca. 20%Wind 0%
Mittwoch, 9. März 2011
![Page 41: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/41.jpg)
24
The Merit-Order-Curve reflects a order of Power Plant due to there short term marginal costs
€/MWh
MW
Mittwoch, 9. März 2011
![Page 42: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/42.jpg)
24
The Merit-Order-Curve reflects a order of Power Plant due to there short term marginal costs
€/MWh
MW
‘mus
t run
s’ – e
.g. W
ind,
Hyd
ro ru
n-of
-rive
r, DH
P
Mittwoch, 9. März 2011
![Page 43: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/43.jpg)
24
The Merit-Order-Curve reflects a order of Power Plant due to there short term marginal costs
€/MWh
MW
‘mus
t run
s’ – e
.g. W
ind,
Hyd
ro ru
n-of
-rive
r, DH
P
Nuke
s
Mittwoch, 9. März 2011
![Page 44: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/44.jpg)
24
The Merit-Order-Curve reflects a order of Power Plant due to there short term marginal costs
€/MWh
MW
‘mus
t run
s’ – e
.g. W
ind,
Hyd
ro ru
n-of
-rive
r, DH
P
Nuke
s
Ligni
te
Mittwoch, 9. März 2011
![Page 45: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/45.jpg)
24
The Merit-Order-Curve reflects a order of Power Plant due to there short term marginal costs
€/MWh
MW
‘mus
t run
s’ – e
.g. W
ind,
Hyd
ro ru
n-of
-rive
r, DH
P
Nuke
s
Ligni
te Coal
Mittwoch, 9. März 2011
![Page 46: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/46.jpg)
24
The Merit-Order-Curve reflects a order of Power Plant due to there short term marginal costs
€/MWh
MW
‘mus
t run
s’ – e
.g. W
ind,
Hyd
ro ru
n-of
-rive
r, DH
P
Nuke
s
Ligni
te Coal
Gas -
CCG
T
Mittwoch, 9. März 2011
![Page 47: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/47.jpg)
24
The Merit-Order-Curve reflects a order of Power Plant due to there short term marginal costs
€/MWh
MW
‘mus
t run
s’ – e
.g. W
ind,
Hyd
ro ru
n-of
-rive
r, DH
P
Nuke
s
Ligni
te Coal
Gas -
CCG
T
Gastu
rbin
e
Mittwoch, 9. März 2011
![Page 48: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/48.jpg)
24
The Merit-Order-Curve reflects a order of Power Plant due to there short term marginal costs
€/MWh
MW
‘mus
t run
s’ – e
.g. W
ind,
Hyd
ro ru
n-of
-rive
r, DH
P
Nuke
s
Ligni
te Coal
Gas -
CCG
T
Gastu
rbin
eOi
l
Mittwoch, 9. März 2011
![Page 49: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/49.jpg)
25
0
20
40
60
80
100
120
140
160
180
200
0 10 20 30 40 50 60 70 80 90 100GW
EUR/
MW
h
Deutschland Frankreich Italien
Merit Order Curve depend on the national Power Plant Park
Mittwoch, 9. März 2011
![Page 50: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/50.jpg)
25
0
20
40
60
80
100
120
140
160
180
200
0 10 20 30 40 50 60 70 80 90 100GW
EUR/
MW
h
Deutschland Frankreich Italien
• Verfügbarkeiten, Saisonalität, Nachfrage
Merit Order Curve depend on the national Power Plant Park
Mittwoch, 9. März 2011
![Page 51: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/51.jpg)
Electricity and Politics
Mittwoch, 9. März 2011
![Page 52: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/52.jpg)
Fight for Endesa• http://www.fundacionfaes.org/record_file/filename/
858/00076-00_-_papeles_44_ingles.pdf
• Endesa: Spanish Utility (0% State held in 2004)• Gas Natural: Spanish Gas Utility• CNE: Spanish Energy Regulator• CNMV: Spanish Finance Regulator• E.on: German Utility• Acciona: Spanish Construction Company• ENEL: Italian Utility (31% state-hold)
Mittwoch, 9. März 2011
![Page 53: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/53.jpg)
Fight for Endesa
Mittwoch, 9. März 2011
![Page 54: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/54.jpg)
Fight for Endesa
Mittwoch, 9. März 2011
![Page 55: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/55.jpg)
Fight for Endesa
Mittwoch, 9. März 2011
![Page 56: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/56.jpg)
Fight for Endesa• January 24th, 2007. The European Commission
announced that it will take the Government of Spain to the European Union’s Court of Justice because of the “Anti-E.On Decree”.
• March 12th, 2007. Enel announced that it controlled 24.98% of Endesa and stated its intention to appoint three Directors, despite the fact that current Spanish legislation prevents foreign state-owned companies from sitting on the Board of Directors and limits their voting power to 3% of the share capital.
Mittwoch, 9. März 2011
![Page 57: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/57.jpg)
Electricity Facts: Value Chain• Storage: Only indirect (flexible generation)• Transportation: Over Grids (standardized,
Grid-Monopols: TSO) www.swissgrid.ch www.rwe.de
• Transportation: limited (ca. 1000km) due to energy loss
• Refining: NO chemical processing but voltage transitors
• Production (Generation): Dependent on fuels, different generation EU27: 28% Nuke, 26% Coal, 24% Gas / US: 45% Coal / China 70% Coal
Mittwoch, 9. März 2011
![Page 58: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/58.jpg)
Electricity Facts• Demand:
– dependent on GDP and population(Western Europe, US, 6-7 MWh p.a. per capita)
– Average EU/ US: 33% Industry, 33% Household, 33% Administration
– US 4000 TWh / Europe 3500 TWh / China 4000-4500 TWh / Japan 1000 TWh / Russia 1000 TWh
• Market, Standards: – Energy – Capacity (maximal Generation) = Energy per time– Capacity Unit MW– Energy Unit MWh: (1TWh=1‘000 GWh=1‘000‘000
MWh=1‘000‘000‘000 kWh)– Price ca. € 50 / MWh– Specify Delivery Point and Period (e.g. base load May, RWE
Grid)
Mittwoch, 9. März 2011
![Page 59: Commodity Trading Introduction to Markets · Commodity Trading Introduction to Markets 7.3.2011 Mittwoch, 9. März 2011. Transportation Physics: Higher Voltage Transportation –](https://reader036.vdocuments.net/reader036/viewer/2022081522/5fbd989b4ae358303d1c8f2c/html5/thumbnails/59.jpg)
Electricity Facts• Market, Exchanges: Regional markets, – US: PJM, ERCOT, New England, NY,
California, Midwestwww.ferc.gov/market-oversight/mkt-electric/overview.asp
– Europe: EEX, Nordpool, et al.www.eex.de
• Market, Players: Utilities, some commodity traders
• Politics: Large political (nationalistic)
Mittwoch, 9. März 2011