Managing Energy Risk

An overview of today's energy markets from a multi-commodity perspective

As global warming takes center stage in the public and private sectors, new debates on the future of energy markets and electricity generation have emerged around the world. The Second Edition of Managing Energy Risk has been updated to reflect the latest products, approaches, and energy market evolution. A full 30% of the content accounts for changes that have occurred since the publication of the first edition. Practitioners will appreciate this contemporary approach to energy and the comprehensive information on recent market influences.

A new chapter is devoted to the growing importance of renewable energy sources, related subsidy schemes and their impact on energy markets. Carbon emissions certificates, post-Fukushima market shifts, and improvements in renewable energy generation are all included.

Further, due to the unprecedented growth in shale gas production in recent years, a significant amount of material on gas markets has been added in this edition. Managing Energy Risk is now a complete guide to both gas and electricity markets, and gas-specific models like gas storage and swing contracts are given their due.

The unique, practical approach to energy trading includes a comprehensive explanation of the interactions and relations between all energy commodities.

• Thoroughly revised to reflect recent changes in renewable energy, impacts of the financial crisis, and market fluctuations in the wake of Fukushima
• Emphasizes both electricity and gas, with all-new gas valuation models and a thorough description of the gas market
• Written by a team of authors with theoretical and practical expertise, blending mathematical finance and technical optimization
• Covers developments in the European Union Emissions Trading Scheme, as well as coal, oil, natural gas, and renewables

The latest developments in gas and power markets have demonstrated the growing importance of energy risk management for utility companies and energy intensive industry. By combining energy economics models and financial engineering, Managing Energy Risk delivers a balanced perspective that captures the nuances in the exciting world of energy.

DR MARKUS BURGER ­(Karlsruhe, Germany) is Director of Risk Manage­ment at EnBW Trading (­Energie Baden-Württemberg AG) a company specialising in ­energy ­trading, optimization and risk management. Markus has more than fifteen years’ experience in Commodity ­Trading, Finance and Risk Management. He has a PhD in mathematics from ­Karlsruhe Institute of Technology (KIT).

DR BERNHARD GRAEBER (Karlsruhe, Germany) is Head of Infrastructure Investments at ­Talanx Asset ­Management. Prior to that he was head of Renewable Energies and International ­Climate Projects at EnBW AG and was res­ponsible for the coordination of all renewable ­energy ­activities within the EnBW group. Bernhard has a PhD in Energy Economics from Stuttgart ­University.

DR GERO SCHINDLMAYR (Essen, Germany) is Head of Risk Control for asset-related trading at RWE ­Supply & Trading GmbH. Over the last fifteen years, Gero held various positions in the finance and energy industry in the area of quantitative modelling and risk management and is author of several ­research publications. He holds a PhD in mathematics from RWTH Aachen, University of Technology.

Managing Energy Risk: A Practical Guide for Risk Management in Power, Gas and Other Energy Markets,

Managing Energy Risk A Practical Guide for Risk Management in Power, Gas and Other Energy Markets Second Edition Managing Energy Risk: A Practical Guide for Risk Management in Power, Gas and Other Energy Markets, Second Edition is the essential guide to modern techniques in financial mathematics for trading energy. Following the successful first edition, it addresses the significant developments of energy markets over recent years and contains substantial new material to meet the requirements of these advances. The book covers energy markets for electricity, natural gas, coal, oil and the market for emission certificates. It also focuses on the renewable energy sector, particularly the energy economic principles, value drivers and risks related to hydro, wind, solar and bio energy. This text integrates energy economic approaches, including fundamental market models with financial engineering approaches commonly used in banks and other trading companies. This includes trading, valuation and risk management of spot products, commodity futures and swaps, structured products such as swing contracts and real options like power plants or gas storages. A multi-commodity approach is taken, covering the mutual influences of electricity, fuels and emission markets. Advantages and disadvantages of different modelling and risk management approaches for practical usage are discussed throughout. Written for researchers and professionals, Managing Energy Risk Second Edition , is an ideal reference for those from an energy economics background as well as those with experience in financial mathematics or trading. The book introduces a wide range of theoretical concepts as well as focusing on applications within the energy business.

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