DOCSLIB.ORG

Petri Mäntysaari the Legal Tools of Electricity Producers in the Internal

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Petri Mäntysaari the Legal Tools of Electricity Producers in the Internal Petri Mäntysaari EU Electricity Trade Law The Legal Tools of Electricity Producers in the Internal Electricity Market EU Electricity Trade Law ThiS is a FM Blank Page Petri Ma¨ntysaari EU Electricity Trade Law The Legal Tools of Electricity Producers in the Internal Electricity Market Petri Ma¨ntysaari Dept. of Accounting and Commercial Law Hanken School of Economics Vaasa Finland ISBN 978-3-319-16512-7 ISBN 978-3-319-16513-4 (eBook) DOI 10.1007/978-3-319-16513-4 Library of Congress Control Number: 2015938910 Springer Cham Heidelberg New York Dordrecht London © Springer International Publishing Switzerland 2015 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. Printed on acid-free paper Springer International Publishing AG Switzerland is part of Springer Science+Business Media (www.springer.com) Preface The target for the completion of the internal electricity market was 2014. The NWE region leads the way in market integration. The gradual emergence of an internal electricity market has changed the legal and commercial landscape for wholesale electricity market participants. The most important wholesale market participants are electricity producers. This book has four principal aims. The first is to describe the characteristic objectives of electricity producers in electricity wholesale markets. The second is to find out what legal tools and practices electricity producers can use to reach their characteristic objectives in the NWE region. Third, the book describes the regula- tion of the internal electricity market at EU level from the perspective of wholesale electricity producers. Fourth, this book contributes to theory-building in commer- cial law. Commercial law research—and legal science in general—can give an alternative view of markets if it focuses on the study of actual market behaviour through the lense of market participants’ legal tools and legal practices. Vaasa, Finland Petri Ma¨ntysaari v ThiS is a FM Blank Page Abbreviations ACER Agency for the Cooperation of Energy Regulators BaFin Bundesanstalt fu¨r Finanzdienstleistungsaufsicht BGB Bu¨rgerliches Gesetzbuch BSC Balancing and Settlement Code CACM Capacity Allocation and Congestion Management CACM Regulation Draft Commission Regulation (EU) No .../.. establishing a Guideline on Capacity Allocation and Congestion Management CAISO The California Independent System Operator CASC Capacity Allocation Service Company CCS Carbon capture and storage CEER Council of European Energy Regulators CFTC The Commodity Futures Trading Commission CfD Contract for Difference CHP Combined heat and power CISG Convention on the International Sale of Goods CJEU The Court of Justice of the European Union CM Clearing Member Commission European Commission CRD IV Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/ 87/EC and repealing Directives 2006/48/EC and 2006/49/EC CRR Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 CWE Central Western Europe DCUSA The Distribution Connection and Use of System Agreement vii viii Abbreviations DCFR Draft Common Frame of Reference DG European Commission, Directorate General DSO Distribution System Operator ECC European Commodity Clearing AG ECR European Court Reports EEG Gesetz fu¨r den Vorrang erneuerbarer Energien (Erneuerbare- Energien-Gesetz) EEX European Energy Exchange AG EFET European Federation of Energy Traders EMCC European Market Coupling Company GmbH EMIR Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories ENTSO-E European Network of Transmission System Operators for Electricity EnWG Gesetz u¨ber die Elektrizita¨ts- und Gasversorgung (Energiewirtschaftsgesetz) EPAD Electricity Price Area Differential ERGEG European Regulators Group for Electricity and Gas FCR Frequency Containment Reserves FERC The Federal Energy Regulatory Commission FRR Frequency Restoration Reserves FTR Financial Transmission Right GCM General Clearing Member ISDA International Swaps and Derivatives Association, Inc. ISO Independent System Operator ITVC Interim Tight Volume Coupling KWG Kreditwesengesetz LFCR Load-Frequency Control and Reserves MAD II Directive 2014/57/EU of the European Parliament and of the Council of 16 April 2014 on criminal sanctions for market abuse (market abuse directive) MAD, MAD I Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse) MAR Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC MCO Market Coupling Operator MiFID II Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/ EU (recast) Abbreviations ix MiFID, MiFID I Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC MiFIR Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 NC CACM Network Code for Capacity Allocation and Congestion Management NC FCA Network Code on Forward Capacity Allocation NC RfG Network Code on Requirements for Grid Connection applicable to all Generators NC Network Code NEMO Nominated Electricity Market Operator NordREG Nordic Energy Regulators NOU Norges offentlige utredninger NPS Nord Pool Spot AS NRA National Regulatory Authority NVE Norges vassdrags- og energidirektorat NWE North-Western Europe NYISO The New York Independent System Operator Ofgem Office of Gas and Electricity Markets OTC Over-the-counter Ot.prp. Odelstingsproposisjon PCR Price Coupling of Regions PSH Pumped storage hydropower PTR Physical Transmission Right REMIT Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency RES-E Electricity generated from renewable sources RR Restoration Reserves RTO Regional Transmission Organization SEC The Securities and Exchange Commission SOU Statens Offentliga Utredningar SWE South-Western Europe TCC Transmission Congestion Contract TEU The Treaty on European Union TFEU The Treaty on the Functioning of the European Union TSO Transmission System Operator UCC, U.C.C. Uniform Commercial Code x Abbreviations USC, U.S.C. United States Code UIOLI principle The use-it-or-lose-it principle UIOSI principle The use-it-or-sell-it principle ULIS Convention relating to a Uniform Law on the International Sale of Goods Contents 1 Introduction .......................................... 1 References ............................................ 7 Part I General Aspects 2 Setting the Scene ....................................... 11 2.1 General Remarks . 11 2.2 Electricity Markets . 11 2.2.1 General Remarks . 11 2.2.2 The Wholesale Market . 12 2.2.3 Participants in the Physical Wholesale Market . .... 18 2.2.4 The Financial Market and the Emission Allowances Market................................... 21 2.3 Business Models . 23 2.3.1 General Remarks . 23 2.3.2 Large Consumers and Retailers . ............ 23 2.3.3 Brokers and Portfolio Managers ................ 24 2.3.4 Energy Merchants .......................... 25 2.3.5 Electricity Producers and Integrated Firms . ....... 27 2.4 The Physical Characteristics of Electrical Energy .......... 38 2.5 Characteristic Issues . 41 2.5.1 General Remarks . 41 2.5.2 Grid Access, Delivery Point and Voltage Level ..... 42 2.5.3 Volume .................................. 45 2.5.4 Transmission and Distribution Capacity . .... 45 2.5.5 Balance . ................................ 46 2.5.6 Measurement .............................. 51 2.5.7 The Separation of Physical Rights, Service Rights and Financial Rights ........................
Load more

Recommended publications
  • 2021 \ E Urope
    Q2 Q22021\ Europe PPA PRICE INDEX 341 Q2 2021 LEVELTEN ENERGY Table of Contents About the LevelTen Energy PPA Price Index 3 Q2 2021 Methodology 4 About LevelTen Energy 5 Contributors 6 Key Takeaways 7 Industry Insights 8 How the Solar Industry is Responding to Xinjiang and Rising 9 Module Costs LevelTen Developer Survey: Solar PPA Prices Likely to Increase Due to Rising Costs 11 Renewable Project Development is a Relay Race: 12 Here’s How We All Get Faster LevelTen Developer Survey: Asset Divestiture Takes Upwards of 6 Months 14 Q2 2021 PPA Price Index 15 Price Index Comparison by Technology 16 Solar PPA Offer Prices by Country: Q2 2021 17 Solar P25 Price Indices by Country: Q2 2020 to Q2 2021 18 Wind PPA Offer Prices by Country: Q2 2021 19 Wind P25 Price Indices by Country: Q2 2020 to Q2 2021 20 Markets with the Highest % of Offers from Developers 21 Project Sizes 22 PPA Prices by Target Commercial Operation Date 23 PPA Price Ranges by Technology 24 PPA Term Lengths 25 Additional Resources 26 2 Q2 2021 LEVELTEN ENERGY About the LevelTen Energy PPA Price Index An Unprecedented Look at the Renewable Energy Market How to Use the LevelTen Energy PPA Price Index Each quarter, the LevelTen Energy PPA Price Index reports the prices By tracking how the P25 Index changes over time, LevelTen can alert the that wind and solar project developers have offered for power purchase industry to changes in the market that may make it more or less attractive. agreements (PPAs) available on the LevelTen Energy Marketplace, the We also give the industry a tool to see how macro-level factors, like world’s largest collection of PPA pricing offers, spanning 21 countries in increased competition or regulatory changes, are impacting renewable North America and Europe.
    [Show full text]
  • Methodology and Concepts for the Nordic
    Stakeholder consultation document and Impact Assessment for the Capacity Calculation Methodology Proposal for the Nordic CCR 0 Table of content: 1 Introduction and executive summary ................................................................................................... 5 1.1 Proposal for the Capacity Calculation Methodology ..................................................................... 5 1.2 Content of this document and guideline for the reader ............................................................... 6 1.3 Capacity calculation process ......................................................................................................... 9 2 Legal requirements and their interpretation ...................................................................................... 10 3 Introduction to Flow Based and CNTC methodologies ....................................................................... 23 3.1 Limited capacity in the electric transmission grid ....................................................................... 23 3.2 Why introduce a new Methodology for Capacity Calculation .................................................... 25 3.3 Description of FB and CNTC ......................................................................................................... 28 4 ACER recommendation on Capacity Calculation ................................................................................. 37 4.1 The influence of the first ACER recommendation on the proposed CCM .................................
    [Show full text]
  • NOTICE: This Is the Author's Version of a Work That Was Accepted For
    NOTICE: this is the author’s version of a work that was accepted for publication in Utilities Policy. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Utilities Policy, Volume 50, February 2018, Pages 194-206 at https://doi.org/10.1016/j.jup.2018.01.004 © <2018>. This manuscript version was made available under the CC-BY-NC-ND 4.0 licence https://creativecommons.org/licenses/by-nc-nd/4.0/ Forward risk premia in long-term transmission rights: The case of electricity price area differentials (EPAD) in the Nordic electricity market Petr Spodniak a, b * Corresponding author Mikael Collan c a Economic and Social Research Institute (ESRI), Whitaker Square, Sir John Rogerson's Quay , Dublin 2, Ireland, [email protected] b Trinity College Dublin (TCD), Department of Economics, Dublin 2, Ireland c LUT School of Business and Management, Lappeenranta University of Technology, Skinnarilankatu 34, 53851 Lappeenranta, Finland, [email protected] Abbreviations EPAD Electricity Price Area Differentials CfD Contract for Difference FTR Financial Transmission Rights LTR Long-Term Transmission Rights NC Network Code GARCH Generalized autoregressive conditional heteroscedasticity VECM Vector error correction model VAR Vector autoregression ABSTRACT Hedging behaviour among players in derivatives markets have long been explained by forward risk premia. We provide new empirical evidence from the Nordic electricity market and explore the forward risk premia dynamics on power derivative contracts called electricity price area differentials (EPAD).
    [Show full text]
  • The Case of Wind Farm Development
    EXAMENSARBETE INOM INDUSTRIELL EKONOMI, AVANCERAD NIVÅ, 30 HP STOCKHOLM, SVERIGE 2019 Project evaluation in the energy sector: The case of wind farm development JOHANNA RAHM JUHLIN SANDRA ÅKERSTRÖM KTH SKOLAN FÖR INDUSTRIELL TEKNIK OCH MANAGEMENT Project evaluation in the energy sector: The case of wind farm development by Johanna Rahm Juhlin Sandra Åkerström Master of Science Thesis TRITA-ITM-EX 2019:232 KTH Industrial Engineering and Management Industrial Management SE-100 44 STOCKHOLM Projektutvärdering inom energisektorn: Utveckling av vindkraftsprojekt av Johanna Rahm Juhlin Sandra Åkerström Examensarbete TRITA-ITM-EX 2019:232 KTH Industriell teknik och management Industriell ekonomi och organisation SE-100 44 STOCKHOLM Master of Science Thesis TRITA-ITM-EX 2019:232 Project evaluation in the energy sector: The case of wind farm development Johanna Rahm Juhlin Sandra Åkerström Approved Examiner Supervisor 2019-05-26 Luca Urciuoli Jannis Angelis Commissioner Contact person Abstract Wind is a fast growing energy resource and the demand for clean energy is increasing with growing interests from media, governmental institutions and the public (EWEA, 2004). The increased interest towards the wind energy market has led to a more competitive environment where it is crucial for a project developer to select projects most likely to succeed, in terms of profitability, among alternatives on the market. To enable such selection, an evaluation process is often applied. Furthermore, traditional evaluation processes are often performed at completion of a project where an early indication of a project’s potential profitability is often missing (Samset & Christensen, 2015). At the early phase of a wind energy project the multiple factors influencing the project’s outcome are often conflicting and contain high level of uncertainty and the evaluation process becomes complex (Kumar et al., 2017).
    [Show full text]
  • How Have Ecotaxes Worked in Germany?
    FEASTA_Review_MAIN 10/18/04 11:56 AM Page 130 The Irish Government has abandoned its plan to reduce the country’s greenhouse gas emissions with an ecotax on the carbon content of fossil fuels which was to have been introduced in 2005. In Germany, similar taxes created over 60,000 new jobs but reduced CO2 emissions by less than 1% in the first two years. This indicates that Irish carbon tax rates would have needed to be very steep for the country to avoid paying hefty fines to the EU because it failed to keep within its Kyoto target. How have ecotaxes worked in Germany? Hans Diefenbacher Volker Teichert Stefan Wilhelmy Dr. Hans Diefenbacher (economics), Dr. Volker Teichert (economics), and Stefan Wilhelmy, M.A. (political science) are senior researchers at the Protestant Institute for Interdisciplinary Research (FEST) in Heidelberg, Germany. Hans Diefenbacher, a member of Feasta, also teaches economics at the University of Kassel. n 2000, Germany released 858 million tonnes amount of the excess is rising. If we take the of carbon dioxide into the global atmosphere, present world population as being around 6.1 Iequivalent to 9.6 tonnes per head of the billion, the climate-neutral release of CO2 would population1 This made the Germans slightly less therefore be less than 2.3 tonnes per head per serious polluters than the citizens of most other year. Per capita emissions in Germany and in the industrial countries as the OECD average is 10.9 rest of the industrialised world are thus more tonnes a head. The British figure was the same than four times the estimated climate-neutral as the German one while the Irish one was rather amount.
    [Show full text]
  • Esittelijä / Föredragande / Referendary Ratkaisija
    Tämä on Energiaviraston sähköisesti allekirjoittama Asiakirjan 07.06.2021 asiakirja. päivämäärä on: Detta är ett dokument som har signerats elektroniskt av Dokumentet är 07.06.2021 Energimyndigheten. daterat: This is a document that has been electronically signed by The document is 07.06.2021 the Energy Authority. dated: Esittelijä / Föredragande / Referendary Nimi / Namn / Name: Jori Säntti Pvm / Datum / Date: 07.06.2021 Ratkaisija / Beslutsfattare / Decision-maker Nimi / Namn / Name: Simo Nurmi Pvm / Datum / Date: 07.06.2021 Tämä asiakirja koostuu seuraavista osista: - Kansilehti (tämä sivu) - Alkuperäinen asiakirja tai alkuperäiset asiakirjat Allekirjoitettu asiakirja alkaa seuraavalta sivulta. > Detta dokument består av följande delar: - Titelblad (denna sida) - Originaldokument Det signerade dokumentet börjar på nästa sida. > This document contains: - Front page (this page) - The original document(s) The signed document follows on the next page > Päätös 1 (13) 2338/400/2020 Fingrid Oyj PL 503 00101 Helsinki Päätös siirto-oikeuksien käyttöönotosta ja suojausmahdolli- suuksien varmistamisesta Suomen ja Viron tarjousalueiden rajalla Asianosainen Fingrid Oyj Vireilletulo 18.11.2020 Ratkaisu Energiavirasto katsoo, että Viron tarjousalueella ei ole riittäviä suojausmahdolli- suuksia ja pyytää Fingridiä myöntämään Suomen ja Viron tarjousalueiden rajalle pitkän aikavälin siirto-oikeustuotteita. Päätös on voimassa toistaiseksi. Päätöstä on noudatettava muutoksenhausta huolimatta. Selostus asiasta Komission asetus (EU) 2016/1719 pitkän aikavälin
    [Show full text]
  • 2017-12-05 Eolus Annualreport 2016-2017
    Eolus Vind is a leading Nordic wind pow- er developer. Eolus creates value at every level of project development, establish- ment and operation of renewable energy facilities. We offer attractive and competi- tive investment opportunities in the Nordic region, Baltic countries and the US to both local and international investors. Founded in 1990, Eolus has been in- volved in the construction of more than 500 of the approximately 3,400 wind turbines now operating in Sweden. The Eolus Group currently has customer contracts for asset management services comprising some 350 MW. Eolus Vind AB has about 6,400 shareholders. Eolus’s Class B share is traded on Nasdaq Stockholm, Small Cap. Eolus Vind AB Box 95, SE-281 21 Hässleholm, Sweden Street address: Tredje Avenyen 3 Tel: +46 (0)10-199 88 00 E-mail: [email protected] www.eolusvind.com ANNUAL REPORT 2016/2017 THE PAST YEAR SIGNIFICANT EVENTS DURING THE FISCAL YEAR RECORD VOLUME IN NORWAY GERMAN KGAL SELECTED EOLUS In November 2016, Eolus was granted a final permit for the In December 2016, Eolus signed an agreement with the German Norwegian Øyfjellet project. This is Eolus’ largest permitted asset- and investment manager, KGAL, regarding divestment of project to date, with capacity of up to 330 MW and estimated the Gunillaberg and Lunna wind farms. The transaction totaled generation of approximately 1.4 TWh per year. Wind measure- 15.4 MW, divided between seven Vestas V100-2.2 MW wind ments and efforts to optimize the project are currently taking turbines. This is KGAL’s first transaction in Sweden.
    [Show full text]
  • 2018-12-21 Eolus Annual Report 2017/2018
    ANNUAL REPORT 2017/2018 EOLUS VIND AB ANNUAL REPORT 2017/2018 EOLUS VIND AB ANNUAL REPORT Eolus Vind is a leading Nordic wind power developer. Eolus creates value at every level of project develop- ment, establishment and operation of renewable energy facilities. We offer attractive and competitive investment opportunities in the Nordic region, Baltic countries and the US to both local and international investors. Since the company’s inception in 1990, Eolus has been involved in the construction of more than 540 wind turbines with a capacity of nearly 930 MW. The Eolus Group currently has customer contracts for asset management services with an installed capacity of more than 400 MW. Eolus Vind AB has approximately 8,200 shareholders. Eolus’s Class B share is traded on Nasdaq Stockholm, Small Cap. Eolus Vind AB Box 95, SE-281 21 Hässleholm, Sweden Street address: Tredje Avenyen 3 Tel: +46 (0)10-199 88 00 E-mail: [email protected] www.eolusvind.com THE PAST YEAR SIGNIFICANT EVENTS DURING THE FISCAL YEAR 232 MW OF WIND POWER TO AQUILA CAPITAL In December 2017, Eolus signed an agreement with Aquila Capital regarding the divestment of Kråktorpet and Nylandsbergen wind farms, comprising 61 wind turbines and a total installed capacity of 232 MW. Kråktorpet will comprise 43 Vestas V136-3.8 MW wind turbines, and Nylandsbergen will comprise 18 Vestas V136-3.8 MW wind turbines. Both wind farms are scheduled KGAL RE-SELECTED EOLUS for handover to Aquila Capital in the second half of 2019. Eolus In December 2017, Eolus signed an agreement with the German will provide asset management services for both of the farms.
    [Show full text]
  • Pricing of Electricity Futures Based on Locational Price Differences: the Case of Finland
    Energy Economics 71 (2018) 222–237 Contents lists available at ScienceDirect Energy Economics journal homepage: www.elsevier.com/locate/eneeco Pricing of electricity futures based on locational price differences: The case of Finland Juha Junttila a, Valtteri Myllymäki b, Juhani Raatikainen c,⁎ a University of Vaasa, School of Accounting and Finance, PO BOX 700, 66401 Vaasa, Finland b Fortum Oyj, PO Box 100, 00048 Fortum, Finland c Jyväskylä University School of Business and Economics, Po Box 35, FI-40014 University of Jyväskylä, Finland article info abstract Article history: We find that the pricing of Finnish electricity market futures has been inefficient during the latest 10 years, when Received 18 May 2017 the trading volumes of Electricity Price Area Differentials (EPADs) have more than doubled. Even though the cal- Received in revised form 10 February 2018 culated futures premium on EPADs is related to some risk measures and the variables capturing the demand and Accepted 23 February 2018 supply conditions in the spot electricity markets, there has been a significant positive excess futures premium in Available online 02 March 2018 the Finnish market, and financial market participants should have been able to utilize this also in economic terms. This finding is new and relevant for the participants of the Nordic electricity markets also in the future, because JEL classification: G13 both the speculative and hedging-based trading is increasing in the Nordic markets. G14 © 2018 Elsevier B.V. All rights reserved. Q41 Keywords: Risk premium Electricity futures EPAD Nordic electricity market Arbitrage 1. Introduction derivatives in the largest and most mature markets, such as the ones in particular states in the US, the Nordic countries, and Germany/Austria Electricity markets around the world have undergone a wave of de- (see e.g.
    [Show full text]
  • TERM POWER TRADING an Analysis of the Recent Development in Power Purchase Agreements in Norway
    CHANGED TRADING BEHAVIOUR IN LONG- TERM POWER TRADING An analysis of the recent development in power purchase agreements in Norway THE NORWEGIAN ENERGY REGULATORY AUTHORITY (NVE-RME) 6 JANUARY 2020 AUTHORS Helge Sigurd Næss-Schmidt, Partner Bjarke Modvig Lumby, Senior Economist Laurids Leo Münier, Analyst 1 PREFACE In light of the increased focus on Power Purchase Agreements (PPA) in recent years, The Norwegian Energy Regulatory Authority (NVE-RME) wants to get a better understanding of the Norwegian PPA market. NVE-RME therefore asked Copenhagen Economics to conduct an analysis on the de- velopment and use of PPAs in Norway with a wider look towards Europe. A key part of the task was to analyse how the market has developed and in particular getting an un- derstanding of how the contractual elements are typically structured in the Norwegian PPA market. NVE-RME was also interested in how the use of PPAs affects different parts of the energy market, especially consequences for the financial forward markets. The approach to this task was based on a mix between desk research of literature on PPAs, inter- views with key market participants and industry knowledge in Copenhagen Economics. 0 TABLE OF CONTENTS Preface 0 Executive summary 4 1 What are PPAs and how do they work? 9 1.1 The different types of PPAs 9 1.2 Risk exposures of market participants in the electricity markets 11 1.3 The structure and use of PPAs in the Nordics 13 1.4 PPAs have in recent years grown in importance 17 2 What makes a PPA different from financial market products? 21 2.1 PPAs and future markets cater to different hedging needs 21 2.2 Possible impact on the hedging opportunities from the development of PPAs 24 References 29 1 LIST OF FIGURES Figure 1 Upfront investment as a share of total cost for different generation technologies ...................................
    [Show full text]
  • Copyright Notice: Reproduction Is Authorised Provided the Source Is Acknowledged
    DISCLAIMER: This report prepared by the Market Observatory for Energy of the European Commission aims at enhancing public access to information about prices of electricity in the Members States of the European Union. Our goal is to keep this information timely and accurate. If errors are brought to our attention, we will try to correct them. However the Commission accepts no responsibility or liability whatsoever with regard to the information contained in this publication. Copyright notice: Reproduction is authorised provided the source is acknowledged. © European Commission, Directorate-General for Energy, Market Observatory for Energy, 2015 Commission européenne, B-1049 Bruxelles / Europese Commissie, B-1049 Brussel – Belgium E-mail: [email protected] 1 QUARTERLY REPORT ON EUROPEAN ELECTRICITY MARKETS CONTENT HIGHLIGHTS OF THE REPORT .............................................................................................. 3 EXECUTIVE SUMMARY ......................................................................................................... 4 1 ELECTRICITY DEMAND DRIVERS .................................................................................. 5 2 EVOLUTION OF COMMODITY AND POWER PRICES ..................................................... 7 2.1 Evolution of power prices, and the main factors affecting power generation costs ................................................................................................ 7 2.2 Comparisons of monthly electricity baseload prices
    [Show full text]
  • Power Interconnection in ASEAN Region Lessons Learned from International Experiences
    Power Interconnection in ASEAN Region Lessons learned from international experiences Principal Investigator: Prof Anthony David OWEN Co- Investigators: Anton FINENKO, Jacqueline TAO Power Interconnection in ASEAN Region • • • Power Interconnection in ASEAN Region Lessons learned from international experiences This report was prepared as part of research project conducted by the Energy Studies Institute, National University on Singapore for the Konrad-Adenauer Stiftung (KAS). Energy Studies Institute National University of Singapore 29 Heng Mui Keng Terrace, Block A #10-01 Singapore 119620 Tel: (65) 6516 2000 Fax: (65) 6775 1831 Corresponding author: Anton Finenko [email protected] Fehler! Verwenden Sie die Registerkarte 'Start', um Heading 1 dem Text zuzuweisen, der hier angezeigt werden soll. 1 Power Interconnection in ASEAN Region • • • Table of Contents Table of Contents ..................................................................................................................................... 2 List of Figures .......................................................................................................................................... 8 List of Tables ............................................................................................................................................ 9 Foreword ................................................................................................................................................ 15 Acknowledgements .............................................................................................................................
    [Show full text]