Risk assessment in energy trading

This paper provides a state-of-the-art summary of risk assessment in energy trading. Techniques from financial engineering are needed by electric energy companies to manage price risk. These tools are needed by suppliers, distributors, and traders in a competitive electric power marketplace. Tools t...

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Bibliographic Details
Published in:IEEE transactions on power systems 2003-05, Vol.18 (2), p.503-511
Main Authors: Dahlgren, R., Chen-Ching Liu, Lawarree, J.
Format: Article
Language:English
Subjects:
Distributors
Economic forecasting
Electric power
Electric power generation
Electric power systems
Electricity supply industry deregulation
Environmental economics
Instruments
Markets
Power engineering and energy
Power generation
Power generation economics
Power system measurements
Risk analysis
Risk assessment
Risk management
State of the art
Suppliers
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Summary:This paper provides a state-of-the-art summary of risk assessment in energy trading. Techniques from financial engineering are needed by electric energy companies to manage price risk. These tools are needed by suppliers, distributors, and traders in a competitive electric power marketplace. Tools that have been adapted to the specific environment of the electric power system include portfolio analysis and hedging instruments. This paper provides a comprehensive critical literature survey of what has been applied to date in the power markets and which areas continue to need additional research. One example market scenario is used throughout the paper to demonstrate the usefulness of the risk assessment methods.
ISSN:0885-8950
1558-0679
DOI:10.1109/TPWRS.2003.810685