This course highlights the risks and rewards inherent in the marriage of physical power and financial products in power deal structures.  Understanding the consequences of combining different types of energy with transmission in the wholesale power market is essential for risk control and exploiting market opportunities.  This program teaches participants how to use a wide range of risk management concepts, including such tools as fixed transmission rights, contracts for differences, power swaps, embedded physical options and multi-energy financial structures.  It reviews market practices, deal constraints, innovative power deals and power asset management concepts. 

Anchored in the practical, the course enables participants to utilize these tools in physical power transactions, plant investment, merchant power plant management, fuel supply management and power trading.  Energy industry professionals who complete this course will be better able to compete more effectively and achieve strategic corporate goals through an enhanced understanding of how to combine traditional power assets with new financial tools.

 Applied Energy Derivatives or its equivalent is a prerequisite for this program; no other advanced preparation is required. 

At the conclusion of this program, participants will be able to: 

ü      Understand risk management issues facing power providers and merchant power plants in a deregulated environment.

ü      Evaluate the differences between firm power (L.D.), system firm, unit contingent and “into” contracts.

ü      Review the proposed power master agreement definitions.

ü      Utilize fixed transmission rights and contract for differences to manage locational marginal-zonal pricing risks.

ü      Understand the evolving process of developing a power price curve and the use of multi-fuel Spark Spreads to develop long-term price curves.

ü      Recognize the pricing difference between generation driven cost models and competitive market gamemanship.

ü      Utilize swaps, options and other financial tools to aid in structuring unique physical deals for both consumers and generators of power. 

ü      Apply financial products to improve risk management techniques, monetize dispatch flexibility and enhance physical plant investments.

ü      Explain and apply multi-fuel techniques to power plants and create innovative multi-fuel deal structures.

ü      Exploit “real options” in physical structures and assets.

CPE Credits earned are:

Accounting & Auditing – 2

Consulting Services – 1

Management – 1

Specialized Knowledge & Applications – 12