Energy Markets Advanced Trading & Hedging

March 2-3, 2021 | Online ::

This course is geared toward those who want to build on a base-line knowledge of energy markets transacting, power trading and hedging. It will cover market dynamics and the difference between transacting in traditional bilateral markets, OTC and exchange energy markets as well as wholesale electricity (ISO) markets. The content will examine the different market players and their motives, as well as the difference between hedging and speculation. The course will also address various instruments and the implications of credit and collateral on prudent decision-making.

The content explains the various tools used to control the associated risks. It also details how these contracts work, how and when they should be used, and how they are priced. Case examples and problem-solving illustrations optimized for power and natural gas trading are used throughout the course to enhance the understanding of the material. Finally, it will identify and illustrate best practices associated with the sound measurement of uncertainty and building solid risk metrics for portfolio management and risk management through optimal hedging and solid hedging program design.

Learning Outcomes

Review portfolio management in traditional utility/balancing area, OTC, Exchange and ISO-based market transactions
Assess market distinctions and price driver dynamics
Discuss relationships between power market trading and hedging
Examine market, credit and counterparty risk management best practices
Evaluate energy trading compliance programs and their application in the current regulatory environment
Demonstrate meaningful uncertainty framework for developing utility and power portfolio hedging programs
Describe and illustrate simulation analysis and risk metrics for utilities and power trading organizations
Build, design, develop and implement a hedge program

Credits

EUCI is accredited by the International Accreditors for Continuing Education and Training (IACET) and offers IACET CEUs for its learning events that comply with the ANSI/IACET Continuing Education and Training Standard. IACET is recognized internationally as a standard development organization and accrediting body that promotes quality of continuing education and training.

EUCI is authorized by IACET to offer 1.1 CEUs for this event.

Instructional Methods 

This program will use PowerPoint presentations, case studies and group discussions.

Requirements For A Successful Completion Of Program 

Participants must sign in/out each day and be in attendance for the entirety of the course to be eligible for continuing education credit.

Agenda

Tuesday, March 2, 2021 Central Time

8:15 – 8:30 a.m. :: Log In and Welcome

8:45 a.m. – 5:00 p.m. :: Course Timing

8:30 – 8:45 p.m. :: Overview and Introductions

8:45 – 9:45 a.m. :: Energy Markets Advanced Trading & Hedging

Physical forward contracts
Futures
Swaps
Case study — hedging with futures vs swaps
Comparative analysis of use of instruments in hedging strategies
Recognizing market players and their objectives

9:45 – 10:00 a.m. :: Break

10:00 – 11:00 a.m. :: Energy Markets Advanced Trading & Hedging (cont’d)

Basis swaps
Hedging natural gas exposures with futures and basis swaps
Congestion hedge instruments
Financial transmission rights (FTRs) and congestion revenue rights (CRRs)
FTR obligations and options
Case studies of hedging strategies and potential manipulation in gas and power markets

11:00 – 11:15 a.m. :: Break

11:15 a.m. – 12:15 p.m. :: Energy Markets Advanced Trading & Hedging (cont’d)

Options
Calls and puts
What drives the value of option premiums?
Options as insurance
Are options a cost or an investment?
Option strategies: Collars
Why most utilities should have options as part of their hedging program
Case study — best instruments for different portfolios

Q&A and Discussion Forum

12:15 – 1:00 p.m. :: Mid-day Break

1:00 – 2:00 p.m. :: Market Risk Management

Market risk measurement and reporting
Distinction and applications of
- Mark-to-Market (MtM)
- Value at Risk (VaR)
- Cost at Risk (CaR)
- Rates at Risk (RaR)
- Gross Margin at Risk (GMaR)
Sensitivity analysis and stress tests
Position management for portfolios with assets, physical contracts and financial instruments

2:00 – 2:15 p.m. :: Break

2:15 – 3:15 p.m. :: Counterparty Risk Management

Counterparty risk management and internal rating systems
Counterparty risk limits
Collateral and netting
Current and potential counterparty exposures
Counterparty risk policies

3:15 – 3:30 p.m. :: Break

3:30 – 4:30 p.m. :: Simulation Analysis and Risk Metrics for Utilities

Risk metrics and simulation
Introduction to distributions
Best practices in management of weather, load and price risk for utilities
Volumetric risk and hedging
- Supply and demand risk
The cost of ignoring volume uncertainty in hedge programs
- Lessons learned from utility hedging debacles
Designing optimal hedge programs for the entire energy portfolio
- Retail load
- Unit characteristics
- Forced outages

4:30 – 4:45 p.m. :: Q&A and Day One Review

Wednesday, March 3, 2021 : Central Time

8:45 – 9:00 a.m. :: Log In and Welcome

9:00 a.m. – 12:30 p.m. :: Course Timing

9:00 – 10:00 a.m. ::Meaningful Uncertainty Framework to Develop Utility Hedging Programs

How to produce realistic weather, load, gas and price scenarios
Creating a portfolio view of physical and financial exposures
Integrating price and volume risk modeling in a coherent framework
Modeling expected costs and revenues
How to assess and visualize market and weather risk factors on cash flows

10:00 – 10:15 a.m. :: Break

10:15 – 11:15 a.m. :: In-Depth Hedge Program Design and Implementation

Hedging tactics vs. hedging strategy
A roadmap to implementing an effective hedging strategy
Understanding and quantifying risk profile and appetite
Defining hedge strategy objectives, linkage to performance objectives
Building hedge strategy alternatives — different types of hedge decisions
- Programmatic (dollar cost averaging) hedges
- Defensive (risk limits) hedges
- Contingent hedges (managing foregone opportunities)
Hedge strategy design and scenario analysis
Case Study — an iterative approach to evaluating the effectiveness of a hedge strategy
Implementing a hedge strategy
- Tactical planning
- Ongoing monitoring and reporting

11:15 a.m. – 12:15 p.m. :: Case Studies with Energy Portfolios

Market vs contracted cost
Dispatch to load vs dispatch to price
Integrated portfolio views
- Purchases and sales positions
- Distinct load and generation positions
Integrated utility value vs portfolio component value
Active vs. passive portfolio management
Case study – understanding the revenue-at-risk of different portfolios
Case study – considering the value of a battery with a wind asset
Case study – execution of a hedge strategy under different market conditions

12:15 – 12:30 p.m. :: Q&A and Discussion Forum

12:30 p.m. :: Program Adjournment

Instructor

Scott Wrigglesworth, Managing Director, Operations & Strategy, Ascend Analytics

Scott Wrigglesworth is Director of Analytics and Strategy with Ascend Analytics. Before joining the company, he spent 17 years with Dayton Power and Light and the AES Corporation. There he focused on practical solutions in energy analytics, actionable reporting, margin modeling and portfolio optimization. In that role, Mr. Wrigglesworth provided analytic expertise for portfolio optimization, planning, and risk management activities. These activities included merchant generation optimization, fuel procurement, wholesale hedging, retail energy, load auctions, rate case preparation, asset valuation, and commercial budget development. Mr. Wrigglesworth teaches a course in Energy Markets at the University of Dayton from where he also earned his MBA. He holds a BA in Global Economics and International Business from Cedarville University.

Online Delivery

We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.

You will receive a meeting invitation will include a link to join the meeting.
Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
- You will need to join the appropriate meeting at the appropriate time.
If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.

Register

REGISTER NOW FOR THIS EVENT:

Energy Markets Advanced Trading & Hedging

March 2-3, 2021 | Online

Individual attendee(s) - $ 1295.00 each

Buy 4 in-person seats and only pay for 3! For this event every fourth in-person attendee is free!

Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before January 29, 2021 in order to be refunded and will be subject to a US $195.00 processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of conference cancellation, EUCIs liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800