Energy Risk Management in Deregulated Electricity Management Workshop

ORFE, Bendheim Center for Finance & the Graduate School Centennial Fund
Apr 6, 2001
Bowen Hall


Event Description

Electricity markets are being radically changed throughout the world. Privatization has been accepted as a legitimate statecraft by governments of more than 100 countries since the pioneer experiments in Chile and England. The new competitive situation significantly changes the existing operational practices and goals or all players in the electricity energy supply chain. From a customer’s perspective all MWs are indistinguishable and should be bought at the lowest possible price. On the other hand, for all other market players there have been changing diverse objectives and two key underlying factors of concern: profits and risk. Indeed, risk exposure has become more evident from the recent worldwide volatility of power and fuel market prices. Even in hydro- dominant power markets risk comes from major droughts as occurred in many places of the world during the last year among other sources. While assuming some degree of risk exposure, the focus of companies in the new evolving energy industry has changed from reliable production, transmission and distribution of electricity to competitive measures driven by financial performance. This vastly changed environment encourages energy suppliers, facing substantial opportunities and risks from deregulated markets, to apply innovative risk management tools to their businesses.

This 1st Princeton Workshop on Energy Risk Management in Deregulated Energy Electricity Markets will bring together researchers and practitioners involved in this emerging and challenging area. The one-day program of lectures and discussions addresses a mix of conceptual framework issues, quantitative modeling and practicalities related to the theme.

The Workshop is sponsored by the Department of Operations Research and Financial Engineering at Princeton University, which has Risk Management as one of its main research areas, the Bendheim Center for Finance, and the Graduate School at Princeton University in celebration of its centennial in 2000-2001.

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