European Electricity Markets: Part I
Jakub Tomczak, Marcin Walendowski and Jarosław Wajer
Introduction
May You Live in Interesting Times
The Dodd–Frank Act and its Impact on the Energy Industry
Assessing Regulatory Risk
Introduction to Price-Reporting Agencies
Fundamental Data in Energy Markets
European and Asian Natural Gas Market Developments – Swamped by the Present?
US Natural-Gas Markets
Managing Oil Price Risk: Dealing with the Time-Varying Relationship between the Price of Oil and Fundamentals
Electricity Markets: US
European Electricity Markets: Part I
European Electricity Markets: Part II
Coal
Energy Real Options: Valuation and Operations
Commodity-Based “Swing” Options
Gas Storage Pricing and Hedging
Valuation and Risk Management of Physical Assets
Arbitrage-Free Valuation of Energy Derivatives
Introduction to Value-at-Risk
Introduction to Portfolio Value-at-Risk
Introduction to Default Risk and Counterparty Credit Modelling
Credit Risk in Power and Gas Markets
Credit in the Energy Markets
This chapter presents the current situation in the electricity market in Europe, focusing on the most important trends and EU policies aiming at reduction of carbon footprint, introduction of third-party access principle and market liberalisation, and increasing the share of renewable-energy sources.
The first section, “Trends in electricity production and demand in Europe, generation sources and price trends”, presents Europe’s electricity statistics and its position in comparison with other parts of the world. The section also provides information concerning the fuel mix of electricity generation and average prices for electricity in particular European countries.
The next section, “EU policy, objectives and directives”, applies to the European regulatory environment, especially the strategic objectives set by the European Union (EU), and their quantification and identification of tools that will enable the achievement of the goals. The EU’s objectives are refined in the form of energy strategies, notably the one entitled “2020 Energy Strategy” (colloquially referred to as “3×20”). This section also focuses on the EU Emissions Trading System (ETS), which is naturally related
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