Energy Risk
Counting on coal
NRG Energy's move to buy Texas Genco seems a wise one for a company with strong dark-spread exposure, but it has its risks, despite the target company being backed by an active hedging programme. Joe Marsh reports
Energy trading helps JP Morgan post record results
Energy-trading revenues played a big role in bringing JP Morgan a 2005 third-quarter net profit of $2.5 billion, up from $1.4 billion in 2004. This was on the back of third-quarter net revenues of $15.6 billion, up from $13.6 billion in the same period…
Endex lists Belgian power forwards
Dutch electricity exchange Endex started listing Belgian power forwards today. Belgian utility Electrabel and German utility Essent did the first trade today, a November baseload contract.
US physical clearing firm gets credit support from CSFB
Investment bank Credit Suisse First Boston is to provide credit support for North American Energy Credit and Clearing’s (NECC’s) services in physical energy markets.
UKPX to launch carbon spot contract on Climex
London-based energy exchange UKPX will co-operate with Dutch emissions exchange New Values to launch a UKPX spot contract for carbon emissions certificates.
BP Singapore chooses Oilspace’s Oilwatch
Global energy major BP’s Singapore division is implementing Oilspace’s Oilwatch, a web-based portal for real-time, aggregated energy prices, news and analytics. BP Singapore is rolling out the service across the Asia-Pacific region.
Standard Bank invests in biodiesel
South Africa-based Standard Bank has entered the biodiesel sector with an $8 million equity investment in Biodiesel Energy Trading (BET).
HSBC is first major bank to go ‘carbon neutral’.
HSBC has reduced its net CO2 emissions to zero by reducing energy use, buying ‘green’ electricity and then offsetting the remaining CO2 emissions by investing in carbon projects.
Tullett Prebon forms wet freight derivatives venture
Tullett Prebon, part of Collins Stewart Tullett, is the latest interdealer broker to partner with a shipping broker to offer forward freight agreements (FFAs). It has started a venture with three international shipping brokers with the aim of…
Exceptions to the rule
Norwegian independent power portfolio managers are concerned that an impending EU directive may split the country’s power market and put them at a disadvantage. Oliver Holtaway reports from Oslo
Raising the standard
Growth in energy trading has led to a need for better standardisation of contracts and integration of exchanges and trading hubs. But more needs to be done to simplify and streamline the trading process, says Wolfgang Ferse
Taking the screen test
Screen trading is spreading faster than ever in the energy markets and market dynamics are changing as a result. Do interdealer brokers in the market see this advance as a threat or an opportunity? Stella Farrington finds out
Finance and faith
Islamic shari’a law may prohibit interest, but far from discouraging investment, shari’a-compliant structured project finance looks set to grow – particularly in the energy arena, as Maria Kielmas reports
The hedging effect
The effect of hedging on a project’s net present value can be difficult to determine. Brett Humphreys shows how different types of hedging affect the distribution and the expected return of a project
A glimpse of freedom
Merger and acquisition activity in the US utility sector, previously kept in check by the Public Utility Holding Company Act, could be set to swell with the repeal of this act in February, some analysts believe. By Oliver Holtaway
Doctor’s orders
Should you try to hedge a physical asset by simply selling its expected output? Neil Palmer shows how, in some scenarios, either under- or over-hedging could make more sense
Shelter from the storm
Energy companies are showing increased interest in hurricane derivatives, a specialist product that can provide an additional layer of protection on top of insurance. Joe Marsh reports
Buyer and seller beware
As a busy M&A period looms in the US utility sector, a wave of power plant sales seems likely. But those looking to hedge the fuel supply to these assets will find it tricky, given the current volatile gas prices. By Joe Marsh
BEAU TAYLOR
Beau Taylor , global head of energy at JP Morgan, plans to turn the bank from a niche participant into a dominant player in the energy markets. By Joe Marsh