Managing Energy Risk 2e - A Practical Guide for Risk Management in Power, Gas and Other Energy Markets

Managing Energy Risk is a practical guide to using modern techniques in financial mathematics for trading energy. Following the successful first edition of the book, this second edition catches up with significant developments of energy markets over the last years and contains plenty of new material especially on gas markets and renewable energy.Taking a multi-commodity view on the energy markets, addressing electricity, gas, coal, oil and CO2 emissions and explaining their fundamental relations, this book is a comprehensive overview of the energy markets and their products explaining models for pricing, portfolio optimization, risk measurement and market analysis.The second edition considers important new developments in the electricity markets and addresses the growing influence of renewable energy. Further, the treatment of gas markets has been significantly extended to become a second main topic of the book besides electricity. The book considers recent developments in the global gas market influenced by the growth of LNG trading and shale gas production. A number of new gas specific models are presented, e.g. for gas storage or swing contracts. The view on power and fuels will be completed with a description of the coal and oil markets and the new developments in the European Union Emissions Trading Scheme.By integrating energy economic approaches, including fundamental market models, with financial engineering approaches commonly used in banks and other trading companies, Managing Energy risk is a valuable resource, relevant for risk management, structuring, pricing, market analysis, and model development.