Power trading on spot and futures markets

How does trading work and what drives prices?

Register for Power trading on spot and futures markets

This online training session provides basic knowledge about price mechanisms, as well as the factors which influence energy prices in both spot and futures markets.

Spot markets provide flexible generation plants (and consumers) with opportunities to optimise their sales revenues. As more intermittent renewables connect to power grids across Europe, prices are becoming increasingly volatile, creating bigger opportunities for flexible generators.

As a result, the futures market has also become an essential hedging instrument against the fluctuating prices found in spot markets. It is therefore crucial that market players understand how prices are formed and the driving forces behind them if they are to be successful in their trading activities.

This training course will teach you how to:

Understand price influences in the spot market and explain interrelationships between them.

Recognise common products in futures markets (futures, forwards, options) and identify opportunities within them.

Evaluate the potential of different markets and calculate the possibilities with help of practical examples.

Agenda

Session 1: Brief introduction to market powers

Overview of power markets: characteristics, motivation and participants
Roles and tasks in the liberalised electricity market
Control energy, balancing energy and their importance for balancing groups

Session 2: Short-term trading at EPEX Spot

The day-ahead auction as reference market
Price formation in the auction: marginal cost-based bids, visualised with the Merit-Order
Price formation in continuous trading (incl. exercise)
Price development along the weather forecast

Session 3: Potentials at the spot market

Market liquidity: volume in intraday trade
Specialties of 15 minute contracts: potential for short-term storage facilities?
EU Market Coupling: Single Day-Ahead Coupling and Cross-Border Intraday Coupling

Session 4: The futures market for electricity trading

Trading motivation: hedging, arbitrage and speculation
Futures trading products: forwards, futures, options
Opportunities and risks of the forward market products
Latest price developments

Session 5: Trading strategies and procurement

Customer segments: small customer vs. industry (SLP vs. RLM)
Electricity procurement: full supply vs. structured pro-curement
Procurement strategies: back-to-back, tranches, portfolio

Session 6: Outlook and market analysis

Market developments in key commodity markets: emissions, natural gas, coal
Insight into Energy Brainpool's modelling of power price scenarios
Introduction to the risk assessment with fundamental scenario swarms

Speakers

Elena Dahlem

Energy Market Analyst

Elena Dahlem has a background in political economy and joined Energy Brainpool’s team for long-term modelling of power prices in 2023. She uses Energy Brainpool’s fundamental model Power2Sim to analyse current and possible future developments on energy markets. Against the backdrop of political and economic news, she refines the model assumptions, focusing on markets in Southwestern Europe. In addition, she regularly conducts seminars on energy and power markets on both beginner and advanced level.

Target group

Professionals from trading, electricity marketing or balancing group management of conventional or RE plants
Professionals from product development or business development of utilities, direct marketers and (virtual) electricity producers
Professionals in portfolio, risk, schedule and load management and analysis

Exemplary Use Case

Your team has already gained some experience in the electricity industry. In the future, your company wants to play a stronger role in the area of trading, analysis or aggregation of conventional or RE plants. Your boss is annoyed by high balancing energy costs, wants to launch a business model for short-term electricity trading or optimise your activities on the short-term electricity markets. Now your team needs information on how the futures market can be used for long-term hedging.

Your staff wants to know which options are available, which market segments are attractive or which access requirements have to be fulfilled. They also need background information on price developments and future trends on the spot and futures markets.