Archive for the ‘Electricity’ category

The Electricity Exchange


I was invited to Prague, to speak at a conference on electricity, along with other regional experts. Until recently, electricity was traded as part of equity, but now Europe, the US and even India have started trading it as a commodity. Technology, utility infrastructure and user sophistication are some of the drivers for the electricity market. Europe is the leading electricity initiative. Today, electric cars earn $1,000 a year as they are plugged back into electricity grids to assist grids as a buffer for peak time. Electricity is traded based on anticipated demand of the quarter ahead (Front Quarter), as 24 hour electricity benchmarks (The German Baseload), etc.

Climate, currency, consumption, catastrophes and Greece drive the business. Henning Gloystein, energy editor at Thomson Reuters, in his presentation, brought out the variables and their likely influences on the sector. How would the sector behave if the euro strengthened or weakened? He highlighted coal as a dark horse in the energy segment. Though the fossil fuel is underplayed in policies, it continues to suggest resilience, especially as energy becomes expensive. Another aspect was the stagnating nature of electricity, which was stuck up in a multi-year trading range…

This article was written for Business Standard

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