globalCOAL - Country & Industry Forecasting: IHS Global Insight
globalCOAL - Country & Industry Forecasting: IHS Global Insight
globalCOAL - Country & Industry Forecasting: IHS Global Insight
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THE EVOLUTION OF A MARKET<br />
Deregulation of<br />
electricity sector<br />
Increased Consumer<br />
Competition<br />
Increased Consumer Risk<br />
Leads to Greater Need for<br />
FLEXIBILITY and Greater<br />
Need to Manage Short Term<br />
GENERATION MARGIN<br />
Spark Spread (US$/MWh)<br />
Integrated energy markets<br />
(power, gas, oil & coal)<br />
allow easier comparisons<br />
= Spot Market Power Price<br />
- Spot Market Generation<br />
Cost (converted into US$ /<br />
MWh for the fuel type used to<br />
generate that power)<br />
LEADS TO:<br />
•Separation of PRICE RISK from VOLUME RISK<br />
•Reduction in dependency on security of supply<br />
Increased Producer Risk<br />
Less certainty of demand<br />
STANDARDISATION<br />
INDEX LINKED DEALS
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