globalCOAL - Country & Industry Forecasting: IHS Global Insight

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THE EVOLUTION OF A MARKET Deregulation of electricity sector Increased Consumer Competition Increased Consumer Risk Leads to Greater Need for FLEXIBILITY and Greater Need to Manage Short Term GENERATION MARGIN Spark Spread (US$/MWh) Integrated energy markets (power, gas, oil & coal) allow easier comparisons = Spot Market Power Price - Spot Market Generation Cost (converted into US$ / MWh for the fuel type used to generate that power) LEADS TO: •Separation of PRICE RISK from VOLUME RISK •Reduction in dependency on security of supply Increased Producer Risk Less certainty of demand STANDARDISATION INDEX LINKED DEALS
REQUIREMENTS FOR A TRADED COAL MARKET • Competitive electricity market • Critical mass of players in the market • Active & liquid spot market (move away from long term fixed prices) • Standard contract for representative commoditised product • Desire / need for risk management among buyers and sellers • Greater degree of flexibility among coal buyers / power stations • Reliable index • Newcomers with appetite for coal price risk • Some form of broker (electronic or voice) Financial Institutions / Speculators RISK Consumers Producers
Page 1 and 2: Traded Markets - Trends in Alternat
Page 3 and 4: globalCOAL Offers Confidentiality N
Page 5 and 6: globalCOAL Market Members 1. AEP En
Page 7: Change in the coal market Factors /
Page 11 and 12: SCoTA TM Standard Specifications Ca
Page 13 and 14: globalCOAL - INDO B Product • Pro
Page 15 and 16: globalCOAL - Clause 13.3 Proposed Q
Page 17 and 18: Indonesia Proposed Logistics - Exam
Page 19 and 20: Development of globalCOAL TONNAGE T
Page 21 and 22: globalCOAL NEWC index (USD/mt RHS)
Page 23 and 24: RB Index TM , NEWC Index TM • Cre
Page 25 and 26: Newcastle Physical/Financial Market
Page 27 and 28: Other Indices in the market TFS API
Page 29 and 30: INDICES The importance of a good in

globalCOAL - Country & Industry Forecasting: IHS Global Insight

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