Pan-European Management of Electricity Portfolios: Risks and Opportunities of Contract Bundling
FCN Working Paper No. 9/2010
31 Pages Posted: 1 Oct 2010
Date Written: August 2010
Today’s European utilities not only focus on electricity supply, but also offer exchange-traded “structured products” or portfolio management for unbundling financial and physical risk positions. Many utilities are only able to provide these services inside of their home markets, but in the globalized economy, the need for a centrally organized pan-European portfolio management has arisen. In this paper, we analyze the problems to be overcome for establishing a European-wide bundling of electricity contracts. For this purpose, a case study based on the business perspective of RWE Supply & Trading in Central and Eastern Europe is carried out.
Keywords: Portfolio management, Risk management, Electricity market liberalization
JEL Classification: L53, L94
Suggested Citation: Suggested Citation