Deregulation and risk management: perspective of the electric utility

Players of the electricity market will be trying to hedge against the risks arising from price volatility. Utilities profit and risk strongly depends on a good management of portfolios of electricity contracts and of energy storage capacity. This paper aims at exhibiting key issues of generation management in an open market environment. It addresses important issues such as impact of trading on generation management, purpose and techniques of optimisation of generation and information that should be exchanged between generation management and trading departments.