Fear and Heat in the Texas Power Markets: A Tail-Risk Example and Perspective
By Peter O’Neill, CFA, Chief Risk Officer and Head of Finance, Uniper Global Commodities North America, a wholly-owned subsidiary of E.ON and Editorial Advisory Board Member, GCARD
In the power markets, prices can move rapidly at quite inopportune times. This article highlights one such event in the Texas power market and describes what led up to and contributed to this extreme market price move, followed by what happened as the market went into settlement. The article concludes with lessons learned on how to manage the price risk around such an event.
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