Page 78 - Impiantistica Industriale - Settembre Ottobre 2014
P. 78
. 2 - Past structure of the
electricity sector
Fig. 3 - Present structure of
the electricity sector
supply and price risk, they will be more subject at a committed fuel purchase volume from the
risk. A dedicated fuel management program must project.
be planned to limit electricity price risk. The IOUs The differences between the past and present
or IPPs can use: structure of electricity sector, that are becoming day
• Purchase Power Agreement (PPAs) indexed by day more remarkable, are evident comparing
figure 2 (past) and figure 3 (present).
to fuel prices;
• Fixed Fuel Price (FFP), that may be not the 2.0 Correct policy to protect
the environment
best choice if electricity prices suddenly drop. (maintaining competitive
the kWh costs and prices)
The real alternative of the IOUs or IPPs is their
ability to secure fuel on spot market at a forecast Production companies that are most efficient at
price low enough to still provide sufficient margin producing electricity can get better profits in relation
to service debt, even in a volatile electricity market. to the price the market is prepared to pay. But the
Fuel suppliers could also offer the following set up of the best strategy is not easy for the ESI
contract conditions: top management that is today at a technology
• take all or some of the electricity price risk crossroads. The ESI options are:
through a fuel contract indexed to electricity
prices;
• hedge electricity price risk themselves;
• offer to be equity participants in exchange for
Impiantistica Italiana - Settembre - Ottobre 2014 77
electricity sector
Fig. 3 - Present structure of
the electricity sector
supply and price risk, they will be more subject at a committed fuel purchase volume from the
risk. A dedicated fuel management program must project.
be planned to limit electricity price risk. The IOUs The differences between the past and present
or IPPs can use: structure of electricity sector, that are becoming day
• Purchase Power Agreement (PPAs) indexed by day more remarkable, are evident comparing
figure 2 (past) and figure 3 (present).
to fuel prices;
• Fixed Fuel Price (FFP), that may be not the 2.0 Correct policy to protect
the environment
best choice if electricity prices suddenly drop. (maintaining competitive
the kWh costs and prices)
The real alternative of the IOUs or IPPs is their
ability to secure fuel on spot market at a forecast Production companies that are most efficient at
price low enough to still provide sufficient margin producing electricity can get better profits in relation
to service debt, even in a volatile electricity market. to the price the market is prepared to pay. But the
Fuel suppliers could also offer the following set up of the best strategy is not easy for the ESI
contract conditions: top management that is today at a technology
• take all or some of the electricity price risk crossroads. The ESI options are:
through a fuel contract indexed to electricity
prices;
• hedge electricity price risk themselves;
• offer to be equity participants in exchange for
Impiantistica Italiana - Settembre - Ottobre 2014 77
