• Discusses power/feedstock contract risk associated with European power tools and financial risk management markets

• Highlights the legal risks associated with radically new types of contract such as weather derivatives and emissions trading

Executive Summary

1: Introduction to Strategy and Risk Concerns
Strategies
Categories of risk

2: The Background to Power Markets
EU Directives
Energy Charter Treaty

3: European Power Markets - Legislative and Regulatory
Developments
Power systems in EU countries
Power systems in other European countries
Power systems in Australasia

4: Power Pool Systems and Exchanges
The UK electricity pool
The Nord Pool
Southern African Power Pool
The Californian Power System
Other pools and exchanges

5: The Power Contracting Regime
EPC contract
O&M contract
Fuel supply agreement
Power purchase agreement
Connection and use-of-system agreement
50 key risk questions

6: Additional Power Contracting Issues
Ancillary services
Insurance
Indemnities
Project finance

7: Electricity Trading
Types of supply contract
Provisions of supply contracts
Hedging
Derivatives
Contracts for differences
Trading of derivatives
Electricity forward agreements
ISDA documentation
Energy derivatives
Weather derivatives
Arbitrage
Emissions trading
Derivatives risk management
Settlement risk
Other legal risks

Conclusion

Appendix 1: Power Contracts - Part 1
Confidentiality agreement
Feasibility study
Consultancy agreement
Project development agreement
Consortium agreement
Corporate structure
Land and planning issues
Some aspects of competition law

Appendix 2: Power Contracts - Part 2
EPC contract
O&M contract

Appendix 3: Hypothetical Power Trading Example
Example
Conclusion

Appendix 4: Power Web Sites

Appendix 5: Abbreviations and Acronyms

Michael Crookes