Risks and risk management for competitive electricity markets, report from CIGRE TF C5-2.02

CIGRE Study committee C5 established a task force called risk management for world markets in 2003. This paper presents the work of the task force and in addition focuses on congestion management as an element in a risk management strategy. The paper is based on results from a survey on risk management. Congestions and outages are major uncertainties for the electric power industry together uncertainties related to the competitive electricity market. Risk management organisation and methods seems to focus on production and trading. The use of financial instruments is an element in a risk management strategy which includes congestion risks. Major uncertainties in the short and long term besides market price are regulatory risks. A challenge for the total risk management of the electricity business is to include the handling of risks related to the regulated business