This is a two day course on valuation and hedging techniques for power generation assets. The course provides in-depth analysis of methodologies to value and manage generation assets and power contracts. The course mainly covers thermal plants, but also contains separate discussion of virtual power plant contracts, tolling deals, and wind and hydro generation assets.

1. Power Generation Valuation & Hedging
29-30 October, 2012, Amsterdam
DISPATCH OPTIMIZATION, HEDGING STRATEGIES & REALISTIC VALUATIONS
Course Leaders
Cyriel de Jong, KYOS Energy Consulting
Hans van Dijken, KYOS Energy Consulting

2. OURS
Power Generation Valuation & Hedging
Welcome to this popular and highly interactive course in
Power Generation Valuation and Hedging
A summary of the course Who should attend?
This two day course provides an in-depth analysis of The course aims to attract a wide range of people active
methodologies to value and manage power generation in the energy and financial sector, including energy
assets and power contracts. The course mainly covers traders, asset developers, portfolio and risk managers,
thermal plants, but also contains separate discussion of energy market analysts, regulators and consultants. The
virtual power plant contracts, tolling deals, and wind and course does not require any specific pre-knowledge. The
hydro generation assets. instructors are used to present technical details in an
intuitive manner, both appealing to quantitative and non-
With real life examples and cases studies the course will quantitative people.
demonstrate what techniques can be used to properly
value and manage power plants, thereby incorporating
relevant technical and commercial plant constraints. Case study and trading game
Furthermore, the course shows how to construct realistic The course is highly practical: throughout the course you
price scenarios, a key element in valuation and hedging. will work on case studies with specialized analysis models
for plant valuation and hedging analysis. The models will be
provided to you for the duration of the course plus a month
thereafter.
Apart from case studies, the course also features an
energy trading game. The goal is to optimize a portfolio of
power plants, while hedging in the market and responding
to news.

3. AGENDA
AGENDA
AGENDA
Programme Day 1 Programme Day 2
Session 1: Power generation and power contract Session 1: Power plant hedging
types ▶ Hedging: difference between gas and coal fired power
▶ Market overview stations
▶ Technologies ▶ Purpose of hedging (risk reduction, profit optimization)
▶ Emissions ▶ Hedge definitions: intrinsic, rolling intrinsic and delta
hedge
▶ Hedging issues:
Session 2: Introduction power plant valuation
▷ Timing: when to start hedging
▶ Explanation of costs ▷ What products to hedge (base, peak, calendar, season,
▶ Financial evaluation: Net present value etc)
▷ Adjust hedge in time: static or dynamic
Case study: NPV valuation (Excel) ▷ What to hedge: capacity or expectation? Expectation
based on forward curve or simulations?
▷ What to hedge: volume or value
Session 3: Real options approach to power plants
▶ Hedging strategies in practice
▶ From intrinsic to extrinsic value
▶ How to monetize flexibility of power stations
Case study: delta hedging – hedge effectiveness
▶ Introduction real options
▶ Pricing options: Black-Scholes, Trees, Monte Carlo hedging power production
▶ Margrabe’s formula to price power plants
Session 2: Renewables
Case study: Plant value with Margrabes (Excel) ▶ Surge in wind power: impact on pricing
▶ Solar power: impact on peak power price
Session 4: Forward Curve Building
Session 3: Cointegration
▶ From fundamental curves to tradable products
▶ Cointegration versus correlation
▶ Build-up of intrinsic value
▶ Effective simulation of spark and dark spreads
▶ Impact wind and solar on hourly curve
▶ Impact cointegration on power plant value
Session 5: Dispatch Optimization Case study: Cointegration (Excel)
▶ Plant constraints: technical, commercial, environmental
▶ Mathematical optimization techniques for power plant Energy Trading Game
dispatch
Case study: Optimal dispatch – Dynamic
Programming (Excel)

4. LEADER
COURSE LEADERS
Cyriel de Jong
Partner, KYOS Energy Consulting
Before Cyriel de Jong founded
Hans van Dijken
Partner, KYOS Energy Consulting
Hans van Dijken has been active
Reviews:
“I attended this course in 2011 and
this was useful. I have learned/
improved some concepts like
KYOS, he was assistant professor at in energy markets since 2001.
Erasmus University. Since 2001 he Before he joined KYOS, he worked Spark Spread, VPP, hedging and I
has been a trainer in energy markets, for Reliant Energy and Nuon in the implemented it in my work. Moreover,
mainly focusing on financial risk Netherlands. I practiced in a small hedging game.
management and energy finance. But for me, the most important thing
During this period, he worked in various was that I met people from different
Cyriel has done a great number of functions within risk management and companies and countries with whom
projects related to energy derivative business development. Within KYOS, I could discuss about our business.”
valuation, risk management and Hans has been working on various Davy Swennen, Business Expert &
investment analysis (including real projects related to investment analysis, Controlling Analyst at EDF Luminus
options). He is particularly active in power plant valuation, tolling deals and
the application of financial simulation implementation of hedging strategies. “The course Power Generation
methodologies to value power plants, He is largely active in optimizing Valuation and Hedging gives a very
gas storages, long-term contracts, and power plant dispatch decisions, while good overview for beginners about
transportation. Cyriel holds an MSc enhancing value through the application how generation assets are used in
in Econometrics from the University of hedging strategies. the different power markets. It also
of Maastricht and a PhD in Financial Hans holds an MSc in Business provides an excellent insight on
Derivatives from Erasmus University. Administration from the University of mathematical models for generation
Twente. optimization and hedging strategies
on an advanced level.”
Jan Smolka, Portfolio Manager
(Generation Assets & Energy
Trading) at Trianel Gmbh

5. R LANGUAGE
The workshop will be delivered in English.
DATE
29-30 October 2012, Amsterdam, The Netherlands
SCHEDULE
Each day starts at 09.00 and finishes at 17.00hrs.
REGISTRATION
http://www.energy-expert-network.com/courses
E-mail: Johanna.Oberg@energy-expert-network.com
Phone:+46 (0) 85 333 2599
FEES
ABOUT THE ORGANIZERS
Early Bird 2225€ (before 17 September) + Dutch VAT
Standard price 2475€ + Dutch VAT
MULTIPLE REGISTRATION DISCOUNT
Register two or more people from the same company
ENERGY EXPERT NETWORK and receive an additional 10% discount.
The Energy Expert Network is a network of experts FOOD AND BEVERAGE
and hands-on energy market participants that provides Food and beverages will be provided to the
participants during the day. Specific wishes can be
companies with tailored courses. submitted to the organization.
The Energy Expert Network consists of the ‘best of the LAPTOP
Provided the character of the workshop participants
best’ industry experts, well known for their knowledge and are required to bring a laptop, which has installed MS
experience in teaching energy industry professionals. Energy Excel.
Expert Network also provide open courses on fixed dates in
co-operation with external experts. DOCUMENTATION
Participants receive documentation, calculations and
exercises in a manual.