Extreme events cutting through repetitive patterns, diverse energy sources and power plants producing identical electricity, volatile price levels contrasting with near certitude as to relations among prices, fluctuation in supply and demand stressing an inflexible infrastructure, political pressure for a turnaround in the energy sector interacting with the forces of globalization: Uncertainty and massive price movements at energy exchanges combined with mainly long-term capital investments involve serious potential risk.
We teach Master students in their final semester in order to acquaint them with the existence of different types of risk, their interaction, and possible hedge mechanisms.