Power trading refers to purchasing and selling power between participants in the energy industry. Various forms of power trading are possible depending on the market design, ranging from short-term trading to long-term power purchase agreements.
One of the earliest forms of an energy market emerged in 1980 when Chile privatized its power industry. Other Latin American countries, such as Argentina, followed suit in the early 1990s and adopted elements of Chile’s newly-liberalized power sector. In 1990, England was the first European country to establish a liberalized power trading market, and its model was adapted for other Commonwealth countries. Even though the English market predated a European market, the European Commission was already working on plans for a European energy market in the 1980s.
The aim was to create market-driven by competition. During the 1990s, several European countries began liberalizing their power markets, which included efforts to unbundle power generation and distribution. The European Green Paper of 1995 played an important role in establishing the liberalization of the European energy landscape as a directive for the years to come. The next step came in 2000 when the Lisbon Strategy transformed this idea into actual policy. This triggered the creation of energy markets in the EU and established a rough road map for moving forward.
Today, “market coupling” enables cross-border trading, allowing several European countries to trade on the same power exchanges.
Our energy trading team has a deep understanding of the global energy supply chain and helps clients to navigate successfully through difficult markets. We provide support for traders in the global markets and advise on long term contracts for sourcing energy and energy trading on and off exchange.
Our clients include oil and gas multinationals, power utilities, international trading companies, independents, banks and finance houses.
We have experience of advising on all energy and environmental products including power from conventional and renewable sources, gas, LNG, oil, coal and emissions allowances, traded on spot, forward and futures markets. We also advise on the associated infrastructure including pipelines, gas and power networks, refineries and storage facilities.
The energy sector continues to face many unique challenges. Global demand for energy continues to rise, resulting in increased competition for consumption of traditional forms of energy.
At the same time, however the use of fossil fuels is coming under increasing political scrutiny, presenting entirely new challenges for energy traders. Our trade & commodities lawyers thrive on helping our clients meet these challenges. Our pragmatic and commercial advice helps our clients succeed, finding solutions in difficult jurisdictions and getting deals done.
