Overview of Valuation and Hedging Theory. - 2. 1 Valuing a Commitment Option. - 2. 2 Market Based Valuation. - Overview of the Competitive Electricity Industry. - 3. 1 Description of Market Participants. - 3. 2 Electricity Markets. - Arbitrage Pricing and the Temporal Relationship of Electricity Prices. - 4. 1 Is Electricity Really Non-storable?. - 4. 2 Arbitrage and the Relationship Between Physical and Financial Contracts for Electricity. - Building a Price Model for Electricity Markets. - 5. 1 Structure of Model. - 5. 2 Modeling Approaches. - A Bid-Based Stochastic Model for Electricity Prices. - 6. 1 Load Characteristics. - 6. 2 Supply Characteristics. - 6. 3 Price as a Function of Load and Supply. - 6. 4 Stochastic Load Model. - 6. 5 Stochastic Supply Process. - 6. 6 Summary of the Bid-based Stochastic Price Model. - 6. 7 Calibration of the Bid-based Stochastic Model. - 6. 8 The Time-scale Separated Bid-based Stochastic Model. - 6. 9 Simulations. - 6. 10 Concluding Remarks. - Optimal Futures Market Strategies for Energy Service Providers. - 7. 1 Hedging Risk for Energy Service Providers. - 7. 2 The Physical and Economic Interaction of Energy Service Providers and their Customers. - 7. 3 Problem Formulation. - 7. 4 Modeling. - 7. 5 Efficient Reformulation of Cost Function. - 7. 6 Solution Approaches. - 7. 7 The End State Problem. - 7. 8 Thoughts on the Complexity of the ESP Hedging Problem. - Valuing Generation Assets. - 8. 1 Introduction. - 8. 2 A Principal Component Based Price Model for Electricity Spot Markets. - 8. 3 Creating a Lookup Table of Cash flows. - 8. 4 Linking Simulated Prices to the Lookup Table to Generate Simulated Cash Flows. - 8. 5 Concluding Remarks. - 8. 6 Figures. - Modeling Locational Price Differences. - 9. 1 Introduction. - 9. 2 Locational Pricing and Markets for Transmission. - 9. 3 Modeling Transmission Rights asa Derivative on Spot Prices. - 9. 4 Overview of Existing Price Models. - 9. 5 Interactions Between Neighboring Markets. - 9. 6 Valuing a Transmission Right. - 9. 7 Simulation Based Valuation. - 9. 8 Dynamic Hedging. - 9. 9 Generalization of the Model to A 3 Node Example. - Investment Dynamics and Long Term Price Trends in Competitive Electricity Markets. - 10. 1 Introduction. - 10. 2 A Long Term Model for Electricity Prices. - 10. 3 Modeling Investment Dynamics. - 10. 4 A Dynamic Notion of Reliability. - 10. 5 Effects of Government Policy. - 10. 6 Concluding Remarks. - Conclusion. - Appendix A. - Appendix B. - References. Language: English