Energy Markets

As markets with both technical boundary conditions and financial price influencing factors, energy markets represent an interface between the financial economy and the real economy, because market participants with interests in the physical acquisition of a good are opposed by those with purely financial interests.

Within this field of work, specific characteristics of energy markets are examined in contrast to financial markets. The focus is on electricity markets, which play a special role due to technical restrictions such as the non-storability of electrical energy. Based on the special characteristics of such markets, the effects on the pricing of derivatives are analysed.