Welcome to the London

UK Energy Exhibition 2011

Come and listen to industry experts speaking throughout the day in the Conference Room
Energy Trader Daily
ENERGY MARKET ANALYSIS

Flash Crash in the Energy Markets? See page10 for our feature on Algorithmic trading

focus on energy sector roles in power, gas, oil and carbon.

Come and visit the NRG Careers stand to discuss your hiring needs or contact us
www.nrgcareers.co.uk +44 (0) 207 125 0313 info@nrgcareers.co.uk

Editors note
Welcome to the UK Energy Exhibition 2011! The event aims to bring together energy market professionals in one place to network and do business with the people that count. With a wide range of exhibitors in attendance, the event presents the ideal opportunity to identify the latest trends in your sector as well as discover cutting-edge technology. We have put together a fantastic series of seminars with expert speakers from across the energy spectrum. We hope you enjoy the UK Energy Exhibition 2011 and look forward to welcoming you back next year!

Contents
Page 4 Page 5 Page 10 Page 12 Page 14 Page 16 Page 17 Page 18 Speakers Corner Schedule Dash for Gas Oil: what lies ahead? Number Crunching: focus on Algo Trading An Interconnected Europe Q&A with our event sponsors Meet the speakers Shale: the known unknown?

Speakers Corner Schedule

A series of 25-minute lectures presented by leading industry figures
UK Power Market Entry and Liquidity Dr. Mark Earthey, Product Manager Europe, Triple Point Technology

10:00

Developments in the Global LNG Market Malcolm Johnson, Faculty, The Oxford Princeton Programme

11:00

European Market Integration Andrew Claxton, Business Services Director, APX-ENDEX

13:00

Technical Analysis in the Energy Markets David Linton, CEO, Updata

13:45

Energy Market Reform & Carbon Initiatives: Implications for Customers Andrew Buckley, Director-General, MEUC

14:45

Panel Q&A session open forum

15:30

See our Meet the speakers feature on page 17

The Dash for Gas

Since Germany announced its intention to shut all its nuclear fleet down by 2022, natural gas power production has been seen as the likely candidate to cover the shortfall in power output. Buy why gas?
Gas is a particularly attractive fuel for power generation as it seen as being safer than nuclear and is regarded as the cleanest of all the fossil fuels. In addition to this, gas reserves (conventional and unconventional) are vast and therefore ensure a degree of sustainability. Conventional gas resources are equivalent to more than 120 years of current global consumption and all major regions have recoverable resources equal to at least 75 years of current consumption.

Leading the field in

Power Market Modelling

PLEXOS Desktop Edition

Desktop Edition
Power Market Simulation & Analysis Software

Leading the field

Power Market Mod

By En
www.e

Energy Exemplar is the developer of class-leading power market simulation software called PLEXOS for Power Systems (PLEXOS). PLEXOS is a successful and competitive fundamental power market simulation product that is used for power market modelling, operations and investment planning, renewable integration analysis and portfolio optimization. Users of PLEXOS include independent system operators, energy regulators, generation companies, transmission companies, plant manufacturers, construction companies, consultants and analysts across every region of the world. Dedicated teams provide technical, consulting and implementation support to a global customer base that demands the best quality products and services. Energy Exemplar continues to push the envelope in being the rst-to-market with the latest advances in mathematical programming and power market simulation theory, as it strives to o er the most comprehensive simulation software to its customer base.

Products
C APACIT Y E XPANSION P LANNING M ARKE T A NALYSIS T R ANSMISSION A NALYSIS U NIT C OMMITMENT P OR TFOLIO O PTIMISATION

Services
C LOUD S IMULATION S ER VICES T R AINING C OURSES I MPLEMENTATION C USTOMISATION

e n e r g ye xe m p l a r. c o m

ELP SOX NOC N TCE

ralpme

moc.ra

lpmex

xE ygr

eygre

enE yB

ne.ww

ELP SOX

ralpme

moc.ra

lpmex

xE ygr

eygre

enE yB

ne.ww

Who are we?

6
version

www.energyexemplar.com

elling

in

Leading the field

Power Market Mod

elling

in

nergy

ergy Ex

exempla

emplar
r.com

By En
www.e

nergy

ergy Ex

exempla

emplar
r.com

OS PLEX

OS PLEXECT NN CO

www.energyexemplar.com

Power Market Simulation & Analysis Software

PLEXOS Connect

Client-server Edition

Client- server Edition

version

6.0

1.0

Unconventional natural gas resources are estimated to be as large as conventional resources and production figures are set to rise in the U.K, Poland and Australia as coalbed methane development and hydraulic fracturing grows. Although hydraulic fracturing in gas production has raised serious environmental concerns, a rigid regulatory framework and close monitoring of drilling activity to assess its impact on air and water quality may allay concerns. Gas movements around the world are set to double with volumes split evenly between pipeline gas and liquefied natural gas. LNG liquefaction capacity, only 270 bcm in 2008, is projected to reach 450 bcm in 2015. Together with an expected expansion of regasification capacity, this will offer increased diversity of supply to global markets.

As natural gas markets become increasingly globalised, China will become one of the largest importers of natural gas in the world as Russia increasingly exports both east and west. In addition to this; India, the Middle East and Brazil will all ramp up their gas demand for power generation and industrial use.

China is currently the most important country in shaping future energy markets. Its existing energy demand and its potential for economic growth means that its policy choices can dramatically affect global gas demand.
China continues to install LNG regasification terminals, and plans to achieve at least 64 bcm import capacity by 2015. China is also preparing for increased domestic gas supply. Higher prices have further encouraged domestic production, illustrated by Chinese oil companies buying up assets such as shale gas resources in North America to gain valuable exploration experience.

Gas was already in play, due to sharply increasing demand from the likes of India and China and with nuclear looking increasingly out of favour with some Western markets, demand for gas as a replacement fuel is set to increase further.

As natural gas markets become increasingly globalised, China will become one of the largest importers of natural gas in the world

Montel Online
the power of energy

Discover the platform of choice in Europes traded energy markets

Up-to-the-minute news in English and local languages Live market data feeds Charting tools Price-driving fundamentals Unprecedented transparency

Contact us to find out more

sales@montel.no
tel: +47 22 99 42 00 for free trial access

LOGISTICS & TRADING

POMAX is the only software that integrates power logistics, trading, and risk management in one enterprise-class application. Its benets are simple, but profound: You see all grids, trades, and notications clearly; you determine risks precisely; you automate from/to connections for 15 major grids; and most of all, you optimise protability easily. Find out why the major powers in power use POMAX. Visit www.navita.com

First-tier functionality, right out of the box.

Oil: What lies ahead?

The OPEC meeting in Vienna on June 8th, the first meeting since the start of the Arab Spring, failed to reach an agreement to increase oil quotas.
Many thought the group would pump extra oil to tame spiralling, and some say unsustainably high oil prices. However, given that no action was taken, can this be seen as tacit approval of current prices by the worlds largest oil cartel? Of the group, Saudi Arabia were the most vocal in their intention to raise oil production and were keen to get their way. Indeed rumours circulated that Saudi Arabia had walked after the group were unable to reach a consensus. Some OPEC members are worried that the high price of oil is damaging the world economy and a further increase could hit demand. They are also worried Western countries will invest in ways to lessen their dependence on crude and look for alternatives, dealing a further blow to demand. Inevitably though, some members are happy with the current prices and do not want any further increase in supply. . Disagreements between member states are not rare. Take the 1973 split between Arab and non-Arab states during the embargo; or when Iraq accused Kuwait of cheating on quotas in 1990. Ironically it was Saudi Arabia that flouted supply quotas unilaterally in 2008 as crude prices moved too fast. Those members in favour of an increase in crude production argued that oil demand would pick up in the second half of 2011 as the global economic recovery gains traction. However this was blocked by six member states, including the current OPEC President Iran. Iran felt that increasing supply would be the wrong course when demand for oil will remain subdued due to a faltering US economy, debt woes in the Eurozone and runaway inflation in emerging markets. It is possible that those countries pushing for an increase will supply the market with more oil nonetheless as they have the spare capacity to do so. This clear disregard for the whole quota system opposes the fundamental principle of a cartel and shows weakness in its structure. One thing is for certain; the rocky ride in the oil market is set to continue

Number Crunching: Algo trading in focus

As algorithmic and high-frequency trading continues to receive flack in some circles, algo trading may eventually become commonplace in gas and power futures once the level of liquidity in their respective markets reaches the level of oil.
Hundreds of thousands of Brent and West Texas Intermediate lots are traded daily on the InterContinental Exchange every day, but in the other European futures markets, no other product is even close to that figure. Crude futures have traded between 200,000 and 800,000 times a day since the start of the year, but all other energy contracts on the ICE trade in the low tens of thousands or even in the hundreds. Generally, algorithmic traders would only be interested in highly liquid markets, but there are some traders ahead of the pack. The CME triggered a trading pause last month after the August Henry Hub natural gas contract fell almost 21 cents or 4.3% in one second before retracing over the next couple of minutes. Many commentators blame the so-called algo traders for the mini-crash. Given the recent downtrend in liquidity in the UK Power market for example, algo trading still seems a long way off in Europes energy markets. However in a post-financial crisis world, with credit lines still being pulled the attraction of an exchange acting as a central counterparty is a big one; and this may facilitate the onset of the automated energy trading revolution. Some market observers think that there is no fundamental reason for the slow uptake of algorithmic trading in the gas and power market besides unhurried acceptance. However others believe there are two major hurdles preventing larger automated execution in the over-the-counter energy markets. Firstly, many physical players have a minimum clip size making it much harder to transfer algorithms used in equities over to energy. Secondly, a large proportion of trades in these markets are still voice brokered, pulling liquidity off the screens.

Energy Procurement and Risk Management

End user trading specialists (Power, Gas, Carbon) Market intelligence Bespoke consultancy services to Energy Buyers

TRANSPARENCY ACCOUNTABILITY INTEGRITY

Unrivalled market intelligence

www.wheldrakeenergy.co.uk

Come and visit the Wheldrake Energy stand to find out more

An Interconnected Europe
A consensus exists among EU member states on the need to reduce their carbon output in the power sector and develop new sources of low carbon energy.
Poland wants to alter its fuel mix and move away from carbon-intensive coal. Wind turbines are sprouting up throughout the whole of Europe as a zero-carbon method of generating power is seen as an increasingly attractive, albeit intermittent solution. The counter arguments to wind are well known and critics often cite the fact that the strength of the wind is not constant with speed varying from a breeze to storm force. A Supergrid will help balance intermittency of electricity supply by interconnecting areas with different peak demand times by building a grid system large enough to capture wind energy. Connections will also be made to hydro reserves in Norway and Central Europe, to create a firm source of electricity generation, rivaling nuclear in its stability. The concept recognises that the UK must connect further amounts of offshore wind to its already congested network by 2020 by implementing offshore clustering. The announcement by Germany that it is to shut all its nuclear power plants by 2022 represents a reversal from September 2010 plans to extend the life of the countrys nuclear reactors. Clearly the Fukushima nuclear crisis in Japan was the nail in the coffin for Germanys nuclear extension program. The largest euro-zone economy now plans to build 25GW of offshore wind generation by 2025; this can only help the aims of the Supergrid concept. The plans also recognise Norways desire to trade its hydro generation and Belgiums plan to include 2GW of offshore wind generation. The future shape of Europes electricity network will be determined not merely by increased variable supply, but also variable demand. Interconnection enables countries not only to have access to Scandinavian hydrological resources or German wind power, but also capacity in continental markets where peak consumption occurs at different times. Supergrid should enable increased competition and better utilisation amongst existing plants, thus bringing down wholesale prices. It will enable more renewables, including wind, with low marginal cost, to connect to the system more efficiently; reducing portfolio risk and thus putting downward pressure on prices.

The Supergrid is still a concept, and as such will evolve with time as the feasibility, operability, commercial viability and regulatory framework becomes more developed. It is envisaged that the Supergrid will include, at least in part, the backbone of an integrated UK offshore network, as well as the development of further direct current links both onshore and offshore in North Western Europe.

CITY GLOBAL FX LTD

PASSIONATE ABOUT FOREIGN EXCHANGE GUARANTEED BEST EXCHANGE RATES
LEADING FOREIGN EXCHANGE CONSULTANT GUARANTEED BEST EXCHNAGE RATES FOREIGN EXCHANGE RATES ON AVERAGE 10% BETTER THAN ALL BANKS & YOUR PRESENT PROVIDER CORPORATE & PRIVATE CLIENTS SPOT & FORWARD CONTRACTS ONLINE FOREIGN EXCHANGE PLATFORM & LIVE RATES
City Global FX Ltd are the UKs leading foreign exchange consultancy, providing foreign exchange rates for all of your corporate and personal requirements which are on average a guaranteed 10% better than High Street banks and other foreign exchange providers. For new accounts, please call us. After your account has been opened there is no obligation to trade, you are free to compare our providers foreign exchange rates with those offered by High Street banks and other providers. When you do trade you may trade using the online foreign exchange platform or by telephone.

Global Sales Line

Tel: +44 (0) 20 7250 1230 Tel: +44 (0) 7525 534 112
Email:

Faz@cityglobalfx.com
Website:

www.cityglobalfx.com

Advanced technical analysis for the Energy Markets

Updata is a registered trade mark of Upadta plc. All trademarks are the property of their respective owners

Updata are world leaders in the provision of technical analysis software and tools used by professional traders and analysts in over 40 countries. In recent years more and more of the companys focus has been in commodities and energy markets with the Updata Professional software increasingly becoming the de facto standard for Technical Analysis in energy trading. The Updata team has decades of experience in the technical analysis of financial markets. Its not just our products that our clients value. They appreciate the relationship we build, our speed of response and our ability to assist in the realization of their technical strategies. The software is compatible with Bloomberg, eSignal, LIM, Montel Power news, Reuters and Updatas own energy data. All your OTC data via Trayport GlobalVision or Reuters RORC and in-house data can be charted and analysed in real time as well.

Updata CEO David Linton is one of the UKs best known technicians as a regular commentator on financial markets in the press and on finance television. His work with Updata takes him to the desks of leading traders and analysts around the world and he is increasingly involved with energy trading companies and face to face consultation at dealing desks. David is a Master Financial Technical Analyst as awarded by the International Federation of Technical Analysts. He is a member of the UK Society of Technical Analysts where he is involved with teaching the STA diploma course. He is also a member of the American Association of Professional Technical Analysts.

Come and hear David Linton speak on Technical Analysis for the energy markets at UK Energy Exhibition on Wednesday 6 July 2011 at 13:45

Advanced Trading Tools

Market Professionals in over 40 countries rely on Updata

Q&A
Energy Trader Daily
ENERGY MARKET ANALYSIS
UKEE: What interested NRG Careers in the UK Energy Exhibition? NRG: We represent a number of leading clients in the energy field, and hope to raise awareness of the work we do in what is still a very niche sector. UKEE: What are the latest trends you are seeing in energy sector recruitment? NRG: The industry has outperformed broadly speaking, when compared to the financial sector for example. Whilst a lot of desks were shut down postLehman, many are re-hiring again and there are a lot of interesting opportunities that can come out of the wreckage of the financial crisis. UKEE: What about the outlook for traders? NRG: As ex-traders ourselves, we know what our clients are looking for. I think employers are getting far more selective in who they hire, due to the pool of talent available. A cultural fit is just as important to hiring managers as a top performer these days. UKEE: In which regions are you seeing the most activity in 2011? NRG: We have been seeing a lot of hiring from Europe, particularly Germany and Switzerland. Many of the trading houses on the continent are still looking to add to their teams, and were perhaps less exposed to the cuts we saw in London and New York. Energy, and commodities in general, are back in fashion and were seeing a lot of candidates move out of banking. UKEE: What interested Energy Trader Daily in the UK Energy Exhibition? ETD: Energy trading is our bread and butter, so it made sense for us to get involved and reach out to our core market of traders, analysts, buyers and anyone interested in energy prices. We believe our market intelligence is second to none, and we are here to launch our real-time audio news service, Energy Squawk. UKEE: Are energy prices on a one way street at the moment? ETD: The market really gained bullish momentum from around April 2010. Sure, we have a potential Eurozone debt crisis, and lagging growth in the UK/US but emerging markets like India and China continue to grow at a phenomenal rate. In addition to this, the Arab Spring does not look like it is going to go away anytime soon; Libya alone has lost up to 1.6m bbl/day of production. The bullish oil phase could continue just from supply side constraints, even with lacklustre Western demand. UKEE: What are the latest trends Energy Trader Daily is seeing at the moment? ETD: Well, the markets are certainly becoming more sophisticated and with this comes the need for information. Naturally, as markets develop, you tend to see the inefficiencies whittled away. We are still a long way from a fully transparent energy market, but there is an increasing amount of data available to help level the playing field.

. .

Meet the Speakers

Dr. Mark Earthey, Product Manager Europe Triple Point Technology Dr. Mark Earthey serves as Product Manager, European Gas and Power for Triple Point Technology and is responsible for managing the development roadmap for Commodity XL, Triple Points leading multi-market commodity trading and enterprise risk management solution. Dr. Eartheys wealth of experience in the energy industry spans over 20 years. Previously having worked at Lacima Group, Sunguard and LogicaCMG, Dr. Earthey is a graduate of the Aston Business School, Birmingham, UK, gaining M.Sc. and D.Phil. degrees. Malcolm Johnson, Faculty, The Oxford Princeton Programme Malcolm has more than 30 years experience at Shell in the natural gas/LNG sector. He was Strategy and Planning Manager in the UK and Germany during the period of gas liberalisation in Europe. Malcolm has been involved in the development of a number of LNG projects including over 13 years on the Sakhalin LNG project He has also provided commercial advice on the Elba LNG receiving terminal expansion, floating LNG, LNG contracts and project development assurance. He is a recognised subject matter expert on commercial LNG matters. Andrew Claxton, Business Services Director, APX-ENDEX Andrew Claxton is responsible for APX-ENDEXs international developments and is predominantly concerned with facilitating cross-border trade and integrating physical markets. He is perfectly placed to deliver our lecture on European market integration, having a unique view of the market from one of Europes leading energy exchanges. He leads APX-ENDEXs involvement in developing market coupling of the day-ahead power markets across North West Europe, developing integrated cross-border intraday markets and investigating possible cross-border market integration solutions for gas. Andrew Buckley, Director General, Major Energy Users Council The Major Energy Users Council represents the interests of large industrial, commercial, retail and public service energy users. Andrew cut his teeth in the industrial and commercial energy market surveying customers for their potential to switch to natural gas when North Sea supplies first came ashore. In 1976 he established the Energy Information Centre to provide market and pricing intelligence for business users. He was closely involved in advising firms on the switch to competitive energy purchasing after privatisation. He also acted as the European Energy Adviser to a major Japanese utility for over ten years. He is a graduate in Economics and Geography from London University. David Linton, CEO, Updata David founded Updata in 1991 after several years trading and developing systems himself. He is a regular commentator on financial markets in the UK press and TV. He is himself an active investor using the Updata TA system for analysis and trading. He teaches the Ichimoku charting module for the Society of Technical Analysts Diploma course. David is one of Europes foremost experts on Technical Analysis, and is well placed to discuss TA in the energy markets.

Shale: the known unknown?

Unconventional gas in North America may no longer be unconventional for long. Indeed the Energy Information Administration (EIA) forecast that as much as 47% of US natural gas production will be from shale in 2035, up from 16% in 2009.
Shale gas is now the fastest growing unconventional resource and is also expected to become conventional across the pond in Europe. The process of extracting gas from rock has sparked a flurry of acquisitions and investments, from supermajors snapping up shale gas specialists to governments injecting capital in to extraction companies. Shale gas in exploration is well suited to Europe because of its large market, established pipeline infrastructure and large dependence on gas imports from Russia. Exploration is still in its infancy with the first test only taking place in 2008. Recent studies indicate there are as much, if not more unconventional gas reserves as there are conventional. Given the size of potential resources, it is hardly surprising test drills are underway in at least 10 countries. Reports reveal that the largest reserves of shale gas in Europe are in Poland. The process of extraction has gained some unfavourable attention in the media lately and these negative perceptions show little sign of disappearing. In the United Kingdom, for example shale gas has been found close to Blackpool in Bowland shale although the extent of the discovery is not yet known. Further wells are to be drilled but progress has been halted as an investigation is underway to determine whether the drilling is linked to two small tremors felt on the Lancashire coast. The Polish government is keen to encourage development of shale gas, which it sees as a unique opportunity to reduce its energy dependence on Russia, without compromising its environmental commitments to reduce coal burning. However, the French are not so enthusiastic. France is the first country to have passed a bill to ban the process of hydraulic fracturing, potentially setting a precedent for other European states. It remains to be seen how quickly shale takes off in Europe, and indeed most industry leaders believe it will be many years before shale makes up a significant part of Europes gas production. .

Thank you
The UK Energy Exhibition would like to thank all our sponsors, exhibitors and visitors for helping to make the event a success. We hope to see you again in 2012!
Energy Trader Daily (www.energytraderdaily.com) NRG Careers (www.nrgcareers.co.uk) Energy Digital (www.energydigital.com) Business Review Europe (www.businessrevieweurope.eu) Commodities Now (www.commodities-now.com) ICIS Heren (www.icis.com/heren) Seven2one (www.seven2one.de) Wheldrake Energy (www.wheldrakeenergy.co.uk) Energy Live News (www.energylivenews.com) Energy Exemplar (www.energyexemplar.com) Triple Point Technology (www.tpt.com) VuePoint Solutions (www.vpsl.co.uk) Oxford Princeton (www.oxfordprinceton.com) The Major Energy Users Council (www.meuc.co.uk) The Power Trading Forum (www.foa.co.uk) City Global FX (www.cityglobalfx.com) Updata (www.updata.co.uk) Navita Systems (www.navita.com) Montel (www.montelpowernews.com) APX-ENDEX (www.apx-endex.com) Telvent (www.telvent.com)

The online hub for energy trading professionals

Come and visit our stand for an exclusive free trial of our reports and real-time audio news service Energy Squawk www.energytraderdaily.com www.energysquawk.com