The Business of Energy – Apr 2017

The Business of Energy – Apr 2017

The business behind the energy market can be very complex. How does one market such an intangible thing that provides so many tangible benefits? Light, Running water … heat. It’s all facilitated by the transport and consumption of energy.

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The Humber Water Treatment Plant in Toronto is used to keep Lake Ontario water clean (Hinds, 2017)

Energy prices around the world are volatile and can be affected by pretty much anything. Political factors, Current Affairs, Environmental factors and geographic factors all affect energy prices. Energy price volatility can have consequences on countries, multiple industries and sectors, drinking water delivery, keeping lakes and rivers clean and other products that several million persons rely on daily.

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The way that the Energy Industry gets around volatility is a mechanism called Energy Futures Contracting (EFC). EFC is legally binding agreement where one or more companies pool together to deliver crude, electricity, natural gas or some other energy source and the contract defines everything like time and place of delivery, delivery method, quantity, frequency of deliveries and all other details excepting price. Price floats or varies based on the Exchange they are traded on, which is the New York Mercantile Exchange (NYMEX). This type of energy contracting offers more flexibility and freedom and provides you the end user with better energy prices.

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