Electricity is an integral part of our lives, with numerous residential, industrial, and commercial uses. It is used to light up homes and offices, run televisions and computers, and provide the power to operate countless other appliances. With world markets opening up due to liberalization, electricity as a commodity can now be traded across borders.

A major part of electricity is generated using coal. Coal is equally important as a commodity but, being a fossil fuel, it is available in limited quantities.

This tutorial is about the electricity and coal markets. It looks at the factors affecting electricity prices and the types of risk in electricity trading. It provides an insight into the trading techniques used in the electricity market and the exchanges that offer electricity contracts. It also looks at the features of the coal market and covers trading in coal, international coal indexes, and information providers.

Objectives
On completion you should be able to:

• Describe the features of the electricity market and how electricity is traded
• Describe the features of the coal market and how coal is traded