[Energy Markets, Energy Options And Option Pricing Techniques]

by

Acknowledgement

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

Signed __________________ Date _________________

Abstract

As we look around we see that the plants grow, move animals and machines and tools that perform the most varied tasks. All these activities have in common that need the energy contest. Energy is a property associated with the objects and substances and is manifested in the changes that occur in nature. Moreover, the study will cover the facts that the starting point was that water is converted by heat into a gaseous state and the gas expansion is used to move a piston in a cylinder. The physicist Rudolf Clausius in 1854 improved the performances of the energy conversion. He showed that only a fraction of the heat energy can be converted into mechanical work. Oil and coal are currently the most used forms of nonrenewable energy. Coal is a combustible material that comes from the earth. It is obtained from mining and is the most difficult resource to get. Oil is another combustible energy that is obtained from drilling, although unlike coal, once the hole is drilled the oil can be pumped out of the hole. This makes it easier and more cost effective to gather oil then coal. The petroleum industry includes the global processes of exploration, extraction, refining, transporting (often by oil tankers and pipelines), and marketing petroleum productsThe combustion of fossil fuels produces greenhouse gases and other air pollutants as by-products. Moreover, the study talks about the energy options and energy pricing techniques as well. Governments have recognised that in most cases energy market reform allows markets to operate more efficiently and cost-effectively. Timely and effective deployment of demand response could greatly increase power system flexibility, electricity security and market efficiency.

Energy

Introduction

Definition of Energy

Many thinkers were concerned with the conversion of kinetic into potential energy in a pendulum (including Galileo Galilei , Christiaan Huygens , Evangelista Torricelli , and Gottfried Wilhelm Leibniz ). Result was that kinetic and potential energy have had an identical size. Leibniz - and later Immanuel Kant - formulated the principle of conservation of energy(New York Times, 2010 ) .

History of Energy Demand

The physicist Nicolas Carnot realized that while performing mechanical work of a change in volume of steam is necessary. He also found that the cooling of the hot water in the steam engine, not only by heat conduction. These findings Carnot published in 1824 in an acclaimed book on the operating principle of the steam engine. Benoît Clapeyron put Carnot's findings in 1834 and developed a mathematical form which is still used graphical representation of ...