Electricity is a controllable and convenient source of energy, of paramount importance for our everyday life. Generators are used to transform other kinds of energy into electricity inside of the power station. Among the renewable energy sources, those that use natural phenomena and can be reintegrated in a short time, there are solar energy, wind energy, hydropower, geothermal and biomass energy. Fossil fuels and nuclear energy are the most known sources of non-renewable energy . The particular source of energy used in a specific geographic area dependent on natural resources and processing facilities available locally.
Although electricity is produced all over the world, production methods differ according to the morphology of the geographic region. In coastal regions, for example, it is possible to exploit the energy of the tides, on the contrary in areas that present geothermal activity is used this type of energy for the production of electricity.
In many parts of the world, the supply of electricity has become a basic requirement for modern lifestyles. Humans consume an incredible amount of electricity even in performing simple everyday gestures..
The electricity is used to power vehicles such as trams and trains.
The contracts of electricity are treated similarly to those of other commodities. However, there is no futures contract most commonly used, because electricity cannot be stored. Therefore, the futures of electricity are often specific to a particular area of distribution (eg, New England, USA) and a particular time of consumption (e.g.. peak time / off-peak). In the United States, the time of ‘peak’ ranging from 7.00 to 23.00, Monday to Friday.
The factors that affect the price of electricity are:
- Electricity source
- Price of fossil fuels
- Environmental regulations