Wholesale Energy

DEFINITION of 'Wholesale Energy '

A term referring to the purchase and sale of energy products – primarily electricity, but also steam and natural gas – in the wholesale market by energy producers and energy retailers. Other participants in the wholesale energy market include financial intermediaries, energy traders and large consumers. Wholesale energy markets developed following the deregulation and restructuring of utilities and electricity markets around the world in the 1990s.

BREAKING DOWN 'Wholesale Energy '

There are independent system operators that coordinate, control and monitor the operation of the energy market. The deregulation of electricity markets and the development of wholesale energy markets have provided end-user benefits such as enhanced reliability, efficient grid dispatch and better price transparency. However, detractors of the wholesale energy concept maintain that it may actually lead to higher prices for retail consumers and can cause artificial shortages such as the California energy crisis of 2000-2001 due to market manipulation.

RELATED TERMS
  1. Federal Energy Regulatory Commission ...

    An independent agency responsible for regulating interstate oil ...
  2. Energy Derivatives

    A derivative instrument in which the underlying asset is based ...
  3. Spark Spread

    The difference between the market price of electricity and its ...
  4. Utilities Sector

    A category of stocks for utilities such as gas and power. The ...
  5. Deregulation

    The reduction or elimination of government power in a particular ...
  6. Carbon Dioxide Tax

    A tax on businesses and industries that produce carbon dioxide ...
Related Articles
  1. Personal Finance

    10 Ways To Save Energy And Money

    The average family spends $1,600/year on utility bills - find out how to put some of that back in your wallet.
  2. Options & Futures

    Fueling Futures In The Energy Market

    The energy market influences every aspect of our lives, and these four options are its driving force.
  3. Retirement

    Losing The Amaranth Gamble

    Investors in this fund didn't see it coming. Would you?
  4. Stock Analysis

    The Top 5 Oil and Gas Penny Stocks for 2016 (XCO, CHK)

    Learn more about the oil and gas industry outlook, and discover the top five oil and gas penny stocks investors should consider for 2016.
  5. Stock Analysis

    3 Volatile U.S. Industries to Exploit in 2016 (VRX, IBB)

    Read about volatile sectors in the stock market that may provide opportunities for investors in 2016, including energy, mining and biotechnology.
  6. Investing News

    What You Can Learn from Carl Icahn's Mistakes

    Carl Icahn has been a stellar performer in the investment world for decades, but following his lead these days could be dangerous.
  7. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  8. Stock Analysis

    The Top 5 Micro Cap Alternative Energy Stocks for 2016 (AMSC, SLTD)

    Follow a cautious approach when purchasing micro-cap stocks in the alternative energy sector. Learn about five alternative energy micro-caps worth considering.
  9. Investing News

    The Next Stop for Oil: $18 a Barrel or $52?

    Predictions on the price of oil are all over the spectrum. Will it hit $18 or $52 this year (or both)?
  10. Fundamental Analysis

    5 Economic Changes to Expect if a Republican Wins in 2016

    Discover the five most likely economic changes the United States can expect if a Republican wins the presidential election in 2016.
RELATED FAQS
  1. Do all oil companies received the quoted price of West Texas Intermediate for their ...

    The quoted, or spot, price of West Texas Intermediate, or WTI, crude oil is just one of several benchmark oil prices. The ... Read Full Answer >>
  2. How do the costs of oil sands producers compare to traditional drillers?

    The oil sands of Canada are some of the most expensive crude oil assets in the world to produce. Each asset type, such as ... Read Full Answer >>
  3. How long does it take an oil and gas producer to go from drilling to production?

    Depending on the depth of drilling required and the type of drilling method used, a standard oil well can commonly advance ... Read Full Answer >>
  4. How do the average costs compare for the different types of oil drilling rigs?

    Average costs vary widely between different types of oil rigs, starting at around $20 million and ranging as high as close ... Read Full Answer >>
  5. How does an oil and gas company measure and state its production?

    Measuring Oil and Gas Production Oil and gas exploration and production companies, or E&P companies, use three basic ... Read Full Answer >>
  6. What credit rating should I look for in an oil and gas company?

    Look for a credit rating in an oil and gas company that is suitable for your desired returns and risk tolerance level. Companies ... Read Full Answer >>
Hot Definitions
  1. Short Selling

    Short selling is the sale of a security that is not owned by the seller, or that the seller has borrowed. Short selling is ...
  2. Harry Potter Stock Index

    A collection of stocks from companies related to the "Harry Potter" series franchise. Created by StockPickr, this index seeks ...
  3. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  4. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  5. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  6. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
Trading Center