Each business’s propensity to risk is different. So, we take a bespoke approach to strategy development and ongoing execution.
Central to success is the development of a robust, well-balanced and dynamic risk management strategy. One that can quickly react to changes in the market.
We only adopt dynamic strategies. These are proven to outperform the market and we consistently deliver savings of >10% above more generic or static models.
Risk Management Benefits
Strategy selection
Energy cost savings
Informative reporting
Strategy development & workshops
The cornerstone of our approach is the development of a bespoke, dynamic risk management strategy.
A strategy would cover your procurement and budget objectives, risk appetite and an alternative ‘shadow’ strategy (should market conditions necessitate a switch).
We deliver this through two workshops covering three main areas:
- Market review – the fundamental drivers of energy prices in the UK and what it means for you.
- Risk management strategy development – the various ways in which your energy price risk can be managed, highlighting the benefits and drawbacks of each through back testing and future scenario modelling using actual data for each strategy.
- Operations and governance – governance, operational and reporting structures going forward.
Dynamic risk management execution
We would adopt dynamic energy purchasing. This delivers a lower commodity cost by maximising the benefit of market volatility and limiting the risk of buying when prices are artificially high.
Dynamic purchasing requires daily analysis and ongoing adjustments to deliver a price lower than the average market, and which reflects your financial and operational objectives. These can include budget considerations, expected market fluxes and demand forecasts, plus any energy you may be self-generating on-site.
To keep you fully informed, we provide weekly position reporting. Each report includes trades executed, open position, distance to each trigger, performance against agreed benchmarks and shadow strategy. It provides necessary information to adjust the strategy if required, meaning you’ve always got the best purchasing strategy for the market conditions.