Risk Management Products

Energy Potential offers a number of risk management solutions. These can be procured individually or as part of a package. 

​Please contact us directly to discuss risk management products with one of our directors.
Power Purchase Agreement (PPA) Assessment Model
The Energy Potential PPA model allows suppliers and generators to assess the income and risks associated with PPAs. The model can be used for:
  • PPA Negotiation – The model can be used to assist both generators and suppliers in the negotiation of a PPA. The model uses half hourly granularity to determine individual income streams based on actual or forecast data including a half hourly wholesale market forward curve and embedded benefits.
  • Bugets & forecasting – The model can be used to determine forecast income over a number of years and help set budgets further out.
  • Regulatory change – As regulatory decisions are made, they are implemented into the model. This enables users to see the impact of these changes from the planned implementation date.
  • Price risk – The model allows price scenarios to be applied to determine the range of income and potential risk associated with the PPA for the supplier. This enables the supplier to assess these risks within the PPA to the benefit of both the supplier and generator.
  • Custom/ standard tariff generator – The model provides two standard tariffs formats for the wholesale element of a PPA and the ability to create custom seasonal time of day tariffs that more closely match the expected export from a generator. This enables suppliers to manage their risk better and share the benefit of this with generators.
  • Regular updates – The model is updated every two months with the latest prices or forecasts and any regulatory change that has been implemented in the intervening period. This ensures that the user is making decisions based on the latest data.
Value-at-Risk
Measuring the risk of an asset portfolio is one of the classic problems in finance, and a favoured solution is the Value-at-Risk (VaR) concept. VaR is a process that provides an estimate of the future risk on a portfolio of assets. Very importantly VaR allows the risk of products in a portfolio to offset each other, so that the effect of hedging risk is naturally captured by the risk measurement. 

Traditionally VaR has been used in Banking and larger Trading Organisations - no doubt related to the historically high costs of designing and implementation. We have a strong history designing, implementing and using Value-at-Risk (VaR) systems. Our VaR engine is designed to be low cost and require minimal configuration; but it does not compromise methodologically, and is based around a robust methodology used by many leading financial institutions, and fully compliant with Regulatory standards.  The model and functionality can be used through Excel. If you can provide us with your risk positions, we will map to a standard format and your risk analysis follows. The Excel interface makes it very easy to use and an analyst could run your risk, fully independently, very quickly.

The model in fact does much more than just VaR and can act as a full analysis and reporting suite for VaR, risk positions, and market risk data.

You can read more about VaR is the note below which uses our engine to perform some example calculations.
Value at Risk
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File Type: pdf
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Data solutions
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Energy Potential has developed a comprehensive data warehouse. which is used for internal analysis and the provision of market data. This has an extensive history of price data across energy assets and we have a rich collection of fundamental data across power and fuels markets.

This application has a chart application that sits on top of our data. This adds functionality to raw data sets and, for example, supports dynamic cleaning of data, manages currency and asset units conversions, and ensures that cross sectional consistency in all data. The flexibility of this system allows data to be added very easily, charts to be saved and output data sets exported to Excel.

You can read more about the chart application with extensive examples here: 
Energy Potential Charting Application
File Size: 1973 kb
File Type: pdf
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