Inprover Energy warn that it is important for businesses to carefully manage risk in order to avoid being ‘rolled over’ when playing the ‘lottery’ of flexible energy purchasing.
The procurement specialist has published a guide ‘Playing the Energy Lottery: How to Manage Risk’, which is available free to download.
In its guide, Inprova Energy details how companies can develop a robust risk management strategy to protect their purchases in the volatile wholesale energy market.
“The only certainty of the wholesale energy market is that it’s turbulent”, said Magnus Walker, Director of Trading and Risk for Inprova Energy. “But flexible energy purchasing provides the opportunity to respond to dips in prices and buy advantageously to make the most of these fluctuations. However, this must be supported by a good risk management system and trading strategy to limit any potential losses.”
The guide shows energy managers how to build a risk management strategy, advising how to assess and reassess risk and how to set company objectives and risk limits. It also outlines the risk management tools available to guard against potential market losses.
Walker added: “Harsh weather, geopolitical instability, currency fluctuations, and capacity constraints are just some of the triggers for energy market volatility. Energy price swings are often unpredictable and extreme, so it’s very important for energy managers to keep a cool head and have a robust plan that will help them survive the inevitable peaks and troughs.
“Risk management is complex and it may be beneficial to seek expert advice from a broker or consultant, who can highlight risk management options and assess your appetite for risk. They should be able to carry out an initial forecast assessment using advanced modelling techniques to devise a balanced risk management system”.
Further information: www.inprovaenergy.com