Risk Management
Power trading carries price, volume and counterparty risk every hour. We define, measure and limit these risks, and the contract states clearly which risk sits with whom.
We don’t eliminate risk. We price it and limit it.
Define
Before every transaction we establish which risk it creates, how long it is held and who carries it.
Measure
Open positions, imbalance exposure and counterparty limits are tracked with current market data.
Limit
When a limit is breached, trading stops. The decision to reduce or accept the risk is taken at the authorised level.
Which risks we manage, and how
The market revenue of a generation or storage asset faces six core risks. Each one has its own control method.
Spot prices moving against an open position.
Actual output deviating from the volume sold or the contracted profile.
The gap between forecast and actual output being settled at imbalance prices.
A bilateral counterparty failing to pay or deliver.
A sudden rise in collateral and cash needed for market transactions.
Changes to market rules, price caps or settlement methods.
From limit to report, the same flow every day
Risk control is part of every step of the trading process, not just the end of it.
Position, tenor and counterparty limits are approved by the Board and reviewed periodically as market conditions change.
Every transaction is checked against current limits and the counterparty’s credit standing before it is entered.
Open positions, forecast deviations and imbalance exposure are tracked through the day at current prices.
The day’s positions, results and limit usage are reported, and the cause of any deviation is recorded.
Risk results and the limit structure are reviewed regularly with senior management and the Board.
Your asset’s risk picture, shared with you
For every asset we serve, we share the risk position in periodic reports and review the results together.
Position status
Volume sold, fixed and still open, broken down by tenor.
Imbalance results
Hourly deviations, imbalance cost and the reduction achieved through portfolio effect.
Counterparty exposure
Open amounts and collateral status per counterparty in bilateral contracts.
Regulatory impact
The possible effect of new regulation on your asset’s revenue and contracts.
About risk management
Let's talk about your asset's potential.
We use essential cookies to run the site and remember your language. Analytics and marketing cookies are only used with your consent. You can change your choice at any time from the footer. Cookie Policy