Risk

In an era of seemingly ever-fluctuating energy prices, it can prove difficult to identify market drivers and thus predict price trends across the industry. This high level of volatility and uncertainty exposes energy users to extreme levels of risk, which can affect budgets significantly. UPL has developed a series of tools to support clients in managing this risk:

Customer-tailored risk assessment workshops
UPL offers bespoke one-day workshops to provide information about energy markets and relevant means of managing energy risks. These are tailored to meet your specific objectives, and cover everything from basic trading to options strategies.

Risk management tools
We can provide clients with access to:

• Daily market updates and weekly analyses
• Basic pricing for a one-year contract
• Historical pricing and graphical analyses

Electricity and gas trading advice and support
Our experienced team has direct knowledge of trading in the UK energy markets. Our bespoke training on the application of risk management rules enables clients to accurately assess market risks, helping to ensure that budgets are not exceeded.

Risk management rulebooks
All trading operations have a risk management rulebook to establish the rules and risks that are being measured and valued. Each rulebook is client specific, reflecting different client attitudes towards risk.

Options pricing
UPL has the ability to produce options pricing models, which can be used to assess some of the more complicated parts of a flexible deal. Some options strategies can be risky, but under the right circumstances they can be perfect for some clients. When entering into an options contract, it is important that clients understand applicable risks and can assess if the option offers significant benefits for their organisation.

Weekly market updates
We can send weekly updates on the markets and the reasons behind oil, gas, carbon and electricity price shifts.

Customer specific energy management systems
UPL can build database systems specifically tailored for clients to produce assessments of financial performance year-on-year. These systems can store years of data on a site-by-site basis, allowing clients to report detailed gains and losses. Weather and production data can also be incorporated, allowing clients to "normalise" annual performance. Customer-specific benchmarks can be uploaded, whilst detailed analysis of an estate’s performance can be produced at the press of a button.

Independent market analysis
Members of UPL’s procurement team will attend client risk management meetings. Analysis of the markets reported at these meetings helps clients formulate trading views. UPL’s energy procurement team can also accurately assess client exposure.