All posts in hedges

Mild winter temps reduce energy consumption equivalent to 12 nuclear power plants

Whilst this month’s mild temperatures across Europe have been pleasant to many of us, they represent a very real financial risk for energy providers, who sell much less electricity and gas than during a cold year due to a reduction in use of heating appliances.  In fact, during the first 3 weeks of January, temperatures reached their highest levels since 2010, with a significant impact on energy consumption.  The average power consumption in France is more than 12GW lower than at the same period last year, or the equivalent of the production of 12 nuclear power plants! Continue Reading

Energy Companies and Portfolio Managers Risk Exposure to Winter Volumetric and Price Risks

This past summer’s record-high temperatures in Southern Europe have demonstrated that without appropriate weather hedges in place, large energy consumers, energy companies and portfolio managers can be exposed to a dangerous level of weather risks.  As winter approaches, unusually mild or extremely cold temperatures are a further threat. Now is the time for these businesses to buy a hedge to protect themselves from temperature uncertainties or risk aggregated losses as the effects of climate change continue to bring unseasonal weather and unexpected and extreme weather events.  Continue Reading