The traditional view is the trade-off between reliability of energy supply and the cost of energy. Retailers offer security of supply but at a higher cost which includes a risk premium and their margin.
We break that nexus by introducing risk management strategies as an integral part of our strategies to save on procurement costs. Some of the ways we will typically reduce supply risk include:
- Sourcing energy from a portfolio of suppliers rather than being reliant on a single retailer
- Eliminating gas supply “take-or-pay” volume risk
- Participation in gas trading hubs to spot purchase short term increases in gas demand or sell excess gas
- Short term gas purchases, sales or swaps with other market participants
- Electricity Demand Side Management to reduce price risk, reduce costs and receive significant incentives
- Development of a risk management system and associated documentation to cover cost, volume, supply, legal and regulatory risk