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CAPABILITY


Risk Management custom analytics application

Risk Management is the application that allows power market traders to industrialize the risk policy.

Overview

Energy companies have multiplied their types of offers to customers, with an increase in fixed price options, index-linked offers based on specific customer needs or offers as a discount on authority tariff. These actions have resulted in a growing asymmetry between formulas used in the sales portfolio and those used in the purchase one. The awareness of the price risk financial exposure, which was already growing in the market due to the competitive context, is now very topical.

The volatility of commodity quotations has coincided with the volatility of the prices of the European market. This has strengthened the demand for tools and technologies that can measure the price risk in a broad sense, cover it and safeguard the margins.

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Specific Services

Risk Management starts from the open position, i.e. the volumes sold which are not financially covered by bilateral purchases and which shall therefore be purchased on the national platforms. This determines the national price risk exposure. The methodological heart of the process is very complex: Volatility estimation methods, Montecarlo simulation algorithms and synthetic risk indicators such as VaR make it possible to summarize the exposures and possible future trends of raw materials (or of the single national price) into synthetic indicators. When an exposure, which is outside the parameters set, is identified, a simulation of coverage operations is carried out (by formula, commodity, portfolio or distribution) to identify the most suitable choice to bring the indicator toward a safe value.

Key features

  • Net exposure: Volumes by purchase and sale formulas and breakdown per commodities

  • Commodities management

  • Management of hedging contracts: SWAP contracts and CfD and IDEX contracts for power and commodities

  • Financial Open Position Report: Self-hedging and final position after portfolio hedging

  • Montecarlo simulation: Commodities and Market Prices

  • Hedging What If: Formula/commodities SWAP, CfD, Energy Derivatives

Why Accenture

Risk management applications are built within the scalable Accenture Insights Platform that provides fast and easy access to an array of industry and functional applications that bolt on to the platform, allowing quicker time to market and more rapid results for clients.

Clients also access our wide range of capabilities rooted in:

  • Industry knowledge. The validity of our advanced analytics outcomes is underpinned by our deep knowledge of the sector.

  • Business. Applications are designed for business users and focused on business results, minimizing advanced analytics complexity. Getting to accurate outcomes does not require statistical, mathematical or IT knowledge—just business know-how.

  • Flexibility. Applications are based on a framework that can be easily integrated in an enterprise operational environment to drive business process action.