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Mitigating the risks in volatile energy markets

The global energy landscape is experiencing profound changes, driven by the green transition and the energy crisis, fostering risks and uncertainties. Gasum mitigates these risks with services such as Power portfolio services, Power Purchase Agreements, a 24/7 energy market control room, and gas portfolio services.

The Nordic energy company Gasum has a sound track record in aiding customers in the ever-more complex and volatile European energy market. The risks now involve price, availability, origin, and political factors for various energy commodities, including natural gas, oil, and electricity.

Price risk hinges on supply shocks, demand fluctuations, and regulatory shifts. Availability risk relates to supply security and energy source choices. Origin risk considers the trustworthiness and eco-friendliness of energy producers. Political risk arises from the unpredictability and influence of energy policies, all necessitating effective management and readiness.

"Stability in the energy market used to prevail, and demand for risk-navigating services was relatively low. However, this has changed. Price volatility has surged, and price predictability has diminished. Preparedness yields substantial benefits when optimizing energy market operations, especially as sector integration progresses," says Atte Pekkala, Gasum’s Solutions Lead, Industry Solutions.

Gasum’s services are based on a deep understanding of the client’s business

Gasum's services are rooted in a deep understanding of clients' businesses. Portfolio services help clients struggling with business predictions, unable to make long-term commitments, or needing market-responsive adjustments. Power purchase agreements secure clients a fixed-price, long-term supply of renewable electricity, reducing price volatility and enhancing sustainability. Gas portfolio services gain importance as gas prices fluctuate amid the energy crisis.

Gasum backs its risk management services with a 24/7 energy market control room, responding to real-time market dynamics. This empowers clients to operate efficiently, seize opportunities, avert threats, and optimize energy consumption.

"Gasum's risk management services are rooted in a profound understanding of clients' businesses and their exposure to energy market risks. We always collaborate closely with clients to create risk management policies and operational models aligning with their needs and objectives," says Atte Pekkala.

Energy desk specialist and screens
Photo: Gasum's control room monitors the energy markets 24/7.

Comprehensive energy market analyses inform Gasum’s risk management services

Gasum's risk management services have enabled clients to thrive in the complex and volatile energy market, improving their business and helping in achieving their sustainability targets.

Services are informed by comprehensive energy market analyses, driven by market insights and forecasts based on various data sources and analyses. Gasum provides forecasts for various horizons, from years to days, offering them separately or as standardized market reviews. Gasum also offers one-off consultations for clients requiring specific advice on market-related impacts on their operations.

"Ordinary people, as well as companies, seek energy price forecasts. However, they recognize that forecasts are not always accurate. The key question is whether to act upon forecasts or use them to inform protective actions through risk management. Decisions should be guided by risk management, not solely by forecasts, as it is the actions taken to manage risks that provide protection, not the reliance on forecasts," Atte Pekkala concludes.

Tags

  • Power markets
  • Energy markets