Lower costs and avoid price peaks – Gasum has expanded Portfolio Services to cover also the gas market

The electricity market is known for its volatility and fluctuations. Due to the current geopolitical situation this applies now also to the gas market. Gasum Portfolio Services supports its customers in managing the risks on both markets.

“Electricity consumers are used to protecting themselves from the risks of the electricity market but companies consuming gas are still adapting to the new situation. However, last years have shown that the market price of gas can fluctuate significantly as well and we don’t anticipate this to change in the near future,” describes Antti Avelan, Head of Industry Business Finland at Gasum.

Gasum’s subsidiary Gasum Portfolio Services holds one of the few MiFID license from the Financial Supervisory Authority among Finnish energy companies. It grants the company a permission to help its customers navigate the energy market by giving recommendations for the purchase or sale of electricity and gas, monitoring both markets, and trading directly in the markets on behalf of the customers.

“If a company makes larger investments, realising them might take years. With our expertise we are able to offer them insight on how we expect the prices of different energy sources will develop in the future. This way the customer can base their decisions on knowledge.”

Tea Kiukas, Gasum Portfolio Services

The services are tailored to the customer

Gasum Portfolio Services bases its services on the needs of the customer. Every customer has a dedicated portfolio manager who advises the customer in the market from their point of view. The portfolio manager is backed by an analysis team who are monitoring and analysing the energy market constantly.

“The customer can either make their own decisions on energy trades based on our recommendations or we can do the decisions for them. In any case, we agree on a risk policy and hedging strategy that we follow,” says Tea Kiukas, Head of Gasum Portfolio Services.

In the latter case, the customer can outsource energy trading, including hedging activities, entirely to Gasum. The risk policy and the expertise of Gasum’s specialists ensure that the customer can focus on their core business while staying protected from energy price peaks and even utilizing the fluctuations in energy prices.

Successful portfolio management saves costs and can advance sustainability

The most obvious advantage of portfolio management services is lowering the price risks of energy to the customer. The services also make it easier to budget and plan costs ahead.

“If a company makes larger investments, realising them might take years. With our expertise we are able to offer them insight on how we expect the prices of different energy sources will develop in the future. This way the customer can base their decisions on knowledge,” explains Tea Kiukas.

The risk policy used in portfolio management takes into account the designated time horizon. Depending on the industry, some companies need to plan further ahead while others can react quicker or shift between different energy sources, i.e. electricity and gas. This affects the framework and hedges used in managing the risks and making hedging decisions.

Portfolio management can also include trading Guarantees of Origin (GOs) for renewable energy and emission allowances. Both of these services support companies on their way towards their sustainability targets.

“A successful portfolio management doesn’t just protect the company from the price fluctuations but can also lower costs,” says Antti Avelan.