Plenary Session
Risk Management approach to energy buying within the energy transition
- Derek Hyland, Global Director Energy Procurement & Risk Management at Ball Corporation
- Merlijn Mertens, Energy Trader at E&C Consultants
Some companies enthusiastically signed 100 EUR per MWh and more PPAs when the markets were up in the crazy levels and got applause for savings made versus forecasted future prices. Will the applause continue now that markets and forecasts have dropped back to double digit levels? Will you still be an energy procurement hero if the PPA you recommended to sign goes out of the money for an extended period of time?
A well-designed PPA can play a crucial role in stabilizing energy cost, which for many clients is the main goal of their energy risk management program. But have your really reflected well on the cost your organization is willing to pay for that stability?And as of 30% of your volume covered by PPAs, there’s the risk of ill design, where instead of decreasing your exposure to market volatility you increase it as you have large volumes of energy to be bought / sold in and to spot markets at moments when production and consumption don’t match.
Cross-border PPAs help you manage this as you bring together larger volumes spread over a larger geographical area. But they create spread risk which can be complex to manage. In this session we’ll discuss how you can maximize the cost-stabilizing impact of PPAs. We’ll also introduce the more advanced risk management techniques that you’ll have to gear up to keep control over your costs when you go up to high percentages of PPA supply.