 Full Course Description
KS201
Energy Risk Fundamentals
This fundamentals seminar takes participants from the basic statistics underlying value-at-risk (VaR) to the most sophisticated techniques used by energy companies today. Learn how a set of effective planning tools can be used to frame, analyze and manage your organization's exposures. In addition to presenting the fundamental concepts of VaR, EaR and risk management, this seminar will also address the financial hedging tools that are required to effectively manage energy risk. Learn a comprehensive energy risk management methodology that addresses energy risk from the strategic perspective of the enterprise level all the way down to the detailed management of specific individual risks.
Learn These Keys to Success:
1. Strategic Risk Management Plan and why it’s important.
2. Risk framing to identify, assess, control and monitor energy risk.
3. Fundamentals of hedging energy risk exposure using spot purchases, forward contracts and options.
4. Layered hedging strategies for volatile energy markets using triggers and stop losses in dynamic hedging decisions.
5. Risk Quantification (Tools) including VaR, TEVaR, CFaR, EaR.
Seminar Agenda
• Introduction to Risk Management
- What it is
- Why it’s important
• Keys to Successful Enterprise Wide Risk Management
- Defining Enterprise Risk Management
- Key Elements of Enterprise Risk Management
- Setting up a Enterprise Management Framework
• Strategic Risk Management Planning
- Identifying Risk
- Understanding Risk
- Quantifying Risk
• Risk Computational Methods
- Analytical Methods
- Historical Methods
- Monte Carlo Methods
• Fundamentals of Hedging Energy Risk
- Review of Hedging Strategies
- Comparing Hedging Instruments
• Case Study – Hedging Energy Exposure
- Spot Market
- Fixed Price
- Call Option
- Collar
- Combinations of Spot, Fixed, Collar and Call
• Case Study - Layered Hedging Strategy
- Statistics Based Hedging
- Setting Trigger Levels
- The Importance of the Long-Run Sustainable Price
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