Risk- and portfolio management
Due to uncertainty regarding the future market prices and production capacity, market operators may experience large fluctuations in their economic results from one period to another in the power market. A market operator may consequently prefer to avoid the chance of low profits even when this has a negative effect on average profitability.
A main task in this area is developing tools for decision support, procedures that assist market operators in managing production systems and also supporting risk assessment when trading in different markets.
The division has produced simulation and presentation programs that are useful for decision support in the energy market. The scheduling of production systems has been based on traditional hydropower models.
Recently a new prototype program for risk management, that integrates hydro scheduling and hedging in the futures market, has been developed. Outputs from the program includes hydro schedules, marginal values of water in the reservoirs and the current values of the different products in the futures market. Profit forecasts include the possibility of future hedging in the market.
Contact:
Birger Mo
