Our risk analysis tools assess the financial risk exposure of energy retailers to fluctuating demand, supply and prices on the electricity market. While consumers (currently still) enjoy flat rates per kWh, retailers need to procure based on predictions per quarter hour, and face highly volatile balancing cost if their predictions are wrong.
The FiRE (financial risk exposure) tool is specifically designed to show retailers an easy-to-read metric for the financial risk they are exposed to, and how much of this risk they will be able to mitigate using demand response. The tool allows SEITA to study a retailer’s losses; by analysing market data we can calculate the retailer’s expected shortfall in future scenarios. In particular, the tool shows the financial effects of various scales of demand response on the retailer’s risk exposure on the imbalance, intraday and day-ahead markets for electricity. It assesses how demand response improves marginal retail profit (actual profit) and—from a different perspective—reduces balancing losses (opportunity costs). Essentially, the FiRE tool computes the value of customer flexibility for a retailer.
The FiRE tool was developed together with Centrum Wiskunde & Informatica (CWI) in Amsterdam. A free demo of FiRE is available here. This is a public demo of a research tool, showing results for stylised trading and flexibility data. In addition, we offer:
- analytics on custom data (trade portfolios and customer flexibility)
- analytics with custom indicators
- additional reporting and documentation of analysis results
If you are interested in finding out their value at risk and how demand response can reduce this risk, please contact us below.