Power Portfolio Optimization and Benchmarking of Financial Trading

Over a 4 months period, ESP Consulting supported SEAS-NVE’s market division in a review of its trading operation in order to optimize value creation from existing trading activities and deliver recommendations for the strategic development of the future trading activities. This work included:

Portfolio optimization and strategy for future trading activities:

  • Review of existing risk policy and recommendations for future developments;
  • Analysis of risk limits in relation to P/L targets;
  • Analysis of hedge and trading portfolios;
  • Calculation of expected P/L based on existing risk limits and market volatility;
  • Analysis of value creation potential in trading portfolios and recommendations on how to optimize and capture value in the Nordic Power Market;
  • Review of key trading processes;
  • Review of third party sourcing and trading agreements; and
  • Analysis of strategic options for the trading department and delivery of a high level plan for the future strategic development of the trading operation in the company.

Benchmarking of financial trading:

  • Delivery of a price database for selected financial power contracts from NASDAQ/OMX;
  • Selection of relevant benchmark for the assessment of trading performance in financial power contracts; and
  • Development of a benchmarking tool to evaluate performance in financial trading against predefined benchmarks.