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.