Risk analytics

Risk analytics

Case study 1

Client: Large European portfolio generator

Region: UK & Ireland

Title: Business model and trading strategy development

Redpoint has been working with the client over a period of two years in developing a Business Model and Trading Strategy to support its portfolio of generation assets.  This work has involved the definition of key portfolio risk factors, the calculation of risk exposures and the development of a contracting strategy to manage those exposures.  Central to this strategy development has been the design and build of several tools which are now an integral part of the client’s operational solution. These include a fuel hedging tool, a gross margin at risk based portfolio model and a contract pricing calculator.  Redpoint is currently providing ongoing consulting advice for the client in supporting these tools and further developing its portfolio risk management strategy.

Case study 2

Client: Large UK vertically integrated utility

Region: UK & Ireland

Title: Business governance design

Redpoint is currently engaged on the design and implementation of a governance structure associated with the major business reorganisation of one of the UK’s largest vertically integrated utilities. This project involves working with the client to design a framework for delegation of authority across its risk control, performance and investment governance lines. It also involves implementation of the new governance framework as a key deliverable in the business reorganisation.

Case study 3

Client: Energy utility company

Region: North-west Europe

Title: Long term hedging and sourcing strategies

Redpoint was engaged by an energy utility company to assist in the development of a long term hedging and sourcing strategy in response to its evolving portfolio.  Phase 1 of the project involved detailed analysis of exposures across the generation and retail businesses, and the development of a model that could simulate risk under different long term strategies.  In Phase 2, we analysed the interaction between the wholesale hedging strategy, the sourcing for its domestic retail business, and its tariff pricing, and advised on how its sourcing strategy should evolve.  This required the development of a dynamic model that could evaluate that impact of different sourcing patterns on purchasing costs, retail margins and market share.  The model was also used as a basis for a simulation game used by senior management to understand better the performance of the company relative to competitors.

Case study 4

Client: Large UK vertically integrated utility

Region: UK & Ireland

Title: Risk policy review

In 2007, Redpoint was engaged to review the risk policy and governance for one of the UK’s vertically integrated utilities.  This involved a thorough rationalisation of existing risk policies and the drafting of new risk policy where appropriate. The project was part of significant changes to the organisation and governance structure of the company. 

Case study 5

Client: Swiss energy trading company

Region: North-west Europe

Title: Trading incentivisation scheme design

In 2007 Redpoint was engaged by the client to re-design its trading and origination incentivisation scheme. The scheme was designed to signal outstanding performance in creating value while ensuring the risk/reward balance between employees and the company was appropriately aligned. This involved developing a structure which ensured that traders and originators recognised the cost of risk capital and trading overheads in the commercial decisions taken, as well as being incentivised to work as a team in pursuing the strategic goals of the company.