We bring distinctive capabilities and tools to help energy-trading companies define strategies, refine operating models, optimize commercial practices, and remove costs and complexity.
Energy markets are undergoing rapid change. Excess natural gas and power-generating capacity is dampening price volatility, renewable operators are setting new trends in dispatch and prices, and regulatory moves are prompting banks to exit the business. To capture opportunities and avoid threats, organizations need to find new ways to deal with markets and manage their risk exposure.
What we do
We serve utilities, merchants, oil and gas companies, commodity trading houses, banks, and hedge funds across the value chain, including asset optimization, trading, origination, and contract structuring. We help clients upgrade marketing and commercial activities, identify and pursue growth opportunities, and develop and execute strategies.
Defining strategic posture
We work with clients to assess their strategic position against market developments, identify growth opportunities, and advise on strategic moves. Our analysis includes geographic conditions, regulatory environments, competitive stances, and liquid and illiquid horizons, and redefines the role and scope of supply, asset-backed and proprietary trading, and origination activities.
Refining the operational model
We help clients clarify the resources and capabilities they need to execute their strategies and work with them to establish appropriate structures, interfaces, and processes. New operating models are geared to integrating activities dispersed across countries and commodities, and strengthening performance and risk measurement, management, and culture.
Optimizing commercial practices
As trading becomes more challenging in an increasingly competitive marketplace, companies need to improve their commercial practices to maintain profitability. We help clients assess the sophistication of their trading and origination, hedging, corporate risk, and governance, and identify improvements to boost their profits and risk/return profile.
Removing cost and complexity
Heavy investments in trading units and technology platforms have led to a proliferation in structures and systems, often at the expense of efficiency. We help clients to redesign complex organizations, processes, and legacy IT systems and strip out cost and complexity.
Examples of our work
Our recent client projects have included:
- working with a European utility to develop a strategic target portfolio and management unit, resulting in the identification of asset investments worth €2– billion to €3 billion
- advising a midstream player on a gas portfolio optimization and trading build-up, creating €200 million in gross margin in the first year alone
- assisting an integrated utility in enhancing the dispatch of pumped storage stations and coal-blending capabilities to create an incremental margin of $100 million per year
- helping a major utility integrate its trading activities in an asset-backed trading house and build supporting systems, processes, and capabilities, delivering cost savings and revenue enhancements worth €800 million within a year
We invest in developing and field-testing our own sector-specific tools, such as:
Commercial Performance Survey in Energy Trading provides quantitative benchmarks for front-office activities, support functions, and risk and capital charges, and enables qualitative analysis of the business model, organization, business challenges and opportunities, and risk practices.
Gas Portfolio @ Risk offers a systematic, long-term review of all gas assets (liquefied natural gas, transmission pipelines, storage) and contracts, with assessments of value at risk, cash flow at risk, and other risk measures.
Commercial Optimization Toolkit helps companies improve their capabilities, processes, and organizational structure in power marketing strategy, IT systems, and performance management, with the potential to add $8– to $12 million per year in earnings before interest and taxes per gigawatt.