Weather-Linked Risk Management Solutions

Energy businesses can have substantial revenue that is highly dependent on weather outcomes. These revenue risks can be managed through weather-linked products.

There is a very strong correlation between weather and demand for energy.

For example, during hot weather, the demand for electricity is high. During cold weather, the demand for gas is high. When there is no wind, there is minimal output (and revenue) from wind farms.

Acting as brokers (through our subsidiary formerly known as CQ Energy), Energy One can offer weather-linked risk management solutions. These are:

Parameter-based

The product is triggered by pre-agreed weather conditions, such as high temperatures, low temperatures or low wind.

Variable format

The product can be in the form of insurance or derivative contracts.

A bespoke way to hedge or insure risk

An example: A product could be linked to the maximum daily temperature in a region and provide a payment when the maximum daily temperature is exceeded.

These services are provided by Energy One’s Adelaide division (formerly known as CQ Energy).

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