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Energy and utility companies operate in a challenging environment of risk, uncertainty and volatility, and the global financial climate makes sound risk management all the more critical. Successfully identifying, measuring and monitoring exposure to a broad range of risks is an essential business process for an energy market participant’s trading and risk management operations. Utilities, for example, are struggling to accurately predict retail demand, control supply costs, protect delivery systems, manage hedging, minimize regulatory disallowances and sustain good credit ratings – in a business environment sharpened by deregulation.
Financial and risk officers are under increasing pressure to demonstrate that risk identification and financial management are grounded in timely, accurate performance and forecasted data that enable senior management to make well-informed strategic decisions. Across all sectors of the energy and utility industries, companies must make real-time, mission-critical decisions amid thousands, or even hundreds of thousands, of variable risk factors – while also improving profitability, controlling costs and enhancing operational efficiency.
The future demands the strategic edge gained from exploiting risk as an opportunity. To achieve this, organizations must adopt a state-of-the-art risk management system that employs advanced analytics, predictive models and what-if scenarios to reveal the potential business effects of countless combinations of events. Cumbersome and error-prone spreadsheets, with limited reporting on a business-unit level, are no longer viable for today’s energy companies. A global perspective that harnesses the power of data integration, predictive analytics and self-service reporting is vital to success.
How SAS can help
Together with RiskAdvisory, a division of SAS, this comprehensive solution includes data integration, cutting-edge modeling tools for reliable risk measures, advanced predictive analytics and easy-to-use reporting capabilities, so you can:
- Establish a powerful software solution to manage your energy risk management program.
- Proactively capture, analyze and simulate the market and credit risks associated with energy price volatility.
- With a portfolio-level view, drill down to the individual transaction level.
- Manage and control the exposures surrounding your commodity positions.
- Create and maintain valuation models in a controlled environment.
- Report and display risk metrics in a dashboard, simulate and stress various scenarios, and maintain market data sourced from multiple perspectives – all on any device.
SAS has a dedicated division of focused energy risk specialists bringing global industry experience from energy marketing organizations, power and gas utilities, and exploration and production companies. Our energy risk consultants have worked with global customers, including utilities, oil and gas producers, financial institutions, hedge funds, local distribution companies, aggregators and pipeline refiners, and storage companies to implement and support their risk management programs.
SAS helps energy market participants embed risk management into everyday processes at all levels of the organization – such as forecasting fluctuations in energy prices to prevent loss of revenue – for improved insights into marketplace volatility. The benefits include:
- Increased analyst productivity through automation.
- Enhanced ability to quickly respond to requests for updated forecasts.
- Faster response time through self-serve access by stakeholders.
- Increased data accuracy and consistency throughout the data chain.
- Better insights into the energy marketplace through advanced analytics.
The SAS® Difference
SAS’ unsurpassed range of statistical solutions, advanced business analytics, portfolio management and data integration capabilities allow customers to quickly implement and leverage the components critical to their organization’s needs. Only SAS offers the ability to value and quantify the risk of such an expansive range of energy instruments, plus a powerful suite of risk analytics to capture, analyze and simulate those risks. With this complete risk management solution, organizations can now achieve a holistic view of data management and risk analysis and reporting, enabling them to compete successfully in today’s volatile energy markets.
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