Risky Energy Aspects – Identification, Evaluation, Acceptability Assessment and Improvement Aims

The increasing worldwide energy consumption, especially in the industry range, forces the companies to search for the solutions, which – being written into sustainable development philosophy – would allow for reducing the level of the energy consumption of the realised processes and lowering the costs of their functioning. Those activities can be undertaken in the systemic way, very often based on the implementation of the energy management system, they can also have the character of technical or technological modernisation. Fundament of the decision concerning the manner of the minimisation of energy consumption should always be the energy risk management covering: its identification, evaluation and acceptability assessment. The studies proposed the principles for defining the significant energy aspects by the full identification of all the present aspects and next the development of unified methodology of their assessment, allowing for appointing the key aspects. The starting point constitutes the energy risk ratio, which takes into consideration the following criteria: probability of the occurrence, significance of the occurrence, ability to monitor, incompatibility with legal requirements, and the interest and attention of the stakeholders. Flexibility of the applied method enables complex application in every organisation – independently of its size and sort of the realised processes – which wants to manage the risky energy aspects.

Energy Risk Management

The backdrop of rapid growth of worldwide energy consumption and increasing concerns about global energy sustainability and environment protection, as well as an increasing uncertainty of commodity prices, require energy companies to use derivatives to hedge against risks related to energy trading. Over time, this situation has led to a more important role for energy risk management as part of a company’s core business operation. This chapter discusses the primary financial instruments used in the energy sector and risk management for energy companies. It reviews the application of several important quantitative methodologies, including Value at Risk and its variant risk metrics, to measure market risk. The chapter also examines credit risk measures and credit risk migration. Lastly, it discusses liquidity risk, operational risk, and legal risk. Overall, the chapter focuses more on the risk the commodity producer/deliverer faces and less on the end user.

The BHEF National Higher Education and Workforce Initiative

Partnerships between higher education and business have long been an important part of the academic landscape, but often they are based on shorter-term transactional objectives rather than on longer-term strategic goals. BHEF's National Higher Education and Workforce Initiative brings together business and academia at the institutional, regional and national levels to create sustainable new opportunities for undergraduates to learn about emerging fields such as data science and analytics, cybersecurity, energy, risk management, and social and mobile technologies through direct engagement with the companies working in these areas. These partnerships are built on a base of evidence, strategic business engagement and design principles that aim to align needs with existing and enhanced capacity.