Get our new report, ‘Market scenarios: the role of hedging’
Energy buyers are navigating more uncertainty than ever. Power prices are volatile and often unpredictable, driven by weather patterns and international influences. Meanwhile, the growing non-commodity component of energy bills also continues to evolve, adding new charges to the cost stack. Amongst this complexity, we’re looking to answer one key question:
How do different hedging strategies perform in extreme market scenarios?
Our new report, ‘Market scenarios: the role of hedging’, outlines the impact of different hedging strategies on average power prices, helping you to understand the effectiveness of each. Using "typical” trading strategies from our extensive Flex portfolio, plus historical price information from our trading desk, we’re sharing how different hedging approaches have performed in practice.
What the data reveals
As you’d expect, the most effective hedging strategy depends on the market's features.
- In a climbing market, longer-term hedging delivers benefits.
- In a bearish market, you’re better off buying power for short-term consumption.
However, markets are rarely either simply bullish or bearish, and the growing significance of intermittent generation is having a real impact on day-ahead (DA) and intraday markets.
It’s often the relevant strategic risks and opportunities – rather than energy market fundamentals – that drive energy purchasing approaches.
Download nowSpeak to your Drax Energy Solutions sales representative – or email insights@drax.com – for access to the full dataset and analysis behind the report.
Disclaimer
We’ve used all reasonable efforts to ensure that the content in this article is accurate, current, and complete at the date of publication. However, we make no express or implied representations or warranties regarding its accuracy, currency or completeness. We cannot accept any responsibility (to the extent permitted by law) for any loss arising directly or indirectly from the use of any content in this article, or any action taken in relying upon it.
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