npower business has launched a new service enabling major energy users that purchase flexibly to make better informed energy procurement decisions and unlock financial rewards.
This unique risk management service – Policy Shaper – will see npower business become the first major energy provider to work with intensive energy users to construct a robust energy policy specific to their business and develop a strategic view of their appetite for risk in energy procurement. The service, based on best practice recommendations, will help energy users understand their exposure to market volatility and provide the necessary tools that lead to tactical execution and controlled purchase decision making.
Incorporating Value at Risk (VaR) reporting, the service will also enable energy users to measure financial rewards according to the risk they take.
Given the fluctuations in energy price, all businesses face some risk in energy purchasing, yet few businesses have a strategic view of their exposure to risk in the energy market.
Douglas McLeish, Business Development Director at npower Business said: “Businesses assess risks of all kinds, whether it is health and safety, security or personnel, and have a policy in place to manage these risks. Energy risks, however, often go unpoliced and do not make it on to the boardroom agenda despite energy typically being a significant investment for businesses. With this new risk management service we will work with the customer to determine how adverse or open they are to risk in energy purchasing and develop an energy policy and procurement strategy based on this.
“Lots of businesses are buying energy in flexible arrangements, but our service takes it a step further by giving businesses a framework in which to make tactical purchasing decisions. With a detailed understanding of the risks they’re prepared to take, energy purchasers can develop a robust energy policy and have a benchmark against which to make purchasing decisions. npower can then provide a selection of products and services to manage the customer’s preferred level of risk.”
The service has been developed on the back of recommendations by the G30 group of international businesses, which called on industrial and commercial businesses to establish a framework of overall risk and adopt the same market risk management practices that are recommended for large financial businesses.
