Benefits of outsourcing energy analytics
In the years 2000 energy companies built up large trading teams, with even larger teams for back office, middle office, portfolio management and risk management. Now that the times have changed, energy companies are forced to scale down rapidly. In this white paper publication, we describe how energy companies can reduce costs while improving their analytics and decisions. We advocate a move from expensive in-house developments to external solution providers for energy analytics. This will help analysts to spend more time on actual analysis instead of operational and development tasks.
Traditional energy companies are under strong financial pressure. They face low or negative margins in sales, in gas midstream activities, and power production. They have to write off millions or billions on their assets. The prices for energy feedstock (coal, gas, oil) continue to fall, making it difficult to generate profits in production, sales and trading. And at the same time, new market players show up with new business models, exploiting innovations in internet technology, in small scale power generation, in green energy, and in marketing and sales.
This poisonous mix of unfriendly market conditions sharply contrasts with the high profits in the years 2000.
The economy was booming, incumbents still benefited from loyal customers and government support in their home markets, gas markets were volatile and exhibited large price spreads, spark and dark spreads for power plants were high, and power producers made large windfall profits on the freely allocated CO2 emission rights.
To read this article, written by Cyriel de Jong and Hans van Dijken:
