Risk management for a hydro-based generator

This talk will cover some of the practical applications of risk analysis and hedging programs for a hydro-based energy generator such as BC Hydro. Risk management for BCH provides a unique challenge due to the significant variability in available energy and prices, and the ability to defer purchases between years.

We will look at a simplified version of BC Hydro's system optimization model and methods to determine the risk profile of purchase costs for a hydro system. We will then discuss methods for developing an optimal hedge portfolio in order to minimize long-term cost risk, and how these differ from more common hedge portfolios.