The Consequences of Volume Destruction and How To Manage the Risks - 9 June 2020

Due to a massive reduction in demand, Power and Gas wholesale prices are at unprecedented lows. This may present opportunities to procure energy at 20-year lows, BUT only for those organisations that have a robust consumption forecast.  

Conversely, where demand is lower than previously forecasted, there is the risk of ‘Take or Pay’ clauses being enacted by utility suppliers whilst other Organisations may be forced to ‘reforecast’ their consumption down. It is likely any sell back of previously hedged volumes will be at a loss, which could result in budgetary issues and an increased cost per Kwh of any volume remaining.   

LGE are perfectly placed to provide the correct strategy to enable BPF members;

• Take advantage of the opportunities that are now apparent.
• Manage volume risk due to a reduction in consumption