Companies continue to be exposed to significant energy and electricity related price risk, and this risk needs to be properly quantified. Energy and electricity companies worldwide depend on accurate information about the risks and opportunities facing day to day decisions. Statistical analysis is frequently misapplied and many companies find that "a little bit of knowledge is a dangerous thing."
Operational decisions, capital investment, risk management, strategic positioning, litigation, and marketing are some of the many areas that require accurate information and analysis founded on sound statistical principles. This comprehensive two-day program is designed to provide a solid understanding of key statistical and analytic tools used in the energy and electric power markets. Be armed with the tools and methods needed to properly analyze and measure data to reduce risk and increase earnings for your organization.
This is a hands on seminar you are encouraged but not required to bring a computer.
What You Will Learn
- Correlation & regression analysis; real option analysis; the Black-Scholes option pricing model; binomial trees; GARCH Models; the measurement of energy price risk; and how to use correlation and regression analysis for maintaining a competitive edge.
- How to minimize price risk through operational design Flexibility; measure forward price volatility and adapt Value-at-Risk concepts (VaR) for the Energy Industry.
- Use actual case studies to examine 1) how Monte Carlo simulation is used to value Demand Response programs; 2) benchmarking techniques used for estimating the incremental cost savings of expanding existing operations; and 3) real-option value of generation assets.
Your Instructor
Kenneth Skinner, PhD - VP and Chief Operating Officer, Integral Analytics
Kenneth Skinner, Ph.D. is Vice President of Risk & Evaluation Products for Integral Analytics, an analytical software and management consulting firm focused on operational, planning, and market research solutions. Dr. Skinner has over 20 years’ experience in evaluation and risk measurement, having worked as an energy consultant with PHB Hagler Bailly and Financial Times (FT) Energy, and as the Derivative Structuring Manager for the retail energy supplier Sempra Energy Solutions. He has his Ph.D. from Colorado School of Mines, in Mineral Economics, with an emphasis in Operations Research, an MBA from Regis University and his BS in Engineering from Letourneau University.
Dr. Skinner is a nationally recognized expert in economic evaluation and modeling of energy assets including energy storage, distribution and generation, efficiency and demand response, renewable energy alternatives, financial derivatives and structured contracts using net present value, econometric and statistical methods, optimization principles, and real option valuation techniques. Dr. Skinner is currently the technology columnist for Wiley Natural Gas and Electricity Journal and is a noted speaker on energy related topics for organizations such as AESP, IAEE, ACEEE, PLMA, IEPEC, INFORMS, Infocast, EUCI, SNL Energy and PGS Energy Training.
The full agenda is not yet available for this event.
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DAY ONE:
The Basics of Deterministic vs. Probabilistic Thinking in Deregulated Markets- Means vs. Standard Deviations
- Distribution Shapes
- Confidence Intervals
- Probability
- Simulation
Application: Calculating Value at Risk (VaR)- The Linear Method and
- The Quadratic Method
- Historic Simulation Method
- Monte Carlo Method
Application: Hedging Energy Exposure- Understanding the "Greeks"
- How and when to Hedge
- Delta Hedging
- Dynamic Hedging
- Gamma Hedging
Application: Component Risk Analysis- Payoff Diagrams
- Portfolio VaR Diagram
- CAPM, RAROC and the Sharp Ratio
- Calculating Load Following Supply Risk
- Layered Hedging using Statistical Triggers
Application: Calculating VaR Using Three different Methods
Correlation and Regression Analysis for Maintaining the Competitive Edge- Univariate and Multivariate Analysis
- Hypotheses Testing
- Testing for Equal Means and Variances
- Control Charts
Case Study: Benchmarking to Industry Standards- GTS Steel vs. KCPL
DAY TWO:
The Energy Forecasting Toolbox- Historical Trend Analysis
- Univariate Time Series
- Multivariate Time Series
- Econometric Models
- Bayesian Estimation
- End-Use Models
- Engineering or Process Models
- Optimization
- Network Models
- Simulation
- Game Theory
- Scenarios
- Surveys
Exercise: Statistical Reports that everyone can understand
Exercise: Building Regressions and Forecasting
Exercise: Using Forecasts in Monte Carlo Simulation
Introduction to Real Options Analysis- Details of Option Model Implementation
- Real Options and Net Present Value (NPV) Analysis
- Estimating Volatility and Uncertainty In Historical Prices
- Black-Scholes, Binomial Trees, and GARCH Models
- Geometric Brownian Motion and Mean Reversion
Application: Minimizing Price Risk through Operational Design Flexibility
Application: Real Option Value of Demand Response and the Smart Grid
Application: Valuing Energy Assets using Real Options
Venue
NYC Torch Club (NYU Campus)
18 Waverly Pl, 10003
New York, NY, USA
Who Should Attend this Seminar
Among those who will benefit from this seminar include energy and electric power executives; attorneys; government regulators; traders & trading support staff; marketing, sales, purchasing & risk management personnel; accountants & auditors; plant operators; engineers; and corporate planners. Types of companies that typically attend this program include energy producers and marketers; utilities; banks & financial houses; industrial companies; accounting, consulting & law firms; municipal utilities; government regulators and electric generators.
Prerequisites and Advance PreparationThis fundamental level group live seminar has no prerequisites. No advance preparation is required before the seminar.
Program LevelBasic level. This fundamental course begins with basic material and then proceeds to the intermediate level.
Delivery MethodGroup-live.
Hotel and Seminar Information
This seminar will be held at the hotel listed below or can be conducted on-site at your facilities. The seminar will start promptly at 8:00 AM and will finish at 4:00 PM on the first day. On the second day, the seminar will resume at 8:00 AM and will finish at 12:00 PM. The program includes continental breakfast, lunch (first day), and coffee breaks. Attendees also receive a professionally produced seminar manual that can serve as a valuable office reference. Dress is casual for all seminars
NYC Torch Club (NYU Campus)18 Waverly Place
New York, NY 10003
View Seminar Location WebsiteBecause of the diversity of hotels found in the area, we will not be holding a block of sleeping rooms with one particular hotel.
