This course adds a third day to the popular Energy Statistical Analysis seminar
to allow the time needed for a more in-depth discussion and explanation of many important topics. Additionally this three-day course is designed as a hand-on workshop. Not only will you learn about practical energy statistical techniques and tools, but you will practice building statistical models in a workshop format.
Learn why companies continue to be exposed to significant energy and electricity related price risk, and how risk and value are 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."
This comprehensive three-day program is designed to provide a solid understanding of key statistical and analytic tools used in the energy and electric power markets. Through a combination of lecture and hands-on exercises that you will complete using your own laptop, participants will learn and practice key energy applications of statistical modeling. Be armed with the tools and methods needed to properly analyze and measure data to reduce risk and increase earnings for your organization.
A laptop is required.
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.
- Workshop exercises will have you building forecast models including time series and financial engineering price models including Geometric Brownian Motion and Mean Reversion Jump Diffusion.
- How to minimize price risk through operational design flexibility; measure forward price volatility and adapt Value-at-Risk concepts (VaR) for the Energy Industry.
- Workshop exercises will have you building VaR models, calculating volatility and simulating complex energy projects.
- Use actual case studies to examine 1) how Monte Carlo simulation is used to value renewable energy, demand response programs and energy storage projects; 2) bench-marking techniques used for estimating the incremental cost savings of expanding existing operations; and 3) real-option value of generation assets and power purchase agreements.
- Actual workshop problems and case studies will look at statistical applications and tools most frequently used in the energy industry.
- Learn the four manage statistical metrics.
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 Preparation
This fundamental level group live seminar has no prerequisites. No advance preparation is required before the seminar.Program Level
Basic level. This fundamental course begins with basic material and then proceeds to the intermediate level.Delivery Method
Each Class is Limited to First 20 Registrants
Your InstructorKenneth Skinner, PhD - VP and Chief Operating Officer, Integral Analytics
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.
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.
DAY ONE:The Basics of Deterministic vs. Probabilistic Thinking for Energy Applications
Fundamental Modeling Tools and Simulation
- Basics of data science - Information from Data
- Descriptive Statistics, Means, Standard Deviations, Distribution Shapes
- Frequency Distributions and Confidence Intervals
- Implications of the Empirical Rule, Transformations and Probability
Exercise: Setting up a Monte Carlo Simulation to Evaluate Project Value and RiskApplication: Calculating Value at Risk (VaR)
- The Linear Method and
- The Quadratic Method
- Historic Simulation Method
- Monte Carlo Method
Exercise: Calculating VaR Using Three Different Methods
Application: Hedging Energy Exposure
Application: Component Risk Analysis
- Understanding the "Greeks"
- How and when to Hedge
- Delta Hedging
- Dynamic Hedging
- Gamma Hedging
- Payoff Diagrams
- Portfolio VaR Diagram
- CAPM, RAROC and the Sharp Ratio
- Calculating Load Following Supply Risk
- Layered Hedging using Statistical Triggers
Exercise: Customer Migration Model Estimating Migration out of Standard Offer Service
Exercise: Measuring Load Following Supply Risk
Exercise: Measuring Intermittent Renewable Supply RiskCorrelation and Regression Analysis for Maintaining the Competitive Edge
- Univariate and Multivariate Analysis
- Hypotheses Testing
- Testing for Equal Means and Variances
- Control Charts
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
- Network Models
- Game Theory
Case Study: Statistical Reports that Everyone Can Understand
Case Study: Benchmarking to Industry Standards- GTS Steel vs. KCPL
Exercise: Building Regressions and Forecasting, PDF's, CDF's and Payoff Diagrams
Exercise: Calculating Hedge Ratios, Constructing an Energy Hedge and a Weather Hedge
Exercise: Using Forecasts in Monte Carlo Simulation to Calculate Risk Premium
DAY Three: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
Exercise: Calculating Volatility
Exercise: Simulating Prices using GBM and Mean Reversion Monte Carlo Models
Exercise: Valuing Combustion Turbines using Real Options
Exercise: Valuing Gas Storage using Real Options
Hotel and Seminar Information
seminar will be held at the hotel listed below. The seminar will start
promptly at 8:00 AM and will finish at 4:00 PM on the first and second
day. On the third day, the seminar will resume at 8:00 AM and will
finish at 12:00 PM. The program includes continental breakfast,
lunch-first and second day only, 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 10003View Seminar Location Website
Because of the diversity of hotels found in the area, we will not be holding a block of sleeping rooms with one particular hotel.