Lacima Swing Application

Value the flexibility of swing contract portfolios with a holistic view of optimal strategies

Swing contracts have been used for many years to manage inherent uncertainty of energy supply and demand. Deregulation of energy markets places even more importance on being able to accurately value the optionality contained in these contracts. Constraints on the quantity of commodity that can be taken make swing contracts particularly difficult to value and risk manage.

Lacima's swing application allows you to capture the value in the flexibility of swing contracts to see how constraints can impact your optimal exercise strategy.

• Greater accuracy in valuations with advanced single and multi factor models
• Value a portfolio at once with a holistic view of reporting on optimal strategies
• Analyze swing contract portfolio information in detail
• Visualize distributions of cash flows and swing volumes
• Incorporate a wide range of constraints into calculations
• Achieve auditability to be compliant with international regulatory standards
• Access wide ranging risk metrics such as earnings at risk, profit at risk and hedge analysis in an instant through Lacima riskAnalytics

Constraints captured include:

- annual and daily contract quantities - contract price (per period) - maintenance periods - minimum bill - carry forward - make up - clawback

- early termination / depletion - indexation (including to baskets) - rolling multi year constraints - excess gas - interruptions - price tranches - nomination lead time