Global Energy Risk Management & Gas Storage

A leading global energy and urban development company is undertaking a multi-phase implementation of Lacima Analytics modules, including Value at Risk (VaR), Earnings at Risk (EaR), Credit Risk, and Limit and Breach Reporting. These capabilities support a diverse portfolio of financial contracts and physical assets across power, gas, oil, interest rates, and FX. In addition, the Lacima Trader > Storage solution is being deployed to optimise the company’s gas storage assets.

The Project

The client had recently commenced trading operations and required accurate and robust risk measurement within a short time frame. A rapidly deployed solution was essential to support valuation and cashflow exposure analysis across a global portfolio of physical and financial instruments, spanning power, gas, oil, interest rates, and FX. Tools for managing credit risk, enforcing trading limits, and optimising gas assets were also high priorities.

The Client

The client is a major player in the energy and urban development sector, operating globally with a balanced portfolio of thermal and renewable energy assets totalling more than 12,600 MW. This includes significant capacity in wind, solar, battery storage, and energy-from-waste technologies. The company is focused on delivering innovative energy solutions that support the global energy transition and promote sustainable development.

To support its trading and asset management activities, the client sought a sophisticated risk management and optimisation platform to handle VaR, credit risk, and limit reporting across its global operations.

The Solution

To meet the client’s requirements and timelines, a phased deployment approach was adopted. In the initial phase, Lacima Analytics modules for parametric, historical, and covariance Monte Carlo VaR were specified, configured to the client’s needs, integrated with internal data systems, and brought into live production within three months. A subsequent phase introduced modules for limit and breach reporting, credit risk (PFE), and the automation of daily risk workflows – including the generation of VaR and management reports.

Later phases are expanding VaR coverage across the full global portfolio, including integration with additional deal capture systems, and extending risk measurement to physical asset exposures through asset modelling and EaR calculations. In parallel, Lacima Trader > Storage is being deployed to support advanced optimisation of gas storage contracts.

The Outcome

Following implementation, the client is able to calculate Delta VaR and covariance Monte Carlo VaR across its entire trading portfolio – including power, gas, oil, interest rates, and FX – in under one minute. This has enabled the trading business to launch on schedule with confidence in the accuracy and timeliness of valuation and risk metrics. Upon completion of all phases, the client will have a comprehensive view of market and credit risk across both traded contracts and physical assets, along with detailed insights into their gas storage portfolio.