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What CEOs Can Learn from Energy Traders
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What CEOs Can Learn from Energy Traders

Philip Hirschhorn, Oscar Wilkison and Tom Brijs
Boston Consulting Group, 2022
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Editorial Rating

8

Qualities

  • Analytical
  • Applicable
  • Overview

Recommendation

Power generation is changing. When energy was produced through the relatively straightforward and stable process of burning fossil fuels, companies could secure long-term, low-price contracts with energy producers, then run their equipment around the clock to maximize profits. But what do you do when energy prices depend on forces as unruly as sunshine and wind? You get really flexible, really fast. This special report from the Boston Consulting Group can tell you how.

Take-Aways

  • With fixed, low-cost energy contracts, 24-hour production was the best strategy, but price volatility inherent in VRE (variable renewable energy) will change that.
  • Companies will need to take on an “energy trader” role to cope with the volatility.
  • A flexible energy user sees electricity not as a cost, but as a value generator. When energy prices dictate it, they halt production to sell electricity back to the market.

About the Authors

Philip Hirschhorn (Sydney), Oscar Wilkison (Sydney) and Tom Brijs (Brussels) are professionals with the Boston Consulting Group. 

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