Turn electricity consumption into a strategic asset with a portfolio manager

Turn electricity consumption into a strategic asset with a portfolio manager

Consulting the experts on the management, risk profile and optimisation of the cost of electricity consumption, making it a strategic asset that can drive the green transition, is now just as natural as consulting a pension or bank advisor on how to manage savings or investments.

Most people are familiar with the concept of portfolio management from the financial sector, where it involves managing shares, bonds, currencies or other types of investments according to individually agreed guidelines. Or from meeting a pension advisor to decide whether savings should be invested and managed with low, medium or high risk.

Electricity portfolio management by Mind Energy is all about helping your business to manage and optimise electricity consumption in a way that reduces risk and optimises costs. Electricity consumption can be elevated from a static but necessary operational function to an important asset in overall strategy and competitiveness for your business.

Maximum incentive for the portfolio manager

"Portfolio management of electricity as a strategic asset can be relevant for any business regardless of size, but the degree of relevance depends on size, industry and energy consumption. In principle, portfolio management is mostly aimed at commercial organisations where energy consumption is a significant part of total costs, regardless of consumption size, but where risk management plays a significant role."

This is according to Jan Rigtrup, Director at Mind Energy Securities, our unit that exclusively trades and optimises for our clients. He explains how we also offer clients performance-based contracts:

"We are very conscious about incentivising each portfolio manager to maximise value created for the client – without necessarily increasing risk for the client. This can be direct economic value and security of supply through cheaper and stable power, or the promotion of strategic sustainability goals."

Choose between different levels of involvement

When working with Mind Energy Securities for portfolio management of electricity consumption, you can generally choose between two different management strategies. Regular portfolio status reporting is an important element in all cases. The difference is the degree to which you want to be involved.

"The agreed strategy is handled as discretionary. This means that the client entrusts us with the mandate to make decisions, such as locking in a current electricity price for purchase or sale. With a non-discretionary agreement, clients must always approve the individual transactions before they can be completed,"

explains Jan Rigtrup.

Focus on value creation and sustainability

Mind Energy Securities' director emphasises that regardless of the form of collaboration, the focus is always on value creation for each client the individual portfolio manager serves:

"The portfolio manager carefully monitors and assesses the market and, taking into account the agreed risk profile, decides when it is wise to lock in the price, i.e. hedging, and when it is better to buy and sell at the current market price. This way, the company gets lower average prices and reduces its overall costs over a longer period of time,"

he says.

If the company wants to develop its energy profile more sustainably and thus contribute to the green transition, portfolio management can also be actively used. For example, Power Purchase Agreements (PPAs) can be integrated as part of the overall portfolio management strategy, which includes fixed-price agreements to purchase electricity generated by solar and wind at agreed prices.

You gain greater budget certainty and know the costs of a gradual transition to more renewable energy. And solar and wind turbine owners gain greater sales and earnings security. Mind Energy Securities can also help to calculate the long-term value of building your own solar parks or wind turbines.