Risk Transfer
CQ Energy, in partnership with Risk Solutions International, delivers structured risk management solutions tailored to meet the specific needs of clients. These risk management solutions allow clients to transfer risks to very highly rated international insurance companies.
Plant Outage Insurance
- Owners of physical plant enter into long term contracts with customers. They can be exposed to significant losses when they suffer unplanned plant outages.
- Plant Outage Insurance provides the owner with protection against the losses that can be incurred during plant outages.
- The insurance product is triggered by bona-fide unplanned plant outages.
- The insurance product can be linked to market price outcomes. and/or weather outcomes.
- The insurance products are written by international insurance companies with very high credit quality.
- Plant Outage Insurance can allow physical plant operators to move away from costly N-1 style policies and substantially improve their bottom line.
Demand Linked Products
- The demand for energy from customers is highly variable. This variability in demand creates substantial risks for energy market participants which must be managed.
- Demand linked products provide an alternative method for managing risks that arise from variable customer demand.
- The product is triggered when demand exceeds a predetermined level.
- The product can be linked to market priced outcomes.
- The product is written by insurance companies of very high credit quality and can be in the form of insurance or derivative contracts.
- For example a product could be linked to the total electricity demand in a region and provide a payment when the market price for electricity (eg: pool price) exceeds a pre-agreed price.
Weather Linked Products
- There is a very strong correlation between weather and demand for energy. During hot weather the demand for electricity is high. During cold weather the demand for gas is high. When there is no wind there is minimal output (and revenue) from wind farms.
- Energy businesses can have substantial revenue that is highly dependent on weather outcomes. These revenue risks can be managed through weather linked products.
- The product is triggered by pre-agreed weather conditions such as high temperatures or low temperatures or low wind.
- The product can be in the form of insurance or derivative contracts.
- For example a product could be linked to the maximum daily temperature in a region and provide a payment when the maximum daily temperature is exceede
