RISK AVOIDANCE
Crossfield has extended risk measurement considerations beyond energy commodity trading, including implementing enterprise wide gross margin at risk reporting, and implementing hedging strategies around physical assets and energy contract positions.
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In the last few decades, many utilities suffered losses because of unexpectedly high plant construction costs, changes in governmental incentives, and shifting fuel supplies for the production of electricity. Since then, the introduction of competition to the industry has come from varying sources, some which are not founded in the electricity industry.
The renewable energy sector has been subject to many risks, some of which are from its relative infancy , the prohibitive barriers to entry and the dependence on governmental and political atmosphere. |
Crossfield ‘s approach to each opportunity is based on its ability to exist in the energy domain based on its merits in an open and free market environment for the production and sale or its products.
Geographies, currencies, bilateral agreement parties, service parties, and the environment are all areas that Crossfield assesses and hedges to minimize its risk.