Risk Management in Hydro Power - 5207 Words

Risk Management In Hydro Power Plants – 18th African Hydro Symposium October 2006 By Joshua Chirikutsi – Zimbabwe Power Company- Kariba South Power station Abstract Hydro power plants like any other business encounter risks in all areas of its operations, but especially in the areas of producing and marketing electricity. As the Electricity supply industry reforms unfold the resultant deregulation brings in several market regulatory and trade related risks. The paper will discuss the general risks affecting Power utilities and will place particular emphasis on hydropower plant operations by analysing the effect of maintenance and operations quality in power plant risk management. 1.Introduction Electric power companies and their†¦show more content†¦The kinds of risks to be managed are decomposed into various classifications as described below. Risk can also be analysed along the value chain and risk management interventions are applied at each stage of the value chain 4.1 General Risks 4.1.1 Price Or Market Risk - comprises the risks to which the company is exposed due to uncertainties in the price of electricity on the market. Volumetric Risk encompasses risks arising from production uncertainty, consumption uncertainty, and uncertainties in the power supply. 4.1.2 Financial Risks, - credit or liquidity risk is especially important in trading. We can divide this risk into two segments; specific credit and systematic credit. Other financial risks include interest-rate risk and currency risk. 4.1.3 Regulatory Risk arises from extra-market factors, such as legal complications, changes and ambiguities in regulations, and political decisions. This risk is especially present in the initial phases of deregulation of the ESI 4.1.4 Modelling Risk can arise when a companys portfolio has been incorrectly valued due to flawed modelling assumptions flawed modelling methodology, or the wrong choice of a model. 4.1.5 Human Error Risks include mistakes in evaluation and analysis, and errors in all aspect of the value chain form power plant operations, maintenance, trading etc. 4.1.6Operational risk At utility level Operational risk is defined as the risk of incurringShow MoreRelatedCase Study Questions On Risk Management Essay999 Words   |  4 PagesDate: 4th October, 2016 Risk Management; DNSC-6254 Risk Management â€Å"Case Study # 2 - ERM† Prepared by: The A Team Aurelia Lianda   Rafael Aita   Nathan Peppler   Osamah Alturki   Moyaid Aseel Table of Contents Page 1. Question # 1.1 3 a) Question # 1.1 – (1.1.1) 3 b) Question # 1.1 – (1.1.2) 3 c) Question # 1.1 – (1.1.3) 3 2. 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