Getting a grip on the market

Weather Risk

Tony West, director of trading and marketing at Innogy, an energy company based in Swindon, UK, recently made an intriguing discovery. “We always knew we had some sort of weather risk,” he says. “But we did some work to find out just how much risk we had. We came to the conclusion that it was the fourth biggest risk after power, gas and coal. Weather risk came out ahead of oil.”

Innogy – one of the UK’s main weather derivatives traders – is the country’s largest supplier of electricity and se